Our current model of capitalism originated from the thinking of Milton Friedman back in 1970. Professor Friedman promoted a narrow view of corporate responsibility, that corporations should answer only to their shareholders. [1] Decades later, this idea of shareholder capitalism has received increasing criticism due to its perceived social harms: increasing inequality, climate crisis, etc. Many scholars and CEOs have promoted an alternative form of capitalism, one that focuses on all stakeholders. [2] While stakeholder capitalism does not have a strict definition, it generally encourages businesses to care for people beyond their owners or board members. Instead, they should seek the maximum benefit of everyone affected by their operation (every stakeholder), such as consumers, employees, and the environment. This view encourages businesses to voluntarily do what many want to force onto them, such as raising their minimum wage or strengthening their environmental standards. The case for stakeholder capitalism stems out of necessity. Fifty years after the theory of Milton Friedman, it has become clear that shareholder capitalism is not sustainable. While our society has witnessed great benefits from fast development, not everyone received their share of the outcomes. Across the world, inequalities are growing along with class, racial and geographical lines. Big corporations have used their outsized influence to discourage fair market competition. Our environment is deteriorating, and the cost of fixing the damages grows with each day of inaction. Shareholder capitalism has made businesses entirely focused on short-term growth, regardless of long-term prospects. Considering the magnitude of the problems, governments and NGOs likely cannot fix them alone, without the transformation of businesses. Therefore, stakeholder capitalism represents a necessary path away from escalating disasters. Businesses, however, do not necessarily have to suffer under stakeholder capitalism. Growing evidence suggests a vibrant and profitable market in stakeholder capitalism. A recent report by the consulting firm McKinsey concludes that businesses with long-term visions enjoy better growth than their peers. [3] Consumers and job seekers increasingly value the social commitment of businesses when making decisions. [4] Businesses that embrace the new model, then, could enjoy a competitive advantage in the product and the employment market. In the long run, the interests of shareholders and stakeholders do not have to constitute a zero-sum game. For these reasons, shareholder capitalism represents a better model of production than stakeholder capitalism. [1]. Friedman, Milton. 1970. "A Friedman Doctrine‐- The Social Responsibility Of Business Is To Increase Its Profits". The New York Times, , 1970. https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html. [2]. Dealbook Newsletter. 2020. "Greed Is Good. Except When It’S Bad.". The New York Times, , 2020. https://www.nytimes.com/2020/09/13/business/dealbook/milton-friedman-essay-anniversary.html. [3]. Hunt, Vivian, Bruce Simpson, and Yuito Yamada. 2020. "The Case For Stakeholder Capitalism". McKinsey & Company. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-case-for-stakeholder-capitalism. [4]. Whittaker, Martin. 2019. "5 Reasons To Give Stakeholder Capitalism A Chance". Forbes, , 2019. https://www.forbes.com/sites/martinwhittaker/2019/09/12/five-reasons-to-give-stakeholder-capitalism-a-chance/?sh=5f82c0104626.

Shareholder is economically preferable for most scenarios, thus Stakeholder replacing Shareholder is not achievable (as attempting to mandate stakeholder would just be State 'Capitalism'. One does not change this just by insisting the government ought impose disadvantages upon businesses who does not engage in the behaviors deemed preferable by the state ). Thus, the question is moot. Much like Socialism, the "Stakeholder Capitalism" doctrine outright ignores the aspects of human nature that pose problems for their doctrine. (Oftentimes blaming models which leverage those aspects for the corresponding negative effects). Ignoring those problems and effects on paper doesn't make them go away in reality, however, and failure is the inevitable result. Change begins and ends with the people. Vote with your dollar. Customers ultimately hold all the power even in Shareholder Capitalism, as their business is the goal which defines the interests of shareholders.

Capitalism should be replaced