{"id":11403,"date":"2023-03-01T14:35:39","date_gmt":"2023-03-01T19:35:39","guid":{"rendered":"https:\/\/americancompass.org\/?p=11403"},"modified":"2023-03-09T10:46:48","modified_gmt":"2023-03-09T15:46:48","slug":"the-corporation-needs-a-new-story","status":"publish","type":"post","link":"https:\/\/americancompass.org\/the-corporation-needs-a-new-story\/","title":{"rendered":"The Corporation Needs a New Story"},"content":{"rendered":"\n<p>The&nbsp;most popular explanations for the unraveling relationship between conservatives and big business are political. Global corporations no longer recognize themselves as American or care about advancing the national interest. Executives oppose Donald Trump and donate to Democrats, while Republicans find their ranks filled increasingly by the working class. Capital has gone \u201cwoke,\u201d advancing socially progressive causes at all costs.<\/p>\n\n\n\n<p>All that likely plays a role. But beneath the political, and driving it, is a justified, if poorly articulated, panic among conservatives about a serious tear in the fabric of capitalism. Corporations no longer have owners.<\/p>\n\n\n\n<p>Conservative respect for corporate decision-making assumes the existence of shareholders whose interests and incentives are decipherable, whose rights to control their property deserve deference, and whose pursuit of their self-interest is expected to produce results also in the public interest. In his&nbsp;<a href=\"https:\/\/www.nytimes.com\/1970\/09\/13\/archives\/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html\" target=\"_blank\" rel=\"noreferrer noopener\">canonical 1970 essay<\/a>, \u201cThe Social Responsibility Of Business Is to Increase Its Profits,\u201d Milton Friedman explained: \u201cIn a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible.\u201d<\/p>\n\n\n\n<p>When Friedman wrote in 1970, 75 percent of&nbsp;<a href=\"https:\/\/www.taxpolicycenter.org\/taxvox\/who-owns-us-stock-foreigners-and-rich-americans\" target=\"_blank\" rel=\"noreferrer noopener\">U.S. corporate stock<\/a>&nbsp;was held in the taxable accounts of American investors. Today, only 25 percent is still held the old-fashioned way; foreign ownership has risen from 5 percent to 40 percent, often by sovereign wealth funds, and the balance sits in a wide variety of pension systems, retirement accounts, and nonprofit endowments. Those accounts tend not to hold actual shares in actual firms. Their assets are often passive investments in&nbsp;<a href=\"https:\/\/www.ft.com\/content\/27b5e047-5080-4ebb-b02a-0bf4a3b9bc08\" target=\"_blank\" rel=\"noreferrer noopener\">mutual funds and ETFs<\/a>&nbsp;or, for the largest investors, stakes in hedge funds that themselves hold equities, even if just for a few milliseconds. For many small investors, 401(k) retirement accounts offer only passive options.<\/p>\n\n\n\n<p>Who owns Apple, and who hired&nbsp;Tim&nbsp;Cook&nbsp;as CEO? Vanguard is the company\u2019s&nbsp;<a href=\"https:\/\/finance.yahoo.com\/quote\/AAPL\/holders\/\" target=\"_blank\" rel=\"noreferrer noopener\">largest<\/a>&nbsp;institutional \u201cholder,\u201d but that is not an owner. The investors on whose behalf Vanguard holds shares may be owners, but they often don\u2019t know it and they certainly don\u2019t act like it. Say Vanguard holds shares for a teacher pension fund. Is that fund an owner, or are the teachers, or are the taxpayers, who must meet their commitments to teachers regardless of the fund\u2019s value?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In National Review, Oren Cass argues that corporations no longer have owners in the way they once did, with far-reaching ramifications for our economy.<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_tec_requires_first_save":true,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"_tribe_blocks_recurrence_rules":"","_tribe_blocks_recurrence_description":"","_tribe_blocks_recurrence_exclusions":"","footnotes":""},"categories":[7],"tags":[25],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.0 - 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