5 ms·

The purpose of a company isn't to employ people. It's to take raw inputs, including employee labor, and turn that into outputs that people want. Employee relief

The purpose of a company isn't to employ people. It's to take raw inputs, including employee labor, and turn that into outputs that people want. Employee relief comes in the form of voting with their feet or if they're critical inputs into what the black box produces

AlexandrB 4y ago
This is why whenever a company claims to be "creating jobs" they're talking about a byproduct they're often trying to reduce/stop not a goal of their business. IMHO "job creation" rhetoric can be dismissed out of hand when discussing taxation and regulation.
- triceratops 4y ago
  Pretty much this. "We created jobs" is just code for "We were forced to spend some money to make even more money".
falcolas 4y ago
Amusing. The purpose of a company was originally exactly that: to employ people and provide services and value to the community they existed in. I mean, this is still the exact reason politicians cite when providing incentives to companies - bringing jobs to their cities/states. I'm pretty sure I don't like this new definition; it feels like it's based on greed, not value.
- jimbokun 4y ago
  When was this time?
- yowlingcat 4y ago
  That's not historically accurate. Historically, the purpose of a company was to be a vehicle that a passive partner could invest capital into an enterprise providing a return on investment, such that an active partner (who did not) could manage it [1]. I do not see historical support for your claim that the purpose of a company was "to employ people and provide services and value to the community they existed in" even if that would be an ideal social outcome (and one which I'd personally prefer to see everywhere). [1] https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history-of-the-corporate-form-and-why-it-matters/ https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history...
  - bigfudge 4y ago
    The reason companies are given legal standing and privilege is because they serve a useful social function, in addition to being a legal nicety for investment. If companies don’t serve useful social purposes we can change the law to withdraw those privileges.
    - yowlingcat 4y ago
      That's incorrect. They are given legal standing and privilege because they serve a useful /economic/ function (tax base). The social function is downstream from this, and it's also what creates friction to actually /change the law/ to withdraw those privileges -- you do it at the risk of hemorrhaging that tax base which funds the governing apparatus.
      - bigfudge 4y ago
        I think you have a narrower definition of ‘social’ function. I mean the things that are useful to society as a whole. Things we seem not helpful/useful/conducive to people leading best lives can be curtailed. Not everyone shares the view that “economic freedoms” are inalienable when they entail externalities.
  - falcolas 4y ago
    https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of-the-corporation https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of... The purpose of a corporation is to conduct a lawful, ethical, profitable and sustainable business in order to create value over the long-term, which requires consideration of the stakeholders that are critical to its success (shareholders, employees, customers, suppliers, creditors and communities) ... https://www.aspeninstitute.org/programs/business-and-society-program/purpose-of-the-corporation/ https://www.aspeninstitute.org/programs/business-and-society... Business corporations are perhaps the most influential organizations in society and have long been recognized as important contributors to the common good. Society grants corporations unique privileges in order to harness their great capacities to serve its needs. https://www.ft.com/content/482a8435-c04c-4be8-9856-941e7ecf128a https://www.ft.com/content/482a8435-c04c-4be8-9856-941e7ecf1... ... it would abandon shareholder primacy and redefine corporate purpose to create an economy that “serves all Americans”. https://hbswk.hbs.edu/item/the-role-of-the-corporation-in-society-an-alternative-view-and-opportunities-for-future-research https://hbswk.hbs.edu/item/the-role-of-the-corporation-in-so... : ... scholars Berle and Means (1932) predicted ... both owners and "the control" accepting public interest as the objective of the corporation.
