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One instance of this misunderstanding that comes to mind is the feverish insistence of some people that "corporations must always act in the interest of shareho
by IfOnlyYouKnew 5y ago
One instance of this misunderstanding that comes to mind is the feverish insistence of some people that "corporations must always act in the interest of shareholder value" and the idea that anything else quickly lands decision-makers in jail. That notion takes the principle that capitalism allows selfish interests to also work for the greater good, and turns it into a religion, where any attempt to directly act with non-selfish motivation is considered a moral failing.
Any actual CXO knows full well that it's rarely obvious what's in the shareholders' interest, that they have rather large discretion and, in a worst case, can always invoke some positive PR value of whatever altruistic decisions they take. As for criminal or civil liability, there has been like one case concerning this idea in the history of US corporations.
- JackFr 5y agoYou seem to misunderstand the point of maximizing shareholder value. If the managers of a company behave in a way that troubles the shareholders, a lawsuit is a very inefficient way to go. You simply take your capital elsewhere.
- jgeada 5y agoWhat capital is that shareholder taking elsewhere? Once a company has sold a share, it no longer has much direct interest in the value of that share on further transactions (much like a publisher only gets value from the first sale of a book, all other sales of that same book produce no value to the publisher). Sure, further share sales may become more difficult, but that is a distinct effect.
- IfOnlyYouKnew 5y agoSure….. I’m referring to an argument of the form “that’s not evil, it’s what they are legally required to do’ Examples; https://news.ycombinator.com/item?id=27564034 https://news.ycombinator.com/item?id=27564034 (the platonic ideal of this fallacy) https://news.ycombinator.com/item?id=27702670 https://news.ycombinator.com/item?id=27702670 https://news.ycombinator.com/item?id=2731253 https://news.ycombinator.com/item?id=2731253 https://news.ycombinator.com/item?id=6653519 https://news.ycombinator.com/item?id=6653519 https://news.ycombinator.com/item?id=3698084 https://news.ycombinator.com/item?id=3698084