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> I miss the days when businesses existed not just to serve investors but also their employees and the common good Uh when was this? For-profit businesses have

> I miss the days when businesses existed not just to serve investors but also their employees and the common good Uh when was this? For-profit businesses have always been created for the primary purpose of making money. Any side effect like employee well being happened to coincide with what maximized profits at the time or due to regulation.

rabidrat 6y ago
Pre-1970 or so. Before Milton Friedman, there was a general sense that companies existed to fulfill some mission, with profit as a means. The CEO of Kellogg commented on this in an interview ca. 1980, that money for a business is like a gasoline for a road trip. You need it to get where you're going, but the point of a road trip is not to accumulate as much gasoline as possible.
- snowwrestler 6y ago
  Is this a joke? The bulk of the labor movement happened before 1970, and it was not because workers were so well-treated and well-compensated that they had a lot of free time on their hands. I'm a big fan of business and entrepreneurship, but let's be clear here: there is a reason we invented government. There was never a time when we could 100% count on the beneficence of business leaders to advance social goals. Edit to add: I'm not trying to demonize all business leaders here. There are some bad actors, but even business leaders who desire to do well have to succeed in the marketplace--even against bad actors. Unfortunately, doing bad things in business often confers the benefit of lowering costs, which is a competitive advantage. This is a known structural issue with a marketplace economy and why we need more than just business to have a good society.
  - rabidrat 6y ago
    Of course, there have always been bad businesses. The difference between pre-1970 and now, is that we've not only socially legitimized the maximization of profit, we've also all but legally mandated it. Now even "decent" business leaders like the CEO of Costco have to continually answer to their shareholders as to why they're not lowering wages and reducing benefit--and in Costco's case, the shareholders may try to take legal action to force them to lower costs, even though Costco the business is already quite profitable. Due to lack of labor regulation and the mantra that "business are required to maximize shareholder value", Costco's decency is fully dependent on its CEO's (unusual) fortitude to fend off those shareholder demands. When its leadership changes, its ability to care for its employees will likely revert to the mean, which as we see in today's environment is abysmal. So really, it's not that "there are some bad actors", but that "the system strongly encourages businesses to install these so-called bad actors as their leaders". I agree with you, that we need strong government labor regulations to counter this mentality, but this mentality is why these regulations have deteriorated over the past 50 years.
    - snowwrestler 6y ago
      > The difference between pre-1970 and now, is that we've not only socially legitimized the maximization of profit, we've also all but legally mandated it. I'm sorry, but this is just not true. If it was legally mandated, then the Costco CEO would not have been able to resist such shareholder demands. Your example proves the opposite of what you think it does. Nothing has changed in the legal structure of corporate governance since 1970. Do you think that investors never demanded greater returns from business leaders prior to 1970? They can still demand all they want, but the law remains clear today that corporate directors and managers have the power to run the business as they see fit, and shareholders' sole remedy for their disappointment, in the absence of outright fraud or gross negligence, is to sell their stock. In February 2014, Tim Cook was the CEO of one of the most valuable companies in the world. At Apple's shareholder meeting, he directly told his shareholders that he does not even consider ROI in some of his decisions. Legal consequences to Apple and Tim Cook for this statement? Zero. He's still CEO. Because there is no legal mandate to maximize corporate profits. Honestly, by buying into this myth that the law changed in the 1970s, you're lending power to a fake idea that you seem to be opposed to. There is a group of people who wish such a mandate existed, and by acting like they're right, you're kind of helping them. Business leaders might make anti-social decisions because they feel competitive pressure to succeed in a marketplace where customers are free to choose and are price-sensitive. That's not nearly the same thing as saying that corporate governance law forces them to make such decisions. It doesn't.
