(From Robin's weekly e-mail newsletter, "Patriot Neighbors". Subscribe for free by e-mailing her at robinitzler@aol.com)
Americans who buy stocks based on a company’s customer
profile outlined in its legal and marketing material, only to see equity
destroyed by foolish C-suite decisions, are applauding Brian Craig.
American First Legal filed a lawsuit on
behalf of Craig on August 8 in U.S. district court in Fort Meyers, Florida,
accusing Target CEO Brian Cornell, and Target’s board of directors of betraying
their customers and shareholders with misleading representations about its
environmental, social and governance (ESG) and diversity, equity, and inclusion
(DEI) mandates. Did Target purposely ignore its known customer base to offer
trans pride and other related merchandise (some geared for children) that would
only appeal to a tiny market segment? The lawsuit alleges
that decisions made by Target’s senior executives caused shareholders to lose
billions of dollars.
Gene Hamilton, vice president and
general counsel of American First Legal:
“Federal law requires publicly traded corporations to provide certain
information to shareholders in their proxy statements that allow those
shareholders to make informed decisions.
“As alleged in our complaint, Target failed to execute its duty to its
shareholders by making statements that led them to believe that political and
social risks were being assessed — when in reality, the only thing Target's
board and management cared about was how effectively they fulfilled the desires
of various metrics advanced by left-wing 'stakeholders.'"
An open letter that appears to be signed by
hundreds of Amazon employees has called upon the company to cease
business in pro-life states among other demands. Shared
by Libs of TikTok, the letter appeared to call upon the tech giant to
take “immediate and decisive action against the threat to basic human
rights with the overturning of Roe v. Wade.”
“As part of Amazon’s wide-reaching efforts toward a more inclusive
and diverse workforce, we believe that Amazon cannot let this recent
decision go unanswered,” the shared letter said. “We ask Amazon, the
world’s best employer, to actively defend against this assault on our
liberty.”
The letter then went on to propose a list of (often hilarious) ideas
for how the company can better promote the cause of abortion, and though
signatories admit that “some ideas bear a larger business risk than
others,” they ultimately believed that these “unprecedented times”
require the company to “think big to change the world.”................To Read More.....
My Take - One of the comments was:
“Amazon Employees Allegedly Demand Business Cease in Pro-Life States and Allow ‘Time to Grieve’” Grieve for what? They obviously don’t grieve for dead babies, so they can go...... themselves - on their own time.
Another said:
"Amazon would save itself much heartache and frustration if they would
fire all malcontents that signed onto this letter... any serious HR
person would know that the people who signed this letter are the least
productive and the most trouble."
This is a Stakeholders Versus Stockholders issue, and Amazon needs to follow get it's head on right and realize that a good firing gets everyone else's head straight, and in this case, they need a lot of firings. It's true Amazon is owned by a left wing loon billionaire, but he's finding himself on the dirty end of the stick with his employees and their pay, conditions and benefits, and he's going to find out, if he already doesn't realize it, once you give in to them, there will be no end to the demands of these leftist misfits.
Why? Because I worry such terms imply a Trojan Horse for statism. And
that’s definitely the case with so-called “stakeholder capitalism.”
As you can see, my core argument is that stakeholder capitalism is just another way of saying cronyism. And if I was being lazy, I would simply point out that Elizabeth Warren is a big proponent of the idea. That, by itself, should convince every thinking person that it’s a bad idea.
But I’m not going to be lazy. I’m going to cite some experts to show why stakeholder capitalism is bad news.
But first, I mentioned Milton Friedman’s famous quote in the above video clip.
Here’s the full quote, and notice that he explicitly says companies should follow rules – both legal and ethical – as they pursue profits.
Friedman was advocating what is sometimes referred to as “shareholder
capitalism,” which is the notion that a company should strive to earn honest profits for its owners.
So what, then is stakeholder capitalism? In a column for the Wall Street Journal, Professor Alexander William Salter warns us that it is an invitation for intervention.
…beneath the lofty rhetoric, stakeholder capitalism is
mostly a front for irresponsible corporatism. …Stakeholder capitalism is
used as a way to obfuscate what counts as success in business. By
focusing less on profits and more on vague social values, “enlightened”
executives will find it easier
to avoid accountability even as they squander business resources.
While
trying to make business about “social justice” is always concerning,
the contemporary conjunction of stakeholder theory and woke capitalism
makes for an especially dangerous and accountability-thwarting
combination. …profits are an elegant and parsimonious way of promoting
efficiency within a business as well as society at large. Stakeholder
capitalism ruptures this process. When other goals compete with the
mandate to maximize returns, the feedback loop created by profits gets
weaker.
Writing for the Washington Post, George Will has a similarly scathing assessment.
…everyone who values economic dynamism, and the freedom
that enables this, should recoil from the toxic noun “stakeholder.”
…Stakeholder capitalism violates fiduciary laws that require those
entrusted with investors’ money to employ it “solely in the interest of” and “for the exclusive purpose
of providing benefits to” the investors. …
In a dynamic society,
resources are efficiently disposed by corporate managements whose
primary duty, which other corporate activities do not compromise, is to
maximize shareholder value… Self-proclaimed stakeholders, parasitic off
others’ labor and accumulation, assert that everything is their business.
In a column for the Wall Street Journal,
Phil Gramm and Mike Solon point out that today’s stakeholder capitalism
is very similar to feudalism, which was a pre-industrial form of
socialism.
…because of the misery Marxism has imposed, the world has
a living memory and therefore some natural immunity to a system in
which government takes the commanding heights of the economy. No such
immunity exists to the older and therefore more dangerous socialism of
the pre-Enlightenment world.
In
the communal world of the Dark Ages, the worker owed fealty to crown,
church, guild and village. Those “stakeholders” extracted a share of the
product of the sweat of the worker’s brow and the fruits of his thrift.
…The 18th-century Enlightenment liberated…people to…own the fruits of
their own labor and thrift. …
These Enlightenment ideas spawned the
Industrial Revolution and gave birth to the modern world… Remarkably,
amid the recorded successes of capitalism and failures of socialism
rooted in Marxism, pre-enlightenment socialism is re-emerging in the
name of stakeholder capitalism. …the biggest losers in stakeholder
capitalism are workers, whose wages will be cannibalized.
And the pursuit of profit is what generates efficiency, which is economic jargon for higher living standards. And that’s good for rich people and poor people.
The bottom line is that I’m not surprised when politicians support
so-called stakeholder capitalism. After all, the crowd in Washington
likes to have more power.
Based on what I said at the end of the above video, I’m disappointed – but not surprised – when big businesses (such as the Business Roundtable or Larry Fink of Blackrock) embrace the idea. After all, “creative destruction” is not so appealing when you’re already as the top.
