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Publicly traded companies have a main goal of making profits for shareholders. This seldom aligns with the public's interest. For many (most?) companies, only

Publicly traded companies have a main goal of making profits for shareholders. This seldom aligns with the public's interest. For many (most?) companies, only the rich have any voting power, whereas the majority of the population just has to follow along. Publicly traded companies are like a democracy where you get more votes the more money you have. The implication here is that your voice/needs are only important if you're rich, and are unimportant if you're average or poor (which kind of explains why the US is the way it is).

Gollapalli 5y ago
Yeah, that's what we're all taught. But, the actual incentive structure of "who controls the corporation?" is not shareholders, whose ownership is a) so diffuse as to be unknowable, sans documentation from a stock exchange b) very often held by proxies, with voting rights exercised by those proxies as well [1], c) nearly impossible to coordinate, even when the majority of shares in in private hands, and d) frequently bought back and owned by management itself. Looking at this structure, one can say that the actual control of the corporation is held a) by the people that manage it, b) by the people that capitalize it (not the same thing as stockholdership) and c) by the people that regulate it. c) is very clearly the government. You could make a very good case that b) is indirectly the government as well, since it comes from banking institutions who receive money to lend from the federal government, or rather, the ability to create debt. My point is that, given the diffusion and non-coordination of ownership of a publicly traded company, combined with the effect of regulation, (and if you know anything about regulatory capture), the coordination of regulation with the large interests being regulated, public corporations may be treated, quite reasonably as public. [1] Something to the tune of a fifth of all shares of Fortune 500 companies are held by Blackrock, Fidelity and Vanguard, as a part of how they issue index funds. These financial institutions are the ones who execute the voting rights on those shares, not the people who bought the index funds. See: https://americanaffairsjournal.org/2020/11/the-new-power-brokers-index-funds-and-the-public-interest/ https://americanaffairsjournal.org/2020/11/the-new-power-bro...

Gollapalli 5y ago

Yeah, that's what we're all taught. But, the actual incentive structure of "who controls the corporation?" is not shareholders, whose ownership is a) so diffuse as to be unknowable, sans documentation from a stock exchange b) very often held by proxies, with voting rights exercised by those proxies as well [1], c) nearly impossible to coordinate, even when the majority of shares in in private hands, and d) frequently bought back and owned by management itself. Looking at this structure, one can say that the actual control of the corporation is held a) by the people that manage it, b) by the people that capitalize it (not the same thing as stockholdership) and c) by the people that regulate it. c) is very clearly the government. You could make a very good case that b) is indirectly the government as well, since it comes from banking institutions who receive money to lend from the federal government, or rather, the ability to create debt. My point is that, given the diffusion and non-coordination of ownership of a publicly traded company, combined with the effect of regulation, (and if you know anything about regulatory capture), the coordination of regulation with the large interests being regulated, public corporations may be treated, quite reasonably as public. [1] Something to the tune of a fifth of all shares of Fortune 500 companies are held by Blackrock, Fidelity and Vanguard, as a part of how they issue index funds. These financial institutions are the ones who execute the voting rights on those shares, not the people who bought the index funds. See: https://americanaffairsjournal.org/2020/11/the-new-power-brokers-index-funds-and-the-public-interest/ https://americanaffairsjournal.org/2020/11/the-new-power-bro...