Gerald F. Davis is Wilbur K. Pierpont Collegiate Professor of Management, University of Michigan Ross School of Business. His recent book is “The Vanishing American Corporation”. Time Magazine describes him as a pre-eminent scholar on financializations of American corporations and new forms of organizations.

Professor Davis questions if viable alternatives to shareholder-owned corporations in the U.S exist. The total U.S. companies listed on the stock exchange dropped by more than half between 1997 and 2012. Some have gone bankrupt (GM, Chrysler, Eastman Kodak). Others have disappeared entirely (Lehman Brothers, Bethlehem Steel, Borders, Circuit City). This decline in public corporations is one of the root causes of income inequality and social instability. Thriving corporations were once an integral part of building a middle class. They offered lifetime employment, stable career paths, health insurance, and pensions to millions. Businesses replacing
them are not the same. Consider that the combined global workforces of prominent technology companies such as Facebook, LinkedIn, Yelp, Zillow, and others, now are fewer than those who lost their jobs when Circuit City was liquidated in 2009. The shareholder economy seems to absolve many companies of a sense of obligation to their employees. So what comes next? Will the future increase economic polarization, or provide a more democratic economy built from grass roots? We must decide.

This is the last in a series of ten lectures held on the second Tuesday of each month.