I am persuaded that erroneous ideas about corporate governance offer an effective line of attack on the idea that "greed is good". The mistake is the tacit assumption that shareholders care about nothing but money. This is obviously false. Recognising the error undermines a pillar of the greed-is-good ideology. It demands changes in corporate law and governance. Best of all, it can be stated in sound bites with lurid examples.

It is reasonable to argue that, because

• Corporations are owned by shareholders, and
  
• Business owners use their property to produce value as best they can, therefore
  
• As their agents, managers should strive maximize the value the corporation produces.

The greed-is-good crowd then assumes a false premise: That maximizing value to shareholders means maximising the market value of their shares -- that is, they tacitly assume that shareholders care about nothing but money.

This has ugly consequences. For example, this principle says that it is proper (even obligatory!) to sell food with toxic additives, provided that this is legal and (taking everything into account) profitable. Likewise, if working conditions in an Indonesian factory can be greatly improved at little net cost, this principle says that doing so would be wrong, no matter how great the improvement or how small the net cost.

This widely held principle impose on corporate leaders what can amount to a fiduciary obligation to do evil, but if corporations act on behalf of their shareholders, how can it be right for them to do what informed shareholders would judge to be wrong?

If corporations exist to maximise value to their owners, then they must not do what their shareholders would reject, and should do what their shareholders would applaud. That is, they must act in a way consistent with the values of actual human beings, and must not act as mere profit-maximisers: Greed is wrong.

This is a radical idea, yet it follows directly from basic principles of the reigning free-market ideology.

Words and ideas I offer here may be used freely and without attribution.