Senator Warren Has A Plan For Capitalism… Destroy It
Article from Reason by Scott Shackford.
Sen. Elizabeth Warren (D–Mass.) thinks she knows what ails capitalism: There aren’t enough people telling the biggest businesses what to do.
Try to contain your surprise that Warren believes the profit motive is ruining capitalism. She wants the largest corporations in the United States to be legally answerable to people other than their shareholders, and she’s introducing a bill to force it.
Warren’s “Accountable Capitalism Act” would require that corporations that earn more than $1 billion in revenue a year (note “revenue,” not “profits”) would need a federal “charter” in order to operate. This charter would obligate these companies to consider all “stakeholders,” not just shareholders, when making decisions. The bill would also require these corporations to permit employees to elect 40 percent of the company’s board of directors; a super majority of 75 percent of directors and shareholders would have to approve political donations. (Gee, I wonder if somebody will propose something similar for unions?) Shareholders would be permitted to sue the company if they felt its actions were driven purely by profit and did not reflect the desires of its many “stakeholders.”
The justification for all this is the common, economically sketchy claim of income inequality; that the rich are getting richer and that wages are stagnating. Warren complains in a Wall Street Journal commentary that shareholders have “extracted” $7 trillion in profits since 1985 that “might otherwise have been reinvested in the workers who helped produce them.”
Read the entire article at Reason.