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Or, maybe, "Everybody is altruistic until they have shareholders." The idea that companies should only be beholden to shareholders that has taken firm hold ove

• dimitrios1 5y ago
  It's not some idea that came about from a vacuum. Put yourself in an investors shoes: you may have some investments that you do for the sake of charity or philanthropy, however, the majority of your investments are to increase your investment. It isn't surprising then, following this basic premise, that we have arrived at the current situation. Capitalism factors in greed for the general welfare of the most people. It just seems that we underestimated the upper bound of human greed.
  • Swenrekcah 5y ago
    It's not so much an underestimation as it is a systematic breakdown of constraints and personal responsibility for owners/directors of large corporations.
• wnevets 5y ago
  They don't have to be. Everyone just chooses to do it that way because its easier to make loads of money.
• simonh 5y ago
  Past 50 years, really? "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." - Adam Smith, 1776
  • dredmorbius 5y ago
    Smith had very few good things to say of joint-stock (shareholder-owned) corporations. They were comparatively scarce at the time. Most businesses of his time, including the "baker and butcher" line you quite, were sole proprietorships or family-owned and operated. The interests he writes of are those of the butcher and baker to themselves. Not to their shareholders. "Shareholder value" is a recent error attributed to Milton Friedman.
  • nowherebeen 5y ago
    > The idea that companies should only be beholden to shareholders This concept was popularized by Milton Friedman with his Shareholder Theory. OP is not wrong. https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine
    • simonh 5y ago
      Maybe, but it’s repackaging a point Smith made 194 years earlier.
      • pjmorris 5y ago
        A shareholder is more like the butcher or baker's brother than the butcher or baker. The incentives are different.
        • simonh 5y ago
          How so?
          • pjmorris 5y ago
            The butcher and baker a) have to understand what it takes to produce quality meats and breads and b) stand face to face with the customer, so they have both professional and reputational stakes in the game. Their stakeholder brothers and sisters may or may not have the same knowledge or reputational risk, and so their self-interested measures may correlate more with what puts money in their pockets in the short term than what makes the business viable over the long term.
            • simonh 5y ago
              Shareholders don’t care about the reputation or quality of service of the company? That seems a stretch. As I’ve commented elsewhere I don’t entirely agree with Friedman because I think some social spending can make commercial sense for a company, but I think what he’s saying is just a pretty direct refinement of the exact same points Smith made.
• SkyBelow 5y ago
  Psychology studies in the past showed people were altruistic. Then psychologist accounted for social capital/good will and worked to remove it from their altruism tests. People stopped being overly altruistic when it stopped benefitting them, likely meaning that what we see as altruism is really a failure to account for all the benefits a person expects to gain and all the negatives they expect to avoid when choosing to perform a certain action. As for shareholders, I think that comes down to the incentive to avoid the negative outcome of being replaced. Those at the top optimize their actions to avoid being replaced which filters down through each level until it effects every level of a company. There is some variety that results from how a company chooses who to promote, but that is still an outcome of not wanting to be replaced. Promote people who you think will strengthen your own position and not those who will weaken it. This ends up being the primordial pool that spawns corporate culture.
  • heterodoxxed 5y ago
    The concept of altruism does not require it to be "pure" or entirely selfless. Altruism can have benefits but those benefits can exist outside of economy and into the realm of the personal, spiritual, social, etc. In other words, that doesn't disprove altruism so much as it proves that economic self-interest is not our only motivator.