Capitalism for the Long Term

February 22, 2011 2:17 PM

In Capitalism for the Long Term Managing Director of McKinsey & Company Dominic Barton sums up his prescriptions for the future of corporate governance for the Harvard Business Review.

Barton desires to restore business’s standing as a force for good, worthy of the public’s trust. To do so business leaders must, [rewire] the fundamental ways we govern, manage, and lead corporations, if capitalism is to survive as the, greatest engine of prosperity ever devised.

First, business and finance must jettison their short-term orientation and revamp incentives and structures in order to focus their organizations on the long term. Second, executives must infuse their organizations with the perspective that serving the interests of all major stakeholders—employees, suppliers, customers, creditors, communities, the environment—is not at odds with the goal of maximizing corporate value; on the contrary, it’s essential to achieving that goal. Third, public companies must cure the ills stemming from dispersed and disengaged ownership by bolstering boards’ ability to govern like owners.

He concludes, We must make the effort regardless. If capitalism emerges from the crisis vibrant and renewed, future generations will thank us. But if we merely paper over the cracks and return to our precrisis views, we will not want to read what the historians of the future will write. The time to reflect—and to act—is now.

posted by ob1quixote (42 comments total)

McK is just selling this because they think it'll sell given the events of the last five years. They basically invented "shareholder value" as a concept back in the 80's. This is pretty much the exact opposite of that.

Also they have terrible elevator manners.
posted by JPD at 2:21 PM on February 22, 2011 [1 favorite]

I'm sorry, but when exactly did capitalism EVER stand "as a force for good, worthy of the public's trust"?
posted by briank at 2:24 PM on February 22, 2011 [1 favorite]

That pungent odor is from all the executives on Wall Street pissing their pants from laughing too hard.
posted by Thorzdad at 2:27 PM on February 22, 2011 [4 favorites]

Talking about the importance of the long term must be a good way for McKinsey's to make a quick buck.
posted by memebake at 2:29 PM on February 22, 2011 [7 favorites]

Paying attention to the long term is the best way to have a very short Wall Street career.
posted by oneswellfoop at 2:32 PM on February 22, 2011

Third, public companies must cure the ills stemming from dispersed and disengaged ownership by bolstering boards’ ability to govern like owners.


Dear Activist Hedge Funds: When you think of engaging a strategy firm the next time you start a proxy fight- please think of us.
posted by JPD at 2:36 PM on February 22, 2011

I'm sorry, but when exactly did capitalism socialism, communism, communitarianism, anarchism, fascism or any other damn -ism EVER stand "as a force for good, worthy of the public's trust"?

FTFY.
posted by ZenMasterThis at 3:03 PM on February 22, 2011 [1 favorite]

You want to solve the economic crisis? Here's your answer: people need to go to jail. They need to be taught a lesson, one that sticks with them & everybody like them: don't do that.
posted by scalefree at 3:11 PM on February 22, 2011 [13 favorites]

You cannot be a force for good when you are legally obliged to maximise shareholder profit. A force for occasionally stumbling upon good, maybe, but not a force for good.
posted by Dodecadermaldenticles at 3:18 PM on February 22, 2011 [7 favorites]

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

I really don't care if he's saying this because it'll be good for business; the means justify the ends as far as I am concerned. The fact is that capitalism has created a lot of utility for the human race while in pursuit of gain; the computer you're reading this one was probably developed as a commercial product and sold for profit. Existing patterns of capitalism are not sustainable, and for an arch-capitalist to point this out and urge adaptation bothers me not at all. People have been advocating this more mature perspective for a long time, and if McKinsey's branding makes that more palatable to investors then so be it. If this is what they're marketing, it's an improvement on the 'somebody else's problem' mentality that prevailed a few years ago.
posted by anigbrowl at 3:25 PM on February 22, 2011 [5 favorites]

Thank-you, anigbrowl, for not just reflexively bashing out yet another tiresome, ironic anti-capitalist screed like so many other MeFites do whenever they see the word "capitalism."
posted by ZenMasterThis at 3:34 PM on February 22, 2011 [1 favorite]

ZenMasterThis:
I'm sorry, but when exactly did capitalism socialism, communism, communitarianism, anarchism, fascism or any other damn -ism EVER stand "as a force for good, worthy of the public's trust"?

