Pitchfork Economics with Nick Hanauer Good Company: Ending the Era of Shareholder Supremacy (with Lenore Palladino)
May 27, 2025
Lenore Palladino, an assistant professor of economics and public policy, critiques shareholder primacy to reveal how it has stifled innovation and exacerbated inequality. She argues for a corporate paradigm that prioritizes workers and communities over wealthy shareholders. The conversation dives into the implications of stock buybacks, the historical evolution of companies like General Electric, and the need for inclusive corporate governance. Palladino presents a bold vision for reshaping economic policy to serve the public good.
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Corporations as Cooperative Groups
- Corporations dominate the economy as cooperative groups rather than just individual competitors.
- Innovation and productivity happen inside corporations through cooperation, not only in the market.
Flaws of Shareholder Primacy
- Shareholder primacy prioritizes only enriching shareholders over employees, community, or customers.
- Changing this norm would have the most profound effect on economic structure and society.
Shareholder Primacy Definition And Impact
- Shareholder primacy legally requires maximizing shareholder wealth and control.
- This framework contributes to inequality, stifles innovation, and is embedded in Delaware law where most US corporations are chartered.