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Wed Aug 21, 2019, 01:48 PM

A capitalist's manifesto for corporate reform

By David Ignatius

The Washington Post

“Evolve or die,” wrote hedge-fund billionaire Ray Dalio in a manifesto published in April titled “Why and How Capitalism Needs to be Reformed.” With each passing month, more business executives have been joining this unlikely crusade to save capitalism from itself.

The loudest reform call yet from inside the system came this week from the Business Roundtable, which represents the chief executives of 192 of the nation’s largest companies. Most of its members signed a statement declaring that making profits for shareholders isn’t a corporation’s sole responsibility. Instead, companies have a broader mission to serve customers, employees, suppliers and communities, too, the statement said.

Jamie Dimon, the chief executive officer of JPMorgan Chase and chairman of the Roundtable, led the signers who agreed: “Many Americans are struggling. Too often hard work is not rewarded.” Dimon had earlier warned in this year’s annual letter to his company’s shareholders that the American dream was “fraying for many” because of stagnant wages and income inequality.

Business leaders seem to recognize the crisis: The system isn’t delivering. President Trump’s election reflects a populist rage that threatens America’s future prosperity and stability.

Many progressives have responded cynically to the billionaires’ revolt. Dalio, after all, founded Bridgewater Associates, one of the world’s biggest hedge funds, and Dimon runs America’s biggest bank. Talk is cheap, critics argue, and if these CEOs really feel the system is in trouble, they should reduce their own pay and give more to their workers and communities.

The skepticism is understandable, but it misses the larger political point: Corporate America fears the system is failing. As Dalio wrote, this is an “existential” moment. The guardians of capitalism seem to realize that they must respond to right-wing populists and left-wing progressives alike or face a worsening political crisis that is already hobbling the country.


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