Milton Friedman once famously argued that the sole obligation of a corporation should be to maximize shareholder profits – period.
History shows that this idea of shareholder primacy has resulted in all sorts of distortions, including the rising wealth inequality, booms, busts and bailouts.
History will also show (we hope) that Friedman was actually right because we now have the concept and the technology to balance the idea of shareholder primacy with societal obligations by expanding the definition of corporate social responsibility to include the funding of the nonprofit sector.
This is achieved by including a social responsibility component in the Trruster Group & Business subscription fee equal to 1% of revenue, which is then distributed back into the community through the nonprofit sector.
This is an integral aspect of the New Third Way.
For the corporations (and the business sector in general), the New Third way will create a level playing field which neatly balances shareholder primacy with societal obligations and expectations. The result will be a true free market economy, reduced regulation and lower taxation.
For the nonprofit sector, the New Third Way will provide a new stable revenue stream beyond donations, government aid and philanthropy. This is particularly important during crises when donations, aid and philanthropy tend to dry up, just when they are needed the most.
Longer term, it will reduce dependence on state welfare and begin to address poverty by creating real opportunities for people to help themselves by helping others.
The New Third Way also signals the beginning of the end of the politics of division by replacing fear and uncertainty with a practical and universally applicable solution to the challenges of the 21st century.
The result will be a more stable global economy, a more efficient and effective nonprofit sector and a more just and fair society for everyone, everywhere.