Restoring the Public Purpose to Private Corporations

17 Pages Posted: 11 Feb 2013

See all articles by Ronald Blackwell

Ronald Blackwell

Independent

Thomas A. Kochan

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: February 10, 2013

Abstract

At different points in time the American corporation has been acclaimed as an instrument of economic progress and critiqued for pursuing narrow interests of shareholders at the expense of employees and the public interest. We argue that the era of shareholder maximizing that emerged in the 1980s and has dominated since then has produced a set of perverse economic outcomes that have limited or stopped economic progress for the majority of the workforce and holds back an economic recovery capable of closing the jobs deficit and improving living standards. Building a more sustainable economy will, therefore, require replacing this narrow conception of the purpose of the firm a broader theory and with policy and institutional reforms that rebalance the power of investors, corporate executives, workers, and their representatives.

Keywords: corporations, labor, shareholders

JEL Classification: labor economics, labor policy, theory of the firm

Suggested Citation

Blackwell, Ronald and Kochan, Thomas A., Restoring the Public Purpose to Private Corporations (February 10, 2013). Available at SSRN: https://ssrn.com/abstract=2214621 or http://dx.doi.org/10.2139/ssrn.2214621

Ronald Blackwell

Independent

No Address Available

Thomas A. Kochan (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E52-583
Cambridge, MA 02142
United States
617-253-6689 (Phone)
617-253-7696 (Fax)

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