Reflections on research, capitalism, and research on capitalism
It seems that asset managers and central banks are suddenly in charge of rescuing us from climate change and other social challenges. That won’t go over well. Better solutions rely on market competition.
The climate keeps changing. Large corporations rake in record profits. Real interest rates fall, and inequality increases. Those are defining challenges of our time.
Last week, Nelson Peltz’s hedge fund Trian lost a proxy fight at DuPont. The outcome of the battle received much attention, among others because the “passive” investors Vanguard, BlackRock, and State Street were instrumental in making his bid fail – they voted against him. Commentators have ex-post rationalized the failure of the campaign with gaps in some of Peltz’s arguments, his personality, and other factors. Curiously, nobody seems to have taken a look at how Peltz’s and the “passive” funds’ economic incentives differed. This note takes a first look at those, and comes to rather interesting conclusions.