How American Corporations Transformed From Producers to Predators - by William Lazonick:

In 2010, the top 500 U.S. corporations -- the Fortune 500-- generated $10.7 trillion in sales, reaped a whopping $702 billion in profits, and employed 24.9 million people around the globe.

Historically, when US corporations have invested in the productive capabilities of their American employees, the US has had lots of well-paid and stable jobs. That was the case a half century ago.

A generation or two ago, corporate leaders considered the interests of their companies to be aligned with those of the broader society. In 1953, at his congressional confirmation hearing to be Secretary of Defense, General Motors CEO Charles E. Wilson was asked whether he would be able to make a decision that conflicted with the interests of his company. His famous reply: “For years I thought what was good for the country was good for General Motors and vice versa.” 

Unfortunately, it’s not the case today. For the past three decades, top executives have been rewarding themselves with mega-million dollar compensation packages while American workers have suffered an unrelenting disappearance of middle-class jobs. Since the 1990s, this hollowing out of the middle class has even affected people with lots of education and work experience. As the Occupy Wall Street movement has recognized, concentration of income and wealth of the top “1 percent” leaves the rest of us high and dry.

What went wrong? A fundamental transformation in the investment strategies of major U.S. corporations is a big part of the story.

In a special five-part series, William Lazonick, professor at UMass, president of the Academic-Industry Research Network, and a leading expert on the business corporation, along with journalist Ken Jacobson and AlterNet’s Lynn Parramore, will examine the foundations, history and purpose of the corporation to answer this vital question: How can the public take control of the business corporation and make it work for the real economy?

For the complete report: William Lazonick: How American Corporations Transformed From Producers to Predators