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You're changing the subject to substantially narrower claims, none of which I disagree with. The claim wasn't that corporations aren't free to explicitly optim

You're changing the subject to substantially narrower claims, none of which I disagree with. The claim wasn't that corporations aren't free to explicitly optimize for goals other than or contrary to shareholder value (this seems trivially true AFAIK). It was that corporations are forced by law to take specific steps like "doing everything they can to optimize tax avoidance", and are legally prohibited from leaving any optimization opportunity on the table (as long as it's legal). Corporations are afforded far more discretion in this area, legally speaking, than your OP comment states.

rsj_hn 7y ago
I never said that they couldn't do it. But I said that these tradeoffs were governed by the corporate charter, which itself needed shareholder approval to change. Thus shareholders can agree to bring in other stakeholders. They can agree that a certain business should maximize its taxes. They can agree to turn the company into a non-profit. But they have to be the ones to agree to do it, and it needs to be spelled out in the various bylaws that define who the stakeholders are that the Board members must faithfully represent. It is not up to management. It is not up to employees. Only the shareholders decide this. The broader claims come from the assumption that shareholders generally support their own economic interests exclusively. My own observation of the world is that this is the case. Even if a shareholder cares about the poor, they would rather have the maximum return from their assets and then donate some money to the poor themselves, rather than asking their investments to donate to the poor and lower their return. So the technicalities are that yes, shareholders can give up these claims if they want to. Admitting this is not, IMO, backing off from my broader claim, but recognizing that shareholder supremacy also empowers shareholders to direct a corporation to include other factors than profits.

rsj_hn 7y ago

I never said that they couldn't do it. But I said that these tradeoffs were governed by the corporate charter, which itself needed shareholder approval to change. Thus shareholders can agree to bring in other stakeholders. They can agree that a certain business should maximize its taxes. They can agree to turn the company into a non-profit. But they have to be the ones to agree to do it, and it needs to be spelled out in the various bylaws that define who the stakeholders are that the Board members must faithfully represent. It is not up to management. It is not up to employees. Only the shareholders decide this. The broader claims come from the assumption that shareholders generally support their own economic interests exclusively. My own observation of the world is that this is the case. Even if a shareholder cares about the poor, they would rather have the maximum return from their assets and then donate some money to the poor themselves, rather than asking their investments to donate to the poor and lower their return. So the technicalities are that yes, shareholders can give up these claims if they want to. Admitting this is not, IMO, backing off from my broader claim, but recognizing that shareholder supremacy also empowers shareholders to direct a corporation to include other factors than profits.