The Illusion of Prosperity: Why Our Shareholder-Driven Economy Is Broken
We are living in a paradox. Corporate profits are soaring, markets are hitting record highs, yet for the average person, life is getting more expensive, wages feel stagnant, and the quality of goods and services seems to be in a perpetual decline. We are told this is the path to prosperity, but for whom? It’s time to state the plain truth: the modern economic system, built on the singular idea of maximizing shareholder profit, is a fundamentally broken and unsustainable model.
The core of the problem lies in its primary directive. When a corporation's legal and ethical duty is to deliver maximum returns to its shareholders, every other consideration becomes secondary. This single-minded focus creates a series of perverse incentives that actively work against the well-being of society.
The Inflation Engine
In a rational economic model, high demand and technological efficiency should lead to lower prices. When a company sells millions of items, the cost to produce each individual item—the "per-unit cost"—drops significantly. This is the principle of economies of scale. That efficiency should be passed on to the consumer in the form of lower prices.
However, in the shareholder-first model, that efficiency is not a benefit to be shared; it is a profit margin to be captured. Why lower prices when high demand allows you to raise them? The goal isn't to provide the most value to the customer, but to extract the most value from the customer for the shareholder. Consequently, inflation becomes a feature, not a bug. It's the easiest lever for corporations to pull to guarantee quarterly growth and appease the market, regardless of the real-world cost to consumers.
The Race to the Bottom on Quality and Wages
The second lever is cost-cutting. To maximize profits, you must minimize expenses. This translates directly into two areas that affect us all: the quality of what we buy and the livelihoods of those who make it.
We see this everywhere: products that break just after the warranty expires, software released with bugs, and customer service that is outsourced and ineffective. These are not accidents; they are business decisions made to protect the bottom line. Simultaneously, the largest expense for most companies is labor. The shareholder model incentivizes suppressing wages, cutting benefits, and fighting against unionization. Workers are seen not as assets to be invested in, but as costs to be minimized. This creates a vicious cycle where the very people who produce the wealth are denied their fair share of it, leading to widespread financial precarity.
The Great Disconnect: Private Jets vs. Public Good
This system has become an engine for immense wealth concentration. The vast profits generated are funneled to a tiny fraction of the population—executives with astronomical salaries and bonuses, and large institutional shareholders. The money that could be used to increase worker salaries, invest in research for better products, or lower prices for everyone is instead used to fund stock buybacks, private jets, and lifestyles of unimaginable luxury for a chosen 1%.
We must challenge this. The wealth a company generates is a collective effort from its workers and the society that supports it. It is not the exclusive property of its shareholders.
A New Paradigm: An Economy for the People
We need a fundamental shift in our thinking. We must move from a model of shareholder value to one of stakeholder value, where a company’s purpose is to benefit not just its investors, but also its employees, its customers, and the community at large.
What would this look like?
Redirecting Profits: Corporate profits must be redirected. Instead of going to a select few, they should be used to provide living wages and excellent benefits for all employees. Imagine a world where corporate success is measured by the well-being of its workforce.
Radical Affordability: If you can't dramatically increase every single person's salary overnight, you can achieve the same result by making life radically cheaper. By prioritizing price reduction over profit maximization, essential goods and services could become vastly more accessible, increasing everyone's real disposable income.
A Societal Dividend: A significant portion of corporate productivity should be returned to society. This could fund robust, free public services—from transportation and healthcare to education and high-speed internet. When society thrives, businesses thrive.
Eliminate Regressive Burdens: The endless taxes, fees, and payment commissions that chip away at the income of regular people must be re-evaluated and largely eliminated. These small cuts disproportionately harm those with the least, while corporations employ armies of accountants to pay as little as possible.
This isn't a fantasy. This is a call for a more logical, sustainable, and humane economic system. The current path leads to ever-increasing inequality and social instability. We have the resources, the technology, and the productivity to create a world of shared prosperity. We just need to change the goal. It is time to stop serving the abstract idea of profit and start building an economy that serves people.
