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Forcing no profits is central management at it's very worst - Setting prices causes many downstream derangements to markets. A complex interconnected system wi

by jp555 7y ago

Forcing no profits is central management at it's very worst - Setting prices causes many downstream derangements to markets. A complex interconnected system will adapt in unforeseeable ways, causing novel externalities for which we have no built up immunity. Ask a soviet.

spamizbad 7y ago
Forcing profits is bad too. Just look at Boeing to see where the naked pursuit of profits can lead. It literally kills people.
- whatshisface 7y ago
  If they had pursued profits harder and more effectively, they would not have had the accidents whose effect was to reduce their profits. Although there are some examples of outright malice or criminality out there, Boeing is closer to an example of an ineffective management culture than an evilly effective one.
  - leto_ii 7y ago
    > If they had pursued profits harder and more effectively, they would not have had the accidents I think this is a bit simplistic or at least too optimistic. The pressures of being listed on the stock market are such that management is more or less compelled to pursue short-term goals. Indeed in the very long run a lot of corporations are harming themselves by harming the environment, impeding innovation etc. but in the short run firing people, cutting R&D budgets, digging up more coal, oil etc. can be very effective. And shareholders really only care about what your profits are gonna be in the next few quarters, not so much about what's gonna happen decades down the line.
    - whatshisface 7y ago
      If you buy a stock and then use your influence to destroy its value, you're punishing yourself for your own bad decision. A lot of real human tragedy is caused by self-destructive behavior. Now, here's an interesting thing to consider. You bring up coal and oil - both industries that are on the way out in the long term. Would it be wise for shareholders to push these companies to invest in R&D to improve their long-term capabilities? No, if coal and oil are on the way out, then the best financial strategy would be to run the companies into the ground as you slowly liquidate them, ideally so that there's nothing left on the very day that fossil fuels are no longer needed. In that case, short-termism is the best strategy.
  - alfromspace 7y ago
    No. Whatever effect the 737 MAX grounding has had on Boeing's profits pales in comparison to the benefit gained by rushing the plane out the door to get in front of Airbus and thus making billions in sales contracts. There has been virtually no effect on Boeing's stock price, and the plane will probably be back in service within the year. All in all, putting lives at risk was a good move for Boeing, and they'll surely do it again.
  - jungturk 7y ago
    I'm assuming by "more effectively" you mean "less shortsightedly"? In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated). Most charitably, the executives perhaps felt they were making judicious, acceptable tradeoffs that would maximize business outcomes over the time horizon they were concerned with - periods measured in quarters or years or even decades. How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? What happens when a black swan occurs and significantly drives down the effectiveness of prior decisions (which until then had been deemed quite effective)? Are profits clawed back?
    - whatshisface 7y ago
      >In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated). If the judgment was really only clear in hindsight then no power structure could have altered it. What's clear only in hindsight to a CEO is clear only in hindsight to a union boss, or a collective, anyone else. >How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? The corporation is already incentivized: in exchange for thinking about long-term profits, it is rewarded with long-term profits. However, executives often have different goals than the corporation they're supposed to represent. If you could figure out how to better align the interests of executives with their corporations, you would see more effective profit-seeking, which would include less killing due to blunders but more killing due to tobacco-industry style exploitation. Giving executives the freedom to put their own interests first (the source of next-quarterism and next-bonusism) is necessary if you want to give them the freedom to pursue ethical goals. You either trust them to make the right decisions or you don't. >Are profits clawed back? Yes! That's what happens when something causes you to lose money.
- naravara 7y ago
  Some people will argue the issue there is time-horizons. If Boeing was worried about profitability indefinitely into the future, these sorts of repetitional disasters would factor in. But if everyone is looking quarter-to-quarter or year-to-year they won't.
  - spamizbad 7y ago
    The project timeline for the 737 MAX was at least 6 years. It was announced in 2011 and entered service in 2017. So you can run into this problem even when thinking 5+ years ahead.
- rayiner 7y ago
  Nobody is forcing profits. If you want to start a non-profit aerospace company, nobody is stopping you.
  - ianleeclark 7y ago
    > Nobody is forcing profits. Shareholders? > If you want to start a non-profit aerospace company, nobody is stopping you. Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.
    - rayiner 7y ago
      > Shareholders? The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. > Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself. My point is to contrast a system where everyone is forced to be a non-profit or co-op (@jp555's hypothetical), and our system, where you are free to be a non-profit or co-op, if you want to. If you can't raise capital or hire top-notch employees under that structure, then that's a problem with the non-profit/co-op organization, not a shortcoming of our economic system.
      - ianleeclark 7y ago
        > The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for the ride. You responded to a comment concerning Boeing, not some fresh-faced up-and-comer of your own creation.
abathologist 7y ago
"not profit driven" does not mean "forcing no profits". The former means that your highest driving purpose and governing logic is not oriented around the accumulation of profit. The latter means you make it impossible to accumulate profit. We can pursue self-organization that pursues escape from the pathological patterns of profit driven production without advocating for, striving for, or tolerating a totalitarian, bureaucratic nightmare. See, e.g., https://thenextsystem.org/start-with-worker-self-directed-enterprises https://thenextsystem.org/start-with-worker-self-directed-en...

