The Stakeholder Capitalism of the Great Reset is Cronyism on Steroids
By: Justin Honse
Tags: Economy, Crony Capitalism, Society, The Great Reset, Capitalism

The Call to Stakeholder Capitalism

The call of the World Economic Forum (WEF) to shift to “Stakeholder Capitalism” is being answered by world leaders, politicians, corporate CEO’s, and other elites whose stated goal is to “reset Capitalism”. This is a global call because it is a global effort by the WEF, and beyond Biden, other world leaders, such as Boris Johnson (UK), and Justin Trudeau (Canada) are also joining.

A move to Stakeholder Capitalism, which would involve drastic changes to America’s economic system, is just one aspect of the WEF’s Great Reset initiative. Previously a “pie-in-the-sky” vision by Klaus Schwab, chairman and founder of the WEF, this Great Reset is fast gaining both adherents and traction. In fact, over 180 corporations signed on to changing the corporate governance model to Stakeholder Capitalism at the Business Roundtable just last year. However, many believe that a move toward Stakeholder Capitalism in the US will only exacerbate some of the biggest problems our system already has.

In Stakeholder Capitalism, you and your community, the environment, and the customers of a business are all supposed to be every bit as important as the shareholders under Milton Friedman‘s view. Friedman, of course, is disdained by some, but is loved by corporations because he seemingly gave them license to focus only on maximizing shareholder value.

To be fair, Friedman’s quote about this actually does incorporate society and ethics — but it often seems that part is overlooked. Yes, a corporation should focus on shareholders, but should do so “…while conforming to basic rules of… society, both those embodied in law and those embodied in ethical custom.” But, you know, they heard the first part and ran with it.

The picture painted by the WEF and other elites about how Stakeholder Capitalism can benefit all, not just shareholders, sounds very tempting at a time of record-high inequality.

The idea that corporations are magically going to focus less on profits and maximizing shareholder value, and instead focus more on improving the lot of all, sounds to some like a dream come true. We must keep in mind, however, that arriving at Stakeholder Capitalism ultimately involves the marriage of the State and Corporations — not unlike China’s State Capitalism today.

A study by KKS Advisors found that several hundred companies who were purportedly moving toward the stakeholder model, including some who signed on at the Business Roundtable, did not appear to show any real improvement when the health crisis hit. A lot of it, turns out, was just talk.

Getting Buy-In

In the US, we have individuals on the right who are very pro-big business, and individuals on the left who are very pro-government. This is well-known. It is not difficult to get buy-in on the surface when you try to marry these two things, because it gives the illusion that the government will still ultimately be in control — though their arms, legs, and even voice, will come from CEO’s and technocrats. Plus, Wall Street generally likes the idea and comfort of knowing that money will easily flow into businesses at the slightest chance of failure.

Don’t get me wrong — I’m not necessarily a huge cheerleader for the shareholder capitalism we have today, and I’m well-aware that from the 1940’s until the mid-60’s, America had one of the most prosperous economies of all time while utilizing aspects of a stakeholder economy. It’s all about implementation, and the intent and direction taken by corporations and by the state.

For what it’s worth, of all the talk in recent years of companies actually taking care of their employees, I have not personally seen or experienced this, nor has anyone I know — even those making close to six-figures.

We have to remember that the end goal — the WEF’s vision of successful implementation of the Great Reset initiative including the Stakeholder economic model — portrays the world in 2030, in which we “own nothing” and “have no privacy”; a world in which sustainability effectively means removal of property ownership rights, and we simply ‘borrow’ everything we need from the purported benevolent state. If this vision gives us pause, we must question their intent.

The WEF also fails to inform us that the Stakeholder Capitalism they so desire is not exactly compatible with democracy. There are certainly problems with inequality in the current shareholder economy — but forcing equality by making everyone’s life equally terrible is no good either.

If the state and corporations get married, it all comes down to whether they are planning to benefit themselves, or truly benefit others. To me, such a system seems a lot like Corporatism.

Merriam-Webster defines Corporatism as:

The organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction

We need to understand that Stakeholder Capitalism is a veiled name for Corporatism.

