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> NB that "returning money to the shareholders" is ultimately what companies are for You have absorbed modern market brokenthink. Companies are for creating g

by jorvi 3y ago

> NB that "returning money to the shareholders" is ultimately what companies are for You have absorbed modern market brokenthink. Companies are for creating goods or services to sell to other parties. They existed long before the idea of shareholders. Following your logic, companies pre-VOC had no existing purpose.

andsoitis 3y ago
> Companies are for creating goods or services to sell to other parties. They existed long before the idea of shareholders. Following your logic, companies pre-VOC had no existing purpose. Sure, but the owners (sole proprietors, shareholders, partners, etc.) of most companies want to make profit selling those services and goods. The more money you make the more you can grow the company or reward yourself (as owner).
gtirloni 3y ago
> Companies are for creating goods or services to sell to other parties Out of autruism? If not, it's to make money for owners. Shareholders are sort of owners thus to make money for shareholders.
- ada1981 3y ago
  Yes, actually. >> For the first companies, the privilege of incorporation, often via royal charter, was granted selectively to facilitate activities that contributed to the population’s welfare, such as the construction of roads, canals, hospitals and schools. Allowing shareholders to profit was seen as a means to that end. Companies were deeply interwoven within the country’s or town’s social fabric, and were meant to contribute to its collective prosperity. << https://qz.com/work/1188731/the-idea-that-companies-should-benefit-society-is-as-old-as-capitalism https://qz.com/work/1188731/the-idea-that-companies-should-b...
  - gtirloni 3y ago
    That's an aspiration, not reality.
  - ToValueFunfetti 3y ago
    That sounds like the economic system was created for the benefit of society and it did so by incentivizing people to create companies in exchange for profit. If someone taxes carbon and that causes me to reduce emissions, is my action altruistic or is the tax?
    - ada1981 3y ago
      Who cares?
      - ToValueFunfetti 3y ago
        Pardon? It is the answer to the question of why companies exist. Companies exist to make profit; capitalism exists to enable for-profit companies to exist because they benefit society. If a company's goal wasn't to make profit, people wouldn't invest in it, and it wouldn't be a company. If you don't care, why participate in a conversation about it and ask a sibling reply for a counterpoint?
        ada1981 3y ago
        Who cases if it’s altruistic or selfish if the outcomes are the same. The argument is that the company exists to benefit society. Profit exists as a side effect of having investors.
        ToValueFunfetti 3y ago
        Someone asked whether companies act out of altruism and you replied to say that they do (or did). A bit of a rug pull to then say 'who cares, the outcome is the same'. But the outcomes are not the same. Tracing the conversation back, the top level comment pointed out that we should expect companies to give their profits to investors because they operate for profit. A company that exists to benefit society would be expected to put its profits towards bettering society, or at least towards its own ability to do so. I argue that benefits to society are a side effect of profit-seeking, which capitalism takes advantage of to great effect. A company with no interest in improving the world will nevertheless wind up doing so, because they'll make money in exchange for providing utility, because the system is designed that way. Expecting a company to behave to benefit society instead of for profit will give you bad predictions when the two are at odds.
  - someguydave 3y ago
    The author of that quote literally founded a company (Granito Group) to sell this message to sympathetic (obviously left leaning) organizations so that he could personally profit from it. Case closed.
    - ada1981 3y ago
      Do you have counter evidence beside ad hominem attacks?
      - someguydave 3y ago
        What part of what I wrote was an attack?
bryanlarsen 3y ago
Businesses have always been for putting food on the table of their proprietors. We've got a few more levels of abstraction now, but the fundamental is the same.
- danbruc 3y ago
  Why does anyone work? Because they need or desire certain goods and services. They entire idea of a business falls flat if it does not produce stuff people want. It is of course true that from the perspective of the business owner running the business is how they work, how they get the stuff they want by making money to buy things, but putting the emphasize on that seems wrong to me, after all you can run a business without trying to make as much profit as possible but you can not run a business that produces nothing.
  - ToValueFunfetti 3y ago
    >you can run a business without trying to make as much profit as possible but you can not run a business that produces nothing This is not an even comparison. A business that produces the minimum amount (0) of product/service should be compared against a business that produces the minimum amount (-$assets) of profit, which corresponds to 0 revenue. Neither business can be run, but the former can at least sit on its assets or pivot into actually making something. A business can also produce too much and collapse (see Atari and DeLorean), but it can't collapse from too much profit. It makes more sense to put the emphasis on profit, I think.
    - jorvi 3y ago
      You can run a business with negative profit (say, to capture market share or using a loss leader), but you can’t run a business with negative production. Production is essential to a business and profit is not, strange as that may seem.
      - ToValueFunfetti 3y ago
        What does negative production mean to you here? I can run an incineration business or a demolition derby, as long as I get paid to do so. If that doesn't count as negative production (because I'm producing space or entertainment value; potentially at a loss to acquire market share), what does? If negative production is a physical impossibility, the claim that you can't run a business with it doesn't tell us anything about business.
carlosjobim 3y ago
Companies never existed without shareholders. It's in the name: "company", ie a group of people. You're thinking about "ventures" or "businesses". Which would exist by decree of the sovereign, for example.
conscion 3y ago
Companies don't exist for returning money to shareholders, but issuing stock exists to return money to shareholders. 1. Company issues stock in order raise capital 2. Company uses capital to grow business 3. Company returns money to stock purchases as risk-reward for purchasing stock Buy-backs are what a company _should_ do once the capital it raised has had a positive ROI

by jorvi 3y ago

andsoitis 3y ago

> Companies are for creating goods or services to sell to other parties. They existed long before the idea of shareholders. Following your logic, companies pre-VOC had no existing purpose. Sure, but the owners (sole proprietors, shareholders, partners, etc.) of most companies want to make profit selling those services and goods. The more money you make the more you can grow the company or reward yourself (as owner).

