Stakeholder Capitalism – Clash of Capitalisms In The Modern Economy

In an era of rapid transformation, the dynamics of business, society, and economies are facing unprecedented scrutiny. This article aims to shed light on the so-called “new normal” being promoted by organizations like the World Economic Forum (WEF), contrasting it with traditional free market principles and the authoritarian model of Chinese communism. The central concern is how these changes impact everyday citizens. The concept of “new normal” suggests a propagated shift in societal standards often using created or pseudo crises, such as the COVID-19 ‘pandemic’ .

Stakeholder Capitalism: Examining the Power Reality

There is a lot of fluff and propaganda by those promoting any political system and its no different with stakeholder capitalism which is being sold to the public with misleading nonsense such as ‘Stakeholder capitalism champions the idea that businesses should balance the interests of employees, customers, communities, and the environment alongside profits’ , sounds good but what is the reality? Fluffy slogans aside let’s cut through the fancy language and look at who really calls the shots in stakeholder capitalism, despite all the talk about serving everyone’s interests:

Shareholder Capitalism Actual Decision-Making Power.

This is the current ‘free markets’ capitalism of the West , lets analyze who has the real power under this political system

The Big Players:

• A small group of very wealthy investors and financial companies actually control most large corporations
• Three massive investment firms (BlackRock, Vanguard, and State Street) control an enormous chunk of nearly every major company
• The Board of Directors makes the big decisions, but they’re usually picked by these same large investors
• CEOs and top executives run daily operations, but their massive bonuses depend on keeping the stock price high
• Major institutional shareholders (BlackRock, Vanguard, State Street) wield enormous indirect power through:
  • Voting rights on major corporate decisions
  • Influence over board composition
  • Ability to move large blocks of shares affecting stock price

Shareholder Capitalism

• Principles: Rooted in free market economics, shareholder capitalism prioritizes the interests of shareholders—those who invest capital in businesses and the interests of buyers , those who choose which products and from which business to buy. Decisions are driven by market forces and consumer choice, allowing individuals a degree of influence over economic outcomes.
• Freedom: While imperfect, this system operates under the assumption of voluntary exchange and competition, which can limit centralized control and authoritarian tendencies.
• Criticisms: Shareholder capitalism can lead to inequality, environmental neglect, and short-termism, as profits often take precedence over broader societal concerns, some degree of state regulation can ameliorat these shortcomings.

What About Everyone Else? – The “Stakeholder” Illusion

While shareholder capitalism is based on a free market concept which gives power to everyone to determine what and where to buy , therefore a free society from authoritarian control, though in practice not entirely free, Stakeholder capitalism gives all the power not to the free market but to stakeholders , these are a small group of individuals (elites) who supposedly represent various segments of society, they get to make all decisions, it is an elitist authoritarian system .

In this framework, the voices of everyday citizens will be marginalized. The political landscape could evolve into one dominated by coalitions of elite stakeholders rather than conventional political parties that represent diverse constituencies. Attempts by non-stakeholders—ordinary individuals—to ascend to positions of influence will be met with resistance, as it is not how the system works, effectively suppressing dissent and limiting participation in decision-making processes.

Globalist Implications Moreover, stakeholder capitalism is explicitly associated with globalist agendas that prioritize international governance over national sovereignty. Such a system inherently opposes traditional nationhood , racial diversity and cultural identities, as exemplified by the open borders policies of nearly all western countries dominated by WEF politicians and financial elites. As free market systems have historically proven more resilient than authoritarian regimes, the reliance on a centralized authority to enforce stakeholder interests raises alarms about inbuilt overreach and loss of democratic freedoms.

More than your usual authoritarian system, stakeholder capitalism relies on one world government to cement the power of its stakeholders, because it is well proven that free systems beat authoritarian systems eventually, therefore stakeholder capitalism is globalist by nature and opposes nationhood in all its cultural manifestations.

Stakeholder capitalism is effectively Oligarchy and elitism , parties will not exist and if they do exist, they would reflect coalitions of stakeholders (elites) rather than conventional political constituencies, for a non stakeholder (a regular person) to rise to shareholder status would amount to a challenge to the established order therefore such attempts would be brutally suppressed, the people would have no direct voice.

Local Communities:

Stakeholder capitalism removes the public pressure element over the stakeholders running public entities therefore it exacerbates the current setup where Municipalities wield limited authority over large corporations. While communities may resort to protests or boycotts, their influence often stops there. Cities frequently find themselves in competition, offering tax incentives and other benefits to attract businesses. Additionally, some corporations may exert undue influence on public officials through various means (bribing etc) . As a result, companies often operate with minimal accountability to the preferences and needs of local communities.

