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> The point of a company is not to maximize employment, it’s to maximize profit. Rant: If most people in our society simply decided this wasn't true -- and tha

> The point of a company is not to maximize employment, it’s to maximize profit. Rant: If most people in our society simply decided this wasn't true -- and that, no, the point of a company is not to maximize profit, we could solve so many harms. And frankly, believing this is optional. It's like saying the point of a person is to live as long as possible. Sure, you can choose to think that, but if you do, it would be easy to paint you as a villain. And, of course, thinking that way is completely optional. And...just because many people do think that way doesn't mean we have to. We can choose to apply a different meaning to the idea of a company. As someone that helps run a company, I very much think our company exists to serve our customers in a very specific way. Most of our economic success, actually, comes from many of the choices that would seem to fly in the face of short-term monetary gain. Companies don't exist to maximize profit. Villains do.

vixen99 4y ago
Successful and well-regarded companies will indeed arithmetically maximize profits if they're around in the long term while they are likely to see short term profiteers fail. Maximizing profits entails rather more than making a quick buck.
deleted 4y ago
[deleted]
pirate787 4y ago
Companies exist to maximize profits with existing legal rules and social norms.
Lyngbakr 4y ago
I think this is aligns with Simon Sinek's philosophy in The Infinite Game[0], which I really enjoyed reading. I totally agree with your point: business mindset is a choice. [0] https://en.m.wikipedia.org/wiki/The_Infinite_Game https://en.m.wikipedia.org/wiki/The_Infinite_Game
pc86 4y ago
You are free to believe something else and go off and do whatever you want with your life. Nobody is stopping you, and more importantly, nobody is calling you a villain for believing differently. And yet here you are, painting everyone who disagrees with you as some sort of maniacal evil-doer because what they believe is different than what you believe.
- barneygale 4y ago
  Mindless accumulation of wealth is evil. All major world religions and ethics systems acknowledge this.
- MSFT_Edging 4y ago
  "Help, my quest to maximize profit at the cost of human misery has people painting me as an un-empathetic, maniacal evil-doer! Why can't people understand that its actually just like, my opinion that causing societal harm for short term quarterly gains is good, is just like my opinion and every opinion is valid!"
  - marknutter 4y ago
    Why does maximizing profit have to come at the cost of human misery? I would argue that maximizing profit is a direct result of reducing human misery.
- SamoyedFurFluff 4y ago
  I think it is maniacally evil to put peoples housing, healthcare, and ability to remain in the country at risk. It is inherently throwing 12,000 households into sudden insecurity. There better be a better reason than “whoops economic headwinds that we didn’t budget/prepare for”. Peoples access to food, housing, healthcare, and not being expelled from the country should be valued way more than this.
  - pc86 4y ago
    These are people making 3, 5, 10 times the median household income on their own. People with in-demand skills, with good resumes, and access to a remote pool of positions. With even the slightest bit of foresight or financial planning, they'll be fine for months or longer.
jstummbillig 4y ago
> Companies don't exist to maximize profit. As soon as this sentiment prevails, not only during times of personal loss, but also in times of personal prosperity, you can start to think of most humans as being part of the solution instead of this particular problem.
barneygale 4y ago
The idea is that if you pit those villains against eachother on a level playing field, they'll improve society on the whole. To a certain extent it's true, and it's only failing in the case of Google/etc because we've allowed mega-companies to become a thing (which distorts the playing field). OTOH we're rapidly heading towards total planetary extinction, so something huge needs to change.
moonchrome 4y ago
Maximizing profit should be the main signal of creating value, if you have a lot of revenue but no profit - you are actually destroying value. There are dynamics where profit chasing can be perverted (eg. monopolistic pricing, fraud, etc.) which is why we have regulations. But profit chasing in itself is the best signal of value creation we have. I've lived in a post socialist country transitioning from socialist to capitalist system and I don't want to live in a world where politics define value, profit chasing can lead to pathologies, but political value system is based on flawed principles.
melvinmelih 4y ago
The purpose of a company is not to maximize profits because that would mean you have to pay taxes. The holy goal instead, is to maximize shareholder value. A small, but important difference (and helps explain the existence of companies like Uber and Twitter who have barely turned a profit in the past decade).
- justahuman74 4y ago
  At some point there does have to be a cash-out, otherwise what would motivate the person at the end of the line to buy the shares that you're selling
  - iglio 4y ago
    The cash out is selling the shares and realising the capital gain? For these types of business, there’s always someone next in line to buy, hoping for the same performance.
politician 4y ago
