A Ponzi Scheme of Promises

This article appears in the October 2024 issue of The American Prospect magazine. Subscribe here.

Steve Pearlstein was eating Honey Bunches of Oats when Jamie Dimon called. “That was the stupidest fucking column I’ve ever read!” Dimon announced when Pearlstein picked up the phone early one morning in June 2018.

“Wow, good morning, Jamie. Nice to hear from you,” Pearlstein, a longtime Washington Post columnist, replied.

The Pearlstein column in question had started with praise for an op-ed that Dimon, CEO of the mega-bank JPMorgan Chase, had written the day before with the iconic investor Warren Buffett, urging publicly traded companies to stop publishing forecasts every three months showing how much profit they expected to pay out to their shareholders. The business leaders argued that quarterly earnings estimates drive companies “to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

More from Adam M. Lowenstein

Buffett and Dimon were right, Pearlstein wrote, to acknowledge that the estimates often did little more than reward executives for short-term cost-cutting and other accounting gimmicks that served as sugar highs for their companies’ stock prices. But Pearlstein contended that the Business Roundtable, the ultra-exclusive coalition Dimon chaired at the time that represented CEOs of more than 200 large U.S. corporations like Google, Walmart, and Goldman Sachs, hadn’t gone far enough in its reforms. If the group really wanted to show it was serious about encouraging executives to run their companies with a focus on the long term, “it should reconsider its 30-year-old decision to declare maximizing value for shareholders as the sole purpose of a corporation,” Pearlstein wrote.

The columnist was referring to a statement that the Business Roundtable had issued in 1997, stating that the “principal objective” of a company is to deliver returns to its shareholders, rather than serve its workers, customers, or communities. This philosophy derived from the radical economist Milton Friedman, whose doctrine that “the social responsibility of business is to increase its profits” emerged from the fringes of right-wing thought in the 1950s and ’60s, before rapidly entrenching itself in corporate boardrooms and the broader ecosystem of American capitalism. Stock markets were the economy, in this conception, and stock prices reflected a company’s success, along with the success of its CEO.

Pearlstein argued that you could draw a direct line from this obsessive focus on short-term profit-seeking to national economic trends like income inequality, wage stagnation, and exploding CEO pay. Shareholder primacy, Pearlstein wrote, had become “the source of most of what has gone wrong with American capitalism.”

CEOs weren’t actually promising a new way of doing business, but simply a new way of talking about doing business.  

That’s what set Dimon off that morning. “He started explaining why I was full of shit,” Pearlstein recalled when we spoke last year. While he and Dimon weren’t close, they were familiar enough that Pearlstein understood that the CEO’s comments were tongue-in-cheek, not hostile. But he also knew that Dimon meant what he said.

Nevertheless, about a year after that conversation, corporate America had a new message. On August 19, 2019, the Business Roundtable issued a press release containing a roughly 300-word statement, signed by 181 of its members. “Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans,’” its headline read, citing a quote from its chair, Jamie Dimon. The CEOs pledged to “lead their companies for the benefit of all stakeholders—customers, employees, suppliers, communities and shareholders,” and “move away from shareholder primacy.” The CEOs added, “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

No details were offered about what, exactly, their companies would do differently. Nor did the executives—a cohort notoriously obsessed with numbers and metrics—include any specific or binding commitments to which they could be held accountable for their promises to all of their “stakeholders.”

In public relations terms, though, the statement was deemed as historic as the Declaration of Independence. “There were times when I felt like Thomas Jefferson,” Alex Gorsky, then the head of Johnson & Johnson and the Business Roundtable member who led the drafting of the statement, told The New York Times, which placed the news on the front page.

Fortune magazine had been informed far enough in advance to publish a lengthy cover story, featuring staged photos of Dimon, Gorsky, and former IBM CEO Ginni Rometty staring stoically at the camera. A Wall Street Journal headline announced, “Move Over, Shareholders: Top CEOs Say Companies Have Obligations to Society.” A prominent business columnist called the new statement “a significant shift and a welcome one.” “CEOs From the Largest U.S. Corporations Just Changed the Purpose of Business,” exclaimed Inc. “A major change in thinking,” suggested the Financial Times editorial board. A Reuters columnist called it a “bombshell.” NBC News informed its readers, “Shareholder value is no longer the main focus of some of America’s top business leaders.”

