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Maximizing shareholder profits can no longer be corporations' main goal, say top U.S. CEOs
A group representing more than 100 of the biggest corporations in the U.S. has released a statement updating its definition of the purpose of American corporations.
JOHANNES EISELE / Contributor
- The new statement says corporations shouldn't only be concerned about maximizing shareholder profits.
- Instead, corporations should focus on all of its stakeholders.
- The idea that corporations need only focus on maximizing shareholder profit took hold in the 1970s and has since remained, more or less, the dominant viewpoint on Wall Street.
Since around the 1980s, most American corporations have agreed their main purpose is to maximize shareholder profits. Now, amid growing concerns about income inequality and Democratic policy proposals that call for restructuring American capitalism, some of the nation's biggest corporations are saying it's time to change the definition of corporate purpose.
The Business Roundtable, a lobbying group of American CEOs, released a statement Monday describing how the corporate world's long-held definition of purpose — often called "shareholder primacy" — "does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable."
"Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity," the statement reads. "We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all."
The Business Roundtable updates its guidelines periodically, but Monday's update is the most explicit to date in rejecting shareholder primacy. The statement — signed by 181 of 192 current members of the Business Roundtable, including CEOS from companies such as Apple, Pfizer, Mastercard, and Ford Motor Company — says members commit to:
- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
The statement doesn't promise any concrete changes, and it's unclear how corporations might change their practices, if at all. One governance expert said the statement actually decreases these executives' accountability.
"It limits accountability for these people to anyone, because if you have multiple stakes with whom you're accountable, you're always going to get it right on someone," Charles Elson, who directs the John L. Weinberg Center for Corporate Governance at the University of Delaware, told The Washington Post. "You can always make an argument that no matter what you've done, some stake will benefit. If your watch stops, it still gets the time right twice a day."
Still, at the very least, the statement signals a symbolic change in ethos of the American corporate elite.
"It really is quite significant," Peter Cappelli, a professor who studies labor economics at the University of Pennsylvania's Wharton School, told the Post. "It sounds like what they're describing is what was the standard view before the mid-1980s — before the shareholder value idea really started to spread."
'Maximize shareholder profits'
The idea of shareholder primacy can be traced back to the economist Milton Friedman, who wrote a New York Times Magazine article in 1970 deriding the claim that corporations ought to be socially responsible, calling it a "fundamentally subversive doctrine" in a free society, adding, "there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
In short, "social responsibilities" are for individuals; corporations need only focus on making as much money as possible without breaking the law.
"That article was very well received in Wall Street," Joseph L. Bower, a professor of business administration at Harvard University, recounted to Forbes. "They loved it. You could see the change in compensation practices. The use of the phrase 'maximize shareholder value' exploded at that time."
Bower once said the idea that corporations need only "maximize shareholder value" is "pernicious nonsense." In a 2017 article for Harvard Business Review, Bower and Lynn S. Paine suggest that Friedman's essential idea "could be damaging to the broader economy," mainly because it gives extreme consideration to shareholders over a short-term timeframe, while ignoring other stakeholders, such as employees or society at large. This results in an "accountability vacuum," they write, because in this governance approach shareholders are effectively treated as owners of the company, when in fact they're not held accountable for any company decisions.
Bower and Paine suggest that a more company-centric governance approach would benefit American corporations' many stakeholders, including but not limited to shareholders. (You can read their detailed piece here.) Meanwhile, some Democratic lawmakers have proposed policy that aims to wrest some amount of corporate power from executives and shareholders and give it to other shareholders.For example, U.S. Sen. Bernie Sanders (D–VT) wants to prohibit corporations from buying back their own stock, which drives up share prices, unless they boost employee pay and benefits. Separately, Sen. Elizabeth Warren's Accountable Capitalism Act aimed to restructure corporate decision-making, in part by mandating that corporations allow 40 percent of board members to be elected by employees, and by limiting the ways in which directors and officers sell company shares.
Inventions with revolutionary potential made by a mysterious aerospace engineer for the U.S. Navy come to light.
- U.S. Navy holds patents for enigmatic inventions by aerospace engineer Dr. Salvatore Pais.
- Pais came up with technology that can "engineer" reality, devising an ultrafast craft, a fusion reactor, and more.
- While mostly theoretical at this point, the inventions could transform energy, space, and military sectors.
