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We also pay people based on how much power they have. People with lots of power and influence have more pull to ensure better pay for themselves. That power may

by mcv 4y ago

We also pay people based on how much power they have. People with lots of power and influence have more pull to ensure better pay for themselves. That power may come from being hard to replace, but it can also come from other things. Even bad CEOs that run their company into the ground, who really should get replaced, still draw significant pay on the way down, and may only be hard to replace because of the power they hold over the company. But also: people don't get paid based on the value they create for society, but on the value they create for shareholders. So running a company into the ground may actually be short-term profitable for the shareholders if you manage to keep dividend payouts high. Parasitic companies extract value from society and give it to their shareholders. Lots of companies do enormous damage to various aspects of society, but as long as they don't have to pay for that damage, they can still be profitable for their shareholders. Shareholder value is the biggest curse ever unleashed on/by capitalism.

achillesheels 4y ago
Sir, I disagree that shareholder value is a curse. I recommend The Visible Hand by Alfred D. Chandler Jr. who noted that over the last century there has been a shift from family-managed businesses to managerial-management which has more loyalty to themselves and abstract owners of the company, creating these kind of effects wherein a subsection of the managerial class can hop and skip through executive management irrespective of the tire fire they leave behind. Or, similarly, the churn and burn of certain speculators seeking immediate gain through capturing the business’s organizational structure to serve its own, as mentioned, selfish ends. Contrast this to the historical need for going to public markets, which is to quickly raise funding to continue to scale the scope of a business firm’s productive assets :)

by mcv 4y ago

achillesheels 4y ago

Sir, I disagree that shareholder value is a curse. I recommend The Visible Hand by Alfred D. Chandler Jr. who noted that over the last century there has been a shift from family-managed businesses to managerial-management which has more loyalty to themselves and abstract owners of the company, creating these kind of effects wherein a subsection of the managerial class can hop and skip through executive management irrespective of the tire fire they leave behind. Or, similarly, the churn and burn of certain speculators seeking immediate gain through capturing the business’s organizational structure to serve its own, as mentioned, selfish ends. Contrast this to the historical need for going to public markets, which is to quickly raise funding to continue to scale the scope of a business firm’s productive assets :)