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Predatory Value ExtractionHow the Looting of the Business Corporation Became the US Norm and How Sustainable Prosperity Can Be Restored$
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William Lazonick and Jang-Sup Shin

Print publication date: 2019

Print ISBN-13: 9780198846772

Published to Oxford Scholarship Online: January 2020

DOI: 10.1093/oso/9780198846772.001.0001

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Reversing Predatory Value Extraction

Reversing Predatory Value Extraction

(p.192) 8 Reversing Predatory Value Extraction
Predatory Value Extraction

William Lazonick

Jang-Sup Shin

Oxford University Press

This concluding chapter suggests the following changes in the United States’ corporate-governance regime that can get its economy back on the path to sustainable prosperity: (1) rescind SEC Rule 10b-18 and ban open-market stock repurchases; (2) redesign executive pay to incentivize and reward value creation, not value extraction; (3) reconstitute corporate boards of directors to include to include representatives of households as workers, as taxpayers, and as savers as well as households as founders—and exclude the predatory value extractors; (4) reform the corporate tax system so that it returns profits to taxpaying households and funds government spending on infrastructure and knowledge for the next generation of innovative products; (5) redeploy corporate profits and productive capabilities to support collective and cumulative careers, and thus enable widespread upward socioeconomic mobility.

Keywords:   SEC Rule 10b-18, executive pay, households, taxpayers, workers, savers, infrastructure, knowledge, productive capabilities, cumulative careers, upward socioeconomic mobility

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