The Equitable Economy

Christina M. Sautter writes that the passage of Senate Bill 21, which rebalances power away from shareholders to corporate management, represents a 150-year-long development in corporate law spurred by regulatory capture that has removed countless restrictions on firm behavior.

Why is nonprofit ownership gaining traction in the U.S., with companies like OpenAI and Patagonia mirroring long-standing models in Europe, such as Novo Nordisk and IKEA? In new research, Ofer Eldar and Mark Ørberg unpack the economic rationales behind nonprofit business ownership, challenge the idea that it’s all about purpose, and highlight the overlooked risks of nonprofit control.

Despite individual investors being strongly divided on environmental, social, and governance (ESG) issues, corporate policies are largely determined by large institutional investors that adopt predominantly moderate ESG stances. In new research, Nicola Persico and Enrichetta Ravina explore this disconnect by examining the mechanisms driving the moderate ESG positions of major financial institutions and investigating potential impacts of allowing individual investors to select their own proxy voters.

The following is an excerpt from Joan Williams' new book, “Outclassed: How the Left Lost the Working Class and How to Win Them Back,” now out at St. Martin's Press.

Anthony T. LoSasso, Ge Bai, and Lawton Robert Burns argue that critics of private equity’s involvement in healthcare ignore that it is often the only financial lifeline available to distressed healthcare providers and can introduce an improvement in outcomes, including quality of care.

Theodosia Stavroulaki reviews how the involvement of private equity in American healthcare leads to, among other negative outcomes, burnout and stress among healthcare workers, particularly physicians. She writes that the consequences could cripple America’s healthcare system.

Robert I. Field argues that private equity’s impact on price competition among nursing homes is limited because prices are mostly determined by Medicaid. However, private equity does impact quality and labor outcomes, which deserve greater government scrutiny.

Brent Fulton discusses private equity’s investments in hospitals and assesses the risks it presents to key stakeholders: private equity investors, debt investors, patients, and the government. He argues financial transparency regulation is needed so fraudulent transfer and bankruptcy laws can be enforced to reduce uncompensated risk being borne by patients and the government (ultimately taxpayers).

Melissa Newham reviews how investors can alter the incentives and behavior of pharmaceutical companies to reduce competition and consumer welfare through common ownership and “rollup” deals.

Over the last year, the United States government has demonstrated increased concern about private equity’s involvement in health care. Barak Richman and Richard Scheffler...