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>lol...maximizing shareholder value is a cause of sagging productivity? Here's the longer paper the author wrote a couple years ago that explains his reasoning. You may disagree with his argument, but to dismiss it outright as having no merit says more about you than it does about the author or the NYT. https://www.brookings.edu/wp-content/uploads/2016/06/lazonic... >Once the problems of strategic control have been addressed, the process of taking back the corporation can turn to
the critical role of organizational integration. Productivity in an advanced economy depends on the extent to which
members of the labor force have the opportunity to engage in collective and cumulative learning over the course of
careers that may span 40 years or more. Under the Old Economy business model, major corporations supported
this social condition through the norm of a career with one company, albeit almost exclusively for white males. It is
unrealistic to assume that in a world of open-systems technologies and intense global competition the norm of a
career with one company could, or should, be restored. That does not, however, lessen the need for collective and
cumulative careers as the employment foundation of a highly productive economy. It is reasonable to believe that
in the provision of lifelong learning through on-the-job experience, government agencies and civil society organizations,
including universities, will have to continue to play important, and perhaps even growing, roles. The business
corporation, however, will have to anchor a national system of career employment through a retain-and-reinvest
resource-allocation regime. Jettison the downsize-and-distribute ideology of MSV, and U.S. business corporations
can focus on becoming learning organizations once again. >If hundreds of billions of dollars annually stop flowing out of the nation’s major corporations to do buybacks, then
vast amounts of resources will become available to provide the financial commitment that innovation requires.84 Ban
buybacks, and companies will be able to use these funds not only, or even primarily, to finance capital expenditures
but more importantly to attract, train, retain, and motivate their career employees. In high-tech companies a significant
proportion of these employees will be engaged in R&D, but the innovative enterprise needs experienced and
motivated employees in a range of other functions as well. And some of the funds made available by a buyback ban
can flow to the government as tax revenues to enable it to invest in physical infrastructure and human knowledge
that can underpin the next generation of innovation. |
You mean like, giving the value created by the corporation back to those to whom its original assets belonged before its success, as a reward for prudent thinking? That sounds it will incentivize valuable investments! Does he have a proposed mechanism? /s
> Productivity in an advanced economy depends on the extent to which members of the labor force have the opportunity to engage in collective and cumulative learning over the course of careers that may span 40 years or more [and this is decreasingly the case].
An important trend to consider, but the causes are totally orthogonal to buybacks/dividends. Technology is moving faster, and skills emerge and obsolesce in different ways than in the halcyon Old Economy.
> It is unrealistic to assume that in a world of open-systems technologies and intense global competition the norm of a career with one company could, or should, be restored.
Hey, he said a correct sentence! Good job!
> And some of the funds made available by a buyback ban can flow to the government as tax revenues to enable it to invest in physical infrastructure and human knowledge that can underpin the next generation of innovation.
Ooh, ooh, here's an idea...let's pass the money back to the investors who will pass it on not to a company that's saying "we don't know what to do with this much money", but rather one that says something promising like, oh I don't know, "we're gonna invest in physical infrastructure and human knowledge that can underpin the next generation of innovation". (And let's tax some agreed-upon amount of economic activity and use it to fund things that are genuinely better undertaken by a government)