Equality by lot

Luigi Zingales (University of Chicago), Oliver Hart (Harvard University), and Helene E. Landemore (Yale University) write on the Harvard Law School Forum on Corporate Governance.

It is interesting to note how in this context the authors are able to enunciate proposals and arguments that are more systematic and thorough than sortition advocates usually manage to achieve in the context of national or local government.

How should asset managers make decisions in today’s world?

Large asset managers, like Blackrock, Vanguard, and State Street, have been quick to recognize the catch-22 they are in: good old value-maximization in the name of a restrictively understood “fiduciary interest” is no longer cutting it. But in turn any explicitly moralized or political use of their concentrated power puts a political target on their backs and subjects them to public opprobrium. Further, while asset manangers can provide expertise on how many dollars will be lost by pursuing an ethical or environment-friendly strategy, they cannot provide any insights, nor do they have any legitimacy, concerning whether the trade-off is worth it, i.e., whether the moral gains exceed the monetary losses, or whether the moral dimension trumps the financial one altogether.

One obvious way out is to offload the moral and political responsibility for value-values tradeoffs to investors themselves. In 2022, BlackRock launched Voting Choice, a program to transfer the right to cast corporate ballots from asset managers back to investors.

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Filed under: Academia, Proposals, Sortition | 6 Comments »