If Corporations Are Being Run to Maximize Returns to Shareholders, Why are Returns So Low?

(This post originally appeared on my Patreon page.)

This summer, the Business Roundtable, a group that includes most of the country’s largest corporations, made big news. It issued a statement that its members would no longer be concerned exclusively with maximizing returns to shareholders. Instead, Roundtable members would take into account the well-being of their workers, the communities in which they do business, and the environment.

This statement was given a mixed reception. While some applauded the idea...