by jp555 7y ago

spamizbad 7y ago

Forcing profits is bad too. Just look at Boeing to see where the naked pursuit of profits can lead. It literally kills people.

whatshisface 7y ago
If they had pursued profits harder and more effectively, they would not have had the accidents whose effect was to reduce their profits. Although there are some examples of outright malice or criminality out there, Boeing is closer to an example of an ineffective management culture than an evilly effective one.
- leto_ii 7y ago
  > If they had pursued profits harder and more effectively, they would not have had the accidents I think this is a bit simplistic or at least too optimistic. The pressures of being listed on the stock market are such that management is more or less compelled to pursue short-term goals. Indeed in the very long run a lot of corporations are harming themselves by harming the environment, impeding innovation etc. but in the short run firing people, cutting R&D budgets, digging up more coal, oil etc. can be very effective. And shareholders really only care about what your profits are gonna be in the next few quarters, not so much about what's gonna happen decades down the line.
  - whatshisface 7y ago
    If you buy a stock and then use your influence to destroy its value, you're punishing yourself for your own bad decision. A lot of real human tragedy is caused by self-destructive behavior. Now, here's an interesting thing to consider. You bring up coal and oil - both industries that are on the way out in the long term. Would it be wise for shareholders to push these companies to invest in R&D to improve their long-term capabilities? No, if coal and oil are on the way out, then the best financial strategy would be to run the companies into the ground as you slowly liquidate them, ideally so that there's nothing left on the very day that fossil fuels are no longer needed. In that case, short-termism is the best strategy.
- alfromspace 7y ago
  No. Whatever effect the 737 MAX grounding has had on Boeing's profits pales in comparison to the benefit gained by rushing the plane out the door to get in front of Airbus and thus making billions in sales contracts. There has been virtually no effect on Boeing's stock price, and the plane will probably be back in service within the year. All in all, putting lives at risk was a good move for Boeing, and they'll surely do it again.
- jungturk 7y ago
  I'm assuming by "more effectively" you mean "less shortsightedly"? In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated). Most charitably, the executives perhaps felt they were making judicious, acceptable tradeoffs that would maximize business outcomes over the time horizon they were concerned with - periods measured in quarters or years or even decades. How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? What happens when a black swan occurs and significantly drives down the effectiveness of prior decisions (which until then had been deemed quite effective)? Are profits clawed back?
  - whatshisface 7y ago
    >In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated). If the judgment was really only clear in hindsight then no power structure could have altered it. What's clear only in hindsight to a CEO is clear only in hindsight to a union boss, or a collective, anyone else. >How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? The corporation is already incentivized: in exchange for thinking about long-term profits, it is rewarded with long-term profits. However, executives often have different goals than the corporation they're supposed to represent. If you could figure out how to better align the interests of executives with their corporations, you would see more effective profit-seeking, which would include less killing due to blunders but more killing due to tobacco-industry style exploitation. Giving executives the freedom to put their own interests first (the source of next-quarterism and next-bonusism) is necessary if you want to give them the freedom to pursue ethical goals. You either trust them to make the right decisions or you don't. >Are profits clawed back? Yes! That's what happens when something causes you to lose money.
naravara 7y ago
Some people will argue the issue there is time-horizons. If Boeing was worried about profitability indefinitely into the future, these sorts of repetitional disasters would factor in. But if everyone is looking quarter-to-quarter or year-to-year they won't.
- spamizbad 7y ago
  The project timeline for the 737 MAX was at least 6 years. It was announced in 2011 and entered service in 2017. So you can run into this problem even when thinking 5+ years ahead.
rayiner 7y ago
Nobody is forcing profits. If you want to start a non-profit aerospace company, nobody is stopping you.
- ianleeclark 7y ago
  > Nobody is forcing profits. Shareholders? > If you want to start a non-profit aerospace company, nobody is stopping you. Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.
  - rayiner 7y ago
    > Shareholders? The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. > Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself. My point is to contrast a system where everyone is forced to be a non-profit or co-op (@jp555's hypothetical), and our system, where you are free to be a non-profit or co-op, if you want to. If you can't raise capital or hire top-notch employees under that structure, then that's a problem with the non-profit/co-op organization, not a shortcoming of our economic system.
    - ianleeclark 7y ago
      > The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for the ride. You responded to a comment concerning Boeing, not some fresh-faced up-and-comer of your own creation.

abathologist 7y ago

"not profit driven" does not mean "forcing no profits". The former means that your highest driving purpose and governing logic is not oriented around the accumulation of profit. The latter means you make it impossible to accumulate profit. We can pursue self-organization that pursues escape from the pathological patterns of profit driven production without advocating for, striving for, or tolerating a totalitarian, bureaucratic nightmare. See, e.g., https://thenextsystem.org/start-with-worker-self-directed-enterprises https://thenextsystem.org/start-with-worker-self-directed-en...