• Public consultation often performative
• Real power limited to negative actions (protests, boycotts)
• Local governments compete for corporate investment, weakening bargaining position

Workers:

Companies talk a lot about “valuing employees,” but the reality is different workers rights depend on the political system which will be dominated by large corporation stakeholders, workers as usual can only advise, not decide. When companies give out stock to employees, most of it goes to top executives, not regular workers and under stakeholder capitalism there is nothing to change this.

• Employees: Despite rhetoric about “employee voice,” actual power remains limited
  • Union representation in US at historic lows (10.1% overall, 6.1% private sector)
  • Works councils in Europe provide consultation rights but rarely veto power
  • Stock-based compensation primarily benefits upper management
• Communities: Limited actual influence
  • Public consultation often performative
  • Real power limited to negative actions (protests, boycotts)
  • Local governments compete for corporate investment, weakening bargaining position
• Environmental Interests:
  • Influence primarily through regulation and public pressure
  • Actual decision-making power remains with management/board
  • ESG metrics often manipulated through creative accounting

Shareholder Capitalism: The Reality of Control

Concentration of Ownership

• Top 1% owns over 50% of stock market wealth
• Three largest asset managers (BlackRock, Vanguard, State Street) control ~$20 trillion
• Institutional investors hold 80% of S&P 500 stock

Actual Power Centers

• Investment Banks: Control capital access and M&A activity
• Private Equity: Direct operational control of portfolio companies
• Hedge Funds: Influence through activist investing
• Corporate Management: Agency problem remains despite theoretical shareholder primacy

State Capitalism (China): Complex Power Dynamics

Party-State Control Mechanisms

• Chinese Communist Party (CCP) maintains control through:
  • Direct ownership of strategic sectors
  • Party committees within private firms
  • Control over banking system
  • Personal career incentives (political-business revolving door)

Actual Power Distribution

• Central Party Leadership: Strategic direction and major decisions
• State-Owned Enterprise (SOE) Management: Operational autonomy within constraints
• Provincial/Local Officials: Significant economic power but accountable to center
• Private Sector Entrepreneurs: Substantial wealth but politically subordinate
• Military: Direct control of military-industrial complex

Competing Power Centers

• Central vs Local Government
  • Local governments control land use and many regulations
  • Compete for investment and growth
  • Sometimes defy central directives
• SOEs vs Private Firms
  • SOEs dominate strategic sectors but often less efficient
  • Private firms drive innovation but dependent on state goodwill
  • Both compete for political influence

Cross-Model Analysis of Power Relations

Financial Sector Dominance

• Western Models (Both Shareholder and Stakeholder):
  • Financial sector’s control over capital allocation gives it decisive influence
  • Central banks’ policies primarily benefit financial assets
  • Financialization affects corporate behavior regardless of stated model
• Chinese Model:
  • State control of banking system
  • Different but still crucial role of finance
  • Growing influence of fintech/digital payment systems

Labor-Capital Relations

• All three models show declining labor power relative to capital
• Different manifestations:
  • Western: Union decline, gig economy
  • Chinese: Hukou system, controlled labor organizations

Technology and Surveillance

• All models trending toward increased corporate/state surveillance
• Different implementations:
  • Western: Corporate data collection, voluntary submission
  • Chinese: Direct state monitoring, social credit system

Conclusions: Real Power vs Theoretical Models

The actual operation of all three systems shows significant divergence from their theoretical frameworks:

1. Stakeholder capitalism often amounts to version of State Capitalism called Fascism but with better public relations
2. Shareholder capitalism in practice means substantial control by financial institutions rather than diffuse shareholders
3. Chinese state capitalism combines party control with significant market elements and competing power centers

The key similarity across all models is the concentration of power in the hands of a small elite, whether financial, corporate, or political, despite different rhetorical justifications and organizational structures, Stakeholder capitalism is an outgrowth of shareholder capitalism, its the stage were large capital greed has reached its apex and tries to consume society , a stage were everything everywhere is owned by the super rich while the people will ‘own nothing and be happy’ as WEF tells us.

If steak holder capitalism succeeds the end game is clear, this abusive insanity by the very few over the many will ultimately result in another ‘Bastille’ style cleansing of the ‘aristos’ from society in my opinion.