The case for shareholder-based capitalism
The purpose of this paper is to examine whether these criticisms of the capitalist system are valid, and whether the proposed reforms are desirable.
The paper looks first at the historical background, showing how the doctrine of shareholder primacy came to the fore in the US and the UK in the 1980s and 1990s, and how that doctrine has come to be challenged by supporters of stakeholder capitalism. A debate is now in progress, on both sides of the Atlantic, pitting defenders of shareholder primacy against a range of pro-stakeholder advocates.
The paper discusses three of the central issues in this debate: what the purpose of companies should be; short-termism; and inequality.