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> as if being a for-profit company requires them to abandon their morals. Agreed. To maximize profit, you must not only consider first order consequences like

> as if being a for-profit company requires them to abandon their morals. Agreed. To maximize profit, you must not only consider first order consequences like being banned in certain countries, but also second order consequences (and beyond) like being perceived as immoral in most countries. Disney is walking a fine line here.

wolverine876 5y ago
I don't think you agree with the GP. The point is that companies are responsible for more than maximizing profit, just like all of us. We all live in the world and our communities and are responsible for far more than maximising our own lives. It's partly enlightended self-interest - if we don't take care of the communities, we lose out - and partly just not being sociopaths. The claim that companies should be sociopaths with no enlightened self-interest is commonly repeated, by companies and investors themselves, but has no ground to stand on. Why they heck should they get to do that?
- falcolas 5y ago
  Yes, this. Once upon a time (a few dozen years ago at most) a company was expected to not only provide for its own longevity, but to provide tangible benefits to its community (good paying jobs that allowed their employees to support their families being one such benefit). We look back on the historical exceptions (AT&T, Standard Oil Co., etc.) because they were exceptions (and because of how they were dismantled by the government - another lesson companies should take).
  - wolverine876 5y ago
    People now assume that 'maximizing shareholder value' is the natural and only law of corporations, that to act otherwise is unnatural perversion, and should be suppressed. But it is just a philosophy, mostly in the US and UK, developed in the 1970s primarily by Milton Friedman in this famous essay, https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html https://www.nytimes.com/1970/09/13/archives/a-friedman-doctr... and by Michael Jensen and William Meckling in their paper, "Theory of the Firm". These days it is widely rejected afaik. First, anything taken to an extreme is absurd on its face; of course shareholder value is important, but it's not the only priority. Second, it's not hard to see how conveniently self-serving the idea is to powerful, wealthy, sometimes egocentric individuals who own a lot of shares - 'yes, the purpose of the world is to maximise my value! Milton Friedman said so!' Third, there are many other models that work very well, such as the German one.
- bitshiftfaced 5y ago
  You're personifying companies as wanting to be responsible, moral citizens. I agree that this is a beneficial perception for a company to have, but it doesn't make sense to me when you go beyond public perceptions. A company is a complex web of self-interested individuals maximizing their own value functions within the constraints of the overall function of maximizing shareholder value. Most of those inside individuals will make decisions with their morals weighted in. But if it interferes too much with the overall function of maximizing shareholder value, then they'll be replaced with other individuals who either have a different moral code or don't weigh certain things as important. For example, would you characterize a big cigarette company as a psychopath? Are the shareholders psychopaths? Do only psychopaths apply to work for them? It's just a web of individuals who happen to maximize their value functions in a way that suits the cigarette business, and just to the extent that society tolerates.
  - falcolas 5y ago
    If a company wants free speech and other rights normally granted to people, they can and should be held to moral standards in the same way we hold people to moral standards. And we, in fact, often do. We're holding Disney responsible for its actions based on a moral stance here. We support (or decry) Namecheap for it's actions in disallowing Russian citizens access to its services. I'd go so far as to say those who do not pit Disney's actions against their own moral code "because profits" are the outliers, the outliers who are only louder when there's little cause for evaluating a company's morals. Now then, do I characterize cigarette companies as sociopaths? You bet I do. Advertising to children, interfering with inquiries into their safety for people in general, and profiteering off addiction can all be linked to sociopathic tendencies. EDIT: This: "But if it interferes too much with the overall function of maximizing shareholder value, then they'll be replaced" is demonstrably not true. Target and Costco, as two examples, have policies in place that prevent them from paying unreasonably low wages (like Wallmart does). This directly lowers "shareholder value" since it reduces profit dramatically, yet they haven't replaced all of Target or Costco's leadership. Amoral behavior is a choice, not a directive.
    - bitshiftfaced 5y ago

wolverine876 5y ago

I don't think you agree with the GP. The point is that companies are responsible for more than maximizing profit, just like all of us. We all live in the world and our communities and are responsible for far more than maximising our own lives. It's partly enlightended self-interest - if we don't take care of the communities, we lose out - and partly just not being sociopaths. The claim that companies should be sociopaths with no enlightened self-interest is commonly repeated, by companies and investors themselves, but has no ground to stand on. Why they heck should they get to do that?

falcolas 5y ago
Yes, this. Once upon a time (a few dozen years ago at most) a company was expected to not only provide for its own longevity, but to provide tangible benefits to its community (good paying jobs that allowed their employees to support their families being one such benefit). We look back on the historical exceptions (AT&T, Standard Oil Co., etc.) because they were exceptions (and because of how they were dismantled by the government - another lesson companies should take).
- wolverine876 5y ago
  People now assume that 'maximizing shareholder value' is the natural and only law of corporations, that to act otherwise is unnatural perversion, and should be suppressed. But it is just a philosophy, mostly in the US and UK, developed in the 1970s primarily by Milton Friedman in this famous essay, https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html https://www.nytimes.com/1970/09/13/archives/a-friedman-doctr... and by Michael Jensen and William Meckling in their paper, "Theory of the Firm". These days it is widely rejected afaik. First, anything taken to an extreme is absurd on its face; of course shareholder value is important, but it's not the only priority. Second, it's not hard to see how conveniently self-serving the idea is to powerful, wealthy, sometimes egocentric individuals who own a lot of shares - 'yes, the purpose of the world is to maximise my value! Milton Friedman said so!' Third, there are many other models that work very well, such as the German one.
bitshiftfaced 5y ago
You're personifying companies as wanting to be responsible, moral citizens. I agree that this is a beneficial perception for a company to have, but it doesn't make sense to me when you go beyond public perceptions. A company is a complex web of self-interested individuals maximizing their own value functions within the constraints of the overall function of maximizing shareholder value. Most of those inside individuals will make decisions with their morals weighted in. But if it interferes too much with the overall function of maximizing shareholder value, then they'll be replaced with other individuals who either have a different moral code or don't weigh certain things as important. For example, would you characterize a big cigarette company as a psychopath? Are the shareholders psychopaths? Do only psychopaths apply to work for them? It's just a web of individuals who happen to maximize their value functions in a way that suits the cigarette business, and just to the extent that society tolerates.
- falcolas 5y ago
  If a company wants free speech and other rights normally granted to people, they can and should be held to moral standards in the same way we hold people to moral standards. And we, in fact, often do. We're holding Disney responsible for its actions based on a moral stance here. We support (or decry) Namecheap for it's actions in disallowing Russian citizens access to its services. I'd go so far as to say those who do not pit Disney's actions against their own moral code "because profits" are the outliers, the outliers who are only louder when there's little cause for evaluating a company's morals. Now then, do I characterize cigarette companies as sociopaths? You bet I do. Advertising to children, interfering with inquiries into their safety for people in general, and profiteering off addiction can all be linked to sociopathic tendencies. EDIT: This: "But if it interferes too much with the overall function of maximizing shareholder value, then they'll be replaced" is demonstrably not true. Target and Costco, as two examples, have policies in place that prevent them from paying unreasonably low wages (like Wallmart does). This directly lowers "shareholder value" since it reduces profit dramatically, yet they haven't replaced all of Target or Costco's leadership. Amoral behavior is a choice, not a directive.
  - bitshiftfaced 5y ago