Terra Firma’s takeover of EMI may be one of the worst deals in corporate history; its backers found out this week that it had cost them nearly £4bn in total. But even if it had ‘worked’, like all private equity deals the transaction was about appropriating value rather than creating it. The private-equity partners, particularly, would have benefited, but essentially the game is zero sum, their gain being made at least in the short term at the expense of the company itself.

That kind of paper gain is what Umair Haque, in his just-published The New Capitalist Manifesto: Building a Disruptively Better Business, calls ‘thin’ or inauthentic value. He opposes this to ‘thick’ value, a kind of social alpha, which adds to wellbeing after all costs have been taken into account. As well as the private-equity deal, Haque gives as an example of thin value the $1 profit made on a $3 burger. In fact, says Haque, the full cost of a burger is probably closer to $30. So the dollar made on the deal isn’t really value at all. The burger maker has borne just $2 of the burger’s full cost, leaving $27 to be picked up by people, society, and future generations. ‘No authentic value has been created; the profit booked an illusion of imbalanced accounting.’

Haque, director of Havas Media Lab, is the new kid on the block, posting a series of fiery blogs and tweets (@umairh) dissing almost all conventional business institutions from traditional economics (‘the ponziconomy’) to Davos (‘Egypt: the young desperately fighting for a better future. Davos: old rich dudes fighting savagely against it’). Michael Porter (also, interestingly, with a Harvard base) is infinitely less of a firebrand and more academically respectable. Yet the establishment strategy guru has come to a similar conclusion. In a big piece in the current issue of HBR entitled ‘How to Fix Capitalism’ (no less), Porter writes that ‘business and society have been pitted against each other for too long.’ Instead, he says, ‘The purpose of the corporation must be redefined as creating shared value, not just profit per se’.

Shared value means creating economic value ‘in a way that also creates value for society by addressing its needs and challenges’ and clearly has much in common with Haque’s ‘thick’ variety. They both aim to get away from the cynical and insulting idea of Corporate Social Responsibility and put the wider social need at the heart instead of the margin of business. They are both thus in the spirit of Peter Drucker who as long ago as 1984 wrote that ‘The proper social responsibility of business is to tame the dragon, that is, to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth’.

At the heart of all three approaches is the idea, self-evident to all except neo-classical economists, that that companies can only flourish sustainably in a healthy society. So if they are manufacturing ‘bads’ that society then has to spend time and money rectifying, they are in effect imposing a tax on everyone, including ultimately themselves. Just as bad, by manufacturing ‘bads’ that they decline to take responsibility for (pollution, obesity, the credit crunch), business steadily undermines its own legitimacy. As Porter points out, ‘diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle’ – not only of of its own making, but also that of business academics, including, ironically, Porter himself.

Now, as Charles H. Green notes in a sympathetic but sceptical review of the two pieces, these are heady and exciting themes, and directionally they are surely right. But this doesn’t mean they will automatically come to pass. As he suggests, the ‘must’ (create shared value) in both authors’ texts has no causal force; it is ‘exhortation dressed up in the words of logical necessity’. He concludes: ‘The last thing capitalism needs right now is a new [closed-system] ideology. Business needs simply to take its seat among other social and political institutions, and to play nicely in the sandbox alongside them’.

Yes: but that raises rather large questions of its own. Business is hardly likely to get humbly down in the sandbox when the zombie shells of the misleading old ideology are still lumbering tiresomely around the landscape. It is they after all that prevented business from doing just that (or rather, exempted it from the need to do so) in the first place. And that raises problems in another and much less familiar arena: the political.

Although neither of them mention it, the corollary of the idea that companies have an obligation to wider society (unavoidable after a crash caused by the Friedmanite insistence that business should be left alone to concentrate on business) is the end of shareholder primacy. Actually, it was always a myth that shareholders owned corporations (see HBR if you don’t believe me), which is simply incompatible with limited liability; and shareholders in general didn’t do very well out of the shareholder value era anyway (HBR again).

But when the myth of the shareholder as organising principle is disposed of, it isn’t just the unlovely and dysfunctional edifice of today’s management conventions that come crashing down with it. Powerful vested interests are endangered too. One notable casualty is the business schools and consultancies, which over 30 years have have invested hugely in theorizing the shareholder model. Take for instance the popular version of strategy (chief guru: a certain Michael Porter) that casts the function of managers as value capture – basically raising barriers to prevent anyone else, including employees and society itself, from eating the shareholders’ lunch. By changing the manager’s job to creating new value through innovation, Porter’s shared value thesis laudably puts managers and society – at last – on the same side. But it may not do much for their pay packets.

This is because also swept away with shareholder value is the present stockholder-oriented governance arrangements. These have indeed done a terrible job of looking after the bulk of shareholders’ interests. But they have also underpinned and justified the grotesque compensation structures that now marry the interests of Wall Street and City of London with those of corporate boardrooms. Unfortunately this unholy alliance – which has hoovered up almost all the wealth increase of the last two decades at the expense of everyone else – now exercises an almost unimaginable sway over politicians, particularly in the US. As Green puts it, ‘Elections and legislation are heavily controlled by corporate interests in the United States today,’ and as he doesn’t put it, these are largely free-market fundamentalists who insist on their god-given right to make money even if they have to bring the world financial system crashing down on top of them to do so. Successive governments have been in similar thrall to finance in the UK, and to a lesser degree in many other western countries.

So now do you get the picture? After 30 years hiding behind the supposedly impartial axioms of economics, perhaps for the first time management is political; and no amount of talk about MBA oaths, ethics classes and even shared or thick value is going to change that. To rephrase Marx: the point is not to understand the world (we’ve done that). The point is to change it.