A new narrative quickly began to solidify: Milton Friedman’s profits-at-all-costs way of thinking was dead. In fact, Fortune wrote in its cover story that “Friedman must be turning in his grave.”

There was just one catch: CEOs weren’t actually promising a new way of doing business, but simply a new way of talking about doing business.

A DRIVING FORCE BEHIND THE BUSINESS ROUNDTABLE’S EMERGENCE in 1972 was a pervasive feeling among CEOs that they were misunderstood. As historian Benjamin C. Waterhouse demonstrates in Lobbying America, his definitive history of corporate America’s political mobilization, many executives had become convinced that they weren’t getting the credit they deserved for their contributions to the economy and society—creating jobs, building infrastructure, giving consumers products they wanted, generating economic growth. Then, as now, CEOs couldn’t figure out why people didn’t seem to like them or trust them.

Yet for much of its lifespan, the Business Roundtable had been content to keep a low public profile. The organization exists to defend corporate executives’ interests in the halls of power, not at the ballot box. That effort has manifested in more than $400 million worth of lobbying over the last quarter-century, in quiet rooms in the nation’s capital. “We don’t seek visibility,” said Thomas Murphy, the head of General Motors and an early leader of the group, in 1979. In 2002, The New York Times was still describing the Business Roundtable as “a small, effective, somewhat mysterious fraternity,” even as the paper of record remarked on the group’s loud promises of ethics reform following a series of corporate scandals that left its members claiming to be “appalled, angered and, finally, alarmed.”

By 2019, however, circumstances had changed. Anonymity was no longer an option. The 2008 financial crisis had seen millions of Americans lose their homes and retirement savings while Wall Street leaders and corporate executives not only escaped accountability but also made off with billions of dollars in taxpayer bailouts. Decades of globalizing, offshoring, lobbying, deregulating, and tax-cutting had created an incarnation of American capitalism that defined business success by the ups and downs of the stock market.

For 50 years, workers’ productivity had soared, but they had shared in few of the gains generated by their labor, even as many navigated stagnating wages, declining social mobility, and ever more precarious economic and environmental conditions. Meanwhile, CEOs, many of whom had built flattering profiles as acclaimed “thought leaders” and cultural icons, were taking home compensation that was, on average, 320 times greater than that of their workers.

Corporations and their bosses had created an unfair, unjust, and wholly rigged system—a self-serving collection of laws, regulations, principles, and worldviews that they had built at home and exported around the world. The system’s architects had helped themselves to its spoils, extracting from it more wealth, more cultural influence, and more political power than ever before. They could no longer hide the fact that it was working better for them than for anyone else.

While calls for change began coming from seemingly every corner—politicians of both parties, scholars and researchers, protesters in the streets and in Zuccotti Park, at the foot of Wall Street—CEOs were particularly worried about the calls coming from inside the house. Survey after survey showed that Americans wanted to work for companies that did more than just make money. Executives didn’t want to lose the workers who enabled their prosperity, but they also didn’t want to have to pay higher wages or provide better benefits—or, even worse, give workers the power to negotiate and bargain collectively.

What big business needed was “a clear expression of purpose,” concluded Larry Fink, the head of the behemoth asset manager BlackRock (and who, at the time, was an enthusiastic proponent of what become known as “stakeholder capitalism,” before deciding it was bad for business). “Society gives each of us a license to operate,” agreed IBM CEO Rometty in 2019. “It’s a question of whether society trusts you or not. We need society to accept what it is that we do.”

In an age of public theater—when, from social media influencers to clickbait headlines to the occupant of the Oval Office, actually doing things had been increasingly supplanted by public pantomimes—CEOs scrambled to put on a different costume and sing a different song. If they had to become benevolent bosses, they wanted that benevolence to happen on their terms.

