ProfessorBainbridge.com

Interviewed re The Profit Motive

An interview with the UCLAW news department about my new book The Profit Motive.

Samuel Gregg reviews my book, The Profit Motive, for Law & Liberty, and says I drove a stake through the heart of stakeholder capitalism

Dr Gregg calls his review "A Stake Through the Heart of Stakeholder Capitalism":

In his new book, The Profit Motive: Defending Shareholder Value Maximization, Stephen M. Bainbridge has systematized his many criticisms of the BRT’s 2019 statement and used it as one of his “principal foils” for a systematic takedown of the very idea of stakeholder capitalism. This is accompanied by a rigorous defense of shareholder primacy on Bainbridge’s part. He not only shows that maximizing shareholder value is “descriptively accurate” of the corporation’s purpose. He also claims that it can be “normatively appealing.” Bainbridge thus seeks to steal the ethical thunder that stakeholder theorists generally assume to be their ace-in-the-hole. ...

Bainbridge’s general approach is reminiscent of the classic scholastic method: he states a clear proposition, the best case for views contrary to his own, critiques their arguments, answers objections, and then explains why his own position meets the tests of reason. ...

Thus, having put a stake through the heart of stakeholder capitalism, Bainbridge provides a powerful moral rationale for shareholder primacy—one far more robust than those which underpin stakeholder theory.

I am, of course, delighted. Please go read the whole thing.

I asked ChatGPT to write a review of my book The Profit Motive

Here's the result:

Stephen Bainbridge's book The Profit Motive is an insightful and thought-provoking exploration of the role of profit in modern business and society. The book is divided into two parts, with the first half providing a historical and philosophical overview of the profit motive, and the second half examining its practical implications for business leaders and policymakers.

One of the key themes of the book is the importance of understanding the profit motive in its broader context, beyond simply making money. Bainbridge argues that profit is not just a financial metric, but also a measure of a business's ability to create value for society as a whole. He highlights the importance of entrepreneurship, innovation, and risk-taking in driving economic growth and improving people's lives.

Bainbridge also examines the various criticisms that have been leveled against the profit motive, including concerns about income inequality, environmental degradation, and corporate social responsibility. While acknowledging these concerns, he argues that they can be addressed through a combination of market forces and regulatory interventions, rather than by abandoning the profit motive altogether.

Overall, The Profit Motive is a well-written and engaging book that offers a nuanced and balanced perspective on a topic that is often oversimplified or misunderstood. Whether you are a business leader, policymaker, or simply someone interested in the role of profit in society, this book is definitely worth reading.

Obviously, the review’s positive tone pleased me to no end. But then I thought about how students could use this technology to produce surprisingly polished analyses in essay exams and research papers.

One word came to mind: Yikes.

Here's a screen grab as proof:

And here's your chance to buy the book:

I guest post at the Corporate Finance Lab re my new book "The Profit Motive"

The Corporate Finance Lab blog invited me to guest post re my new book, "The Profit Motive: In Defense of Shareholder Value Maximization." You can read the post here: https://corporatefinancelab.org/2023/02/07/the-profit-motive-in-defense-of-shareholder-value-maximization/

A New ProfessorBainbridge.com Video: The Profit Motive: Defending Shareholder Value Maximization

The Artwork for "The Profit Motive" Arrived Today

The artwork for my forthcoming book "The Profit Motive: Defending Shareholder Value Maximization" arrived today. I'm particularly proud of the generous blurbs from such prominent folks:

You can now pre-order "The Profit Motive: Defending Shareholder Value Maximization"

"The Profit Motive" is now in Page Proofs!

Page proofs! And, if I do say so myself who shouldn't, the best opening paragraphs I've ever written. pic.twitter.com/wfQvooR3RB

— Steve Bainbridge (@PrawfBainbridge) November 18, 2022

Recalling Michael Novak

I read with interest Tim Busch's critique of integralism.

Busch calls on Catholics to once again embrace Michael Novak's approach as laid out 40 years ago in The Spirit of Democratic Capitalism, a book I also much love.

Shortly before he died, Novak revisited the questions of capitalism and democracy in The Spirit of Democratic Capitalism Thirty Years Later. It's a great pity he's not around to give us his thoughts on those questions in today's context.

As much as I admire Novak's The Spirit of Democratic Capitalism, however, it is his book Toward a Theology of the Corporation that has had the biggest influence on my thinking about corporate governance.

It was Michael Novak's books that piqued my interest in the 1990s about Catholic social thought, which in turned piqued my interest in Catholicism, which in turn led to me crossing the Tiber.

James Park, The Valuation Treadmill

My friend and UCLAW colleague James Park's new book The Valuation Treadmill "traces the history of securities fraud regulation from the 1960s to the present to better understand the problem of public company securities fraud."

Jim makes "the novel argument that securities fraud emerged as a significant risk for public companies as investors changed how they valued stocks. As investors adopted modern valuation models and attempted to develop projections of a corporation’s ability to generate earnings into the future, it became more important for public companies to meet market expectations about their performance. Public corporations now have a structural incentive to issue misleading disclosure to create the appearance that their economic prospects are brighter than they really are."

He uses very interesting case studies involving Xerox, Penn Central, Apple, Enron, and GE.

Jim offers up a brief summary of his argument at the Harvard Forum. But you really need to buy the book.

 

Fifth Edition of Agency, Partnerships, and Limited Liability Entities is Now Out

It's here. Agency, Partnerships, and Limited Liability Entities: Cases and Materials on Unincorporated Business Associations https://t.co/0H8lqjSdPu pic.twitter.com/PVWeGDPDAv

— Steve Bainbridge (@PrawfBainbridge) April 12, 2022

Introducing The Profit Motive

2/ Since the title of the book is "The Profit Motive: : Defending Shareholder Wealth Maximization," there doesn't seem to be much point in hiding the ball behind a pretense of academic objectivity. So here's what I've got. Thoughts? #lawtwitter #academictwitter #corpgov pic.twitter.com/5mMk0UVA1h

— Steve Bainbridge (@PrawfBainbridge) December 23, 2021

Note to adopters of Bainbridge's Business Associations Cases and Materials

The book's website has an update memo with UFCW v. Zuckerberg and notes, which updates the Delaware law of demand excusal.

Look what came in today's mail: The 11th edition of my Business Associations casebook

Longtime users will notice a major change to the cover of this edition. My friends and coauthors Bill Klein and Mark Ramseyer have decided to retire from working on our books. It has been an honor and privilege to work with them these many years. Going forward, I will be solely responsible for editing the books.

I do not plan any significant changes to the editorial style. In editing this book, I will continue to follow the six basic but apparently widely ignored principles that have informed the book since Bill’s first edition. Each principle is one that I think helps produce a book that teaches students the gist of the law they need to know; that trains them to apply it; and that (perish the thought) almost makes them enjoy the process.

A personal book plug

Now available—"Business Associations: Cases and Materials on Agency, Partnerships, LLCs, and Corporations, 11th" by @UCLA_Law Prof. @PrawfBainbridge. Learn more at https://t.co/0elwnAywzU (https://t.co/k5jHRGpkFF). #WestAcademicAuthor pic.twitter.com/MMn9RL7uXl

— West Academic for Faculty (@WestAcademic) November 17, 2021