What Socialism Gets Wrong

George Melloan reviews Big Business by Tyler Cowen. Excerpts:

"First, business makes most of the stuff we enjoy and consume. Second, business is what gives most of us jobs."

"Capitalism’s critics would likely respond that it is beside the point because it doesn’t address the vital question of social justice. Mr. Cowen responds, in turn, that in fact large corporations have adapted better to changing social norms than most other institutions, including government. The pursuit of profit in a competitive marketplace motivates corporations to seek public goodwill, not only to win customers but to give meaning to the work of their employees."

"“Friedman failed to understand that the cultural, intellectual, ideological, and even emotional foundations of business go far beyond an attachment to profit. People care about what they do, and they seek meaning through their jobs. Profit maximization is best thought of as a convenient fiction that does a fairly good job boosting profits precisely because it rejects a sole emphasis on profits as a goal.”"

"it has become increasingly difficult to run a modern corporation. In addition to the usual challenges of the balance sheet and competitive pressure, there is increased media and regulatory scrutiny to contend with, technological advances to adapt to, and polyglot global workforces to manage. Men and women who can cope with such demands are rare and thus have a high market value."

"CEOs mostly deserve their rewards. When they don’t and are dismissed with a golden handshake—a seemingly exorbitant severance package—the reason is usually that it is the easiest way to get rid of them, averting legal wrangling and bad publicity, or so the corporate board believes."

"fraud is more prevalent in nonprofit organizations than in profit-making ones. What is more, “plenty of charities and nonprofits don’t actually change or improve the world or deliver any useful product at all, but rather simply continue as lost causes with no impact.”"

"“As of 2015, 55 percent of Americans had money invested in stocks . . . ,” he writes. “Even if you do not personally own many or any equities, there is a good chance your retirement fund or pension fund does."

"he asks why, if businesses are supposed to control our politics, corporations bear such heavy loads of taxes and regulation."