How Shareholder Value Ideology Destroyed the Middle Class - Dr. William Lazonick, UMass - DSPod #308

Dr. William Lazonick is an economist who studies innovation and
competition in the global economy, who has recently been focusing
on the corrosive role of stock buybacks. We invited him on to
explain why this widespread financial practice is such a bad idea
in his eyes, and in return were provided with a comprehensive
model of what makes a successful economy. In short, Lazonick
believes that no economic system can survive without "the firm,"
the kind of old school corporate organization that maintained a
stable a social contract with its workers, sometimes over the
course of an entire lifetime. In Lazonick's view, all economic
growth and progress comes down to the ability of the firm to
honor that social contract, which means he traces the slump we're
in to the death of this tradition. But the question is, what
caused us to become eternally itinerant workers in search of
global opportunties, hopping from job to job every few years?
Lazonick's got that answer, too. He points to a radical
transformation of our financial and economic system that came to
a head in the 1970s. PATREON: get episodes early + join our
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FURTHER READING Eric Williams: Capitalism and Slavery
(https://amzn.to/4gvd0rW) Alfred Marshall: Principles of
Economics (https://amzn.to/49AnpR9) John Kenneth Galbraith: The
Great Crash (https://amzn.to/4iuykQp) Edwin Black: IBM and the
Holocaust (https://amzn.to/4gwFce8) Milton Friedman: The Social
Responsibility of a Business is to Increase Profits
(https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html)
(00:00) Go!
(00:09:21) The Study of Economics: Integrating History and
Theory
(00:15:21) Capitalism, Innovation, and Economic Growth
(00:29:27) Shift from Feudalism to Corporate Structures
(00:37:00) Global Capital and Industrial Revolution
(00:41:28) Transition to Large Firms in America
(00:49:12) Evolution of U.S. Steel and Stock Market's Role
(00:52:05) Venture Capital and Initial Public Offerings
(00:59:12) Corporate Financial Strategies Pre-Depression
(01:03:00) Stock Buybacks and Modern Corporate Strategies
(01:09:40) Rise of Mass Unionization
(01:20:14) Stock Market Roles and Corporate Control
(01:31:10) Managerial Strategy Shifts
(01:41:06) Technological Shifts and Corporate Adaptation
(01:51:13) Rise of Silicon Valley and Corporate Strategy
(01:56:23) Evolution of the Tech Industry
(02:02:47) Shareholder Value Ideology
(02:18:40) Shift in Investment Strategies
(02:26:02) Corporate Focus on Stock Buybacks
(02:32:00) Mechanics of Stock Buybacks
(02:37:14) Financialization and Market Effects #CorporateHistory,
#StockBuybacks, #ShareholderValue, #StockMarket, #Innovation,
#EconomicGrowth, #IndustrialRevolution, #TechnologyTrends,
#MiddleClassDecline, #SiliconValley, #ShareholderValue,
#CorporateCulture, #Unionization, #EconomicInequality,
#ModernEconomy, #USEconomy, #LaborMarket, #HumanCapital,
#EconomicDecline, #1970sEconomy,
#CorporateCollapse,#WealthInequality, #1980sEconomy,
#FinancializationCrisis, #StockMarketImpact, #SiliconValleyStory,
#VentureCapital, #StartupCulture, #TechInnovation,
#Microelectronics, #TechHistory, #CorporateAdaptation,
#ShareholderValue, #CorporateStrategy, #MiltonFriedman,
#EconomicPolicy, #FinancialMarkets, #CorporateFinance,
#StockBuybackDebate, #EconomicAnalysis, #sciencepodcast,
#longformpodcast