By William Lazonick
Lack of stable and remunerative employment opportunity results in socioeconomic precarity. A nation can mitigate socioeconomic precarity when the investment triad of household units, government agencies, and business corporations develop and utilize its productive capabilities. Within the investment triad, this paper focuses on business corporations as innovate enterprises that, through strategy, organization, and finance, generate the higher quality, lower-cost products that enable higher living standards. For post-World War II United States, I argue that, based on retain-and-reinvest resource allocation and career-with-one-company employment, major business corporations, through progressive value creation. enabled a substantial portion of the labor force to overcome socioeconomic precarity. I then summarize how, especially from the 1980s, corporate financialization, characterized by transitions from progressive value creation to predatory value extraction, increased socioeconomic precarity for less-educated members of the US labor force. The paper closes with a corporate-governance policy agenda for substantially reducing socioeconomic precarity in the United States.
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