William Lazonick & Mustafa Erdem Sakinç

William Lazonick is president of the Academic-Industry Research Network, an Open Society Fellow, and University of Massachusetts emeritus professor of economics. Mustafa Erdem Sakinç is assistant professor of economics at University of Paris 13 and senior researcher at the Academic-Industry Research Network. The research that underpins this article has been funded by the Institute for New Economic Thinking.

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Make Passengers Safer? Boeing Just Made Shareholders Richer.

And none more so than their own executives

From time to time, large airliners of different makes, models, and vintages crash —but, fortunately, not very often. It was an extraordinary event, therefore, when two brand-new, identical aircraft went down because of the same malfunction, with one Boeing 737 MAX 8 plunging into the sea off Indonesia on October 29, 2018, and another plummeting to the ground in Ethiopia less than five months later. Our research, based on publicly available information, strongly suggests that the dedication of Boeing’s senior executives to increasing their company’s profits and stock yield—which also augmented their own compensation—resulted in management decisions that contributed to the two 737 MAX crashes. While much more information remains to be discovered, the reported evidence, still unfolding almost daily, points to executive culpability in the crashes that took the lives of 346 passengers and crew. Boeing announced its intention to build the 737 MAX series in 2011...