4 ms·

I think of it like this: It's the company's job to maximize shareholder value. It's the worker's job to maximize worker value. It's the market's job to push

I think of it like this: It's the company's job to maximize shareholder value. It's the worker's job to maximize worker value. It's the market's job to push profit to zero. So the union is like a new force in the equation: they put pressure on the company to give the workers more value. Which could actually be good for business: if treating workers results in better work product, the shareholders might not push for that (typically markets optimize for quarterly earnings). But the union can secure better conditions for the workers, which might lead to moving to a better local maxima.

rainsford 4y ago
I always think of unions as less a new force in the equation you described and more of a labor side equivalent of the collective organizing and action that happens on the company/shareholder side to maximize value. Instead of individual workers all trying to maximize their value in isolation with the company trying to collectively maximize value for all shareholders, unions ideally make it more of a one-to-one balance of "workers" and "shareholders". I agree with your general thought that it could be good for business, but I'd take it a small step further and suggest a more comprehensive way to think about what's good for business as encompassing workers and shareholders equally. A situation that optimizes shareholder value at the expense of worker value is not really economically optimal even if that doesn't necessarily damage the business long term. If you can get much better conditions for workers with only a small drop in shareholder value, for example, that could be considered a net win.
- chii 4y ago
  > only a small drop in shareholder value, for example, that could be considered a net win. only the shareholders can decide if this is worth a drop. And i would imagine the majority of them would not accept a small drop like that.
  - kelseyfrog 4y ago
    When shareholders reduce a company to a single metric[shareholder value] the metric becomes meaningless. At that point it doesn't matter.

rainsford 4y ago

I always think of unions as less a new force in the equation you described and more of a labor side equivalent of the collective organizing and action that happens on the company/shareholder side to maximize value. Instead of individual workers all trying to maximize their value in isolation with the company trying to collectively maximize value for all shareholders, unions ideally make it more of a one-to-one balance of "workers" and "shareholders". I agree with your general thought that it could be good for business, but I'd take it a small step further and suggest a more comprehensive way to think about what's good for business as encompassing workers and shareholders equally. A situation that optimizes shareholder value at the expense of worker value is not really economically optimal even if that doesn't necessarily damage the business long term. If you can get much better conditions for workers with only a small drop in shareholder value, for example, that could be considered a net win.

chii 4y ago
> only a small drop in shareholder value, for example, that could be considered a net win. only the shareholders can decide if this is worth a drop. And i would imagine the majority of them would not accept a small drop like that.
- kelseyfrog 4y ago
  When shareholders reduce a company to a single metric[shareholder value] the metric becomes meaningless. At that point it doesn't matter.