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Shareholder Value or Public Purpose? From John Maynard Keynes and Adolf Berle to the Modern Debate

Author

Listed:
  • Suzanne J. Konzelmann
  • Victoria Chick
  • Marc Fovargue-Davies

Abstract

The debate about corporate purpose is a recurring one that has re-emerged today. What should be the guiding principles of business: the pursuit of profit or a contribution to public well-being? We trace key elements in this debate in the UK and the US from the interwar years, when John Maynard Keynes and Adolf Berle made important contributions, to the present. Both the earlier and the current debates are centred around whether we see business institutions as strictly private entities, transacting with their suppliers, workers and customers on terms agreed with or imposed upon these groups, or as part of society at large and therefore expected to contribute to what society deems to be its interests. Whether current developments will ultimately produce a shift in corporate purpose akin to the one that followed the Second World War remains to be seen. But the parallels to the interwar debates, and the uncertain economic, political and social environment in which they took place, are striking. Our objective is to see what might be learned from the past to inform the current direction of thought concerning capitalism and corporate purpose.

Suggested Citation

  • Suzanne J. Konzelmann & Victoria Chick & Marc Fovargue-Davies, 2020. "Shareholder Value or Public Purpose? From John Maynard Keynes and Adolf Berle to the Modern Debate," Working Papers wp520, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp520
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Corporate purpose; shareholder primacy; John Maynard Keynes; Adolf Berle;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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