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As much as I agree with your sentiment that shareholder value shouldn't be the only focus of companies, you can't reason with companies in complete isolation of

As much as I agree with your sentiment that shareholder value shouldn't be the only focus of companies, you can't reason with companies in complete isolation of their environment. The grimmer reality is that companies compete with one another, and customers - be them consumers, businesses, non-profits, or administrations. They all mind things like cost and quality to a degree, so you need to constantly improve your processes, and indeed automate, to stay in business.

salawat 8y ago
I agree in principle to needing to continually increase quality. I do not agree that that invalidates my point against the dangerous optimization around shareholder value. The corporation is there to provide a service, good, or solution. That service good or solution will by necessarily differ for the most part from others in the same market space, thus creating competition over the capital moving into the space. Unfortunately, this is where the perverse incentives start coming into play. Eventually, you hit that point of diminishing returns as an actor in the market. One of a few things then has to happen. A) Downsizing, hyper-optimization, and automation to create the illusion of growth and ROI to keep the investment bucks rolling in. This leads to decreased employment, and if unchecked creates value deserts at a certain point of optimization. You end up setting the bar so high to break into an area, that smaller endeavors without some massively disruptive edge being managed by people not interested in being bought out stand a chance at being able to survive. B) You fail due to investors selling off your stock to reinvest elsewhere. Given enough sell off, you'll likely start seeing stock price go down. No one wants money in a company that can't grow anymore. The situation in B) can lead to C) Vertical/Horizontal integration. This tends to be risky, because you start bumping heads with regulatory agencies if you aren't careful, and the word 'monopoly' or 'oligopoly' starts getting thrown around. You CAN make incredible growth numbers by merging with the right things, but the network effects of an emphasis on shareholder returns and a minimization in financial payouts to laborers means a steady positive feedback loop is created, siphoning economic power to the people with shares, which is increasingly NOT the people working jobs. Eventually, there may be wealth transfer via inheritance from shareholding parents, but wages have been minimized for discouraging a large portion of the working population from buying stock. This can be exacerbated as new goods price starts to take into account that there are generally at least enough well off enough people to the not+well-off people where prices will stabilize on the higher end of the scale over time. Leaving people looking for cheaper lower quality goods they can afford now. This leads to a manufacturing race to the bottom. See current status quo with manufacturing moving to Asia. This can hold out only until some other metric starts to significantly raise the bar in terms of minimum cost to produce or transport goods. Which coincidentally, environmental concerns are starting to do. Once things start getting more expensive to produce, and the cost gets offloaded to the customer... Well... You'll have a bunch of pissed off people who can't afford stuff, hired or not. It'll take a long while. Heck, it's been what, 100, 200ish years, for our population to start getting to the scale technologically where we can even get a non-trivial number of people to even CONTEMPLATE theatre planet's capability to absorb our economic externalities is limited to within a few human lifespans. It isn't an easy problem. A lotta moving pieces.

salawat 8y ago

I agree in principle to needing to continually increase quality. I do not agree that that invalidates my point against the dangerous optimization around shareholder value. The corporation is there to provide a service, good, or solution. That service good or solution will by necessarily differ for the most part from others in the same market space, thus creating competition over the capital moving into the space. Unfortunately, this is where the perverse incentives start coming into play. Eventually, you hit that point of diminishing returns as an actor in the market. One of a few things then has to happen. A) Downsizing, hyper-optimization, and automation to create the illusion of growth and ROI to keep the investment bucks rolling in. This leads to decreased employment, and if unchecked creates value deserts at a certain point of optimization. You end up setting the bar so high to break into an area, that smaller endeavors without some massively disruptive edge being managed by people not interested in being bought out stand a chance at being able to survive. B) You fail due to investors selling off your stock to reinvest elsewhere. Given enough sell off, you'll likely start seeing stock price go down. No one wants money in a company that can't grow anymore. The situation in B) can lead to C) Vertical/Horizontal integration. This tends to be risky, because you start bumping heads with regulatory agencies if you aren't careful, and the word 'monopoly' or 'oligopoly' starts getting thrown around. You CAN make incredible growth numbers by merging with the right things, but the network effects of an emphasis on shareholder returns and a minimization in financial payouts to laborers means a steady positive feedback loop is created, siphoning economic power to the people with shares, which is increasingly NOT the people working jobs. Eventually, there may be wealth transfer via inheritance from shareholding parents, but wages have been minimized for discouraging a large portion of the working population from buying stock. This can be exacerbated as new goods price starts to take into account that there are generally at least enough well off enough people to the not+well-off people where prices will stabilize on the higher end of the scale over time. Leaving people looking for cheaper lower quality goods they can afford now. This leads to a manufacturing race to the bottom. See current status quo with manufacturing moving to Asia. This can hold out only until some other metric starts to significantly raise the bar in terms of minimum cost to produce or transport goods. Which coincidentally, environmental concerns are starting to do. Once things start getting more expensive to produce, and the cost gets offloaded to the customer... Well... You'll have a bunch of pissed off people who can't afford stuff, hired or not. It'll take a long while. Heck, it's been what, 100, 200ish years, for our population to start getting to the scale technologically where we can even get a non-trivial number of people to even CONTEMPLATE theatre planet's capability to absorb our economic externalities is limited to within a few human lifespans. It isn't an easy problem. A lotta moving pieces.