Over the course of the 20th century, the business enterprise in America, which began with the founder/owner and management being synonymous, transitioned to professional managers overseeing the operations of the enterprise (managerial capitalism) in the 1940's and then beginning in the 1980's (to what we now have) where the executive elite leverage corporate assets in support of the goal of maximizing return to shareholders. This transition in corporate management correlates with the transformation from industrial capitalism to financial capitalism--from making things to making profit.
Within the former system the business enterprise earns a profit as a by-product of producing goods and services, while within the latter the enterprise seeks to make profit--anyway it can--for the benefit of shareholders. With increasing shareholder value the focus of the corporate executive no longer serves the business of the firm as much as they serve the (short-term) interests of the shareholders. In a 2007 presentation at the Conference on Entrepreneurship and Capitalism Mark Mizruchi claimed this change represents " a resurgence of stockholders and investors that calls forth a new era of shareholder power." With the greatest portion of an executive's compensation coming in the form of stock, options and other incentives, serving shareholders translates into serving oneself. Accordingly, the corporation's value is strictly instrumental to the selfish interests of the executive elite. We now have self-interest maximizing corporate executives of our largest corporations with considerable power and influence acting as society's overlords .
It's Predictable
All of this was quite predictable considering the precept of our system of economics . That is, financial capitalism is a logical development from the notion that material self-interest maximization among independent individuals is the way to greater societal wealth. The material self-interest dynamic leads to a self-reinforcing cycle whereby societal culture mediates the development of the necessary traits by favoring those who exhibit the behavior reflective of these traits. More to the point, the words individualistic, competitive, materialistic, and self-interested are quite descriptive of what Western society favors. Thus not surprisingly most Americans believe themselves to be independent individuals who are unashamedly competitive with a desire to amass great personal wealth. This perspective is quite evident among most, especially top corporate executives.
If the aim is 'to maximize your material self-interest', then why wouldn't those in authority--those with the greater influence--leverage the system and seek to perpetuate it to their advantage? Left unchecked--yes, unregulated--self-interested behavior becomes unencumbered behavior serving only the wealthy. A system in support of self-interest will unavoidably become self-serving. With the inherent interdependence of people in society such behavior is ultimately self-destructive behavior. Hence by cooperating with this system, in the end we all lose.
Everyone, Not Select Ones
Some might argue that the weak and impoverished among us shouldn't be guaranteed benefits from the government; that the weak link in the chain is weakening the strength of society. A policy of entitlement is a drain on society and it must be eliminated.
But there will always be a weakest link! What are we to do, follow the misguided practices of business management and periodically cast out the bottom 10% from society like they rid their organizations of the past year's low performers?
As Gregory Bateson asserted evolution follows the path of viability. The implication being that the viability of a society depends on the viability of all its citizens, not just a select few. If this viability is not sustained then the prospect for society's evolution, its continued progress, is unlikely.
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