High-Status Versus Low-Status Stakeholders

The literature on stakeholder theory has largely ignored the difficult and central issue of how judges and firms should resolve disputes among stakeholders. When the issue is addressed, focus has largely been on the potential for management to use stakeholder theory as cover for rent‐seeking or on disputes between classes of stakeholders. Sharply underappreciated is the potential for disparate interests within a stakeholder class. That potential is particularly acute due to a (largely education‐driven) stark and growing class divide in the United States. There is a substantial difference between the interests of a highly educated professional and managerial elite and a pink‐collar and blue‐collar working class who mostly do not hold 4‐year degrees. Despite their smaller numbers, the professional and managerial elite will frequently win out in intra‐stakeholder disputes with working‐class stakeholders due to their greater status, power, and influence. Because this class divide is cultural, social, and political, as well as economic, these disputes will go beyond financial pie‐splitting to culture war issues. This threatens to be destabilizing for both the republic and individual firms and undermines both the practical and ethical arguments for the stakeholder theory.