gtirloni 3y ago

> Companies are for creating goods or services to sell to other parties Out of autruism? If not, it's to make money for owners. Shareholders are sort of owners thus to make money for shareholders.

ada1981 3y ago
Yes, actually. >> For the first companies, the privilege of incorporation, often via royal charter, was granted selectively to facilitate activities that contributed to the population’s welfare, such as the construction of roads, canals, hospitals and schools. Allowing shareholders to profit was seen as a means to that end. Companies were deeply interwoven within the country’s or town’s social fabric, and were meant to contribute to its collective prosperity. << https://qz.com/work/1188731/the-idea-that-companies-should-benefit-society-is-as-old-as-capitalism https://qz.com/work/1188731/the-idea-that-companies-should-b...
- gtirloni 3y ago
  That's an aspiration, not reality.
- ToValueFunfetti 3y ago
  That sounds like the economic system was created for the benefit of society and it did so by incentivizing people to create companies in exchange for profit. If someone taxes carbon and that causes me to reduce emissions, is my action altruistic or is the tax?
  - ada1981 3y ago
    Who cares?
    - ToValueFunfetti 3y ago
      Pardon? It is the answer to the question of why companies exist. Companies exist to make profit; capitalism exists to enable for-profit companies to exist because they benefit society. If a company's goal wasn't to make profit, people wouldn't invest in it, and it wouldn't be a company. If you don't care, why participate in a conversation about it and ask a sibling reply for a counterpoint?
      - ada1981 3y ago
        Who cases if it’s altruistic or selfish if the outcomes are the same. The argument is that the company exists to benefit society. Profit exists as a side effect of having investors.
        ToValueFunfetti 3y ago
        Someone asked whether companies act out of altruism and you replied to say that they do (or did). A bit of a rug pull to then say 'who cares, the outcome is the same'. But the outcomes are not the same. Tracing the conversation back, the top level comment pointed out that we should expect companies to give their profits to investors because they operate for profit. A company that exists to benefit society would be expected to put its profits towards bettering society, or at least towards its own ability to do so. I argue that benefits to society are a side effect of profit-seeking, which capitalism takes advantage of to great effect. A company with no interest in improving the world will nevertheless wind up doing so, because they'll make money in exchange for providing utility, because the system is designed that way. Expecting a company to behave to benefit society instead of for profit will give you bad predictions when the two are at odds.
- someguydave 3y ago
  The author of that quote literally founded a company (Granito Group) to sell this message to sympathetic (obviously left leaning) organizations so that he could personally profit from it. Case closed.
  - ada1981 3y ago
    Do you have counter evidence beside ad hominem attacks?
    - someguydave 3y ago
      What part of what I wrote was an attack?

bryanlarsen 3y ago

Businesses have always been for putting food on the table of their proprietors. We've got a few more levels of abstraction now, but the fundamental is the same.

danbruc 3y ago
Why does anyone work? Because they need or desire certain goods and services. They entire idea of a business falls flat if it does not produce stuff people want. It is of course true that from the perspective of the business owner running the business is how they work, how they get the stuff they want by making money to buy things, but putting the emphasize on that seems wrong to me, after all you can run a business without trying to make as much profit as possible but you can not run a business that produces nothing.
- ToValueFunfetti 3y ago
  >you can run a business without trying to make as much profit as possible but you can not run a business that produces nothing This is not an even comparison. A business that produces the minimum amount (0) of product/service should be compared against a business that produces the minimum amount (-$assets) of profit, which corresponds to 0 revenue. Neither business can be run, but the former can at least sit on its assets or pivot into actually making something. A business can also produce too much and collapse (see Atari and DeLorean), but it can't collapse from too much profit. It makes more sense to put the emphasis on profit, I think.
  - jorvi 3y ago
    You can run a business with negative profit (say, to capture market share or using a loss leader), but you can’t run a business with negative production. Production is essential to a business and profit is not, strange as that may seem.
    - ToValueFunfetti 3y ago
      What does negative production mean to you here? I can run an incineration business or a demolition derby, as long as I get paid to do so. If that doesn't count as negative production (because I'm producing space or entertainment value; potentially at a loss to acquire market share), what does? If negative production is a physical impossibility, the claim that you can't run a business with it doesn't tell us anything about business.

carlosjobim 3y ago

Companies never existed without shareholders. It's in the name: "company", ie a group of people. You're thinking about "ventures" or "businesses". Which would exist by decree of the sovereign, for example.

conscion 3y ago

Companies don't exist for returning money to shareholders, but issuing stock exists to return money to shareholders. 1. Company issues stock in order raise capital 2. Company uses capital to grow business 3. Company returns money to stock purchases as risk-reward for purchasing stock Buy-backs are what a company _should_ do once the capital it raised has had a positive ROI