Neil Emerick responds to my recent comment that shareholder capitalism is “a system that worsens economic inequality”, by arguing that “capitalism is a lousy predictor for whether a society is likely to show inequality or not” in “Wrong on inequality”, (March 1). Where did the word “shareholder” fall off? Shareholder capitalism, as proposed by Milton Friedman (his 1970 New York Times article is online), is not capitalism. It is at base a doctrine that corporations have a responsibility only to their shareholders, not to society, and that an implicit Adam Smithian “invisible hand” will do the rest. I’m refraining from writing about this because I deal with it in my forthcoming book, so I’ll just be clear that capitalism is the only way for a society to get out of inequality. Also, I’ve been saying for some time now in Business Day that nation-building (which Emerick calls “homogeneity of society”) is a fundamental inverse marker for inequality, so even a predictor for economic succes...
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