Milton Friedman, the leading figure of the neoliberal school, laid the theoretical foundation for shareholder capitalism in his 1962 book "Capitalism and Freedom," arguing that "a corporation's only responsibility is to its shareholders." In a 1970 op-ed for The New York Times, he declared that "the sole social responsibility of business is to maximize profits." This era-defining essay became gospel for American-style management philosophy.
Half a century later, in August 2019, the U.S. Business Roundtable (BRT), composed of CEOs of major American corporations, issued a "Statement on the Purpose of a Corporation." It declared that for businesses to be sustainable, they must deliver value to all five stakeholders — shareholders, customers, employees, suppliers and local communities. The statement is regarded as a historic turning point in which America's largest corporations officially embraced stakeholder capitalism, a concept that had previously been confined to academic discussion.
The recent bonus dispute at Samsung Electronics raises the fundamental question of who creates corporate profits and who should reap them. Industry Minister Kim Jung-kwan said consideration must be given not only to the efforts of labor and management but also to the government's infrastructure support and the contributions of partner companies and minority shareholders. Kim Yong-beom, the presidential chief of policy, went a step further by proposing a "national dividend" that would return part of the excess profits earned by companies in the artificial intelligence (AI) era to the public.
Chief of Policy Kim's idea aligns with the concept of the "entrepreneurial state" advanced by economist Mariana Mazzucato, who is reportedly an inspiration for President Lee Jae-myung. Mazzucato argues that numerous innovations such as mobile phone cameras, the internet, GPS and touchscreens emerged from the U.S. government's space and military technology programs, eventually giving rise to Big Tech firms like Apple. She contends that when the state leads industrialization-stage technology development as a value creator and private companies subsequently monopolize the profits, those gains should be collected as excess profits and redistributed. President Lee's "AI basic income" concept follows similar logic — that the government should accelerate the AI transition, then have society share the resulting productivity and profits to ease inequality.
Whether under stakeholder capitalism or the entrepreneurial state, the central argument is that companies must coexist with the community and look after the interests of future generations. The problem with Samsung Electronics' Super Corporate Union, which has called for a general strike, is that the very party undermining these values of solidarity and coexistence is the union itself. There is no consideration for non-regular workers or employees of partner companies, let alone for colleagues in the company's non-semiconductor divisions. The union has cast aside the cumbersome causes that large-company unions have long championed — walking with the weak, social responsibility — and laid bare the naked pursuit of self-interest.
Government policy appears to have contributed to the situation reaching this point. The Lee Jae-myung administration has pushed shareholder capitalism policies that neoliberals would favor, such as treasury share cancellations and expanded dividends. On the other hand, measures such as the "Yellow Envelope Law," which grants subcontracted workers the right to bargain with prime contractors, are closer to stakeholder capitalism. These represent conservative and progressive agendas, respectively. The two forms of capitalism, which should stand at opposite poles, have now degenerated into competing claims to divide up large corporate profits, becoming an obstacle to expanded investment. This is largely the result of the government framing policy under the moralistic dichotomy that "large corporations and major shareholders are the strong, while workers and minority shareholders are the weak."
Corporate profits are best reinvested for long-term growth. Only then can taxes and jobs grow, and only then can future generations have hope. When too much corporate cash flows out of the company in the form of dividends and bonuses, economic vitality contracts. One reason for the decline of American manufacturing is that companies were reduced to a kind of "cash dispenser" for shareholders. Distributing corporate profits is natural, but doing so excessively amounts to slitting open the goose that lays the golden eggs.
The government is working to expand future growth engines through "productive finance," redirecting market funds tied up in real estate toward the capital markets. But companies like Samsung Electronics and Hyundai Motor cannot be created simply by injecting money. Beyond national support, they require private-sector entrepreneurship, stable labor-management culture and tightly knit supply chains. Such industrial ecosystems take decades to build and are hard to restore once broken. The Samsung Electronics union dispute has prompted calls for a social discussion on how to distribute corporate profits. It is also an occasion to reflect on whether the series of government policies is undermining the dynamism unique to Korean companies.