I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question.

Also, obvious troll is obvious.
posted by public at 3:35 PM on February 22, 2011 [3 favorites]

Also they have terrible elevator manners.

Did one of them fart in your elevator just as they were leaving?
posted by indubitable at 3:45 PM on February 22, 2011 [1 favorite]

legally obliged to maximise shareholder profit.

there is no legal obligation to maximize shareholder profit.
posted by JPD at 3:45 PM on February 22, 2011 [2 favorites]

McKinsey: grifters with graduate degrees.
posted by leotrotsky at 3:53 PM on February 22, 2011

JPD,

Well semantics aside, from a practical standpoint and subject to law and other constraints there most certainly is.
posted by sfts2 at 3:53 PM on February 22, 2011

"For a rough definition of “long term,” think of the time required to invest in and build a profitable new business, which McKinsey research suggests is at least five to seven years"

This is the heart of the problem. Thinking 5-7 years in advance isn't going to prevent capitalism-as-usual from from depleting sensitive resource stocks, wreaking havoc on social and ecological systems, and creating new crisis-inducing bubbles.
posted by narcotizingdysfunction at 3:57 PM on February 22, 2011 [4 favorites]

no there isn't actually. You can argue this however you want. The world is filled with boards that act in manners that run counter to maximizing shareholder value. As long as a board is fulfilling their fiduciary duties and acting in good faith they have no other obligation. Or you can choose to go through the last 100 years of Delaware chancery court cases. The only time a public company is obligated to maximize shareholder value is in a small subset of occasions related to M&A. This isn't arguing semantics. If there was any sort of legal obligation you would see activist hedge funds suing boards all the time to compel them to sell the company.

It goes without saying that a private corporation can do pretty much whatever it wants.
posted by JPD at 4:04 PM on February 22, 2011 [3 favorites]

I'm sorry, but when exactly did capitalism socialism, communism, communitarianism, anarchism, fascism or any other damn -ism EVER stand "as a force for good, worthy of the public's trust"?

FTFY.


Humanitarianism? Feminism? Egalitarianism? Abolitionism? Pacifism? There are more I'm sure, especially if you don't insist on the position actually including the -ism suffix (e.g. civil disobedience, satyagraha). Maybe you don't like all of them, but I'd be surprised if you don't think any one of them ever stood as a force for good worthy of the public's trust.
posted by Marty Marx at 4:09 PM on February 22, 2011 [2 favorites]

ZenMasterThis,

I think socialism is the odd man out there if we take it to mean what it is commonly understood as in the US -- essentially a free market democracy with higher taxes, more subsidies, increased regulation, and a few publicly-owned organizations providing essential services like healthcare, unemployment insurance, welfare etc (i.e social democracy). It's an approach that has contributed to higher standards of living among larger portions of the populations in a number of countries. I know it's not without it's problems, but a bit of regulation and public ownership can certainly act in the interests of the public and be worthy of the public's trust (at least as compared to self-regulation). How can we expect "business leaders" and "executives" to sit down and focus long-term of their own accord when there's still good money to be made by focusing on the short-term? What's needed is clearly-defined rules to the game and penalties for breaking them or going out of bounds. Call me cynical, but if they were serious about the public good I figure they'd be selling this line to legislators. Business has never been a force for good, it's a force for business with good as a by-product.
posted by Hoopo at 4:12 PM on February 22, 2011 [1 favorite]

Well semantics aside, from a practical standpoint and subject to law and other constraints there most certainly is.

Um, no. Under the law the shareholder-elected Board of Directors makes overall policy decisions and provides oversight. Specific board duties are set by the corporate bylaws.

