American Made: What Happens to People When Work Disappears

by Farah Stockman

At the time, the owners of Link-Belt practiced what many called “stakeholder capitalism,” in which a CEO saw his job as balancing the interests of all stakeholders: employees, customers, suppliers, shareholders, and the government. For much of the twentieth century, premier business schools taught this as the proper conduct of a business leader. But in the 1980s, as global competition heated up, business schools and corporations abandoned that philosophy and embraced “shareholder capitalism,” which preached that a CEO’s sole responsibility was to increase the profit of shareholders. This idea, proselytized by the conservative economist Milton Friedman at the University of Chicago business school, made it a solemn duty for CEOs to rid themselves of their expensive obligations to the American workers who had long produced their iconic brands.