What, though, if the way our companies are run is contributing to inequality? That was the suggestion made by the Bank of
Haldane's argument goes as follows. Humans have problems deferring gratification. That goes for consumers, but it also goes for company bosses. And if power resides with this group, what you get is widening inequality, because the fruits of a company's growth go disproportionately into raising executive pay and dividends, rather than into higher real earnings and investment.
Haldane says there is a case for reform that would provide a different set of incentives and skew companies towards delivering long-term value for a broader range of stakeholders.
It's hard to quibble with that. The way companies are run does seem to be a factor in the widening gap between rich and poor. The decline of collective bargaining means trade unions are less able to act as a counterweight to shareholder power. What's more, other countries have managed to move to a model biased towards investing rather than distributing.
What Haldane doesn't do is explain how this change will come about. History suggests the resistance will be stiff.
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