Pub Date : 2021-06-17DOI: 10.1093/oso/9780197578957.003.0010
John N. Drobak
Chapter 10 shows the commonality between other economic propositions and the two economic beliefs that are at the heart of this book, that U.S. markets are competitive and that the primary responsibility of corporations is to make money for its shareholders. Many people believe statements just because economists make them. Some people take these statements to be absolute truths, even though they are only opinions drawn from economic narratives disputed by many economists. Yet, despite this rejection, policymakers, members of the media, and laypeople still believe that they are true. John Quiggin and other economists refer to these views as “zombie economics” because they “still walk among us.” The chapter considers three of these: trickle-down tax policy, austerity, and privatization. No serious economist supports trickle-down tax policy, while the benefits of the other two propositions are disputed by a good number of economists. One of the lessons of this book is the need to question economic propositions put forth by policymakers as the absolute truth.
{"title":"Postscript","authors":"John N. Drobak","doi":"10.1093/oso/9780197578957.003.0010","DOIUrl":"https://doi.org/10.1093/oso/9780197578957.003.0010","url":null,"abstract":"Chapter 10 shows the commonality between other economic propositions and the two economic beliefs that are at the heart of this book, that U.S. markets are competitive and that the primary responsibility of corporations is to make money for its shareholders. Many people believe statements just because economists make them. Some people take these statements to be absolute truths, even though they are only opinions drawn from economic narratives disputed by many economists. Yet, despite this rejection, policymakers, members of the media, and laypeople still believe that they are true. John Quiggin and other economists refer to these views as “zombie economics” because they “still walk among us.” The chapter considers three of these: trickle-down tax policy, austerity, and privatization. No serious economist supports trickle-down tax policy, while the benefits of the other two propositions are disputed by a good number of economists. One of the lessons of this book is the need to question economic propositions put forth by policymakers as the absolute truth.","PeriodicalId":325368,"journal":{"name":"Rethinking Market Regulation","volume":"30 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130572173","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-06-17DOI: 10.1093/oso/9780197578957.003.0005
John N. Drobak
Chapter 5 echoes the growing sentiment that corporations need to take into account other interests besides that of their shareholders. It traces the origins of the idea that corporations exist solely to increase the wealth of their shareholders and explains how this belief in shareholder primacy came to be accepted as a truism by many scholars, judges, and commentators. When Milton Friedman originally popularized this idea in 1962, he wrote that corporations should serve shareholder interest “within the rules of the game.” These days the rules of the game are influenced tremendously by business lobbying. The chapter explains how the political influence of labor waned and was replaced by business influence in the 1970s. Since that time, Congress has done very little to protect labor because business interests have become extremely powerful lobbyists and substantial donors to political campaigns.
{"title":"Corporate Stakeholders","authors":"John N. Drobak","doi":"10.1093/oso/9780197578957.003.0005","DOIUrl":"https://doi.org/10.1093/oso/9780197578957.003.0005","url":null,"abstract":"Chapter 5 echoes the growing sentiment that corporations need to take into account other interests besides that of their shareholders. It traces the origins of the idea that corporations exist solely to increase the wealth of their shareholders and explains how this belief in shareholder primacy came to be accepted as a truism by many scholars, judges, and commentators. When Milton Friedman originally popularized this idea in 1962, he wrote that corporations should serve shareholder interest “within the rules of the game.” These days the rules of the game are influenced tremendously by business lobbying. The chapter explains how the political influence of labor waned and was replaced by business influence in the 1970s. Since that time, Congress has done very little to protect labor because business interests have become extremely powerful lobbyists and substantial donors to political campaigns.","PeriodicalId":325368,"journal":{"name":"Rethinking Market Regulation","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128498211","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-06-17DOI: 10.1093/oso/9780197578957.003.0009
John N. Drobak
Chapter 9 lays out proposals for change. They range from simple and uncontroversial ones, like requiring the government to collect reliable statistics about the number of jobs lost through mergers and outsourcing, to controversial proposals, like adding labor representation to the corporate boards of directors. Although some antitrust scholars have recently proposed changing merger review to include consideration of the effects on labor, the chapter argues that changing the current process is not feasible. Instead, the chapter proposes the creation of a new government panel to review proposed mergers and outsourcing. The board would assess the expected displacement of labor in comparison with a realistic appraisal of the expected gains to consumers. The chapter argues that the proposed reforms cannot be achieved until the influence of business on Congress is limited. The chapter also deals with political effects, by pointing out that the harm to workers has aggregated over the years, culminating in popular support for both Donald Trump and Bernie Sanders in the 2016 presidential election. There is a dark side to this growing populist movement, however, because disgruntled labor has played a role in nationalistic and fascistic movements during the twentieth century.
{"title":"Recommendations","authors":"John N. Drobak","doi":"10.1093/oso/9780197578957.003.0009","DOIUrl":"https://doi.org/10.1093/oso/9780197578957.003.0009","url":null,"abstract":"Chapter 9 lays out proposals for change. They range from simple and uncontroversial ones, like requiring the government to collect reliable statistics about the number of jobs lost through mergers and outsourcing, to controversial proposals, like adding labor representation to the corporate boards of directors. Although some antitrust scholars have recently proposed changing merger review to include consideration of the effects on labor, the chapter argues that changing the current process is not feasible. Instead, the chapter proposes the creation of a new government panel to review proposed mergers and outsourcing. The board would assess the expected displacement of labor in comparison with a realistic appraisal of the expected gains to consumers. The chapter argues that the proposed reforms cannot be achieved until the influence of business on Congress is limited. The chapter also deals with political effects, by pointing out that the harm to workers has aggregated over the years, culminating in popular support for both Donald Trump and Bernie Sanders in the 2016 presidential election. There is a dark side to this growing populist movement, however, because disgruntled labor has played a role in nationalistic and fascistic movements during the twentieth century.","PeriodicalId":325368,"journal":{"name":"Rethinking Market Regulation","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130714217","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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