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Yup. And even the headline question of this pernicious concept leaves massive ambiguities. Is the goal to maximize profits this quarter, or shareholder value

by toss1 4y ago

Yup. And even the headline question of this pernicious concept leaves massive ambiguities. Is the goal to maximize profits this quarter, or shareholder value (share price) this quarter, or over the course of a decade, or a century, or a millennium ? Merely changing the answer over those four options would entail massive changes in management goals and choices. The entire pernicious concept merely enables exploitative behavior — exploiting employees, the people in the surrounding community/society, and the environment, externalizing costs on everyone else while internalizing profits. If we are going to treat corporations as effectively persons, it is far past time to expect them to behave as good citizens. (and if they do not behave as good citizens, then treat them as bad citizens, i.e., jail or execute them)

ampear 4y ago
> Is the goal to maximize profits this quarter, or shareholder value (share price) this quarter, or over the course of a decade, or a century, or a millennium? Merely changing the answer over those four options would entail massive changes in management goals and choices. This is the absolutely crucial core question that gets skipped over so, so often.
- mytailorisrich 4y ago
  This is a question that is answered in company board meetings when shareholders actually tell directors what they want. This is not a philosophical question to be pondered on in a vacuum.
  - ampear 4y ago
    Agreed there isn't a single answer to be reached in a vacuum, and obviously this is the mechanism by which majority shareholder intention may be communicated. The statement stands.
alright_scowl 4y ago
I am both an employee and a small-time investor in the stock market. I actually prefer to see companies as entities such as their only goal is maximizing profits, all else be damned. They will exploit every worker and will externalize every negativity in their profit-driven mandate. And typically short term profits will trump long term anything. It's the role of governments, as representatives of society, to rein in companies so that they don't act in ways that damage the society where they are inserted in. Cue in labor and union protections, environment regulations, etc and so forth. And yes, companies that break regulations should be treated as criminals, including termination.
- rawgabbit 4y ago
  What you appear to be saying is that corporations are an existential threat to everyone. If so, they should be abolished.
  - alright_scowl 4y ago
    Not really. But they are entities designed to pursue profits as their primary motivation. With proper regulation, when the pursuit of profits align with the needs of society, they can be great to have around. Problems arise when regulation is insufficient, when regulators are complacent or corrupt, or when governments look after the desires of corporations instead of the benefit of the people. When that happens, then yes, they become a threat to society.
- astrange 4y ago
  > I actually prefer to see companies as entities such as their only goal is maximizing profits, all else be damned. They will exploit every worker and will externalize every negativity in their profit-driven mandate. And typically short term profits will trump long term anything. They clearly don't do this though. There are less profitable and more profitable industries and companies don't move out of the less profitable ones. If they were out there exploiting anyone and everyone, they'd all be selling crack instead of furniture. Or at least mandating the employees be on it for productivity.
mytailorisrich 4y ago
Companies have boards in which shareholders tell directors and the execs what they consider their interests are. They can say that it's max profits now, or they can say that they want steady over the long term.

by toss1 4y ago

ampear 4y ago

> Is the goal to maximize profits this quarter, or shareholder value (share price) this quarter, or over the course of a decade, or a century, or a millennium? Merely changing the answer over those four options would entail massive changes in management goals and choices. This is the absolutely crucial core question that gets skipped over so, so often.

mytailorisrich 4y ago
This is a question that is answered in company board meetings when shareholders actually tell directors what they want. This is not a philosophical question to be pondered on in a vacuum.
- ampear 4y ago
  Agreed there isn't a single answer to be reached in a vacuum, and obviously this is the mechanism by which majority shareholder intention may be communicated. The statement stands.

alright_scowl 4y ago

I am both an employee and a small-time investor in the stock market. I actually prefer to see companies as entities such as their only goal is maximizing profits, all else be damned. They will exploit every worker and will externalize every negativity in their profit-driven mandate. And typically short term profits will trump long term anything. It's the role of governments, as representatives of society, to rein in companies so that they don't act in ways that damage the society where they are inserted in. Cue in labor and union protections, environment regulations, etc and so forth. And yes, companies that break regulations should be treated as criminals, including termination.

rawgabbit 4y ago
What you appear to be saying is that corporations are an existential threat to everyone. If so, they should be abolished.
- alright_scowl 4y ago
  Not really. But they are entities designed to pursue profits as their primary motivation. With proper regulation, when the pursuit of profits align with the needs of society, they can be great to have around. Problems arise when regulation is insufficient, when regulators are complacent or corrupt, or when governments look after the desires of corporations instead of the benefit of the people. When that happens, then yes, they become a threat to society.
astrange 4y ago
> I actually prefer to see companies as entities such as their only goal is maximizing profits, all else be damned. They will exploit every worker and will externalize every negativity in their profit-driven mandate. And typically short term profits will trump long term anything. They clearly don't do this though. There are less profitable and more profitable industries and companies don't move out of the less profitable ones. If they were out there exploiting anyone and everyone, they'd all be selling crack instead of furniture. Or at least mandating the employees be on it for productivity.

mytailorisrich 4y ago

Companies have boards in which shareholders tell directors and the execs what they consider their interests are. They can say that it's max profits now, or they can say that they want steady over the long term.