I don't think the timing adds up for this explanation. Friedman introduced the shareholder value doctrine in 1970, and Jack Welch's Pierre Hotel speech that kicked off the era of slash-and-burn management was in 1981. Meanwhile, index funds were a tiny fraction of assets under management until well into the 2000s.
I am starting to believe more and more that the shareholder value movement has done enormous damage to the social fabric. It basically declares that the only stakeholders of an economy are owners. Anybody else doesn’t count. If this doesn’t change, then progress in AI and robotics will lead to a very dystopian society with a few haves and many have nots.