This perspective, implemented broadly, would considerably reduce the pools of available financing accessible to a given company. This in turn would reduce employment levels as companies contract in a more difficult capital environment. If you are an investor, activist or otherwise, you benefit from the current practice that managers have a fiduciary duty to shareholders.
abh123 4y ago
A company is a legal thing that is owned by shareholders. Like if I own a car, I want it to take me from A->B as expediently as possible. I don't want my car to have a social mission. I'm not sure why a company should be different. Now I do think that the disbursed profits to shareholders from the company should be used to fund many social missions, via charities and non-profits and the like.
- SamoyedFurFluff 4y ago
  If you own a car you don’t just want it to take you from A->B expediently. You should also want to do it presumably safely, without killing people, following laws, in a way that also keeps the car maintainable. If you want cars to slow down in school crossing zones that’s a social mission.
  - foogazi 4y ago
    > If you want cars to slow down in school crossing zones that’s a social mission. That’s risk avoidance - social mission would be driving around town giving free rides to people
    - SamoyedFurFluff 4y ago
      Isn’t risk avoidance social in nature when it’s dealing with people?
  - abh123 4y ago
    Breaking the law is not expedient in the larger sense. What I meant is let's not hobble the car by for example like the sibling poster says giving away free rides or having to drop off free meals. These can be better achieved by Charities or Soup Kitchens.
- jeffreyq 4y ago
  I'm inclined towards your argument, but to play devil's advocate, I'd say you are making a false equivalence between a car and a company. A car is exclusively a tool, and a company is a tool from some perspectives, but involves humans. Hence why ethics are involved and there is no clear answer. If instead you replaced car with horses, or worse yet, with human powered transportation would your answer be any different.
nine_k 4y ago
Pretty funnily, quite a few companies in the US seem to exist not to maximize profit. Some, like Amazon, immediately reinvest the profits into their growth and avoid taxes on the profits. Some, like Uber, seem to exist to only sustain an illusion of future possible profits. Most of startups in the era of cheap money were manifestly unprofitable, and spent more and more attempting to achieve growth and grab the market share. Beside these, there is a number of barely profitable companies that just exist to sustain their business and give the owners and a few employees some daily bread. Most small restaurants and small stores are like that. They maximize not the short-term profit but the probability to keep earning something in foreseeable future, a bit like subsistence farming.
randomdata 4y ago
> we could solve so many harms. The only 'harm' in question is that the other evil profit seeking villains are losing their source of profit, left to go back to do wonderful volunteer work at charities or whatever it is that is considered more virtuous. Crushing 12,000 villains in one fell swoop, perhaps Google is the superhero here?
yboris 4y ago
+1 for your sentiment. Thank you for articulating it. Feels like so many people in the US has taken the Adam Smith self interest sentiment to the extreme, to the point that people seem to forget we are living in a society - a very interdependent entity that functions poorly if we don't work together.
UncleMeat 4y ago
Yep. This is entirely our choice. "Oh, corporations have to be massively harmful entities that crush people under their feet in order to enrich their investors" is a choice. It is a system created entirely by humans. This is what people say when they talk about how capitalism has so thoroughly won. People speak about it like it is a force of nature or a property of physical reality itself. There is no alternative. If megacorps don't abuse their employees and vacuum up dollars from their customers in every possible way then the line will go down, and we can't have that.
p0pcult 4y ago
I agree with you. I think the purpose of a company is to help ensure social stability by providing productive and meaningful employment. If the government is doing its job and ensuring an environment in which firms can thrive (financial stability, infrastructural stability, social stability), then the firm's responsibilities should mirror those: take care of employees and customers by treating them fairly (financial, social stability) and the physical environment (infrastructural stability). Just because Milton Friedman claimed that it is the main objective of a company to maximize shareholder value[1], doesn't mean it is true. Milton Friedman was a bad dude, and part of a bad school of economics[2]. [1] https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine [2] https://en.wikipedia.org/wiki/The_Shock_Doctrine https://en.wikipedia.org/wiki/The_Shock_Doctrine
SpicyLemonZest 4y ago
I don’t think you can choose to apply a different meaning to Google, though. Ad tech is the Platonic ideal of a profit-focused enterprise, and even someone who’s not personally working on ads has to understand that’s where their salary and benefits are coming from.
glacials 4y ago
I agree with you, but companies exist in an evolutionary environment where—broad strokes—anyone who doesn’t do this gets out-competed. You can have 99 companies that behave well, but just one that doesn’t can drive them all out of business if it’s willing to do what they won’t. The solution is not to chew them out, but to pass policy and vote with your wallet.