The U.S. Navy controls patents for some futuristic and outlandish technologies, some of which, dubbed "the UFO patents," came to light recently. Of particular note are inventions by the somewhat mysterious Dr. Salvatore Cezar Pais, whose tech claims to be able to "engineer reality." His slate of highly-ambitious, borderline sci-fi designs meant for use by the U.S. government range from gravitational wave generators and compact fusion reactors to next-gen hybrid aerospace-underwater crafts with revolutionary propulsion systems, and beyond.
Of course, the existence of patents does not mean these technologies have actually been created, but there is evidence that some demonstrations of operability have been successfully carried out. As investigated and reported by The War Zone, a possible reason why some of the patents may have been taken on by the Navy is that the Chinese military may also be developing similar advanced gadgets.
Among Dr. Pais's patents are designs, approved in 2018, for an aerospace-underwater craft of incredible speed and maneuverability. This cone-shaped vehicle can potentially fly just as well anywhere it may be, whether air, water or space, without leaving any heat signatures. It can achieve this by creating a quantum vacuum around itself with a very dense polarized energy field. This vacuum would allow it to repel any molecule the craft comes in contact with, no matter the medium. Manipulating "quantum field fluctuations in the local vacuum energy state," would help reduce the craft's inertia. The polarized vacuum would dramatically decrease any elemental resistance and lead to "extreme speeds," claims the paper.
Not only that, if the vacuum-creating technology can be engineered, we'd also be able to "engineer the fabric of our reality at the most fundamental level," states the patent. This would lead to major advancements in aerospace propulsion and generating power. Not to mention other reality-changing outcomes that come to mind.
Among Pais's other patents are inventions that stem from similar thinking, outlining pieces of technology necessary to make his creations come to fruition. His paper presented in 2019, titled "Room Temperature Superconducting System for Use on a Hybrid Aerospace Undersea Craft," proposes a system that can achieve superconductivity at room temperatures. This would become "a highly disruptive technology, capable of a total paradigm change in Science and Technology," conveys Pais.
High frequency gravitational wave generator.
Credit: Dr. Salvatore Pais
Another invention devised by Pais is an electromagnetic field generator that could generate "an impenetrable defensive shield to sea and land as well as space-based military and civilian assets." This shield could protect from threats like anti-ship ballistic missiles, cruise missiles that evade radar, coronal mass ejections, military satellites, and even asteroids.
Dr. Pais's ideas center around the phenomenon he dubbed "The Pais Effect". He referred to it in his writings as the "controlled motion of electrically charged matter (from solid to plasma) via accelerated spin and/or accelerated vibration under rapid (yet smooth) acceleration-deceleration-acceleration transients." In less jargon-heavy terms, Pais claims to have figured out how to spin electromagnetic fields in order to contain a fusion reaction – an accomplishment that would lead to a tremendous change in power consumption and an abundance of energy.
According to his bio in a recently published paper on a new Plasma Compression Fusion Device, which could transform energy production, Dr. Pais is a mechanical and aerospace engineer working at the Naval Air Warfare Center Aircraft Division (NAWCAD), which is headquartered in Patuxent River, Maryland. Holding a Ph.D. from Case Western Reserve University in Cleveland, Ohio, Pais was a NASA Research Fellow and worked with Northrop Grumman Aerospace Systems. His current Department of Defense work involves his "advanced knowledge of theory, analysis, and modern experimental and computational methods in aerodynamics, along with an understanding of air-vehicle and missile design, especially in the domain of hypersonic power plant and vehicle design." He also has expert knowledge of electrooptics, emerging quantum technologies (laser power generation in particular), high-energy electromagnetic field generation, and the "breakthrough field of room temperature superconductivity, as related to advanced field propulsion."
Suffice it to say, with such a list of research credentials that would make Nikola Tesla proud, Dr. Pais seems well-positioned to carry out groundbreaking work.
A craft using an inertial mass reduction device.
Credit: Salvatore Pais
The patents won't necessarily lead to these technologies ever seeing the light of day. The research has its share of detractors and nonbelievers among other scientists, who think the amount of energy required for the fields described by Pais and his ideas on electromagnetic propulsions are well beyond the scope of current tech and are nearly impossible. Yet investigators at The War Zone found comments from Navy officials that indicate the inventions are being looked at seriously enough, and some tests are taking place.
If you'd like to read through Pais's patents yourself, check them out here.
Laser Augmented Turbojet Propulsion System
Credit: Dr. Salvatore Pais
A global survey shows the majority of countries favor Android over iPhone.
- When Android was launched soon after Apple's own iPhone, Steve Jobs threatened to "destroy" it.
- Ever since, and across the world, the rivalry between both systems has animated users.