The shareholders can vote their shares for the Directors listed on their proxy ballots, or write-in their own choices; their chosen Directors might propose to maximize profits, grow market share or even install a beer tap in the company cafeteria if the have the shareholder's backing.
posted by ZenMasterThis at 4:16 PM on February 22, 2011

public companies must cure the ills stemming from dispersed and disengaged ownership

That's funny - at the turn of the last century, management theorists were saying that owners who usually typically inherited the businesses they were running were incompetent managers - that's where you get management consultants like McKinsey. That's the era where management was professionalized, and it saw itself as a modern, competent, meritocratic discipline fighting against autocratic hereditary privilege. But when aristocratic or bourgeois owners were also managers of their businesses, they were held to various social standards, however minimal, on questions of morality, propriety, etc., that were understood to transcend mere profit motive, and kept capitalism’s worst excesses from disrupting society.

But that’s only because they had what today we think of as a rigid, authoritarian, exclusionary, hierarchical social order that prescribed the moral behavior and character of all members of society, including the elites. So this proposal is essentially a call to return to a notion of a social code of conduct that we’ve spent the last 40 years dismantling on the grounds that they are a priori oppressive. How is that going to work? This is why social democracy is being dismantled – there’s no set of broadly shared values that we can draw on to limit capitalist excess. The only possibility is to dismantle capitalism completely.
posted by AlsoMike at 4:18 PM on February 22, 2011 [2 favorites]

JPD, then I must not be understanding Dodger v. Ford Motor Company, 1919 (which is always a possibility). Or perhaps I have the less optimistic appraisal of the judgment.
posted by Dodecadermaldenticles at 4:20 PM on February 22, 2011

Maybe you don't like all of them, but I'd be surprised if you don't think any one of them ever stood as a force for good worthy of the public's trust.

@Marty Marx: Very good point; well taken. My post was intended to call-out the other government "-isms" which (along with capitalism) tend to become reactionary over time.
posted by ZenMasterThis at 4:28 PM on February 22, 2011

Or to argue against myself, is it just a ruling applicable to that particular case? I know it has been cited in other cases, but I suppose that doesn't mean my initial contention holds.
posted by Dodecadermaldenticles at 4:28 PM on February 22, 2011

You want to solve the economic crisis? Here's your answer: people need to go to jail.

Perhaps so, but arguments like this would be a lot more convincing if they specifically said which laws were broken and by whom. I feel the primary problem is that we junked a lot of existing legislation around the end of the 1990s and didn't think through the consequences. I wasn't at all surprised to see a financial crisis hit after so many years of a booming real estate market. But bad policy and bad business strategy don't equate to criminal activity in a lot of areas. If we start jailing people simply because they seem to have done well out of the whole financial mess then we've abandoned any meaningful rule of law, which is sort of what has happened in Russia.

Actually, a lot of people have gone to jail, and sometimes for quite lengthy terms. But this isn't very politically satisfying to most people because none of them were big fish like the CEOs of investment banks or heads of regulatory agencies. I understand why that's so frustrating, but unless you can point to which laws were broken then it's not much different from burning people for witchcraft. I could tell you about how the DoJ is actually investing a great deal more money into investigating corporate crime and how certain famous companies are working night and day to produce the libraries of documents they've been ordered to hand over, but only people in the legal industry seem to care about the ins and outs of that.

You cannot be a force for good when you are legally obliged to maximise shareholder profit.

Certainly you could; there are positive as well as negative externalities, and many economists consider it worthwhile to subsidize the former just as they do to tax the latter. But in any case, business managers are not legally obliged to maximize shareholder profits. That idea is based on an old case from 1919 known as Dodge v. Ford Motor Co., but it hasn't been cited in support of a decision for ~30 years and even at the time it wasn't the clear-cut prescription people suggest. The fiduciary duty to put the shareholder's interests first is tempered by what's called the 'business judgment rule,' which boils down to the idea that while you want the company to be profitable, you also want it to be around in the future instead of going bust immediately after a dividend payment.

