Just days ago, a most prestigious business organization of some 200 top corporate leaders took a dramatic step to unshackle American business from the clutches of shareholder primacy. They embraced a new model of business governance. It is a tremendous boost for capitalism.
Larry Fink has been preaching to CEOs about how companies need to dedicate themselves to all stakeholders, not simply shareholders. Likewise, Walker has directed the Ford Foundation to hone in on “the future of work,” hoping to loosen shareholder primacy’s grip around the neck of corporations.
Daniel Lubetzky, the founder and CEO of Kind, the healthful snack company, wants to build a better world through business. Employees are treated as partners, not lackeys whose wages are an onerous drain on profit.
Workers will learn the secrets of customer satisfaction if you pay them what they deserve, listen to their ideas and set them free to be creative. Recognize the crucial importance of what they do, compensate them in ways commensurate with their true value, and our economy will begin to right itself.
Capitalism is in crisis. The solution is clear: employees must be motivated, trained, respected, and properly rewarded. This does not call for value redistribution (or socialism). This calls for increasing employee compensation from the incremental value of what is produced.