- Now the results are in: worldwide, consumers clearly prefer one side — and it's not Steve Jobs'.
A woman on her phone in Havana, Cuba. Mobile phones have become ubiquitous the world over — and so has the divide between Android and iPhone users.Credit: Yamil Lage / AFP via Getty Images.
Us versus them: it's the archetypal binary. It makes the world understandable by dividing it into two competing halves: labor against capital, West against East, men against women.
These maps are the first to show the dividing lines between one of the world's more recent binaries: Android vs. Apple. Published by Electronics Hub, they are based on a qualitative analysis of almost 350,000 tweets worldwide that presented positive, neutral, and negative attitudes toward Android and/or Apple.
Steve Jobs wanted to go "thermonuclear"
Feelings between Android and Apple were pretty tribal from the get-go. It was Steve Jobs himself who said, when Google rolled out Android a mere ten months after Apple launched the iPhone, "I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this."
Buying a phone is like picking a side in the eternal feud between the Hatfields and the McCoys. Each choice for automatically comes with an in-built arsenal of arguments against.
If you are an iPhone person, you appreciate the sleekness and simplicity of its design, and you are horrified by the confusing mess that is the Android operating system. If you are an Android aficionado, you pity the iPhone user, a captive of an overly expensive closed ecosystem, designed to extract money from its users.
Even without resorting to those extremes, many of us will recognize which side of the dividing line that we are on. Like the American Civil War, that line runs through families and groups of friends, but that would be a bit confusing to chart geographically. To un-muddle the information, these maps zoom out to state and country level.
If the contest is based on the number of countries, Android wins. In all, 74 of the 142 countries surveyed prefer Android (in green on the map). Only 65 favor Apple (colored grey). That's a 52/48 split, which may not sound like a decisive vote, but it was good enough for Boris Johnson to get Brexit done (after he got breakfast done, of course).
And yes, math-heads: 74 plus 65 is three short of 142. Belarus, Fiji, and Peru (in yellow on the map) could not decide which side to support in the Global Phone War.
What about the United States, home of both the Android and the iPhone? Another victory for the former, albeit a slightly narrower one: 30.16 percent of the tweets about Android were positive versus just 29.03 percent of the ones about Apple.
United States: Texas surrounded!
Credit: Electronics Hub
There can be only one winner per state, though, and that leads to this preponderance of Android logos. Frankly, it's a relief to see a map showing a visceral divide within the United States that is not the coasts versus the heartland.
- Apple dominates in 19 states: a solid Midwestern bloc, another of states surrounding Texas, the Dakotas and California, plus North Carolina, New Hampshire, and Rhode Island.
- And that's it. The other 32 are the United States of Android. You can drive from Seattle to Miami without straying into iPhone territory. But no stopovers in Dallas or Houston – both are behind enemy lines!
North America: strongly leaning toward Android
Credit: Electronics Hub
Only eight of North America's 21 countries surveyed fall into the Apple category.
- The U.S. and Canada lean Android, while Mexico goes for the iPhone.
- Central America is divided, but here too Android wins hands down, 5-2.
Europe: Big Five divided
Credit: Electronics Hub
In Europe, Apple wins, with 20 countries preferring the iPhone, 17 going for Android, and Belarus sitting on the fence.
- Of Western Europe's Big Five markets, three (UK, Germany, Spain) are pro-Android, and two (France, Italy) are pro-Apple.
- Czechia and Slovakia are an Apple island in the Android sea that is Central Europe. Glad to see there is still something the divorcees can agree on.
South America: almost even
Credit: Electronics Hub
In South America, the divide is almost even.
- Five countries prefer Android, four Apple, and one is undecided.
- In Peru, both Android- and Apple-related tweets were 25 percent positive.
Africa: watch out for Huawei
Credit: Electronics Hub
In Africa, Android wins by 17 countries versus Apple's 15.
- There's a solid Android bloc running from South Africa via DR Congo all the way to Ethiopia.
- iPhone countries are scattered throughout the north (Algeria), west (Guinea), east (Somalia), and south (Namibia).
Huawei — increasingly popular across the continent — could soon dramatically change the picture in Africa. Currently still running on Android, the Chinese phone manufacturer has just launched its own operating system, called Harmony.
Middle East: Iran vs. Saudi Arabia (again)
Credit: Electronics Hub
In the Middle East and Central Asia, Android wins 8 countries to Apple's 6.
- But it's complicated. One Turkish tweeter wondered how it is that iPhones seem more popular in the Asian half of Istanbul, while Android phones prevailed in the European part of the city.
