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This is a very interesting comment, but this statement is concerning: "Corporations are supposed to be automata that optimize an objective function." Of course
by timkam 5y ago
This is a very interesting comment, but this statement is concerning: "Corporations are supposed to be automata that optimize an objective function."
Of course, from the perspective of neoclassical economics, it is true, and of course, there are obligations to shareholders. But generally, I think it is great that corporations are not automata that optimize an objective function. Corporations are social organizations, and I think it roughly holds that the harder the problem is that a corporation is solving for some business purpose, the more space it needs to give for social aspects. It's not that all of management thinks about profit optimization from morning to evening.
- deleted 5y ago[deleted]
- adamrezich 5y agocorporations flip between being agents of morality and automata that optimize an objective function depending on what is currently politically and financially convenient for them.
- yellowapple 5y agoI'd go a step further and suggest that the periods wherein they're "being agents of morality" are periods wherein they as automata determine that it is currently politically and financially convenient to be such.
- Etherlord87 5y agoI think it's problematic to think of companies as anything other than organizations maximizing profits. If you have two companies A and B, where A maximizes profits, and B perhaps cares about profits but also has other goals, which company will grow faster, making the other less and less relevant? Therefore I think a company's purpose is to maximize profits, and society's purpose is to make "good behavior" the most profitable. This is not to say that it's impossible for a company to follow some moral goals and therefore become stronger due to the marketing power of such conduct, or high employee morale. What I want to say, that it would benefit our society if we worked out mechanisms that make it predictable and gather precedents to convince investors to such behaviors.