William Lazonick-2013-The Financialization of the U.S. Corporation
The Financialization of the U.S. Corporation: What Has
Been Lost, and How It Can Be Regained
William Lazonick*
I. INTRODUCTION: WHAT HAPPENED TO ECONOMIC PROSPERITY?
Many of us know what a prosperous economy looks like. People who want to work have no problem finding jobs. People who want to build careers can accumulate the necessary work experience over time.
People who want to start their own businesses can tap into sources of committed finance enabling them to get their firms up and running.
When the work has been done, careers have been built, and businesses have become going concerns, the prosperous economy yields a distribution of income that most people regard as fair. The prosperous economy has a large and stable middle class, with hard-working and dedicated people finding opportunities to climb up the economic ladder. The intergenerational expectation is that children will do better than their parents.
And after several decades of remunerative work, their parents can retire with enough savings to at least remain in the middle class for the rest of their lives.
Many of us know what a prosperous economy looks like because, for people who are old enough to remember, it is what the U.S. economy used to be. For most college-educated people that economy existed as recently as the 1990s, while for most high-school-educated people, it disappeared a decade before that. More generally, the past thirty years or so have seen an unrelenting disappearance of middle-class jobs accom*
Professor, Department of Economics, University of Massachusetts Lowell; President, The Academic-Industry Research Network; william.lazonick@yahoo.com. The concepts discussed in this paper were presented at The Future of Financial and Securities Markets: The Fourth Annual Symposium of the Adolf A. Berle, Jr. Center for Corporations, Law and Society of the Seattle University School of
Law. The Symposium took place in London on June 14–15, 2012. The research in this
Been Lost, and How It Can Be Regained
William Lazonick*
I. INTRODUCTION: WHAT HAPPENED TO ECONOMIC PROSPERITY?
Many of us know what a prosperous economy looks like. People who want to work have no problem finding jobs. People who want to build careers can accumulate the necessary work experience over time.
People who want to start their own businesses can tap into sources of committed finance enabling them to get their firms up and running.
When the work has been done, careers have been built, and businesses have become going concerns, the prosperous economy yields a distribution of income that most people regard as fair. The prosperous economy has a large and stable middle class, with hard-working and dedicated people finding opportunities to climb up the economic ladder. The intergenerational expectation is that children will do better than their parents.
And after several decades of remunerative work, their parents can retire with enough savings to at least remain in the middle class for the rest of their lives.
Many of us know what a prosperous economy looks like because, for people who are old enough to remember, it is what the U.S. economy used to be. For most college-educated people that economy existed as recently as the 1990s, while for most high-school-educated people, it disappeared a decade before that. More generally, the past thirty years or so have seen an unrelenting disappearance of middle-class jobs accom*
Professor, Department of Economics, University of Massachusetts Lowell; President, The Academic-Industry Research Network; william.lazonick@yahoo.com. The concepts discussed in this paper were presented at The Future of Financial and Securities Markets: The Fourth Annual Symposium of the Adolf A. Berle, Jr. Center for Corporations, Law and Society of the Seattle University School of
Law. The Symposium took place in London on June 14–15, 2012. The research in this