- JumpCrisscross 4y ago
  > purpose of a company was originally exactly that: to employ people and provide services and value to the community they existed in This describes charities, trusts and local governments. Maybe artisans. The East India companies weren’t trying to “provide services and value” to anyone but their owners. Even going back to Roman times, civic duty and commercial interests were distinct parts of peoples’ work. You were expected to do both. But the unification of the two pursuits appears to be more modern.
  - falcolas 4y ago
    Shareholders are not the only stakeholders who should be considered in a company. "The purpose of a corporation is to ... create value over the long-term, which requires consideration of the stakeholders ... (shareholders, employees, customers, suppliers, creditors and communities) ..." https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of-the-corporation https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of...
    - JumpCrisscross 4y ago
      > Shareholders are not the only stakeholders who should be considered in a company Sure. (Though this is far from settled.) But saying this was the "original...purpose of a company" is inaccurate.
- jokethrowaway 4y ago
  Employment is just a necessary evil. I can't wait until I can just spawn an ai instead of hiring someone
- over_bridge 4y ago
  Hence why every business owner boasts about being a job creator. This despite these jobs being an unwanted side effect of the actual goals of the business. Cost centres. 'Look at all these employees I resent having to spend money on and actively try to make redundant and underpay. Aren't I just great?'
bo1024 4y ago
Says who? I think the idea of "purpose" of a company is very nebulous and interacts opaquely with: the "incentives" of a company, the societal purpose for having companies, the mission statement of a particular company, etc. I would say the purpose of a company is mostly to make money for the owners of the company, which is not the exact same as what you said.
johannes1234321 4y ago
The question is: Is that the way it has to be? Can't we build a society which is better? Can't we build a society where "sane" employment is a valid and wanted output and not only maximising shareholder value?
- kelseyfrog 4y ago
  Theoretically or in practice? Practically, we haven't yet developed anti-fragile socio-ideological technologies which can out compete shareholder-maximization ideologies(SMIs). Instead SMIs are adept at castrating anti-SMIs and rendering them inert before they can establish a foothold. The world we enter into today is the product of this anti-SMI castration. You can even see echos of the great SMI war play out whenever SMI granades are casually lobbed in the bushwar of this discussion.
  - bigfudge 4y ago
    Not in the US, but Germany and Scandinavian countries show this very much is a possibility. Medium sized firms in Germany just don’t behave the same way they do in the US and large enterprises are subject to far more state intervention. And it still works fine.
    - kelseyfrog 4y ago
      Yes. My comment was very US-centric. You're right; the outcomes are demonstrably true. Board-level representation is a good example of this. Maybe asking rhetorically in a different way - what is the series of chess moves where that goal is achieved?
triceratops 4y ago
It's to take raw inputs and turn it into money. No one really wants telemarketing calls, or patent lawsuits but companies "produce" those things regardless to make money.

