Corporations have been operating under the mistaken belief that they are legally obligated to maximize shareholder returns for a couple of decades now, to the detriment in general of labor and the overall quality of goods and services provided.
I would expect something similar to happen to here: this would incentive massive changes in attitude towards national infrastructure and services. Take NASA for example: it's already difficult to convince taxpayers at large to support NASA even to the meager extent that it is; now put NASA into the context of being even perceived as a very minor drag on GDP in a country where citizens expect to get an annual return on GDP, and there's no way NASA would continue to be funded.
Everyone would be willing to forsake long-term goals and returns in exchange for short-term financial incentives -- exactly the problem of so many businesses today.
(Rural areas would also be absolutely gutted by urban centers -- this would become a system that empowers tyranny of the majority.)
I think former President Obama has already replied to this idea more eloquently than I could:
"...government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with." ... "...if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences -- setting aside my Syria and Yemen portfolio -- then I think those suggestions are terrific." https://obamawhitehouse.archives.gov/the-press-office/2016/1...
I would really like to know which school produced the idea that maximizing shareholder returns IS NOT the primary imperative of any commercial enterprise.
Note the vast majority of corporations are not public and their only shareholders are the individual owners. So, maximizing return on their capital and labor is not based on some "mistaken belief", it is a basic existential requirement. Show me someone that doesn't understand that and I'll show you someone that has never run a business.
I had the words "legally obligated" in there on purpose, to try to avoid a pointless ideological argument in favor of objective fact. And on that point, the Supreme Court says you're wrong: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
How about Luigi Zingales, professor of finance at the University of Chicago Booth School of Business and a former president of the American Finance Association.
> Corporations have been operating under the mistaken belief that they are legally obligated to maximize shareholder returns for a couple of decades now
Thats because its very expensive when you don't, from the shareholder lawsuits.
You can try to scale up your worldview without getting sued to oblivion, but it is a parallel fantasy.
I would expect something similar to happen to here: this would incentive massive changes in attitude towards national infrastructure and services. Take NASA for example: it's already difficult to convince taxpayers at large to support NASA even to the meager extent that it is; now put NASA into the context of being even perceived as a very minor drag on GDP in a country where citizens expect to get an annual return on GDP, and there's no way NASA would continue to be funded.
Everyone would be willing to forsake long-term goals and returns in exchange for short-term financial incentives -- exactly the problem of so many businesses today.
(Rural areas would also be absolutely gutted by urban centers -- this would become a system that empowers tyranny of the majority.)
I think former President Obama has already replied to this idea more eloquently than I could:
"...government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with." ... "...if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences -- setting aside my Syria and Yemen portfolio -- then I think those suggestions are terrific." https://obamawhitehouse.archives.gov/the-press-office/2016/1...