Thinking 5-7 years in advance isn't going to prevent capitalism-as-usual from from depleting sensitive resource stocks, wreaking havoc on social and ecological systems, and creating new crisis-inducing bubbles.

Those are human problems. Capitalism did not suddenly disrupt some ancient order of stability. All of these things predated capitalist theory and have continued to exist even where that theory is rejected. Maoist China, for example, repeatedly made catastrophic bad economic decisions of exactly the kind you describe - from melting down cooking pots in a misguided attempt to make cheap steel, to deliberately killing off much of the domestic bird population in the belief that it would improve grain yields.

Capitalism does not magically insulate us from making stupid decisions, any more than any other political system does. Nor does it promote the idea of making stupid decisions. All it does is provide an objective system (market pricing) for matching supply and demand. Knowing this has allowed the creation of mechanisms for preserving the environment as well as exploiting it, such as selling development rights to environmental organizations which can then purchase land and leave it untouched. Reflexive critiques of capitalism tend to assign it the bill for everything bad without giving credit for anything it has ever achieved, and depend on the idea of some alternative system with a crystal ball whose practitioners never, ever make mistakes and are able to plan the economy flawlessly. This just doesn't exist, folks. Within 10 years of the Russian revolution Trotsky was writing letters to Moscow explaining that the only way the Soviet state was going to advance the condition of its people was if they went back to using markets to set prices, because setting them by decree was just not working. Good intentions are no guarantee of good results, and across the scale of a large economy they're likely to wreak even more havoc than markets.

One example little known to the general public is trading in onion futures. In 1958 a law was passed forbidding onions to be traded on forward commodity markets, because of what was happening in the Chicago futures market. It remains in effect, so for over 50 years now onions have been excluded from the normal markets. But even though the onion market is beyond the grasp of capitalist speculators, prices for onions continue to be volatile - many say, more than other agricultural commodities. Why is this?
posted by anigbrowl at 4:32 PM on February 22, 2011 [4 favorites]

Actually, a lot of people have gone to jail, and sometimes for quite lengthy terms.

just curious, who? (other than madoff&co.)
posted by ennui.bz at 4:42 PM on February 22, 2011

Smaller-scale financial fraudsters, mainly. Ongoing updates here. Unsurprisingly, quite a few of them involve mortgage-related scams. You might also find this interesting (registration required if you want the full details).

Of course, these only account for a small number of the potential cases. People will absolutely have to go on holding the administration's feet to the fire. But rebuilding a dismantled compliance regime doesn't happen overnight; and with the really big complex cases, you have the twin problems of building sufficient evidence, and trying not to undermine economic confidence at the same time. I think you'll see more and more prosecutions through 2011 and 2012 for this reason. Not very emotionally satisfying, I admit, but I'm not sure there would have been any benefit to having them far earlier, in that trials don't create jobs. Especially not ones that fall apart midway through.
posted by anigbrowl at 5:12 PM on February 22, 2011

All it does is provide an objective system (market pricing) for matching supply and demand.

Do you truly believe the market as it exists in reality (not in a textbook) is genuinely objective? I would argue that the market is constantly manipulated (both by private and public spheres) enough to make its objectivity biased at times. I tend to agree that facilitating such an elastic relationship between supply and demand is a wonderful function of capitalism...but to argue that it is somehow objective outside of the context of theory is a bit naive.

Capitalism does not magically insulate us from making stupid decisions...Nor does it promote the idea of making stupid decisions

I would say it promotes the idea of making stupid decisions with the same regularity that it does promote the idea of making good decisions. It does both often. The profit motive can, as you pointed out, be used for good, although often it takes more creative thinking to use this motive for good than stupid (think carbon credits). For stupid, please see the entirety of the US Healthcare system as it now exists.

Knowing this has allowed the creation of mechanisms for preserving the environment as well as exploiting it, such as selling development rights to environmental organizations which can then purchase land and leave it untouched

Its more often the case that only corporate buyers pockets deep enough to pay a fair price for undeveloped land than an environmental organization, and there is a fairly stereotyped history of corporations mismanaging said land at the expense of biodiversity - an outcome whose cost, unfortunately cannot be properly valuated in capital markets - and whose consequences with regard to human well being are not yet fully known. Keep in mind it was government regulation, not private markets, that created the US National Park system and the reason why the US has more national parks than any other country.

