Dorsey David - Capitalists, arise!: end economic inequality, grow the middle class, heal the nation

In this valuable and well-written book, Peter Georgescu explores the erosion of the American Dream and the societal impacts of growing economic inequality. Fortunately, he is an optimist and presents a compelling case for what the private sector can do to simultaneously advance the interests of both workers and shareholders. Unlike many books about the future of our economy, this is one you should buyand actually read.

Jason Grumet, President, Bipartisan Policy Center

Peter Georgescu, one of Americas leading business thinkers, has issued a sharp warning to his fellow capitalists: theyve become the unwitting enemy of the free-market system they claim to love. By elevating share prices over the welfare of the workers and consumers who buy their products, theyre in danger of driving our great, corporate profit-making engine into the ground. This book talks frankly to blinkered titans who have hijacked the system. To keep capitalism alive, he tells them, all Americans have to thrive.

Jane Bryant Quinn, author of How to Make Your Money Last

Capitalists Arise! highlights the perilous human cost of opportunity inequality and how it threatens the entire American system. Georgescu offers a critique of how the philosophy of shareholder primacy, since the 1980s, has contributed to shrinking opportunity for most Americans. Importantly, he points to solutions business and the nation need with great urgency.

Raymond D. Horton, Professor of Ethics and Governance, Columbia Business School

Peter Georgescu is a great storyteller. In his new book he takes on one of the driving stories of our timeincome inequality. He makes you not just understand but feel the consequences in human terms. And then he goes on to offer real-world solutions. This book will not just make you think; it will drive you to action.

Shelly Lazarus, Chairman Emeritus, Ogilvy & Mather, and Board Member, General Electric, Blackstone Group, and Merck

Capitalists Arise! is a powerful call to action for the business community to address the rapid rise in inequalities of income, wealth, and opportunity witnessed over recent years. The work of the OECD has underlined, with greater clarity than ever before, the true nature of the threat posed by soaring inequalities to growth, political stability, and the very existence of our future prosperity. Business may have contributed to the problem, but it can also be a key part of the solution. Georgescus message is simple: business cannot serve one master alonethe shareholder. Rather, he asserts that, for its own benefit, the business community must treat their employees, their companies, and their communities more fairly. Inclusive growth is the only viable socioeconomic solution for our times. Capitalists Arise! is a must-read.

Angel Gurra, Secretary-General, Organisation for Economic Co-operation and Development

Capitalists Arise! is the most compelling book I have read about the disastrous effects of ever-widening income inequality in America since Charles Murrays Coming Apart. It offers compelling solutions for an America on the brink.

Pamela Carlton, President, Springboard

CAPITALISTS, ARISE!

END ECONOMIC INEQUALITY, GROW THE MIDDLE CLASS, HEAL THE NATION

PETER GEORGESCU
with David Dorsey

Capitalists, Arise!

Copyright 2017 by Peter A. Georgescu

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed Attention: Permissions Coordinator, at the address below.

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First Edition

Hardcover print edition ISBN 978-1-5230-8266-7

PDF ebook ISBN 978-1-5230-8267-4

IDPF e-book ISBN 978-1-5230-8268-1

2017-1

Cover design: Brad Foltz. Book production and interior design: VJB/Scribe.

Copyeditor: John Pierce. Proofreader: Nancy Bell. Indexer: Theresa Duran.

Author photo: Elle Muliarchyk.

To our son Andrew
With respect and admiration

FOR THE PAST FOUR decades, capitalism has been slowly committing suicide. Its going on in plain view, although few recognize whats happening because, to most observers of the stock market, nothing looks amiss.

The stock market has become the yardstick of the nations financial and economic health: we assume that stock prices measure the well-being of corporate and business success, and we continue to apply this metric even as the market reaches record-setting territory. Growth in the value of stocks has become an obsession. It is part of our culture. Shareholders have come to demand it. Year in and year out, quarter after quarter, profits must go up. As a result, a CEO must push earnings and stock prices skyward by whatever means possible. Do that consistently, and the CEO is richly rewarded, celebrated in the press, and applauded by the financial community. Any CEO who allows earnings and profits to languish, even temporarily, is in danger of losing his or her job. That has become our zeitgeistdeliver earnings, push up the stock price, or perish. It has the appearance of a natural, reasonable process, but it isnt. It is an unforgiving ritual, a cruel way to do businessa way through which unintended actions have disastrous long-term consequences for companies and our society in general. This is the world in which shareholders have come to demand and get maximum, short-term returns. A world where shareholders have dominion over all other stakeholders in a company. Nearly four decades of this version of capitalism have damaged the long-term viability of businesses and helped create a vast, unequal America in socioeconomic terms. Simply put, shareholder primacy has become a kind of cancer that needs to be eradicated before it destroys our way of life.