A FEW MONTHS AFTER BEING CHEWED OUT BY JAMIE DIMON, Pearlstein got another call, this time from the CEO of the Business Roundtable itself, Joshua Bolten, the longtime Washington insider, bass guitar player, and former White House chief of staff to President George W. Bush. Bolten said he and Dimon wanted to meet with Pearlstein to talk about the column.

Such an invitation wasn’t unheard of. The Business Roundtable exemplifies the D.C. folk wisdom that influencing public policy requires more than just paying for face time with lawmakers and regulators. It also requires subtler, more intangible maneuvers—including attempts to persuade the insular networks of the so-called “opinion elites” who shape public policy, such as congressional and White House staffers, reporters, pundits, lobbyists, and consultants. The group routinely hosts off-the-record “salon dinners” before its CEO meetings, designed for influential journalists to get “a sense of how the CEOs [are] thinking about the big public-policy issues facing the country,” Judy Miller, Jamie Dimon’s longtime chief of staff, told me.

The invitation Bolten had issued to Pearlstein, Miller said, was a “smaller subset” of those off-the-record gatherings. In fact, when Pearlstein made his way to one of Dimon’s private rooms at JPMorgan’s Park Avenue headquarters on October 16, 2018, he was accompanied by just two other journalists: Joe Nocera of The New York Times, and Rick Wartzman, who was contributing regularly to Fast Company and had written critically of the Business Roundtable’s 1997 pledge to put shareholders first.

Pearlstein also invited Judy Samuelson, who ran a program at the nonprofit Aspen Institute that focused on advocating for corporations to operate with a long-term mindset. Bill McNabb, the former head of the institutional investment firm Vanguard and then a member of the Business Roundtable’s board, was there, as was Miller, Dimon’s chief of staff, though neither said much during the dinner. As Dimon and the journalists spoke, Bolten mainly took notes, chiming in on occasion.

Sitting across from each other at a long conference table, Dimon held the floor for a long time. “He kind of fills the room,” Wartzman said. The essence of Dimon’s comments was: Why did the media harp on criticizing big companies? Why couldn’t people appreciate the reform efforts that CEOs and the Business Roundtable were already making? Why did critics of corporate power insist, as Dimon would caricature their arguments in a follow-up email the next day, “that large successful companies have created the ills of society”?

Despite the hype around the statement, CEOs failed to get the kind of buy-in that would have signaled something meaningful.

There was no shortage of concerning trends for the group to discuss over dinner, from rising inequality to exploding CEO compensation to climate change–fueled destruction to a sharp increase in companies’ spending financial gains on buying their own stock to drive their share prices—and their executives’ pay packages—even higher. This obsession with stock buybacks reflected the broader “financialization” of the U.S. economy, where more and more business activity was generated by hedge funds, private equity firms, and other Wall Street traders who made money by moving money around, and who shared only a fraction of those gains.

At one point, Samuelson, who was sitting directly next to Dimon, tried to jump in to ask where the Business Roundtable stood on climate change. “He said, ‘Don’t interrupt me,’” Samuelson recalled. “With all due respect, I thought you brought us here because you wanted to hear from us,” she replied. (The following year, the organization released a statement calling for “market-based solutions” to the climate crisis.)

As they had in public, Pearlstein and his colleagues pushed Dimon and the Business Roundtable to reform its 1997 statement proclaiming that corporations existed primarily to deliver returns to their shareholders. But the CEO didn’t appear to buy their arguments. He said that to be successful, companies already had to address the needs of employees, customers, and the communities they operate in. Whenever the dinner guests “tried to ask him a question about broadening the Business Roundtable’s vision beyond shareholders,” Nocera told me, “he would just say, I already do that and I already knew that. We take care of employees. We take care of our customers. I don’t understand what the problem is.”

In an email, Miller told the Prospect that it “was not the case” that Dimon opposed changing the statement. “The dinner helped clarify his own thinking and led Jamie to encourage the Business Roundtable to restate the purpose to clarify what is already true—that, like Jamie said, successful companies do take care of employees, customers, and communities,” Miller said. “The statement was not a re-prioritization—it merely clarified that for companies to be successful over the long term, they have to do these things.”

