Lazonick is a leading authority on how the financialization of corporations works and its consequences. His 2017 and 2019 articles on the financialization of the pharmaceutical industry laid waste to the notion that we pay high drug prices in order to support expensive research and drug trials.2 We pay high drug prices to super-size drug company profits.
What Is Financialization
Financialization is one of the most significant changes in the US economy over the past 50 years. It is the shift in the goals of business from producing products and services to the extraction of as much money as quickly as possible. It is the implementation of Milton Friedman’s 1970 doctrine of shareholder value being the only objective of a company.3 The private equity industry is the pinnacle of this theory in action.
Footnotes
- Intel is a storied pioneer in the production of microprocessor chips. Through the 1990s, it was the dominant manufacturer of high-end chips.
- see Lazonick, William, Matt Hopkins, Matthew Frye Jacobson, Mustafa Sakinc, and Oner Tulum. “US Pharma’s Financialized Business Model.” Institute for New Economic ThinkingWorking Papers, no. No. 60 (2017): 28. and Financialization of the U.S. Pharmaceutical industry by William Lazonick, Öner Tulum, Matt Hopkins, Mustafa Erdem Sakinç, and Ken Jacobson, The Academic-Industry Research Network, December 2, 2019 https://www.ineteconomics.org/uploads/papers/Lazonick-financialization-of-the-US-pharmaceutical-industry-20191202_1-final.pdf
- https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html
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