At the annual World Economic Forum meeting in Davos this year, Klaus Schwab gave a televised interview where he said that stakeholder capitalism will become the ideal economic system for efficiently allocating resources in order to “master ze future.” However, the problem with Schwab’s stakeholder capitalism is that it is inconsistent with its stated ends. Furthermore, Schwab’s ideas are not new. Most of them are variations of old ideas like social responsibility and fixing market failures. In an article from March 2021, Schwab argues there are three types of capitalism: shareholder, stakeholder, and state. However, in formal comparative economics, neither shareholder nor stakeholder capitalism is recognized as its own system. Shareholder capitalism just means capitalism (or liberalism, formally). Since stakeholder capitalism claims to respect the private property regimes of capitalism, its difference lies in proposing alternative institutional arrangements that structure market activity. On the other hand, state capitalism is closest to political capitalism or fascism in the literature.
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