Episode 362: Shareholders and Stakeholders

Words & Numbers · Jan 17, 2024 · 32m

For whom does the corporation exist: investors, workers, customers, the community? Economists tend to answer, "investors." That's not to say that workers, customers, and the community aren't important, but rather that the corporation exists to further the interests of the investors. Where the interests of the workers, customers, and community coincide with those of investors, the corporation also cares about those groups. But where their interests conflict with those of investors, the interests of investors take precedence. That's the principle of "shareholder value." The principle of…