Reflexive critiques of capitalism tend to assign it the bill for everything bad without giving credit for anything it has ever achieved, and depend on the idea of some alternative system with a crystal ball whose practitioners never, ever make mistakes and are able to plan the economy flawlessly

Reflexive defenses of capitalism tend to assign it the bill of a crystal ball whose practitioners never, ever make mistakes and are able to plan the economy flawlessly.

But even though the onion market is beyond the grasp of capitalist speculators, prices for onions continue to be volatile - many say, more than other agricultural commodities.

Well clearly this is proof positive of the innocuous nature of capital markets.
posted by jnnla at 5:20 PM on February 22, 2011 [1 favorite]

Reflexive defenses of capitalism tend to assign it the bill of a crystal ball whose practitioners never, ever make mistakes and are able to plan the economy flawlessly.

Guh-hunh? You lost me there, at least. Reflexive defenses of capitalism tend to paste labels with "Misunderstood genius" over displays of "terrible fucking mistakes." Because the whole point is that the blind justice of the market cannot truly err; therefore that which seems like an error must have hidden utility.

But the defenders of capitalism don't suggest that its practitioners never makes mistakes --- for every buyer there is a seller --- or that capitalism "plans" anything, much is the way that a chemical reaction isn't "planned" it simply occurs.
posted by Diablevert at 5:37 PM on February 22, 2011

Unmonitored, unregulated, and generally left to its own devices, capitalism tends to revert to corporatism, risky speculative excess, and wealth disparity. At this juncture in human history we have been given clear evidence that this kind of hypercapitalism is among the most culturally and socially destructive forces the world has ever known, capable of wrecking cultural traditions, regional economies, indigenous peoples, working families, and the Earth's natural environments. If we don't as a species find a new path out of the current path of scorched earth capitalism, we are well and truly doomed.
posted by The Emperor of Ice Cream at 6:30 PM on February 22, 2011 [4 favorites]

JPD, then I must not be understanding Dodger v. Ford Motor Company, 1919 (which is always a possibility). Or perhaps I have the less optimistic appraisal of the judgment.

uh yeah - Read the wiki entry:

or this paper citied in the wiki article

Here I'll quote the abstract for you:

Among non-experts, conventional wisdom holds that corporate law requires boards of directors to maximize shareholder wealth. This common but mistaken belief is almost invariably supported by reference to the Michigan Supreme Court's 1919 opinion in Dodge v. Ford Motor Co.

This Essay argues that Dodge v. Ford is bad law, at least when cited for the proposition that maximizing shareholder wealth is the proper corporate purpose. As a positive matter, U.S. corporate law does not and never has imposed a legal obligation on directors to maximize shareholder wealth....Courts accordingly treat Dodge v. Ford as a dead letter. (In the past three decades the Delaware courts have cited the case only once, and then on controlling shareholders' duties to minority shareholders).
posted by JPD at 6:43 PM on February 22, 2011

Perhaps so, but arguments like this would be a lot more convincing if they specifically said which laws were broken and by whom.

Start with the robosigners that committed perjury (thousands of counts per day/per person in some cases) and the companies that hired them to commit perjury. I bet a creative AUSA could even find a RICO case somewhere in there. Then we can move on to the mortgage lenders that created documents out of whole cloth, the servicers that are still doing the same, and the banks that are repossessing property that doesn't belong to them. While doing all of that we can also hit up the iBanks that were offering prospectuses that they were short selling on the other side. Then we can go after the naked shorters, the inside traders, the banks that were bribing politicians into making interest rate swaps, the people hiding their money in Swiss bank accounts, material misrepresentations of financials...