- The phone divide matches up with the region's main geopolitical one: Iran prefers Android, Saudi Arabia the iPhone.
Asia-Pacific: Apple on the periphery
Credit: Electronics Hub
Another wafer-thin majority for Android in the Asia-Pacific region: 13 countries versus 12 for Apple — and one abstention (Fiji).
- The two giants of the Asian mainland, India and China, are both Android countries. Apple countries are on the periphery.
- And if India is Android, its rival Pakistan must be Apple. Same with North and South Korea.
Experts point to the fact that both operating systems are becoming more alike with every new generation as a potential resolution to the conflict. But as any student of human behavior will confirm: smaller differences will only exacerbate the rivalry between both camps.
Maps taken from Electronics Hub, reproduced with kind permission.
Strange Maps #1096
Got a strange map? Let me know at email@example.com.
English is a dynamic language, and this summer's new additions to dictionary.com tell us a lot about how we're living.
- The summer update to Dictionary.com added hundreds of new words and definitions.
- Many of them are in areas related to justice, technology, and COVID-19.
- The new slang terms will leave more than a few people confused.
In any given year, new words are added to the dictionary to reflect how society's use of them has changed, often in response to ongoing events. For Summer 2021, more than 1200 new, improved, and revised definitions were introduced to Dictionary.com, including 231 entirely new words. A review of those words, the subjects they cover, and the stories behind their creation tells a rich story about the times we live in.
A word by any other definition?
You might wonder why we need to carry out such extensive addition and redefining campaigns. John Kelly, the Managing Editor of Dictionary.com, explained in a statement why these changes were made and their importance:
"The latest update to our dictionary continues to mirror the world around us. Long COVID, minoritize, 5G, content warning, domestic terrorism — it's a complicated and challenging society we live in, and language changes to help us grapple with it. But sometimes language changes just for fun. Yes, yeet is now in the dictionary, which may prompt some of us to use one other of our new entries: oof! Perhaps these lighter slang and pop culture newcomers to our dictionary reflect another important aspect of our time — a cautious optimism and a brighter mood about the future ahead after a trying 2020."
The English language isn't static, so it is up to lexicographers to get the dictionaries up to speed. Let's face it, we might need more than a few new words to talk about last year.
The times they are a-changin'
Good Communication 101: Mirroring, Jargon, Hifalutin Words | Alan Alda | Big Think www.youtube.com
Words that describe the continuing COVID-19 pandemic are still being added. The recent additions, which include long haul and long hauler may speak to the shift in how we interact with the pandemic — it is now a long-term rather than an acute concern for many people. Changes to our lives as a result of the pandemic and new ways to cater to those challenges, like ghost kitchen and side hustle, also made their way in.
In the aftermath of the murder of George Floyd and the protests that followed, Americans searched for terms related to racial issues at significantly higher levels than before. This not only called for updates and additions to words in this area last year but a continuing review, which has added new terms like the acronyms JEDI and DEI and the new word one-drop rule. Other terms long included, like Jim Crow and Black Codes, saw updates this summer.
Technology continued to advance through thick and thin as well. Terms like 5G, asynchronous, and abandonware made it into the recent update. Given how much time we all spent using tech in the last year and a half, it is only fitting that we would need these terms. 5G also has the unfortunate distinction of being both a telecommunications technology and a target for conspiracy theorists, perhaps making a dictionary entry for it all the more important.
Other words previously defined as regional or cultural in nature have been redefined in the light of their evolving use. Y'all is now listed as its own term and deemed an "informal" pronoun rather than a mere variant of "you-all." The post explaining the update noted that the term is now more known for informality than regionalism and has enjoyed a surge in use as a gender neutral pronoun.
Mind hack: 7 secrets to learn any new language | Steve Kaufmann | Big Think www.youtube.com
Perhaps it is necessary that after a year that required so many of the above words to be added or clarified, there are new slang terms that will seem like absolute gibberish to somebody disconnected from popular culture. New words like yeet, zaddy, and oof were added this year, showing that even in difficult times, fun new ways to use language are cropping up all the time.
The website's lexicographers also saw fit to officially add one of the honorable mentions for 2020's word of the year to the list of vulgar slang terms. Regrettably, it is unfit for publication, but it rhymes with spit-snow.
So, now that y'all know about these updates, perhaps we can all order from the new ghost kitchen from apps on our 5G smartphones before getting back to our side hustles. Yeet!
Virtual reality continues to blur the line between the physical and the digital, and it will change our lives forever.