Wall Street Journal

‘Stakeholder’ Capitalism in Action

by Alyssia Finley
October 21, 2019

Pacific Gas and Electric Co. is getting incinerated by California politicians for shutting off power to two million residents amid heavy, dry winds. The publicly traded San Francisco-based utility has been found responsible for two dozen or so wildfires since 2016, some caused by power lines sagging from steel towers more than a century old.

The purpose of the blackouts was to avoid more damage from an aging grid that has not been adequately maintained. In January PG&E filed for chapter 11 bankruptcy to restructure tens of billions of dollars in liabilities, including for wildfire. Democrats, including Gov. Gavin Newsom, are predictably lambasting the company for prioritizing profits over safety. San Jose Mayor Sam Liccardo says he wants to turn it into a nonprofit.

Yet PG&E exemplifies the left’s “stakeholder” model, according to which businesses are accountable not only to their shareholders but also their workers, the environment and local communities and society at large. In practice, that means businesses exist to serve their political overlords.