The Tyranny Of Shareholders At Social Level

Corporations aren't evil on their own.

People often wonder why corporations turn into anti-social entities that end-up doing more harm than good to the customers. My view is that all corporation end up acting in accordance to shareholder interests which can be in conflict with public interest. This is the tyranny of shareholders on a social level.

The concept of tyranny of shareholders initially expressed the contradiction between what is good for a corporation and what is good for the shareholders. For example, laying off talented employees could be bad for the corporation but good for the shareholders who will increase profits.

In this post, I call the tyranny of shareholders the contradiction between shareholder interests and society’s interests. Indeed sometimes, something can be good for shareholders but bad for society as a whole. For example, offshoring  research and development activities could be good for shareholder who will again increase profits but bad for a society because it loses innovative capabilities.

My view is that society must protect itself from powerful agents who could have conflicting interests with the public. In other words, governments should prevent big players from performing things that will end up harming society under the justification that it’s in the shareholders right to make a profit.