Capitalism recoupled

The Fall of the Labor Share and the Rise of Superstar Firms

Colm Kelly and Dennis J Snower

Oxford Review of Economic Policy, 2021, vol. 37, issue 4, 851-863

Abstract: This paper examines major forces that have decoupled economic and business prosperity from social prosperity and explores how recoupling can be promoted. Economists have specified well-known conditions under which free market enterprise with shareholder value maximization is efficient. These conditions are systematically violated by three forces—globalization, technological advance, and financialization (GTF)—that have weakened the connections between economies and societies over the past four decades. Consequently, the recoupling process requires abandoning the default premise of economic decision-making that social progress follows financial performance. For business, it calls for a move from shareholder to stakeholder value. For government, it calls for setting legal obligations, targets, and incentives to ensure that stakeholder value is compatible with a rigorously defined concept of ‘societal and planetary value’.

Keywords: globalization; technology; financialization; shareholder value; stakeholder value; efficiency; social prosperity; wellbeing (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1093/oxrep/grab025 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxford:v:37:y:2021:i:4:p:851-863.

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by Christopher Adam

More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited
Bibliographic data for series maintained by Oxford University Press ().