December 13, 2005

Excerpts: The Battle For The Soul of Capitalism - Part XXIV

By: Dylan Schleicher @ 8:23 PM – Filed under: Management & Workplace Culture

A New Kind of Capitalism

The change from traditional owners’ capitalism to the new managers’ capitalism is at the heart of what went wrong in corporate America. It was reflected in the stock market bubble and the subsequent market burst, during which at least $2 trillion of wealth was transferred from public investors to corporate insiders, entrepreneurs, and financial intermediaries. Largely through stock options, executive compensation reached extraordinary levels, despite the production of corporate profits that were in fact, measured by the growth of our economy, less than ordinary. Managed earnings was an important engine of the system, and its goal, at least implicitly, was to raise corporate stock prices whether or not increases in intrinsic corporate values were achieved. It is that pathological mutation in capitalism that largely explains what went wrong. Explaining why it went wrong is the province of the next chapter.

link to book

About Dylan Schleicher

Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.