About 30 years ago, the socially embedded corporation of the post-World War II period was reconceived as a giant money machine. This started innocently enough. As global competition began to affect American industries, many wondered how to make managers more accountable for the firm's performance. The idea was that managers were not acting in shareholders' interests to maximize profits. Theorists suggested all kinds of reasons why this might be so, from inertia and self-interest to community loyalty and even "honor."
One solution eventually dominated all others: markets for corporate control. A new breed of activist investors led tender offers, often hostile, to take over companies whose share prices were regarded as underperforming. Most stockholders responded simply by choosing the highest offer. Leveraging up debt and driving new economies of scale by combining or reorganizing resources were seen as ways to impose discipline on teams of managers and limit their divergence from shareholder-wealth maximization. New compensation and incentive systems linked executive pay to the performance of the company's stock price.
The company became a transaction machine designed to maximize profit, untethered from its community, society, and country. Jobs were outsourced, work was automated, assets were concentrated, costs were cut to the bone, and balance sheets depended on increasingly arcane financial engineering. Takeovers gave way to mergers. Industries consolidated, limiting consumer choice. The inward focus to which management had always been vulnerable became pathological, banishing the needs of customers and employees to a distant horizon. Job security became tenuous, and most families depended on two incomes. A large majority of employees wanted more flexibility at work than their employers allowed. Working parents, and especially mothers, foundered. Customers were treated as anonymous and expendable.
Two comments: 1.) The current situation is not just a result of the cyclical nature of any functioning economy. It is about the way we do "business". 2.) Personally, I think we're all fucked - rich and poor, alike. Whether you earn and/or make money. . . See ya in the Soup Line™.