That's off the top of my head. If I go through my bookmarks I bet there's more!
posted by ryoshu at 6:43 PM on February 22, 2011 [3 favorites]

I expect you can argue semantics all night on this. Google Fiduciary duty. In general, and in practice, Boards are motivated to operate to maximize profit with a fair degree of caveats and legal constraints. The foundation of this motivation the fiduciary duty - as quoted below "the highest standard of care at equity or law" If you want to argue that the fiduciary duty is to exercise the will of the shareholders, fine. I'd suggest the vast majority of shareholders want to maximize the value of their shares.

I hate quoting Wikipedia, but this is so freaking obvious it doesn't really deserve more.

"A fiduciary duty[2] is the highest standard of care at either equity or law. A fiduciary (abbreviation fid) is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust.

In English common law the fiduciary relation is arguably the most important concept within the portion of the legal system known as equity. In the United Kingdom, the Judicature Acts merged the courts of equity (historically based in England's Court of Chancery) with the courts of common law, and as a result the concept of fiduciary duty also became usable in common law courts.

When a fiduciary duty is imposed, equity requires a stricter standard of behavior than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where his fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from his fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd"[3] and that "[t]he distinguishing or overriding duty of a fiduciary is the obligation of undivided loyalty"


It would be hard to argue that having a fiduciary duty is 'no legal obligation.' The 'beer tap' argument is patently false, because a Board Member is under no obligation to exercise his fiduciary duty as any individual sees fit. He is free to exercise his own judgement, and there are legal remedies for aggrieved shareholders. I might argue that ubiquitous beer taps on corporate property led to either happier, more productive employees, or more stupified, easily led employees, and thus more long term shareholder value. The judge/jury would decide on the merits in a civil suit that argued that these beer taps represented a breach of fiduciary duty.
posted by sfts2 at 7:44 PM on February 22, 2011

anigbrowel must be troll, how else does he post here regularly and yet seem to miss this recent ftp whose linked article recounts, in detail, the crimes that were committed and the lack of political will to enforce them?

Fraud would be where I would start, I imagine insider trading wouldn't be too difficult to prove, nor eventually racketeering.
posted by Shit Parade at 7:45 PM on February 22, 2011

Do you truly believe the market as it exists in reality (not in a textbook) is genuinely objective?

In terms of single transactions, no. In the aggregate, yes. It is not optimized for any particular result, and is only as good as its participants' collective ability to think ahead. For years I thought that planned economies were almost bound to be superior to such a chaotic approach, and yet industrial planning has a terribly poor record.

Don't get the idea that I'm opposed to regulation, though, or think that only private capital's preferences matter. I'm basically a Keynesian and think government has a variety of important roles to play, and probably does a better job by rationing healthcare and so on than the market can, because there are limits on the market's ability to price things accurately. What I'm objecting to is the idea that capitalism can't do anything right, when it's abundantly clear that it does a lot of things better than central planning does. So when I see the CEO of McKinsey saying that business needs to take a more holistic approach to capital investment and so on I'm pleased, because it suggests more resources will be devoted to looking at the business value of sustainability, specifically finding better ways to measure it.

Start with the robosigners that committed perjury (thousands of counts per day/per person in some cases) and the companies that hired them to commit perjury.

All 50 state attorneys-general, as well as federal regulators, have been on top of this for the last several months. I can't say exactly when the Moment of Truth is going to be, but I suggest you don't invest any money in the banking sector between now and next April.

Then we can go after the naked shorters, the inside traders, the banks that were bribing politicians into making interest rate swaps, the people hiding their money in Swiss bank accounts, material misrepresentations of financials...

In brief (because I see where you're coming from, and encourage you to keep learning more about this): naked shorting is not illegal, and there's no special reason why it should be as long as people don't default on their trades; inside traders tend to get prosecuted pretty aggressively already, Martha Stewart being a good example - although there's an argument that insider trading is not really all that bad and perhaps ought not to be illegal; I'm curious to know which banks were 'bribing politicians into making interest rate swaps,' though if you mean what I think you mean then state AGs would have a field day; the IRS has gone after a lot of people for hiding assets abroad; and likewise the SEC continues to be involved in cases about material misrepresentation of financials.

anigbrowel must be troll, how else does he post here regularly and yet seem to miss this recent ftp whose linked article recounts, in detail, the crimes that were committed and the lack of political will to enforce them?