vixen99 4y ago

Successful and well-regarded companies will indeed arithmetically maximize profits if they're around in the long term while they are likely to see short term profiteers fail. Maximizing profits entails rather more than making a quick buck.

deleted 4y ago

[deleted]

pirate787 4y ago

Companies exist to maximize profits with existing legal rules and social norms.

Lyngbakr 4y ago

I think this is aligns with Simon Sinek's philosophy in The Infinite Game[0], which I really enjoyed reading. I totally agree with your point: business mindset is a choice. [0] https://en.m.wikipedia.org/wiki/The_Infinite_Game https://en.m.wikipedia.org/wiki/The_Infinite_Game

pc86 4y ago

You are free to believe something else and go off and do whatever you want with your life. Nobody is stopping you, and more importantly, nobody is calling you a villain for believing differently. And yet here you are, painting everyone who disagrees with you as some sort of maniacal evil-doer because what they believe is different than what you believe.

barneygale 4y ago
Mindless accumulation of wealth is evil. All major world religions and ethics systems acknowledge this.
MSFT_Edging 4y ago
"Help, my quest to maximize profit at the cost of human misery has people painting me as an un-empathetic, maniacal evil-doer! Why can't people understand that its actually just like, my opinion that causing societal harm for short term quarterly gains is good, is just like my opinion and every opinion is valid!"
- marknutter 4y ago
  Why does maximizing profit have to come at the cost of human misery? I would argue that maximizing profit is a direct result of reducing human misery.
SamoyedFurFluff 4y ago
I think it is maniacally evil to put peoples housing, healthcare, and ability to remain in the country at risk. It is inherently throwing 12,000 households into sudden insecurity. There better be a better reason than “whoops economic headwinds that we didn’t budget/prepare for”. Peoples access to food, housing, healthcare, and not being expelled from the country should be valued way more than this.
- pc86 4y ago
  These are people making 3, 5, 10 times the median household income on their own. People with in-demand skills, with good resumes, and access to a remote pool of positions. With even the slightest bit of foresight or financial planning, they'll be fine for months or longer.

jstummbillig 4y ago

> Companies don't exist to maximize profit. As soon as this sentiment prevails, not only during times of personal loss, but also in times of personal prosperity, you can start to think of most humans as being part of the solution instead of this particular problem.

barneygale 4y ago

The idea is that if you pit those villains against eachother on a level playing field, they'll improve society on the whole. To a certain extent it's true, and it's only failing in the case of Google/etc because we've allowed mega-companies to become a thing (which distorts the playing field). OTOH we're rapidly heading towards total planetary extinction, so something huge needs to change.

moonchrome 4y ago

Maximizing profit should be the main signal of creating value, if you have a lot of revenue but no profit - you are actually destroying value. There are dynamics where profit chasing can be perverted (eg. monopolistic pricing, fraud, etc.) which is why we have regulations. But profit chasing in itself is the best signal of value creation we have. I've lived in a post socialist country transitioning from socialist to capitalist system and I don't want to live in a world where politics define value, profit chasing can lead to pathologies, but political value system is based on flawed principles.

melvinmelih 4y ago

The purpose of a company is not to maximize profits because that would mean you have to pay taxes. The holy goal instead, is to maximize shareholder value. A small, but important difference (and helps explain the existence of companies like Uber and Twitter who have barely turned a profit in the past decade).

justahuman74 4y ago
At some point there does have to be a cash-out, otherwise what would motivate the person at the end of the line to buy the shares that you're selling
- iglio 4y ago
  The cash out is selling the shares and realising the capital gain? For these types of business, there’s always someone next in line to buy, hoping for the same performance.

politician 4y ago

This perspective, implemented broadly, would considerably reduce the pools of available financing accessible to a given company. This in turn would reduce employment levels as companies contract in a more difficult capital environment. If you are an investor, activist or otherwise, you benefit from the current practice that managers have a fiduciary duty to shareholders.

abh123 4y ago

A company is a legal thing that is owned by shareholders. Like if I own a car, I want it to take me from A->B as expediently as possible. I don't want my car to have a social mission. I'm not sure why a company should be different. Now I do think that the disbursed profits to shareholders from the company should be used to fund many social missions, via charities and non-profits and the like.

