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Home Publications Blogs Beat the Press Andrew Ross Sorkin: Top Executives Run Their Companies to Reduce Inequality

Andrew Ross Sorkin: Top Executives Run Their Companies to Reduce Inequality

Tuesday, 21 January 2014 11:36

It amazing what you can learn reading the New York Times. Andrew Ross Sorkin devoted his column today to the annual World Economic Forum held in Davos, Switzerland. He goes through a list of top executives of major companies and then tells readers:

"Whatever their reasons for staying away, the leaders of some of the largest and most transformative companies are demonstrating, with their absence, the difficulty of convening a global conversation with all the main stakeholders. Given that one of the themes this year is how to address economic inequality, it would be helpful to have the world’s largest employers participate in that discussion, not to mention a sampling of rank-and-file workers, who never receive an invitation."

It's not clear why Sorkin thinks that the top executives of the world's largest companies would have something special to say about addressing economic inequality. After all, these are the people who are pushing hardest to increase inequality. This is a bit like bemoaning the failure of tobacco company representatives to show up at a meeting devoted to ending smoking.

Most of us think that these executives focus on getting rich themselves and possibly enriching their shareholders. If they place a lot of emphasis on reducing inequality that would be news to many of us. For example, does the head of a major corporation come to a board meeting and tell the directors:

"sales and profits are down, but we've reduced global inequality."

That would be news if it were the case, but somehow I doubt it. It is reasonable to assume that corporations are trying to make money, which is why their directors have little interest in even pretending they care about inequality.

Comments (11)Add Comment
written by Wade, January 21, 2014 11:54
In general, I agree with you. However, not every businessman is solely interested in enriching himself. Take a look at "Up the Organization", which is the best business book around, though slightly dated and long out of print. Its author, the head of Avis at the time, refused a raise offered by his board of directors, because the company was, in his opinion, underperforming, and he saw that as his own failing.
Of course, that was before finance captured corporate America.
If you work in a publicly traded company, you may want to place your employees' welfare over profits, but if you do, you will soon be replaced by someone who is more shareholder oriented, and by now, enough guys have been replaced to give the heads of corporations deservedly bad raps.
I think Robert Reich wrote about this process in one of his books.
The Davos Pareto Club
written by Last Mover, January 21, 2014 12:18

Oxfam, the poverty charity organization just reported that the world's 85 richest people have the same amount of wealth as the bottom half of the world's entire population.

Is Oxfam going to Davos? Since membership and a ticket to get in is only $70k, that's a real bargain for that many people, don't you think? Especially to learn how inequality is essential to reward the best makers to produce the most to go around for everyone.

We knew you would understand.

This message is from The Davos Pareto-85 Club, where at least one person is made better off in the top half and no one is worse off in either half because of it.
written by MacCruiskeen, January 21, 2014 12:46
While Sorkin is a shill, I didn't see in the article where he says what you say he says in the headline. He says that inequality is to be discussed at Davos ("We're all for it" is presumably the consensus), and then says some people go and some don't, for reasons that have nothing to do with the topic at hand.

"It's not clear why Sorkin thinks that the top executives of the world's largest companies would have something special to say about addressing economic inequality. "

It's not clear why you think he thinks that.
due to globalization, world incomes are soaring..., Low-rated comment [Show]
written by ltr, January 21, 2014 1:39
Reading Sorkin is always like I imagine reading Jamie Dimon would be. The column is jibberish justifying corporate power.
written by Kat, January 21, 2014 2:08
They care about inequality... as in "caring about how they can profit from inequality".
As the rich have been getting richer, so too stocks associated with the rich, have performed exceptionally well. Our Plutonomy Basket, generated returns of 17.8% per annum, on average, from 1985. If Plutonomy continues, which we think it will, if income inequality is allowed to persist and widen, the plutonomy basket should continue to do very well. Names in this basket that our analysts recommend as buys include Julius Baer, Bulgari, Burberry, Richemont, Kuoni, and Toll Brothers

pete, 83 people are richer than 3.5 billion people ...
written by Squeezed Turnip, January 21, 2014 3:19
… so how can you say "we're getting there?"

Here's more.
written by pete, January 21, 2014 4:30
Well when I was studying developing economies, the issue was always getting incomes up, and there were a lot of failures, such as the idea that huge tariffs on imports in the 3rd world was a way to boost internal production. Finally the idea has been to incourage foreign investment, not discourage foreign investment (except in Venezuela and places like that). With capital limited, of course those with capital are reaping high returns. That said, global incomes are soaring, granting many access to things like, hmmm, running water, food, health care, etc. That should be the metric of success, not relative wealth.
Perhaps Sorkin could have channelled his inner Yogi Berra when he wrote this
written by John Wright, January 21, 2014 9:04
To paraphrase Yogi Berra:

On why he no longer went to Davos, "Nobody goes there anymore. It's too crowded."

Yogi actually was speaking about Ruggeri's, a St. Louis restaurant.

Note, Yogi is still alive, and it is encouraging that he, like many other notables is not going to Davos.

The Motley fool site ( http://www.fool.com/investing/...-2014.aspx)

has this:

"One of the big themes of Davos 2014 is "income inequality"
Let me get this straight. Attendees are paying around $40,000, so they can talk about "income inequality"? Will there be a breakout session on irony?"

written by dax, January 22, 2014 6:47
What annoys me most about the comments section here is often the only thing I can think of saying is, "I agree" or "Right on Dean." There are +/- buttons for individual comments. Maybe there should be one for the post itself, so people like me can just hit the + button.
Missing Executives
written by Bart, January 22, 2014 5:33

Those missing CEOs could be busy huddling with their TPP lobbyists.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.