The Bank of England’s Andrew Haldane chief economist is bang on the money!
It is a couple of months now since Andrew Haldane suggested that shareholder power is leading to slower growth, and yet the shockwaves can still be felt. How utterly refreshing to hear someone with such potential ‘clout’ espouse such ear piercing common sense! Mr Haldane points out that in 1970, £10 out of each £100 profit was paid to shareholders (via dividends). Apparently, that figure today is between £60 and £70. Coupled with that, it would seem that in 1945 a share was held for approximately six months, and now it is approximately…six years! Andrew Haldane goes on to argue that the model of the shareholder dominated firm of the last century and a half, may well be doing us more harm than good. And meanwhile researchers at Stanford have concluded that pressure to meet quarterly earnings may be reducing R&D spend and negatively impacting U.S. growth by 0.1% per annum. Bravo Mr Haldane, bravo Stanford researchers.

At last, we are beginning to see the green shoots of pragmatic, balanced thinking. We must think longer term. We must think about sustainability. We must think about a fairer system of reward, lest we allow a truly dystopian ‘mash-up’ to manifest as the hunger games meets a zombie apocalypse, where a drooling set of jogging morons, eager to feast at the altar of avarice, literally eat us out of house and home!

A link to the original FT article is pasted below:

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