Category: Research updates

Why Are Workers Getting Smaller Pieces of the Pie?

“It’s one of the biggest economic changes in recent decades: Workers get a smaller slice of company revenue, while a larger share is paid to capital owners and distributed as profits. Or, as economists like to say, there has been a fall in labor’s share of gross domestic product, or GDP. A new study co-authored by MIT economists uncovers a major reason for this trend: Big companies that spend more on capital and less on workers are gaining market share, while smaller firms that spend more on workers and less on capital are losing market share.”

Today’s GDP Figures Won’t Tell Us Whether Life Is Getting Better – Here’s What Can

“Australia’s Social Progress Index, launched last month by the Centre for Social Impact at UNSW Sydney and the Social Progress Imperative […] It will enable the well-being and opportunities to be ranked and compared by location and time. The online tool enables anyone to explore how we are tracking on 12 components grouped into three domains: basic human needs, foundations of well-being, and opportunity.”

How Socialism Became Un-American through the Ad Council’s Propaganda Campaigns

“Sanders is a Democratic Socialist. And the label ‘socialist’ is a political liability in American culture. […] In my research, I have found that this antipathy toward socialism may not be an accident: American identity today is strongly tied to an image of capitalism crafted and advertised by the Ad Council and American corporate interests over decades, often with the support of the U.S. government.”

More Equal Distribution of Wealth Makes People Happier

Since the liberalization of the Western economies in the 1980s and 1990s, income inequality has increased dramatically. In the public debate, the question arises how this inequality impacts societies and what role it plays in the functioning of the economy. Bjorn Lous has studied this issue, based on the question: How do the various aspects of economic freedom relate to (inequality of) life satisfaction and trust through their relationship with income inequality?

Study Finds Ethics Can Be Taught – In Finance, At Least

“Advocates for ethics testing argue that financial crises and corporate scandals, from the 2001 Enron scandal to the Great Recession of 2007 to 2010, can often be traced back to poor conduct training and a lack of social norms. Critics, such as the management guru Peter Drucker, question whether ethics can or even should be taught. In their view, business ethics courses were created ‘largely for the sake of appearances.’ […] So, can ethics be taught? According to our new research the evidence points to ‘yes’.”

Larry Fink Isn’t Going to Read Your Sustainability Report

“As my colleagues Michael Porter, George Serafeim, and I point out in a recent article, “Where ESG Fails,” most sustainability reporting is unreliable, inconsistent, and largely covers factors that are immaterial both to the economic performance of the company and to the company’s global impact. […] If Fink is correct in predicting that capital will increasingly be allocated to those companies with the most sustainable business models, then investors will need new sources of data to understand and anticipate the economic significance of sustainability strategies.”

The Devil Is in the Detail When It Comes to Responsible Investing

“Civil society organisations, academics and journalists have begun questioning whether responsible investment can bring about the level and pace of change required to enable an inclusive climate change transition. They are also highlighting the high risk of greenwashing – when companies set ambitious climate goals but have no plans for how to get there. To better understand whether the financial industry is really shifting, we looked to South Africa, a country with a leading regulatory framework for responsible investment.

Why Crowdfunding May Not Be the Great Democratising Force in Investment after All

“Initially, crowdfunding brought great optimism that it would have a “democratising effect” on finance. On the one hand it would enable entrepreneurs excluded from traditional sources of finance to attract funding. And, on the other, it would provide new opportunities for people with even relatively modest amounts of money to invest. […] Our work has reviewed the available research on crowdfunding to examine whether this relatively recent method of financing new and small businesses lives up to the lofty claims of democratising investment in the 21st century.”

Companies Promoting Causes Can Be Accused of ‘Wokewashing’ – Allying Themselves only for Good PR

“More consumers want companies to address societal problems, including climate change and crumbling infrastructure. Additionally, more than half want to buy from brands that take stands on social issues. At the same time, consumers are increasingly skeptical about these partnerships, seeing them as marketing stunts. It’s called wokewashing.”

Finance, Class, and the Birth of Neoclassical Economics: The Marginalist Revolution Revisited

“In economic textbooks, the concept of ‘value’ is regarded as nothing more than the prevailing market price. This definition might seem self-evident, but it stands in sharp contrast to the classical theories of Adam Smith and David Ricardo, who used the notion of ‘value’ to probe beneath the surface of the market and discover objective factors that regulate economic exchanges. It was only in the late nineteenth century, when the idea of ‘marginal utility’ was first introduced into the field, that ‘value’ came to be viewed as a subjective measure that is reflected in prices.”

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