There’s a quiet revolution stirring—and it’s not coming from activist boardrooms or ESG committees. It’s coming from markets, investors, and everyday shareholders who are finally demanding a return to clarity, accountability, and growth. After years of drifting into the foggy waters of stakeholder capitalism, the world is beginning to remember an eternal economic truth: profits aren’t the problem. They are the solution.
Let’s call it what it is—stakeholder capitalism, buoyed by ESG orthodoxy, has been a costly detour from prosperity. It emerged in part as a public relations response to the 2008 financial crisis, when taxpayers were forced to bail out major banks that had caused the meltdown. Instead of reform or accountability, elites offered lip service through stakeholder rhetoric—an attempt to appease a disillusioned public without changing the power structure. A feel-good fantasy sold by billionaires and bureaucrats, it promised everything to everyone: higher wages, greener companies, more inclusive boardrooms, happier communities, and sustained growth. What did it deliver? Lagging returns, bloated corporate bureaucracies, and a widening wealth gap that favored the elite over the everyday investor.
This wasn’t capitalism with a conscience—it was capitalism with a fog machine. ESG scores were treated like moral compasses, yet they often disagreed wildly. One firm’s “climate champion” was another’s “carbon criminal.” It was chaos masquerading as clarity. And behind the curtain? Well-compensated executives pocketing bonuses while stockholders nursed 2% dividends and watched their shares underperform.
Milton Friedman, whose legacy still lights the path forward, warned us. The business of business is business. That doesn’t mean ignoring ethics—it means honoring the social contract of capitalism: deliver value, create growth, and let profits be the yardstick. In doing so, firms create jobs, raise wages, and fund innovation. Everyone wins. That’s the beauty of the free enterprise system.
Meanwhile, ESG funds lagged the broader market, Europe’s stakeholder economies stalled, and in the United States, despite all the lofty pledges, shareholder value took a back seat. BlackRock’s assets ballooned to $10 trillion by 2024, according to company filings and Bloomberg data on the back of the ESG craze, while small investors got left behind. It was regulatory arbitrage dressed up as virtue. And it didn’t deliver results.
But here’s the good news—the pendulum is swinging back. In Q1 of 2025 alone, ESG funds saw $2 billion in outflows. Proxy battles are erupting in boardrooms from coast to coast. The message is clear: investors want profits, not platitudes. They want growth, not guilt. They want companies to compete, not to cosplay as mini-governments.
It’s time to revive what works. Capitalism, unshackled by political fashion, produces the very outcomes stakeholder theorists claim to want: just look at the U.S. tech sector, where profit-driven innovation has led to groundbreaking products, job creation, and rising wages: rising living standards, better products, dynamic economies. But it does so through discipline, innovation, and clear incentives—not through committee meetings and carbon accounting.
The world doesn’t need corporations to be social engineers. It needs them to be productive, profitable, and competitive. That’s how we build wealth for everyone—from retirees to workers, from entrepreneurs to consumers. That’s how we restore the American Dream.
Milton Friedman had it right. And today, as markets reject ESG excess and refocus on fundamentals, the future looks bright again. The fallacy of stakeholder capitalism is fading, and the free market—powered by profits, liberty, and opportunity—is rising once more.
Let’s embrace it.