SamoyedFurFluff 4y ago
If you own a car you don’t just want it to take you from A->B expediently. You should also want to do it presumably safely, without killing people, following laws, in a way that also keeps the car maintainable. If you want cars to slow down in school crossing zones that’s a social mission.
- foogazi 4y ago
  > If you want cars to slow down in school crossing zones that’s a social mission. That’s risk avoidance - social mission would be driving around town giving free rides to people
  - SamoyedFurFluff 4y ago
    Isn’t risk avoidance social in nature when it’s dealing with people?
- abh123 4y ago
  Breaking the law is not expedient in the larger sense. What I meant is let's not hobble the car by for example like the sibling poster says giving away free rides or having to drop off free meals. These can be better achieved by Charities or Soup Kitchens.
jeffreyq 4y ago
I'm inclined towards your argument, but to play devil's advocate, I'd say you are making a false equivalence between a car and a company. A car is exclusively a tool, and a company is a tool from some perspectives, but involves humans. Hence why ethics are involved and there is no clear answer. If instead you replaced car with horses, or worse yet, with human powered transportation would your answer be any different.

nine_k 4y ago

Pretty funnily, quite a few companies in the US seem to exist not to maximize profit. Some, like Amazon, immediately reinvest the profits into their growth and avoid taxes on the profits. Some, like Uber, seem to exist to only sustain an illusion of future possible profits. Most of startups in the era of cheap money were manifestly unprofitable, and spent more and more attempting to achieve growth and grab the market share. Beside these, there is a number of barely profitable companies that just exist to sustain their business and give the owners and a few employees some daily bread. Most small restaurants and small stores are like that. They maximize not the short-term profit but the probability to keep earning something in foreseeable future, a bit like subsistence farming.

randomdata 4y ago

> we could solve so many harms. The only 'harm' in question is that the other evil profit seeking villains are losing their source of profit, left to go back to do wonderful volunteer work at charities or whatever it is that is considered more virtuous. Crushing 12,000 villains in one fell swoop, perhaps Google is the superhero here?

yboris 4y ago

+1 for your sentiment. Thank you for articulating it. Feels like so many people in the US has taken the Adam Smith self interest sentiment to the extreme, to the point that people seem to forget we are living in a society - a very interdependent entity that functions poorly if we don't work together.

UncleMeat 4y ago

Yep. This is entirely our choice. "Oh, corporations have to be massively harmful entities that crush people under their feet in order to enrich their investors" is a choice. It is a system created entirely by humans. This is what people say when they talk about how capitalism has so thoroughly won. People speak about it like it is a force of nature or a property of physical reality itself. There is no alternative. If megacorps don't abuse their employees and vacuum up dollars from their customers in every possible way then the line will go down, and we can't have that.

p0pcult 4y ago

I agree with you. I think the purpose of a company is to help ensure social stability by providing productive and meaningful employment. If the government is doing its job and ensuring an environment in which firms can thrive (financial stability, infrastructural stability, social stability), then the firm's responsibilities should mirror those: take care of employees and customers by treating them fairly (financial, social stability) and the physical environment (infrastructural stability). Just because Milton Friedman claimed that it is the main objective of a company to maximize shareholder value[1], doesn't mean it is true. Milton Friedman was a bad dude, and part of a bad school of economics[2]. [1] https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine [2] https://en.wikipedia.org/wiki/The_Shock_Doctrine https://en.wikipedia.org/wiki/The_Shock_Doctrine

SpicyLemonZest 4y ago

I don’t think you can choose to apply a different meaning to Google, though. Ad tech is the Platonic ideal of a profit-focused enterprise, and even someone who’s not personally working on ads has to understand that’s where their salary and benefits are coming from.

glacials 4y ago

I agree with you, but companies exist in an evolutionary environment where—broad strokes—anyone who doesn’t do this gets out-competed. You can have 99 companies that behave well, but just one that doesn’t can drive them all out of business if it’s willing to do what they won’t. The solution is not to chew them out, but to pass policy and vote with your wallet.