End the duopoly

The NBA-China Disaster Is a Stress Test for Capitalism

On August 19, the definition of a company in America changed. The Business Roundtable, a U.S. lobbying group that represents nearly 200 companies, issued a statement proclaiming that the “purpose” of a business in 2019 was no longer to look out merely for shareholders. It was to protect the interests of all “stakeholders”—employees, partners, suppliers, communities, the environment, the very world itself. The group’s lofty statement seemed to reorient the role of a public company from the maximization of profit to the maximization of goodness.

‘Twas a lovely sentiment. And it lasted about 50 days. This week, the news dunked all over the Business Roundtable’s new definition.

The story started, as things often do these days, with a deleted tweet. Daryl Morey, the general manager of the Houston Rockets basketball team, publicized on Twitter his support for Hong Kong protesters, who are demanding a variety of civil liberty protections from mainland China and the Hong Kong police. The tweet disappeared almost immediately.

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But the damage was done. Chinese companies, furious over public sympathy for Hong Kong, were swift in their vengeance. They suspended licensing agreements with the NBA. They blacklisted the Rockets, historically the most popular U.S. basketball team in China, by banning them from appearing on state TV. The partnership between the NBA and China, which is worth billions of dollars over the next decade, is now in jeopardy.


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