Future generations will wonder in disbelief how an economist could promote the idea that the “social responsibility of business is to increase profits”.
That’s like a doctor advertising cigarettes.
Tomorrow’s economists will describe shareholder primacy as the deadliest of ideas. Their students taught that at the start of the 21st century, despite all evidence that the devil’s maxim was destroying the planet, generations continued to be taught that not only was it right to maximize profits, it was their duty.
How could that be? Why would an economist promote value destruction and the decapitalisation.
Behind the fool’s alchemy of turning everything of value into money was an industry pushing an obscenely successful twelve step marketing campaign. A plan that put the survival and growth of the finance industry before all else. The last to realise that we could never buy back what we had destroyed forever in the pursuit of profit.
Through reverse engineering, we can begin to understand the design and architecture of the deadliest marketing campaign in history that was hidden in plain sight.
Get Them Young
Teach business students that the goal of business is to maximise shareholder value.
Marketing Shareholder Primacy : 1 - Get them Young
Stay On Message
Mould public opinion by repeating the three core messages of shareholder value consistently throughout the media and across all platforms:
shareholders are owners | directors are agents | profits are good for society
These supporting truths/lies reinforce the central soundbite of shareholder primacy - maximize shareholder value.
Marketing Shareholder Primacy: 2 - Stay on Message
The Economist Promotes Shareholder Primacy: It Must Be Spring in the Northern Hemisphere
Win Their Hearts
Associate shareholder value with broader societal values - democracy, property rights and accountability.
Marketing Shareholder Primacy: 3 - Win Their Hearts
Do Company Directors Know Right from Wrong
Play Mind Games
Use psychological techniques to promote the goal of maximising shareholder value and suppress discussion of alternatives.
Marketing Shareholder Primacy 4: Play Mind Games
Shareholder Primacy: Paradigm or Groupthink
Lose Their Minds
Activate shareholder friendly scholarship. Exploit blind spots in academic literature and ethics to advantage.
Do Scholars Have a Duty to Maximise Shareholder Value? *
Three Contradictions in Australian Director Education
An Open Letter to Corporate Governance Scholars
Exploit a Little Truth
Imply that investors bankroll capitalism when nothing could stretch the grain of truth further.
Argue that because shareholders own something that means they own everything.
Duty Before Virtue : The Real Ethical Dilemma Facing Corporate Governance
How Shareholder Value Tied the Invisible Hand : And Why Unilever Wants it Back
Make it Personal
Create impression that shareholders are human to invoke sympathy when the overwhelming number are corporations that buy and sell shares as a way to make profits.
“mum and dad investor” is code for very large corporation.
What do turtles and shareholders have in common?
Change the Law
Change the law to give the investment industry a competitive advantage over other industry segments.
Re-frame the Problem
Engage in rhetorical re-framing. Position shareholder value as the solution to the problem caused by profit maximisation. The long-term value discourse is one example of reframing the problem.
Likewise, Michael’s Porter’s idea of shared value smells a lot like those cigarettes that were advertised as “light”, or “mild” to give the impression of a healthier alternative.
Social Purpose without Social Responsibility : Rethinking the Corporation
Divide and Conquer
Pit managers and directors against each other. A central device in profit maximisation is to keep the board of directors and management separate.
Reframing the Relationship Between the Board and Management
Open New Markets
Encourage investment industry serving "good governance" in new and emerging markets throughout the world.
Use Fear as a Last Resort
Create fear that if companies act in anyone but the shareholders' best interest, capitalism will collapse.
Sadly, smoking and maximizing profits have more in common than just an effective marketing campaign. Shareholder primacy is the cause of the corporate equivalents of cancer and mental illness- decapitalisation and cotard’s syndrome. But, unlike the doctor who promoted smoking in the 1940’s, the economists not only promoted the idea that the social purpose of the corporation was to increase profits, they manufactured it and groomed generations of business leaders to execute the plan.
But why would scholars do any of this?
With a shake of the head “what else did they have to teach?”