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> Most shareholders now, in terms of percentage of voting stock ownership, are not individuals but mutual funds, who don't care what the corporation's goals ar

> Most shareholders now, in terms of percentage of voting stock ownership, are not individuals but mutual funds, who don't care what the corporation's goals are as long as its stock price and dividends meet targets; and CEOs, even if their share holdings are small as a percentage of the total, can easily get themselves special compensation packages and golden parachutes regardless of whether they improve the corporation's situation or not. You stopped just short of what I think is the real issue here. Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. There’s literally an episode of Black Mirror about this. They “privatize profits and socialize costs,” as the saying goes, and they don’t blink at doing things that may be illegal, because the profit reward is so strong. This is the kind of thinking that had oil companies suppressing climate change research in the 80s and tobacco companies suppressing lung cancer research in the 40s and 50s. A feel good statement by a couple hundred CEOs isn’t going to do anything about that.

pdonis 7y ago
> Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. I don't think "whatever is profitable" pins it down enough. They do what is profitable on a short time scale. They don't do what is profitable over long time scales like 30 or 50 or 100 years. If they did, they would not be able to get away with, for example, privatizing profits and socializing costs, because what enables them to do that is that the profits show up in the short term but the costs only show up in the long term. Back when corporate governance worked, shareholders were mostly individuals and they typically held shares on a long time horizon. That created obvious incentives to judge corporations by profits on a long time horizon. But now, most shareholders are mutual funds who judge individual corporations on a short time horizon--if the corporations don't make their numbers, the mutual fund trades their stock away. That means corporations have no incentive now to look at profits on a long time horizon--even though their shareholders do.
- pmiller2 7y ago
  > They don't do what is profitable over long time scales like 30 or 50 or 100 years. We’re facing down the imminent collapse of civilization due to climate change on a 30-50 year scale. Does it even make sense to consider the long term anymore?
  - pdonis 7y ago
    > We’re facing down the imminent collapse of civilization due to climate change on a 30-50 year scale. No, we're not. We have lots of ways to adapt, just as humans have adapted to climate change in the past.
    - jsymolon 7y ago
      Look up the "Little Ice Age" and the "Great Famine of 1315–1317" Then consider what adapting to climate change could mean.
      - pdonis 7y ago
        Which means we should be spending resources on making our society more robust: getting more people out of poverty and making our infrastructure more resilient. That will make it easier for people to adapt as compared with those previous times when virtually everyone on the planet was poor and there was no infrastructure at all to speak of. But climate change alarmists aren't telling us to do that; they're telling us to take all the resources we could be spending on those good things, and instead squander them on draconian efforts to curb CO2 emissions based on models that have been falsified by the data.
    - pmiller2 7y ago
      That’s the kind of short sighted thinking that’s going to kill most of us. I say most, because, while I expect humanity will adapt, civilization as we know it may not.
      - pdonis 7y ago

pdonis 7y ago

> Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. I don't think "whatever is profitable" pins it down enough. They do what is profitable on a short time scale. They don't do what is profitable over long time scales like 30 or 50 or 100 years. If they did, they would not be able to get away with, for example, privatizing profits and socializing costs, because what enables them to do that is that the profits show up in the short term but the costs only show up in the long term. Back when corporate governance worked, shareholders were mostly individuals and they typically held shares on a long time horizon. That created obvious incentives to judge corporations by profits on a long time horizon. But now, most shareholders are mutual funds who judge individual corporations on a short time horizon--if the corporations don't make their numbers, the mutual fund trades their stock away. That means corporations have no incentive now to look at profits on a long time horizon--even though their shareholders do.

pmiller2 7y ago
> They don't do what is profitable over long time scales like 30 or 50 or 100 years. We’re facing down the imminent collapse of civilization due to climate change on a 30-50 year scale. Does it even make sense to consider the long term anymore?
- pdonis 7y ago
  > We’re facing down the imminent collapse of civilization due to climate change on a 30-50 year scale. No, we're not. We have lots of ways to adapt, just as humans have adapted to climate change in the past.
  - jsymolon 7y ago
    Look up the "Little Ice Age" and the "Great Famine of 1315–1317" Then consider what adapting to climate change could mean.
    - pdonis 7y ago
      Which means we should be spending resources on making our society more robust: getting more people out of poverty and making our infrastructure more resilient. That will make it easier for people to adapt as compared with those previous times when virtually everyone on the planet was poor and there was no infrastructure at all to speak of. But climate change alarmists aren't telling us to do that; they're telling us to take all the resources we could be spending on those good things, and instead squander them on draconian efforts to curb CO2 emissions based on models that have been falsified by the data.
  - pmiller2 7y ago
    That’s the kind of short sighted thinking that’s going to kill most of us. I say most, because, while I expect humanity will adapt, civilization as we know it may not.
    - pdonis 7y ago