The journalists’ point, however, was that when push came to shove, when the inevitable trade-offs had to be made, investors always came first over other stakeholders. Wartzman kept pushing, noting that the Business Roundtable hadn’t always been explicitly committed to shareholder primacy. In fact, he pointed out, the group had endorsed some version of stakeholder capitalism in the early 1980s.

Eventually, after much back-and-forth, Dimon said that he and Bolten would look into it. That’s the biggest kiss-off in history, Wartzman thought. But then came the Roundtable’s new statement the following August, seeming to give Dimon’s dining companions what they’d asked for. “I was stunned,” Wartzman said. “I felt like, yeah, we had really done something at that dinner.”

ELITE RESPONSE TO THE BUSINESS ROUNDTABLE’S STATEMENT wasn’t unanimously positive. Some conservatives, still in thrall to Milton Friedman’s argument that a company’s only “social responsibility” to society is to make money, called the statement “virtue-signaling fanfare”—an early preview of Republican political posturing about “woke capitalism” that would become a significant issue in the party’s 2024 presidential primary. Steven Mnuchin, a former Goldman Sachs partner who was then serving as Donald Trump’s Treasury secretary, said he “wouldn’t have signed it.” The Wall Street Journal editorial board, ardent defender of free-market fundamentalism and bigger-is-better corporate concentration, groused that “the mucky-mucks of the Business Roundtable are tweeting in unison how ‘proud’ they are to have abandoned the corporate purpose of serving shareholders for the more politically au courant ‘stakeholder’ model.” Yet these dissents only served to underscore the statement’s significance.

The years that followed saw COVID-19 unleash not just immense human suffering but also trillions of dollars of new wealth for some of the world’s richest people. Enormous sums of taxpayer money were used to prop up desperate companies, which then promptly deployed much of the largesse to buying up their own stock and rewarding shareholders.

Corporate governance experts routinely described the pandemic as a test case for the promises of stakeholder capitalism exemplified by the Business Roundtable statement: If company bosses were serious about taking care of everyone, the thinking went, they would uphold that commitment even when circumstances made it challenging.

Yet a number of studies from this period found that, compared to other firms whose CEOs did not sign, those whose CEOs affixed their name to the statement were more likely to lay off employees during COVID-19, were less inclined to contribute to pandemic relief efforts, had “higher rates of environmental and labor-related compliance violations,” emitted more carbon into the atmosphere, and spent more money on dividends and buybacks (which overwhelmingly benefit executives and shareholders). When it came to whether Business Roundtable CEOs changed their behavior after putting their names on the 2019 statement, one researcher concluded that “signing this statement had zero positive effect.”

An important tell about the intentions behind the statement was that its signatories were not companies but their chief executives, in their capacity as individuals. In fact, a study conducted by two Harvard Law School professors found that almost none of the CEOs who elected to sign the statement (at least among the public companies that responded to the scholars’ inquiry) had that decision reviewed or approved by their board of directors. “The most plausible explanation for CEOs choosing to join the BRT statement without board approval,” the scholars argued, “[had] to do with their view that the statement would not produce a significant change in their companies’ treatment of stakeholders.”

In other words, despite the hype around the statement, CEOs failed to get the kind of buy-in that would have signaled something meaningful. On this point, at least, one Business Roundtable CEO might have been expected to agree with the Harvard study’s conclusion. In 2018, BlackRock’s Larry Fink, a signatory of the 2019 statement, wrote that he expected a chief executive to “publicly articulate your company’s strategic framework for long-term value creation and explicitly affirm that it has been reviewed by your board of directors. This demonstrates to investors that your board is engaged with the strategic direction of the company.”

Shareholders quickly reached the same conclusion as the Harvard researchers. As Columbia Business School’s Shiva Rajgopal, co-author of one study that investigated whether Business Roundtable CEOs followed through on their pledges, observed, “When these guys signed the BRT statement, the stock prices of these firms [did not] move … There was no heartbeat at all.” This suggests, as Rajgopal and his co-author wrote, “market participants agree with the assessment that the BRT statement represents cheap talk.”

