In the wake of the Great Depression, British economist John Maynard Keynes published his revolutionary book "The General Theory of Employment, Interest, and Money." He differentiated between short- and longterm value, and noted that the American markets were designed to encourage the former over the latter, at the expense of society.
Economists who pushed against Keynesian policies in the 1960s and '70s, most notably Milton Friedman, believed that trying to incorporate societal good into a company's mission was foolish, and that the only way to truly benefit all stakeholders was to focus solely on making choices that created value for shareholders; the rest would fall into place.
Friedman's ideas took hold in the 80s, most notably in the United States. They were further cemented through judicial precedents establishing shareholder primacy as the fiduciary responsibility of public companies. There was a rise of activist investors, and Nobel laureate Joseph Stiglitz told me this all led to the reign of toxic short-termism.
The reason he thinks the tide has been shifting away from Friedman's lens, with leaders like BlackRock CEO Larry Fink proclaiming he will not do business with companies that lack a clearly defined purpose beyond the abstraction of increasing shareholder value, is because of a survival instinct, at a time when overall GDP growth is much slower in the last two decades than it was between the end of World War II and 2000.
It's an old debate about business' role in the world, and the balance is shifting once again.
"As they said in the Bible, 'There is nothing new under the sun,'" Stiglitz said, laughing. "But there is a new context to it today."