Soulless system has many victims
ANN CROTTY: Are the days of shareholder capitalism numbered?
Shareholder capitalism incapable of long-term thinking
Could it be that the days of shareholder capitalism are numbered? Not in actual days, but perhaps in years? With every new round of job cuts, accompanied by dividend payments and share repurchases, it becomes apparent the system’s winner-take-all attitude is incapable of the nuance, flexibility or long-term thinking needed in a democratic economy. It is procyclical in the extreme. When growth is on the up it encourages ever more spectacular growth rates, the sort that invariably end in bubbles and tears. When growth trends reverse and economies start to shrink, shareholder capitalism encourages that shrinking as jobs are cut to reduce costs and protect profits. Company executives think as isolated entities and feel forced to do whatever it takes to protect their bottom lines. So when Pick n Pay, Edcon and the JSE Limited (to mention a few) cut jobs, they ensured short-term protection of their bottom lines, just as they ensured the recession would be more severe and last a little lon...
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