I saw it, but I was at a legal seminar and had too much stuff to read to get stuck into a MetaFilter thread. I was not very impressed with it: Matt Taibbi is not a lawyer and while he likes to work up his readers' righteous anger, he skips over the tedious business of explaining legal issues in detail, because that would be boring. This is why he often leaves out crucial facts about the things he's reporting on, and lets the readers mentally fill in the blanks rather than compromise the emotional impact of the story with pernickety details. Of course, many people fill in the blanks incorrectly, but that's OK because he's not getting paid for accuracy.

Obviously, not agreeing with you makes me a Bad Person.
posted by anigbrowl at 9:41 PM on February 22, 2011

no, but your condescension and general disdain for anyone who isn't a lawyer giving an opinion on law or matters of justice actually do make you a "Bad Person" (capitals and all).

I wish I could block people.
posted by Shit Parade at 9:53 PM on February 22, 2011

I'm not a lawyer. You don't need a law degree (or any other kind) to find journalistic manipulation and rhetorical fallacies objectionable, or to point them out. I formed this opinion about Matt Taibbi because I got tired of reading stories with his byline on them and looking on the internet to learn more about the subject, only to find he had omitted all kinds of significant details which didn't seem to fit in with the story he was trying to tell. What good are his articles if I can't refer to them in conversation and feel sure of their accuracy?
posted by anigbrowl at 10:31 PM on February 22, 2011

If you want to argue that the fiduciary duty is to exercise the will of the shareholders, fine. I'd suggest the vast majority of shareholders want to maximize the value of their shares.

No fiduciary duty does not mean you exercise the will of the shareholders. The mechanism that ensures the board exercises the will of the shareholders is the fact that they are elected. Really. Go back and read all of the stuff you quoted from Wiki and tell me where it says "will of the shareholders". If fiduciary duty implied what you seem to think it implies proxy fights would work quite differently. Additionally you would be able to sue a board to compel them to do something you as a shareholder think is in your interest.

The fiduciary himself can define what the interests are of the equity holders he has been elected by. If the equity holders disagree with that they can unseat him, but they cannot compel him to act differently as long as he has acting in good faith and not in his own self-interest.
posted by JPD at 4:30 AM on February 23, 2011

What I'm objecting to is the idea that capitalism can't do anything right, when it's abundantly clear that it does a lot of things better than central planning does. So when I see the CEO of McKinsey saying that business needs to take a more holistic approach to capital investment and so on I'm pleased, because it suggests more resources will be devoted to looking at the business value of sustainability, specifically finding better ways to measure it.

Agreed on all points.

Most of my knee-jerk reactions to "Capitalism," and I suspect a lot of the reaction of the MeFi community in general, is actually a reaction to the recent trend of deregulated / Randian / Chicago School Capitalism that has been a real headache lately for a lot of people - not capitalism per se. It's indeed good news to see a CEO espousing a Keynesian approach. I think if we move away from the entrenched Hayekian philosophy that has dominated the narrative of capitalism since the Reagan / Thatcher era we might actually validate the statement that capitalism is the tide that raises all boats. Here's hoping.
posted by jnnla at 10:52 AM on February 23, 2011

Obviously, not agreeing with you makes me a Bad Person.


Yes, to many of the ignorant here, it does. Thanks for trying defend some sanity.

So many here display an icky lack of gratitude or understanding of the incredible amount of good that capitalism has done for the world, notwithstanding its problems.
posted by shivohum at 11:28 AM on February 23, 2011

How soon we forget. Just a few days ago on the Blue: Everything's fucked up, and nobody goes to jail. You can end the piece right there. Until somebody at the top of the food chain gets punished with imprisonment, the cycle will continue.
posted by scalefree at 11:30 AM on February 23, 2011