This article discusses the impact of the shareholder value ideology on emerging technologies such as artificial intelligence (AI) and robotics. The concept of maximizing shareholder value, popularized in the 1970s by economists like Milton Friedman, has led to detrimental outcomes in American companies. The focus on enriching shareholders at the expense of other stakeholders has resulted in short-term thinking, poor working conditions, shoddy products, and income inequality.
Despite increasing criticism, the shareholder value ideology continues to dominate the American business landscape. The article argues that when new technologies are introduced into this distorted system, they are often used to further the greedy aims of shareholders instead of benefiting employees or society as a whole. In an interview with the Institute for New Economic Thinking, economist William Lazonick expresses concerns about the potential impact of AI and robotics on American employees.
Lazonick highlights the importance of upgrading the capabilities of the labor force as technological advancements occur. This would require freely available education, early retirement options, and retraining programs. He emphasizes the need to acknowledge that routine work will be automated or outsourced if not economically viable. The persistent under-compensation of American workers exacerbates this issue.
The article draws attention to the historical impact of technological changes on different groups of workers, such as black employees and white blue-collar workers in the automobile industry. Lazonick argues that the promotion of shareholder value in the 1980s led to the devaluing of workers and the suppression of wages. This mindset still dominates today, making it challenging to implement necessary adjustments.
The article also discusses the decline in accessible higher education and the extortionate rates of student loans. This further hinders the positive transition of workers amidst technological advancements.
In conclusion, the article highlights the need for a shift away from the shareholder value ideology in order to ensure that emerging technologies are used in a way that benefits employees and society. Upgrading the labor force, providing better education opportunities, and addressing income inequality are crucial steps in achieving this goal.
Source: Institute for New Economic Thinking