YET THE CLEAREST SIGNALS ABOUT WHAT THE BUSINESS ROUNDTABLE really intended with its high-profile statement came not from academics, not from workers, not even from shareholders, but rather from the Business Roundtable and its CEO members themselves.

Sometimes they weren’t particularly subtle. In December 2020, after a media blitz celebrating the first anniversary of the statement’s release, Joshua Bolten spoke at a forum hosted by the industry publication Directors & Boards. In the audience were many board members—the people who hire and fire CEOs and set their pay—and corporate governance experts. These are people who would want to know, and who in some cases are legally required to know, whether companies were suddenly changing their strategies and business models to focus less on shareholders.

Bolten told the audience that the statement “gives the public a more accurate reflection of what we think CEOs are doing every day—the important work that our companies are doing to support all of the company’s stakeholders.” The Business Roundtable head was “proud of our work to correct [the] misimpression” that “corporations are run solely for profit, for the already rich people who own shares in the corporation.” Asked to leave board members with a recommendation, Bolten encouraged companies to use the statement as a marketing asset. “Tell the story of your corporation to the public,” he replied. “Do not underestimate the value of promoting all the good that your company is doing for our society in the course of doing its regular business” (emphasis added).

A few months later, in May 2021, the House Financial Services Committee held a hearing with the six biggest bank CEOs: Dimon, as well as Jane Fraser of Citigroup, Brian Moynihan of Bank of America, James Gorman of Morgan Stanley, David Solomon of Goldman Sachs, and Charles Scharf of Wells Fargo. Five of these CEOs had signed the 2019 statement. Fraser wasn’t running Citi at the time, but her predecessor had signed, and during her tenure Citi continued to highlight its signing of the statement. (Fraser also joined the Business Roundtable’s board of directors.)

The aim of the celebrated 2019 statement turned out to be simply to preserve and perpetuate “CEO tyranny.”

One participant in the committee hearing was Andy Barr, a Republican congressman from Kentucky, who derided stakeholder capitalism as a “radical” scheme by “the extreme left” to infiltrate boardrooms and undermine the free market. When it was Barr’s turn to question the bank bosses, he asked each CEO to respond to the same question: “In an event where there is a direct conflict between the interests of shareholders and non-owner stakeholders, will you prioritize shareholder interests?”

“Yes,” replied Dimon, who, in addition to chairing the Business Roundtable when it issued the 2019 statement, had earlier published a 66-page letter touting his company’s commitments to its stakeholders, noting that “it’s important to understand and reaffirm the magnitude of our contributions.”

In the past, these CEOs had either implied or stated explicitly that stakeholder capitalism was a “win-win” that didn’t require trade-offs at all. The statement itself proclaimed that the “long-term interests” of different stakeholders were “inseparable.” But Dimon, when asked point-blank to take a side, reflexively aligned with investors.

Bank of America’s Brian Moynihan, who had been a loud proponent for stakeholder capitalism, tried at first to deflect, stating that “we deliver both for shareholders and for society.”

“When there is a conflict, which one will you prioritize?” Barr asked again.

“We will prioritize the returns for the company,” Moynihan acknowledged.

The other CEOs agreed. Goldman Sachs’s David Solomon: “Yes, we would prioritize shareholders.”

Citi’s Jane Fraser: “Yes, we will prioritize our investors.”

Wells Fargo’s Charles Scharf: “Yes, our shareholders.”

THE YEARS SINCE HAVE SEEN CORPORATE PROFITS REACH record highs while driving inflation and consumer prices upward. Meanwhile, on issue after issue—fighting climate change, protecting workers, strengthening the economy—the Business Roundtable has continued to lobby and litigate and otherwise back a ferocious barrage of corporate resistance against the very policies and viewpoints that the group earned a crescendo of elite praise for claiming to support.

