Mariana Mazzucato in Project Syndicate:
BlackRock Chairman and CEO Larry Fink’s latest annual letter has taken the business world by storm. BlackRock is the world’s largest asset manager, and Fink, addressing the CEOs of the companies whose assets his firm manages on behalf of investors, took the opportunity to advocate a more ecologically sustainable, socially conscious, forward-looking form of capitalism rooted in stakeholder rather than shareholder value.
Fink’s exhortation seems like a welcome break from orthodox dogma. But if his vision is supposed to be “woke,” it is not nearly woke enough. We’ve heard all this before, including in Fink’s own 2018 and 2019 letters, and in the ballyhooed 2019 Business Roundtable statement that Fink helped spearhead. But far too little has changed, largely because the vision expressed by Fink and other corporate leaders stops short of the radical reforms needed to transform capitalism in the interests of people and the planet.
Fink’s version of stakeholder capitalism is based on conceptual sleight of hand. After all, his support for stakeholders is conditional on a secure profit pipeline for shareholders, which means that shareholder value remains the bottom line. Stakeholder value becomes merely a means to an end – to benefit shareholders in the long run. It is thus a betrayal of stakeholder capitalism’s true intent: to create value for public benefit.