Sunday, April 15, 2012

Quotation for Today: American Corporations: Once World-Class Producers, Now World-Class Predators

The quotation for today introduces a compilation of articles that discusses the behavior of corporations in American society. The articles review the historical behavior of corporations and contrasts that historical behavior with the way corporations conduct themselves nowadays; contemporary conduct resulting from corporations becoming "financialized."
When the shareholder-value mantra becomes the main focus, executives concentrate on avoiding taxes for the sake of higher profits, and they don’t think twice about permanently axing workers. They increase distributions of corporate cash to shareholders in the forms of dividends and, even more prominently, stock buybacks. When a corporation becomes financialized, the top executives no longer concern themselves with investing in the productive capabilities of employees, the foundation for rising living standards for all. They become focused instead on generating financial profits that can justify higher stock prices – in large part because, through their stock-based compensation, high stock prices translate into megabucks for these corporate executives themselves. The ideology becomes: Corporations for the 0.1 percent -- and the 99 percent be damned.
The 99 percent needs to understand these fundamental changes in the ways in which top executives have decided to make use of resources if we want U.S. corporations to work for us rather than just for them.
William Lazonick

William Lazonick is professor of economics and director of the UMass Center for Industrial Competitiveness. Professor Lazonick serves as president of the Academic-Industry Research Network, and he is author of the book, Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States (W.E. Upjohn Institute, 2009); winner of the 2010 Schumpeter Prize.

You can read more on the transformation of American corporations into world-class predators from world-class producers by following the link in the enclosed citation.

Lazonick, William. "How American Corporations Transformed from Producers to Predators." Corporations for the 99%. Ed. Lynn Parramore. AlterNet April 2012, 2-6 (PDF). 

Correction: An earlier version had the incorrect date in the citation.

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