A New Enlightenment Reading List

Below are some suggested readings to get you in the mood for the conference. We’re not endorsing the particular views in any of these articles. They’re just a sampling of the existing discussion around some of the big ideas that the conference is designed to address.

Since the Conference

A Roadmap For Reshaping Capitalism

“Perhaps the most striking news from the conference was the emerging consensus that maximizing shareholder value is a thoroughly bad idea. If no remedial action is taken, the economic, social and political consequences are likely to be dire.”

by Steve Denning

Forbes.com, July 7, 2019

https://www.forbes.com/sites/stevedenning/2019/07/07/a-roadmap-for-reshaping-capitalism/

Capital Market Governance

Hard Choices: The importance of thoughtful deliberation and its implications for the future of capitalism

“we should all keep in mind that the benefits of capitalism are not so obviously and directly attributable to the system the way the adverse side effects and increasing societal inequality are. The invisible hand is, by definition, invisible.”

by Seth Klarman

https://www.alumni.hbs.edu/stories/Pages/story-bulletin.aspx?num=6818

For Companies, It Can Be Hard to Think Long Term

“Do I please investors who are in it for the long haul, or do I please investors who are playing the quarterly game?” There is no easy answer to that question.

By John D. Stoll

Wall Street Journal, Dec. 3, 2018

https://www.wsj.com/articles/for-companies-it-can-be-hard-to-think-long-term-1543846491

The Capitalist's Dilemma

Are Investors Bad for Business? The financial sector's power can have unintended, harmful effects on executive decision making -- but there are ways to mitigate the damage.

By Clayton M. Christensen and Derek van Bever

Harvard Business Review, June 2014

https://www.hbs.edu/faculty/Pages/item.aspx?num=50982

Are CEOs Paid for Performance?

“Has CEO pay reflected long-term stock performance? In a word, “no.” Companies that awarded their Chief Executive Officers higher pay incentive levels had below-median returns, based on a sample of 429 large-cap U.S. companies observed from 2005 to 2015.”

MSCI, July 2016

https://www.msci.com/www/research-paper/are-ceos-paid-for-performance-/0412607620

Profits Without Prosperity: How Stock Buybacks Manipulate the Market, and Leave Most Americans Worse Off

William Lazonick, 2014

“Five years after the end of the Great Recession, corporate profits are high and the stock market is booming. Yet most Americans are not sharing in the apparent prosperity. ... For this lack of shared prosperity, the allocation of corporate profits to stock buybacks bears considerable blame.”

https://www.ineteconomics.org/uploads/papers/LAZONICK_William_Profits-without-Prosperity-20140406.pdf

(also published in Harvard Business Review)

You might also enjoy reading this new profile of William Lazonick:

The Economist Who Put Stock Buybacks in Washington’s Crosshairs

By Sheelah Kolhatkar

The New Yorker, June 20, 2019

https://www.newyorker.com/business/currency/the-economist-who-put-stock-buybacks-in-washingtons-crosshairs

Global Governance of Technology & Trade

How to Save Globalization

"We live in a time of protectionist backlash. ... By now, it is well known that this backlash followed a dramatic rise in inequality in the United States. ... Addressing the backlash requires giving all Americans the tools they need to carve out the sense of security and purpose they have lost amid change."

By Kenneth F. Scheve and Matthew J. Slaughter

Foreign Affairs, October 15, 2018

https://www.foreignaffairs.com/articles/united-states/2018-10-15/how-save-globalization

The WTO has become dysfunctional

"A fair world trade regime would recognise the value of diversity in economic models. It should seek a modus vivendi among these models, rather than tighter rules."

by Dani Rodrik

Financial Times, August 6, 2018

https://www.ft.com/content/c2beedfe-964d-11e8-95f8-8640db9060a7

Testimony to the U.S. Senate on Responding to International Predatory Economic Practices (Summary)

"Many generally play by the rules, but a significant and growing share of nations have taken to “innovation mercantilism” by employing a host of unfair domestic economic and trade policies and practices to limit domestic market access to foreign firms in advanced industries and expand foreign market access for their firms."