While the 2019 statement included a commitment to “protect the environment,” for instance, the Business Roundtable spent millions of dollars lobbying and campaigning to defeat President Joe Biden’s landmark climate law and stymie his administration’s environmental agenda. In March 2021, after the Securities and Exchange Commission (SEC) proposed a rule to require public companies to study and disclose how climate change could affect their businesses, the group pushed aggressively for the SEC to weaken the proposal. Three years later, after the SEC finalized a watered-down version of the rule—even adopting some of the changes that the Business Roundtable and other corporate trade groups had suggested—the organization still filed an amicus brief to get the rule tossed out entirely. “Business Roundtable has concluded that the final rule is counterproductive and beyond the SEC’s statutory authority,” Bolten said.

The claim that the climate disclosure rule is beyond the SEC’s authority echoed an argument that the Business Roundtable and other corporate interest groups have used to stop other Biden-era regulatory efforts—and that, following the Supreme Court’s June decision to throw out a 40-year-old precedent known as the Chevron doctrine, will make it far more difficult for federal agencies to impose any new rules on businesses, no matter how popular the rule or how predatory the business.

The Business Roundtable deployed this overstepping-its-authority reasoning in a nearly instantaneous lawsuit earlier this year against the Federal Trade Commission’s (FTC) ban on corporate noncompete agreements. Noncompetes give companies the power to stop their employees from leaving to work for a competitor, or from starting a business that might compete with their former employer. The day after the FTC finalized the ban—one of many popular Biden administration efforts to challenge corporate power—the Business Roundtable joined a handful of other companies and corporate trade groups in its lawsuit against the measure. “The FTC’s categorical prohibition on noncompete agreements is misguided and far beyond the agency’s statutory authority,” Bolten said.

The FTC estimates that freeing workers from noncompete agreements could raise wages by $300 billion a year. In 2022, three years after the Business Roundtable’s new policy statement, executive compensation remained some 344 times higher than typical workers’ wages. By that point, CEO pay had risen more than 1,200 percent since 1978, according to the Economic Policy Institute, compared to only 15 percent for workers. Closing that gap might appear to align neatly with the Business Roundtable statement, in which CEOs pledged to “invest in our employees,” in part by “compensating them fairly and providing important benefits.”

Banning noncompetes, moreover, could liberate some 30 million workers to move to (or start) companies that offer better pay, benefits, and opportunities than their current employers—a pro–free market policy if there ever were one. That, too, is a principle that the Business Roundtable routinely celebrates. “We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all,” the statement’s signatories affirmed.

One of the most consistent rationales that Business Roundtable members offered for signing the 2019 statement was the need to provide meaning to their employees’ work. “Attracting and retaining the best talent increasingly requires a clear expression of purpose,” BlackRock’s Larry Fink wrote in 2019. That same year, the scandal-plagued consulting giant McKinsey & Company, whose CEO is a member of the Business Roundtable and which counts numerous Roundtable companies as clients and confidants, advised that talking about social and environmental issues could “help companies attract and retain quality employees, enhance employee motivation by instilling a sense of purpose, and increase productivity overall.” Defending noncompete agreements, however, suggests that while executives might like the idea of motivating workers by offering them a “sense of purpose,” they’re just as happy to retain those workers using legal threats and coercive employment contracts.

(In response to an email requesting comment for this story, the Business Roundtable referred the Prospect to an essay published by the organization about the statement’s five-year anniversary.)

The Business Roundtable will likely have little need in the future to sue the federal government on this and other matters if circumstances deliver them an outcome with which CEOs appear increasingly comfortable: Donald Trump’s return to the White House.

Much of the disgraced former president’s economic agenda aligns closely with corporate America’s insatiable hunger for lower taxes, which the Business Roundtable has pursued throughout the Biden presidency and in previous decades. Over the past year in particular, the group has joined other corporate trade groups in spending liberally to secure another round of corporate tax cuts. While they have thus far been unsuccessful, the campaign appears set to continue, especially as many of the 2017 Trump tax cuts expire next year, and a lobbying battle royale commences in Washington.

“For the remainder of this year and next, Business Roundtable will be putting its full weight behind protecting and strengthening tax reform,” Bolten said recently. “We’re fully energized for this effort, and we’re prepared to spend eight figures over the course of this campaign, among the largest efforts in the 52-year history of the Business Roundtable.”

