Antitrust as Corporate Governance: Why a Firm’s Mission Is to Earn No Profit

BlackRock, the vast asset manager, has been feted for demanding that the boards of its portfolio firms pursue a social purpose, which likely entails spreading corporate profits beyond shareholders to include labor and victims of environmental harm.[1] But despite being a shareholder in numerous firms, BlackRock should not actually have a say over what happens to corporate profits, because the law already requires that profits go to one group only, and not the group you might expect.

The consumer welfare standard in antitrust law requires that firms maximize the margin between price and product quality, a quantity called consumer … Read more