      - rabidrat 6y ago
        The expression "all but" means "almost but not quite".
        snowwrestler 6y ago
        I know, that's what I'm trying to say: it's not true that CEOs are "almost but not quite" legally mandated to maximize profit or shareholder value. The law says plainly that they are not. "All but" is handy phrasing if you're trying to create the impression that something you prefer is true. If you don't prefer it, I think that using that phrase is like shooting yourself in the foot rhetorically. I think it's more constructive to point out that such a mandate does not exist (regardless of what some shareholders seem to believe), and there are good reasons it doesn't.
- nickik 6y ago
  This a perfect example of how mythical history of the left totally distorts peoples view of history. Kellogg also burned girls clitoris away because he was against masturbation. Other then he had incredibly toxic fights about the right to the IP and broke his relation with his brother. Clearly he didn't care about profits. Also a single example doesn't prove that things were structurally different. There are tons of companies now that exist with different goals.
asveikau 6y ago
Your idea is not an inevitability but actually from the late 20th century, and became very popular starting in the 80s. Here is a link that showed up in google for me when I tried to find support of this claim: https://www.washingtonpost.com/opinions/harold-meyerson-the-myth-of-maximizing-shareholder-value/2014/02/11/00cdfb14-9336-11e3-84e1-27626c5ef5fb_story.html https://www.washingtonpost.com/opinions/harold-meyerson-the-...
- ativzzz 6y ago
  Sure, and here is a counterexample from the 1600-1800s: https://en.wikipedia.org/wiki/East_India_Company https://en.wikipedia.org/wiki/East_India_Company Literally they bought an army and took over India for money.
  - asveikau 6y ago
    Need to keep in mind we now remember this endeavor as ethically challenged, but was it literally 100% for money or did want of these goods play a role: > cotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium. Surely access to those provides some benefit other than making money, which it also did for them. Also worth noting that not every company is ... that one.
    - wutbrodo 6y ago
      > was it literally 100% for money or did want of these goods play a role: > cotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium. Surely access to those provides some benefit other than making money, which it also did for them. This is an utterly meaningless distinction. Money is fungible with all of those goods.
      - asveikau 6y ago
        I am not sure you are using fungibility completely correctly because the goods have a condition, are perishable, they can be bartered or traded or maybe are fungible with respect to each other but are not literal money and literally interchangeable with money. Anyway, if you want to go down that path you can easily conclude that literally any good or activity is just money, that you live a money-dominated life and we all exist for money all the time and while useful in some contexts I don't think it's particularly apt, but I hope you enjoy it.
willis936 6y ago
Prior to the 1980s. https://en.wikipedia.org/wiki/Shareholder_value https://en.wikipedia.org/wiki/Shareholder_value
freepor 6y ago
No, when businesses were owned primarily by single individuals, their priorities were much more aligned with the goals of a single individual. The owners cared not only about profits but respect in the community, influence over politics, etc. and made choices that today’s publicly traded companies would and do not.
- djrogers 6y ago
  > The owners cared not only about profits but respect in the community I think you need to read a little more history. People haven't changed their core nature in the past 40 years. Look at Carpetbaggers, the Triangle Shirtwaist company, and William Hearst for relatively recent examples. Further back you can look at The Dutch East India Company, the Knights Templar, and the various and sundry monopolies that have arisen throughout history. People are driven to acquire capital initially to meet their own needs, then for power. There always have been people and groups of people who strive for the latter, not being satisfied with the former. Romanticizing long dead business owners may play well in movies and books, but it isn't reflective of human nature.

