John Kay on the corporation of the 21st century

We’ve been told that business is run by a capitalist elite which uses its accumulated wealth to control the means of production; that ownership of the means of production is the main source of economic power.

Wrong. In the twenty-first century, products and production have dematerialised. The goods and services provided by the leading companies of the twenty-first century appear on your screen, fit in your pocket or occupy your head. The intangible means or production – the organisational capabilities which characterise modern corporations – are not capable of being owned by anyone at all.

The gap between the remuneration of corporate managers and the earnings of their employees and customers has now reached a scale which threatens the structure of society. The pharmaceutical industry creates life-saving vaccines, but has forfeited the trust of the public through greedy behaviour. Facebook and Google have far more customers than any companies in history, but are widely reviled. We ‘hate the producer’ as we ‘love the product’.

John Kay describes how the pursuit of ‘shareholder value’ destroyed some of the leading companies of the twentieth century. His incisive overhaul of our ideas about business redefines our understanding of successful commercial activity and the corporation. This is a brilliant and original work from one of the greatest economists.