The Remedy

E:  I agree with much here and in the full article., particularly this from the latter:
“The attraction of the language of modern micro to our business and investment class is consequently its ideologically convenient cover for wealth accumulation and protection rather than for its explanatory power. Real business, especially the corporation, represents an impossible challenge to economic theory.”

I would add that perhaps this is understated: “Economics cannot theorize correctly about the firm until it absorbs the reality of the corporate form that dominates business.” It seems to me that now the corporation is the dominant institution in all sectors, including governance. In my view economics orthodoxy is the emperor’s clothes, the “ideologically convenient cover” for the power of capital that is presently expressed in the global corporation.

I see these as issues that command further research if economics is to be taken seriously, all characteristics of the power of corporate capital, which I call the “elephant in the room” in discussions of diverse subjects in current affairs: the corporation is the dominant institution of our time, is inherently irresponsible, is inherently unstable, is dominated by short-term vision, fosters income and wealth inequality, seeks to turn everything into commodities in service to profit, and is undemocratic.

And about “shareholder primacy”, an ideology addressed and criticized in the article, Milton Friedman’s (and others’) advocacy of this ideology completely disregards the long history of the corporation as a government-chartered institution — a creature of the state — which charters often explicitly stated the public responsibilities that went with the charter. As the author discusses:

“[The corporation] is unowned. In this sense it is akin to a nation state, the church, most universities, and, at least here in the US, most towns. It would be odd to describe any of those bodies as being owned by the people who animate them. Yet we routinely talk of firms being owned by stockholders. It is this misattribution of ownership that leads most economists astray in their theorizing.”

Agreed and worth repeating again and again until we can construct a new orthodoxy in the field of economics. Radford’s is an informative article that I recommend to all.

Me:   “[The corporation] is unowned. In this sense it is akin to a nation state, the church, most universities, and, at least here in the US, most towns. It would be odd to describe any of those bodies as being owned by the people who animate them. Yet we routinely talk of firms being owned by stockholders. It is this misattribution of ownership that leads most economists astray in their theorizing.”

Indeed. And the best way to remedy this mis-attribution is to vouchsafe and directly GIVE/GIFT the most potent factor in a monetary economy, i.e. money, “into the many hands of the individual” ….at a point in time in the economic/productive process (retail sale) where it will have maximum problem resolving and beneficial effect.

 

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