What debates and discussions on the ethics of markets, business and economics stood out in 2019? To answer that question, we looked back at the articles that we sourced for you from a range of different websites throughout the year. The three topics we distilled:

  1. Does Business Have a Purpose Beyond Profit?
  2. Economic Growth: Problem or Solution?
  3. Can We Make the Economy More Democratic?

Below a quick recap of – sometimes opposing – contributions to these discussions. Where do you stand?

1. Does Business Have a Purpose Beyond Profit?

A ‘Statement on the Purpose of a Corporation’, published by the Business Round Table on 19 August 2019, triggered a lot of responses. “The history of what – and who – businesses serve reveals that this is an age-old debate, which has raged since the dawn of modern day capitalism” (The Conversation, 10 October 2019). Economist Milton Friedman famously argued in a 1970 article in New York Times Magazine that creating profit for shareholders is the only responsibility of companies, (Big Think, 19 August 2019). Under neoliberalism this idea became widely supported, although some economists have continued to argue “that idea to be not only wrong, but disastrous to society” (Brave New Europe, 1 July 2019). In August 180 CEOs signed a statement saying that the interests of other stakeholders and society at large should indeed also be taken into account.

A bad idea according to Jesse Fried, professor at the Harvard Law School, as “shareholder primacy is what keeps managers accountable and allows capital to flow where it is needed in the economy” (Financial Times, 7 October 2019). Stakeholder capitalism would, according to another critic be a “recipe for cozy corporatism that would offer CEOs real cover for wrong-doing” as responsibilities are no longer clear (CAPx, 23 august 2019). Moreover, there would be nothing wrong with a focus on profit if Adam Smith, the founding father of modern economics, were right that “the profit motive channels people’s energies into serving others” (CAPx, 28 November 2019). But was he? “Whether purpose and profits work together or are fundamentally at odds with each other can be informed by empirical research“, and there is at least some evidence that they tend to work together (Hardvard Business Review, 20 August 2019).

Other than responses from defenders of shareholder capitalism, the statement led to “three main strands of reaction”: applause, skepticism and realism (Harvard Business Review, 9 November 2019). “Is the Business Roundtable Statement Just Empty Rhetoric?” (Harvard Business Review, 30 August 2019) is a question that probably many have wondered about. It remains to be seen. “As of now“, one professor of business administration argued, “there are at least four reasons to view the statement as more of a symbolic gesture than a harbinger of change in how corporate America functions” (Harvard Business Review, 22 August 2019). There are, however, at least”6 ways CEOs can prove they care about more than shareholder value” (Harvard Business Review, 2 September 2019).

Perhaps though other parties now need to seize the momentum that the declaration created and do their bit to change shareholder capitalism. Arguably “it will be incumbent on governments to create space for it to succeed” (Project Syndicate, 26 August 2019), and “if America’s most powerful CEOs really mean what they say, they will support sweeping legislative reforms” (Project Syndicate, 27 August 2019). Although according to some the current law “doesn’t prevent companies from considering the interests of other groups (The Conversation, 27 August 2019).

2. Economic Growth: Problem or Solution?

“Economic growth is the answer” to the problem of inequality, so American economics professor Michael Boskin claimed on Project Syndicate (12 December 2019). At least group of Australian researchers will probably not be convinced. They argue that economic growth is not enough for creating “a fairer, greener and more prosperous” society (The Conversation, 19 November 2019). They will then probably be interested to learn that neighboring country New Zealand recently decided to put “well-being, not growth or production, at the center of its economic policy” (Big Think, 6 June 2019). Not only countries, but also “social enterprises can help to rethink business growth, another group of researchers claims (The Conversation, 27 March 2019).

More outspoken against growth is writer and entrepreneur Jag Bhalla, who holds that sustainability and growth do not combine, and that “ending the ‘endless growth’ fairy tale needs moral clarity” on what the components of the good life are (Big Think, 2 October 2019). He could perhaps draw support from two researchers who present “five reasons ‘green growth’ won’t save the planet” (The Conversation, 20 March 2019).

But will the values of sustainability and  justice not clash? Can we end poverty without growth? Fortunately, so economist Joseph Stiglitz argues, “there is ample room to change the quality of growth and significantly reduce its environmental impact without condemning billions of people to lives of deprivation” (Project Syndicate, 9 December 2019). But that may require a lot of human creativity and a better collaboration between economists and other disciplines, topics recently addressed by Deidre McCloskey in a new paper titled “How Growth Happens” (Acton Institute Blog, 14 January 2019).

3. Can We Make the Economy More Democratic?

The balance between capitalism and democracy has rarely been stable, but in recent decades it has tilted decidedly toward markets and the technocrats charged with regulating them“, so a recent article on Project Syndicate (20 September 2019) starts. Can we make the economy more democratic? Should we? And if so, how? Various books and articles appeared in 2019 addressing these questions.

It was for example argued by Marjory Kelly that “to make the economy more fair, we need to make it more democratic” (FastCompany, 29 October 2019). Along similar lines, Andrew Cumbers argued that “we need to fundamentally fix the way we run our economies and hand economic power back to the people” (The Conversation, 5 December 2019).

Cooperatives are one way to make the economy more democratic. One might not expect this, but apparently “America leads the world with cooperatives, with over 30,000 businesses [already] operating under this model” (Big Think, 9 January 2019). Crowdfunding may be another strategy, although some have warned that “crowdfunding may not be the great democratising force in investment after all” (The Conversation, 11 September 2019).

Will democratization harm the economy? Not according to an article in The Conversation (30 May 2019), which presented research indicating that “sharing profits and ownership with workers not only make them happier, it benefits the bottom line too.” Why then is this model not more widely adopted? According to another article in The Conversation (20 May 2019) this is partly because “employee-owned companies are resisted by banks, lawyers and governments“.

Perhaps though full employee ownership is not needed. Even just giving employees a voice may have benefits for both companies and societies, as there is research indicating that “companies with workers on boards make longer-term decisions” (The Conversation, 27 November 2019).

Finally, some articles zoomed in on online platforms and the gig economy that it has created. “Why would platform users delegate intermediation to third-party companies which gain from the economic value of their exchanges when they could manage the platforms themselves?“, the authors of one article ask (The Conversation, 3 November 2019). Cooperatives also feature as a possible solution in another article on “how to build a fairer gig economy in 4 steps” (Big Think, 2 November 2019).