Decades from now, economic historians may look back at Aug. 19, 2019, and say, “That’s when it all changed.”
Chief executives from top companies announced efforts to build an economy that works for all Americans. The announcement came from the Business Roundtable, a group of nearly 200 CEOs led by Jamie Dimon, CEO of JPMorgan Chase. The group revised its mission statement to prioritize employees, communities and the environment, along with shareholders.
This shift comes after increased political and social criticism of wealth inequality and CEO pay as a growing number of companies rely on freelance and contract workers, who don’t receive employee benefits. Before now, the group’s mission was to maximize shareholder value, a philosophy that has guided the American corporations for decades.
But according to Margaret Blair, an economist at Vanderbilt University Law School, this change could bring back the practices of American corporations from last century, before shareholder primacy began to dominate boardrooms in the 1980s. Blair spoke with “Marketplace” host Kai Ryssdal about the implications of the change and how this could affect workers. The following is an edited transcript of their conversation.
Kai Ryssdal: First things first, I suppose. Were you surprised by this announcement today?
Margaret Blair: A little bit. It does seem to me that it’s an interesting development, indicating that there are certain people who are worried about the direction that capitalism has been going for the last 10 or 15 years or 20 years.
Ryssdal: And perhaps also, there’s some handwriting on the wall here. It’s become an issue in the campaign. This economy, as we all know, is changing. And I guess one does wonder where they’ve been that they’re just now catching up?