Today’s Problems

There are problems with America’s economy today no doubt. Two of the ugliest outgrowths plaguing America’s economic system are crony capitalism, and “socialism for the rich”. Some might say these are two sides of the same coin, even. Unfortunately, shifting to “Stakeholder Capitalism” will likely give us a system with these specific problems being magnified to the fullest extent.

Throughout this economic downturn in the time of the pandemic, we’ve already been repeatedly seeing the government intervening in the free-market with bailouts, and helping decide the winners and losers. This is crony capitalism — a big part of today’s problems.

We’re also seeing taxpayers having to foot the bill for the bailout packages. When the corporations do well, they keep their gains; but when they have losses, we the people ultimately eat those losses. Their losses are our losses, full stop. This is “socialism for the rich, and capitalism for everyone else”.

These are some of the big problems with our economy that stakeholder capitalism will only serve to intensify. Why would we want to go along with the WEF’s idea of stakeholder capitalism if it’s just going to supercharge the idea of crony capitalism?

The union of business and government, and bringing in NGO’s and other corporations into the fold as if they were shareholders of government may sound altruistic for their vision, but really it just opens the door to very deep pockets, with the corporations appearing to sell out for access to the money by furthering an agenda. The CEO’s know they will still get their money; they know their shareholders will still get their money; but they get to look good to society and fulfill their dreams, with access to ever-increasing funding under the guise of equality and a green economy.

Increased Centralization

We are living in a time where we are seeing the massive benefits of decentralization, whether it’s the Internet, or cryptocurrency, or any other number of powerful and enduring things. A capitalist free-market economy is separate from the state and effectively decentralized. This is also the reason that the Federal Reserve Bank is supposed to be independent — and yet now Janet Yellen is moving to the Treasury in preparation for what is likely a merging of the Treasury and the Fed — in line with the goals of the Great Reset agenda.

Corporatism in a stakeholder economy moves toward increased centralization of power and control over the economy. The reason “socialism for the rich” is a thing is due to increased centralization, and government intervention into our economy. Corporatism is state-sanctioned erasure of competition, and the forming of state-approved monopolies. Corporatism is also similar to Socialism in many respects. Corporatism is a big government with increased power that controls who gets what, regardless of who earned it, and regardless of how value was created.

Again, why would we want to take America further in this direction with the plans of the Great Reset, when it’s one of the worst aspects of our economy now?

Just imagine what the big tech companies, financial and energy corporations can do when they don’t need to worry about profit. That might sound great for a moment — but it quickly turns terrifying when you think about it.

Whose Utopia?

The WEF’s vision for the Great Reset in conjunction with corporatism under green pretenses is basically this: we can promise you our version of utopia, but you can’t have it unless you are willing to give up regular American democratic life, give up free-market capitalism with its competition and property ownership, give up your data, and give up your privacy. Give up all of that, and get out of the way and let us make our version of utopia — which to many of us will seem like a dystopia instead.

Your convenience is not worth giving up your privacy. Your safety is not worth giving up your freedoms. They will not truly be able to offer protection in exchange for your privacy no matter what they say. Whatever safety you gain will be offset by new dangers such as hacking your identity and health records, as we have already started seeing with spearphishing scams to get data under the guise of vaccine accessibility. Technology will not solve all problems, as new problems not even yet conceived will arise.

In part this is about the inefficiency of governments with democracies, and the perceived increased agility of incorporating the private sector to move things forward more quickly, as they get the money and the approval to do so.

This is a move away from free-market capitalism, and means increasing state intervention in corporations. We’ve already been watching this happen with the COVID-19 economy with the government keeping the corporations on life-support with bail outs. They are already getting competition out of the way by allowing far too many small and medium size businesses to permanently close. That’s just a taste of what is to come, as corporations become sanctioned by the government to look good to society, but be given a pass for their other ills.

You must consider that top-down control is not good for our freedoms. Just look at what the CCP does in China, like having a firewall on its Internet. China is arguably also corporatist under its state capitalism. This is the sort of thing that state intervention and top-down control gets you.

The WEF can promise a pie-in-the-sky utopia all they want — but if they were to hold a vote asking Americans if they wanted to mimic something like China’s economy, and move toward their 2030 vision, I think we all know what that vote would be. And while we won’t have a direct say in these changes, we can at least be aware and push back, and we will likely resist …fiercely.