Restoring the Public Purpose to Private Corporations
17 Pages Posted: 11 Feb 2013
Date Written: February 10, 2013
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: Suggested Citation