rabidrat 6y ago

Pre-1970 or so. Before Milton Friedman, there was a general sense that companies existed to fulfill some mission, with profit as a means. The CEO of Kellogg commented on this in an interview ca. 1980, that money for a business is like a gasoline for a road trip. You need it to get where you're going, but the point of a road trip is not to accumulate as much gasoline as possible.

snowwrestler 6y ago
Is this a joke? The bulk of the labor movement happened before 1970, and it was not because workers were so well-treated and well-compensated that they had a lot of free time on their hands. I'm a big fan of business and entrepreneurship, but let's be clear here: there is a reason we invented government. There was never a time when we could 100% count on the beneficence of business leaders to advance social goals. Edit to add: I'm not trying to demonize all business leaders here. There are some bad actors, but even business leaders who desire to do well have to succeed in the marketplace--even against bad actors. Unfortunately, doing bad things in business often confers the benefit of lowering costs, which is a competitive advantage. This is a known structural issue with a marketplace economy and why we need more than just business to have a good society.
- rabidrat 6y ago
  Of course, there have always been bad businesses. The difference between pre-1970 and now, is that we've not only socially legitimized the maximization of profit, we've also all but legally mandated it. Now even "decent" business leaders like the CEO of Costco have to continually answer to their shareholders as to why they're not lowering wages and reducing benefit--and in Costco's case, the shareholders may try to take legal action to force them to lower costs, even though Costco the business is already quite profitable. Due to lack of labor regulation and the mantra that "business are required to maximize shareholder value", Costco's decency is fully dependent on its CEO's (unusual) fortitude to fend off those shareholder demands. When its leadership changes, its ability to care for its employees will likely revert to the mean, which as we see in today's environment is abysmal. So really, it's not that "there are some bad actors", but that "the system strongly encourages businesses to install these so-called bad actors as their leaders". I agree with you, that we need strong government labor regulations to counter this mentality, but this mentality is why these regulations have deteriorated over the past 50 years.
  - snowwrestler 6y ago
    > The difference between pre-1970 and now, is that we've not only socially legitimized the maximization of profit, we've also all but legally mandated it. I'm sorry, but this is just not true. If it was legally mandated, then the Costco CEO would not have been able to resist such shareholder demands. Your example proves the opposite of what you think it does. Nothing has changed in the legal structure of corporate governance since 1970. Do you think that investors never demanded greater returns from business leaders prior to 1970? They can still demand all they want, but the law remains clear today that corporate directors and managers have the power to run the business as they see fit, and shareholders' sole remedy for their disappointment, in the absence of outright fraud or gross negligence, is to sell their stock. In February 2014, Tim Cook was the CEO of one of the most valuable companies in the world. At Apple's shareholder meeting, he directly told his shareholders that he does not even consider ROI in some of his decisions. Legal consequences to Apple and Tim Cook for this statement? Zero. He's still CEO. Because there is no legal mandate to maximize corporate profits. Honestly, by buying into this myth that the law changed in the 1970s, you're lending power to a fake idea that you seem to be opposed to. There is a group of people who wish such a mandate existed, and by acting like they're right, you're kind of helping them. Business leaders might make anti-social decisions because they feel competitive pressure to succeed in a marketplace where customers are free to choose and are price-sensitive. That's not nearly the same thing as saying that corporate governance law forces them to make such decisions. It doesn't.
    - rabidrat 6y ago
      The expression "all but" means "almost but not quite".
      - snowwrestler 6y ago
        I know, that's what I'm trying to say: it's not true that CEOs are "almost but not quite" legally mandated to maximize profit or shareholder value. The law says plainly that they are not. "All but" is handy phrasing if you're trying to create the impression that something you prefer is true. If you don't prefer it, I think that using that phrase is like shooting yourself in the foot rhetorically. I think it's more constructive to point out that such a mandate does not exist (regardless of what some shareholders seem to believe), and there are good reasons it doesn't.
nickik 6y ago
This a perfect example of how mythical history of the left totally distorts peoples view of history. Kellogg also burned girls clitoris away because he was against masturbation. Other then he had incredibly toxic fights about the right to the IP and broke his relation with his brother. Clearly he didn't care about profits. Also a single example doesn't prove that things were structurally different. There are tons of companies now that exist with different goals.

asveikau 6y ago

Your idea is not an inevitability but actually from the late 20th century, and became very popular starting in the 80s. Here is a link that showed up in google for me when I tried to find support of this claim: https://www.washingtonpost.com/opinions/harold-meyerson-the-myth-of-maximizing-shareholder-value/2014/02/11/00cdfb14-9336-11e3-84e1-27626c5ef5fb_story.html https://www.washingtonpost.com/opinions/harold-meyerson-the-...

ativzzz 6y ago
Sure, and here is a counterexample from the 1600-1800s: https://en.wikipedia.org/wiki/East_India_Company https://en.wikipedia.org/wiki/East_India_Company Literally they bought an army and took over India for money.
- asveikau 6y ago
  Need to keep in mind we now remember this endeavor as ethically challenged, but was it literally 100% for money or did want of these goods play a role: > cotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium. Surely access to those provides some benefit other than making money, which it also did for them. Also worth noting that not every company is ... that one.
  - wutbrodo 6y ago
    > was it literally 100% for money or did want of these goods play a role: > cotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium. Surely access to those provides some benefit other than making money, which it also did for them. This is an utterly meaningless distinction. Money is fungible with all of those goods.
    - asveikau 6y ago
      I am not sure you are using fungibility completely correctly because the goods have a condition, are perishable, they can be bartered or traded or maybe are fungible with respect to each other but are not literal money and literally interchangeable with money. Anyway, if you want to go down that path you can easily conclude that literally any good or activity is just money, that you live a money-dominated life and we all exist for money all the time and while useful in some contexts I don't think it's particularly apt, but I hope you enjoy it.

willis936 6y ago

Prior to the 1980s. https://en.wikipedia.org/wiki/Shareholder_value https://en.wikipedia.org/wiki/Shareholder_value

freepor 6y ago

No, when businesses were owned primarily by single individuals, their priorities were much more aligned with the goals of a single individual. The owners cared not only about profits but respect in the community, influence over politics, etc. and made choices that today’s publicly traded companies would and do not.

djrogers 6y ago
> The owners cared not only about profits but respect in the community I think you need to read a little more history. People haven't changed their core nature in the past 40 years. Look at Carpetbaggers, the Triangle Shirtwaist company, and William Hearst for relatively recent examples. Further back you can look at The Dutch East India Company, the Knights Templar, and the various and sundry monopolies that have arisen throughout history. People are driven to acquire capital initially to meet their own needs, then for power. There always have been people and groups of people who strive for the latter, not being satisfied with the former. Romanticizing long dead business owners may play well in movies and books, but it isn't reflective of human nature.