If the group succeeds, one almost certain consequence will be a further widening of America’s racial wealth gap. The Business Roundtable’s goal of securing additional corporate tax breaks while preserving some of the individual tax provisions for the wealthy—both efforts that, like the Trump tax cuts, benefit white Americans far more than Black Americans—is fundamentally incompatible with its stated commitments of tackling racial injustice. The organization has regularly held up its campaigns about racial justice and equal opportunity as evidence that its members are following through on the commitments they made in 2019. Where the group puts its money and lobbying might will reveal its true priorities.

Beyond new tax cuts and fewer regulations, however, Trump’s re-election would deliver another benefit, if a less tangible one, for CEOs: Even as they work tirelessly for parts of his economic agenda, they can once again take the opportunity to be seen as society’s saviors, as the compassionate and benevolent and empathetic bosses who stand against polarization and division, as the earnest policymakers who lead the nation’s response on climate change, racial justice, worker discontent, and inequality—even preserving democracy—while the Trump administration does the opposite.

A second Trump term hands CEOs a chance to claim the appreciation that so many of them feel they deserve—a present-day incarnation of the same craving for praise and power that drove the group’s creation more than half a century ago.

IN MAY 2020, FORTUNE MAGAZINE ASKED CEOS OF THE FORTUNE 500 the question that many observers had wondered since the Business Roundtable’s communications team hit “send” on that headline-generating press release some nine months prior: Did they really mean what they said about redefining the purpose of the corporation? The response was revealing. Sixty-three percent of Fortune 500 CEOs said, “I agree with the statement and believe most good companies have always operated that way. Nothing changed.” (emphasis added).

“Nothing changed” was, of course, precisely the outcome that the CEOs were seeking by acting as if everything had changed. Signing a bold-sounding statement, conveniently devoid of specific benchmarks or binding commitments, deflected public scrutiny by giving executives something to point to when pressured or challenged by activists, employees, or other “stakeholders.” If asked to prove that they were following through on a commitment or pledge, they could simply issue another one. It was a Ponzi scheme of promises.

But CEOs weren’t the only beneficiaries. A world in which corporations fixed problems on their own came with benefits for politicians and regulators, too. As long as corporations appeared to be solving environmental and social problems, policymakers were spared the difficult and politically fraught prospect of imposing new taxes, regulations, or laws. Similarly, by appearing to solving global challenges like income inequality and climate change, businesses preserved an all-important seat at the negotiating table in the policymaking process, a position CEOs have used to dictate the terms of public debates and to steer policy outcomes in their favor.

Executing as aggressive (and expensive) a PR effort as the 2019 “purpose of the corporation” statement might have been a relatively novel undertaking for a trade association known mainly for its behind-the-scenes lobbying. But the Business Roundtable’s promise to save the world and make money doing it was only the most visible manifestation of the group’s decades-long campaign to protect the interests of executives. As reflected in its ongoing efforts to shape Biden-era policy, the aim of the celebrated 2019 statement turned out to be simply to preserve and perpetuate what I describe as “CEO tyranny”: the power of business titans to run their companies without being questioned or scrutinized—unencumbered and unchecked by regulations, taxes, labor unions, or oversight of any kind—and to capture for themselves as large a share of their companies’ profits and their workers’ labor as they can get away with.

If the 2019 statement had come from a political party or candidate for elected office rather than a group of chief executives, it would have been easier to recognize it for the campaign ad it was. In fact, what the Business Roundtable statement revealed was not the beginning of a fairer and more equitable capitalism, but rather the culmination of a decades-long transformation of the role of the CEO from a business manager into a politician.

Despite the relentless fire hose of hype from CEOs and their boosters in the consulting class and the business media suggesting that corporate America was leading the charge to change capitalism once and for all, the only campaign that was really under way was the one that the Business Roundtable had been waging since its creation more than half a century ago: the preservation, at all costs, of political and economic power. Milton Friedman’s embrace of shareholder primacy may have been pronounced dead, but CEO tyranny was alive and well.