Too Many Corporations, Like Universities, Have Lost Their Way

The Business Roundtable is a Washington, D.C.-based association of "more than 200 chief executive officers of America's leading companies ... that support one in four American jobs and almost a quarter of U.S. GDP."

In 2019, Jamie Dimon served as their chairman, and under his leadership, they made a significant change.

It has always been understood that the responsibility of any corporation is to serve the interests of its shareholders -- the owners of the company.

Economist Milton Friedman wrote in his famous book "Capitalism and Freedom," first published in 1962, that corporations have one responsibility -- to maximize profitability for its shareholders.

"Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible," wrote Friedman.

But in 2019 the Business Roundtable did exactly this. They announced that they were abandoning primacy of serving shareholders as the core corporate responsibility and that shareholders would now be viewed as just one group of "stakeholders," alongside "customers, employees, suppliers" and "communities."

What happened to private property? Corporate CEOs work for the owners, the shareholders.

Private property is what sets a free society apart from socialism.

Dimon noted, "The American dream is alive but fraying. ... These modernized principles reflect the business community's unwavering commitment to continue to push for an economy that serves all Americans."

If the American dream is "fraying," it is because of departure from the principles that define a free society, upon which our great country emerged. Economic freedom, private property, personal responsibility and creativity are the source of our success, not of our failures.

Blurring the lines between the private and the public, no one knows what their job is -- government, corporations, universities.

Government has exploded by trying to do what individuals should be doing for themselves.

The result of all the efficiencies is slowdown of growth. The victims are the poor, not high-earning CEOS.

As our country sinks under a tsunami of spending and debt, hopefully the CEO of the nation's largest bank, and CEOs of all our corporations, will wake up that loss of freedom, not too much freedom, is what is hurting our nation.

Star Parker is president of the Center for Urban Renewal and Education and host of the weekly television show "Cure America with Star Parker." Her recent book, "What Is the CURE for America?" is available now. To find out more about Star Parker and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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