Robert D. Atkinson, May 9, 2018

https://itif.org/publications/2018/05/09/testimony-us-senate-responding-international-predatory-economic-practices

Ethics, Economics & Capabilities

The Problem With Inequality, According to Adam Smith

The allure of extreme wealth can contort human sympathies, causing the public to admire the wealthy and shun the poor.

by Dennis C. Rasmussen

The Atlantic, June 9, 2016

https://www.theatlantic.com/business/archive/2016/06/the-problem-with-inequality-according-to-adam-smith/486071/

Managing Our Hub Economy

"In a painfully ironic turn, after creating unprecedented opportunity across the global economy, digitization—and the trends it has given rise to—could exacerbate already dangerous levels of income inequality, undermine the economy, and even lead to social instability."

by Marco Iansiti and Karim R. Lakhani.

Harvard Business Review, Sept/Oct 2017

https://hbr.org/2017/09/managing-our-hub-economy

The Problem With Innovation: The Biggest Companies Are Hogging All the Gains

Economists trying to explain a long-term slowdown in productivity increasingly believe gains are not spreading through the economy, as they once did

By Jason Douglas, Jon Sindreu and Georgi Kantchev

Wall Street Journal, July 15, 2018

https://www.wsj.com/articles/the-problem-with-innovation-the-biggest-companies-are-hogging-all-the-gains-1531680310

Progressive Capitalism Is Not an Oxymoron

We can save our broken economic system from itself.

"We are now in a vicious cycle: Greater economic inequality is leading, in our money‐driven political system, to more political inequality, with weaker rules and deregulation causing still more economic inequality. ... We need regulations that ensure strong competition without abusive exploitation, realigning the relationship between corporations and the workers they employ and the customers they are supposed to serve."

By Joseph E. Stiglitz

New York Times, April 19, 2019

https://www.nytimes.com/2019/04/19/opinion/sunday/progressive-capitalism.html

China

China – Partner and Systemic Competitor: How Do We Deal with China's State-Controlled Economy?

“German industry has no interest in a conflict-oriented economic, political and technological containment or decoupling from China. Systemic differences and divergences do not necessarily mean conflict but require the reliable and resilient management of common interests. Cooperation is necessary – despite competition.”

Federation of German Industries (BDI), January 2019

https://e.issuu.com/embed.html#2902526/66954145

When the World Opened the Gates of China

Was it a mistake for the U.S. to allow China to join the World Trade Organization? Assessments of the 2001 deal often determine positions in today’s bitter trade debate.

By Bob Davis

Wall Street Journal, Updated July 27, 2018

https://www.wsj.com/articles/when-the-world-opened-the-gates-of-china-1532701482

One Belt, One Road, and a Lot of Debt

By Nathaniel Taplin

"the evidence that Beijing is engaged in a coordinated campaign to enmesh borrowers in debt—and then strong-arm debtors or snatch away prized strategic assets—is thin. ... the real political purpose isn’t a debt trap but building goodwill and high-level relationships that could enable real military, diplomatic or trade alliances down the road as China’s rise continues."

Wall Street Journal, Updated May 2, 2019

https://www.wsj.com/articles/one-belt-one-road-and-a-lot-of-debt-11556789446

Xi Jinping’s Superpower Plans

As the U.S. retreats, Beijing is talking more boldly about how it wants to change the global order and assert its own values and interests.

By Elizabeth Economy

Wall Street Journal, Updated July 19, 2018

https://www.wsj.com/articles/mr-xis-superpower-plans-1532013258

Course Correction: Toward an Effective and Sustainable China Policy

Asia Society/US-China Task Force Report

Orville Schell and Susan L. Shirk, Chairs

February 2019

https://asiasociety.org/sites/default/files/inline-files/CourseCorrection_FINAL_2.7.19_1.pdf

A full-length panel discussion worth watching if a national security perspective is of interest:

Conscious Decoupling: Are the United States and China Parting Ways?

A panel discussion with Ely Ratner, Tom Donilon, Elizabeth Rosenberg and Derek M. Scissors

Center for a New American Security, June 14, 2019

https://www.cnas.org/publications/video/conscious-decoupling-are-the-united-states-and-china-parting-ways