50 Years of Short-Termism
September 11, 2020
By Matt Hughes
What “social responsibility” really means.
The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.
The Social Responsibility of Business
Fifty years ago, Milton Friedman declared in the New York Times Magazine that “the social responsibility of business is to increase its profits.” And for 50 years, we’ve witnessed the destructive power of that thinking, as Roosevelt President & CEO Felicia Wong captured in The Emerging Worldview: How New Progressivism Is Moving Beyond Neoliberalism. Today, Wong, Roosevelt Chief Economist Joseph Stiglitz, and 20 more experts reflect on Friedman’s era-defining manifesto in a NYT Magazine and DealBook discussion. “Friedman ends with a warning: The doctrine of ‘social responsibility’ would invade ‘every human activity.’ But he got it backward,” Wong writes. “Today it’s the mind-set of the shareholder—short-termism, ‘greed is good’—that invades all.”
As Stiglitz writes, “in a democracy where money matters—clearly true in this country—it is in the private interest of corporations to do what they can to make sure that the rules of the game serve their interests and not the interests of the public at large. And they often succeed.” For more from Stiglitz, watch his Bloomberg Markets interview on small business policy needs.
A Legacy of Exclusion
In an interview with CNBC’s Jon Fortt and Andrew Ross Sorkin, Roosevelt Fellow Mehrsa Baradaran explains the structural reasons for widening racial wealth gaps. “This is not a problem created by Black Americans. This is a problem created by exclusionary zoning, by racial covenants, by redlining, by people wanting to maintain for years and years and years their racially ‘homogenous’ neighborhoods, which meant, essentially, all white. And this is about property values, and this is about schools and exclusion. That is the legacy that we are dealing with right now.” Watch now.
“Instead of slashing aid in the midst of an economic crisis, Congress should maintain unemployment support where it has been, as well as making race-conscious fixes to the distribution of further stimulus checks by the IRS,” Roosevelt Fellow Anne Price and Universal Income Project Co-Director Jim Pugh write in a TIME op-ed. “Open up the process to ITIN filers, send recurring checks instead of band-aid stop gaps, coordinate with other social service agencies to identify people without prior tax returns, and invest in outreach efforts and infrastructure needed to ensure Black and Latinx people know about this support and how they can receive it.” Read on.
What We’re Reading
Faces of Power: 80% Are White, Even as US Becomes More Diverse – New York Times
Buyer Beware: Student Debt – frank news