AlexandrB 4y ago

This is why whenever a company claims to be "creating jobs" they're talking about a byproduct they're often trying to reduce/stop not a goal of their business. IMHO "job creation" rhetoric can be dismissed out of hand when discussing taxation and regulation.

triceratops 4y ago
Pretty much this. "We created jobs" is just code for "We were forced to spend some money to make even more money".

falcolas 4y ago

Amusing. The purpose of a company was originally exactly that: to employ people and provide services and value to the community they existed in. I mean, this is still the exact reason politicians cite when providing incentives to companies - bringing jobs to their cities/states. I'm pretty sure I don't like this new definition; it feels like it's based on greed, not value.

jimbokun 4y ago
When was this time?
yowlingcat 4y ago
That's not historically accurate. Historically, the purpose of a company was to be a vehicle that a passive partner could invest capital into an enterprise providing a return on investment, such that an active partner (who did not) could manage it [1]. I do not see historical support for your claim that the purpose of a company was "to employ people and provide services and value to the community they existed in" even if that would be an ideal social outcome (and one which I'd personally prefer to see everywhere). [1] https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history-of-the-corporate-form-and-why-it-matters/ https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history...
- bigfudge 4y ago
  The reason companies are given legal standing and privilege is because they serve a useful social function, in addition to being a legal nicety for investment. If companies don’t serve useful social purposes we can change the law to withdraw those privileges.
  - yowlingcat 4y ago
    That's incorrect. They are given legal standing and privilege because they serve a useful /economic/ function (tax base). The social function is downstream from this, and it's also what creates friction to actually /change the law/ to withdraw those privileges -- you do it at the risk of hemorrhaging that tax base which funds the governing apparatus.
    - bigfudge 4y ago
      I think you have a narrower definition of ‘social’ function. I mean the things that are useful to society as a whole. Things we seem not helpful/useful/conducive to people leading best lives can be curtailed. Not everyone shares the view that “economic freedoms” are inalienable when they entail externalities.
- falcolas 4y ago
  https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of-the-corporation https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of... The purpose of a corporation is to conduct a lawful, ethical, profitable and sustainable business in order to create value over the long-term, which requires consideration of the stakeholders that are critical to its success (shareholders, employees, customers, suppliers, creditors and communities) ... https://www.aspeninstitute.org/programs/business-and-society-program/purpose-of-the-corporation/ https://www.aspeninstitute.org/programs/business-and-society... Business corporations are perhaps the most influential organizations in society and have long been recognized as important contributors to the common good. Society grants corporations unique privileges in order to harness their great capacities to serve its needs. https://www.ft.com/content/482a8435-c04c-4be8-9856-941e7ecf128a https://www.ft.com/content/482a8435-c04c-4be8-9856-941e7ecf1... ... it would abandon shareholder primacy and redefine corporate purpose to create an economy that “serves all Americans”. https://hbswk.hbs.edu/item/the-role-of-the-corporation-in-society-an-alternative-view-and-opportunities-for-future-research https://hbswk.hbs.edu/item/the-role-of-the-corporation-in-so... : ... scholars Berle and Means (1932) predicted ... both owners and "the control" accepting public interest as the objective of the corporation.
JumpCrisscross 4y ago
> purpose of a company was originally exactly that: to employ people and provide services and value to the community they existed in This describes charities, trusts and local governments. Maybe artisans. The East India companies weren’t trying to “provide services and value” to anyone but their owners. Even going back to Roman times, civic duty and commercial interests were distinct parts of peoples’ work. You were expected to do both. But the unification of the two pursuits appears to be more modern.
- falcolas 4y ago
  Shareholders are not the only stakeholders who should be considered in a company. "The purpose of a corporation is to ... create value over the long-term, which requires consideration of the stakeholders ... (shareholders, employees, customers, suppliers, creditors and communities) ..." https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of-the-corporation https://corpgov.law.harvard.edu/2020/05/27/on-the-purpose-of...
  - JumpCrisscross 4y ago
    > Shareholders are not the only stakeholders who should be considered in a company Sure. (Though this is far from settled.) But saying this was the "original...purpose of a company" is inaccurate.
jokethrowaway 4y ago
Employment is just a necessary evil. I can't wait until I can just spawn an ai instead of hiring someone
over_bridge 4y ago
Hence why every business owner boasts about being a job creator. This despite these jobs being an unwanted side effect of the actual goals of the business. Cost centres. 'Look at all these employees I resent having to spend money on and actively try to make redundant and underpay. Aren't I just great?'

bo1024 4y ago

Says who? I think the idea of "purpose" of a company is very nebulous and interacts opaquely with: the "incentives" of a company, the societal purpose for having companies, the mission statement of a particular company, etc. I would say the purpose of a company is mostly to make money for the owners of the company, which is not the exact same as what you said.

johannes1234321 4y ago

The question is: Is that the way it has to be? Can't we build a society which is better? Can't we build a society where "sane" employment is a valid and wanted output and not only maximising shareholder value?

kelseyfrog 4y ago
Theoretically or in practice? Practically, we haven't yet developed anti-fragile socio-ideological technologies which can out compete shareholder-maximization ideologies(SMIs). Instead SMIs are adept at castrating anti-SMIs and rendering them inert before they can establish a foothold. The world we enter into today is the product of this anti-SMI castration. You can even see echos of the great SMI war play out whenever SMI granades are casually lobbed in the bushwar of this discussion.
- bigfudge 4y ago
  Not in the US, but Germany and Scandinavian countries show this very much is a possibility. Medium sized firms in Germany just don’t behave the same way they do in the US and large enterprises are subject to far more state intervention. And it still works fine.
  - kelseyfrog 4y ago
    Yes. My comment was very US-centric. You're right; the outcomes are demonstrably true. Board-level representation is a good example of this. Maybe asking rhetorically in a different way - what is the series of chess moves where that goal is achieved?

triceratops 4y ago

It's to take raw inputs and turn it into money. No one really wants telemarketing calls, or patent lawsuits but companies "produce" those things regardless to make money.