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"Show me the incentives, and I'll show you the results." - Charlie Munger It used to be that companies existed to transfer value to shareholders by doing somet

"Show me the incentives, and I'll show you the results." - Charlie Munger It used to be that companies existed to transfer value to shareholders by doing something. In the case of Boeing it was making airplanes. They build you an airplane, you pay them for it, they had a list of rules to play by in order to reduce the costs of making that plane in order to make a profit. Boeing's incentives are to transfer as much value as humanly possible to its shareholders. They've made sure that large parts of their C-Suite, managers, executives, etc. are in on this by giving them shares. Those people have decided they don't want to play by the rules anymore. There's little incentive for them not to. If the Biden administration gets voted out in November, most of these regulatory and law enforcement pushes you've seen here of late (Adobe, TicketMaster, etc.) are going to go away because the people in charge at companies like Boeing have participated in regulatory capture. Thus, there are no more rules. You have to start throwing those people in prison (or worse) for the rest of their lives and make compensation in unrealized gains illegal if you want this to stop.

dkarl 2y ago
I agree, but I think we need to distinguish between the people and the corporation, and stop thinking that the way we treat people (such as the Boeing executives) will solve the system problem. We absolutely need to stop treating corporations like people -- and I'm not talking about taxation. I'm talking about the way we think and talk about corporations the same way we talk about people. When we domesticated animals, we had to be very cognizant that they were not people. For example, bulls are extremely aggressive and extremely physically powerful. You can allow a person into a room with a baby in a crib. There are exceptions, and they are treated as exceptions. With bulls, you do not allow them into a room with a baby in a crib, by default or by exception. It would be considered criminally irresponsible for a person to say, this bull is an exception, I've had it for five years, it's a great friend, and based on its past behavior I'm going to keep it in the same room with my infant child. You just wouldn't do that. We have enough experience with corporations to know that we need to start treating them less like humans and more like a species of partly domesticated but still extremely dangerous animal. Based on long experience with them, we should expect corporations to predictably lie, steal, and destroy whenever it is in their financial interest. We don't need to get rid of them (we don't have any good replacement for their role in the economy) but should structure the way we treat corporations around our knowledge of their destructive tendencies. Our long experience with cattle has taught us ways to protect humans from their destructive tendencies while still extracting what we want from them. We keep cattle out of our residences, we castrate most of the males, and we manage intact bulls in a way that ensures human safety while allowing them to serve their necessary functions. We design fences and other management technology with their aggression and power in mind. It is long past time to treat corporations the same way. In many small ways we have done this, but always held back by the human metaphor. Corporations are in a sense made of humans, and we feel a sense of respect towards fellow humans that we then unconsciously, and with horrible consequences, extend to the corporations they are part of. We need to consciously and decisively put that behind us. You don't have to be cynical about humans to accept that corporations are greedy and untrustworthy. That is their nature. How you square that with the nature of the humans who run them is irrelevant, as irrelevant as bovine neuroscience is to knowing that we should keep bulls out of our nurseries. We don't have to agree about humans to agree about corporations and stop giving them free reign to wreak havoc in society.

dkarl 2y ago

I agree, but I think we need to distinguish between the people and the corporation, and stop thinking that the way we treat people (such as the Boeing executives) will solve the system problem. We absolutely need to stop treating corporations like people -- and I'm not talking about taxation. I'm talking about the way we think and talk about corporations the same way we talk about people. When we domesticated animals, we had to be very cognizant that they were not people. For example, bulls are extremely aggressive and extremely physically powerful. You can allow a person into a room with a baby in a crib. There are exceptions, and they are treated as exceptions. With bulls, you do not allow them into a room with a baby in a crib, by default or by exception. It would be considered criminally irresponsible for a person to say, this bull is an exception, I've had it for five years, it's a great friend, and based on its past behavior I'm going to keep it in the same room with my infant child. You just wouldn't do that. We have enough experience with corporations to know that we need to start treating them less like humans and more like a species of partly domesticated but still extremely dangerous animal. Based on long experience with them, we should expect corporations to predictably lie, steal, and destroy whenever it is in their financial interest. We don't need to get rid of them (we don't have any good replacement for their role in the economy) but should structure the way we treat corporations around our knowledge of their destructive tendencies. Our long experience with cattle has taught us ways to protect humans from their destructive tendencies while still extracting what we want from them. We keep cattle out of our residences, we castrate most of the males, and we manage intact bulls in a way that ensures human safety while allowing them to serve their necessary functions. We design fences and other management technology with their aggression and power in mind. It is long past time to treat corporations the same way. In many small ways we have done this, but always held back by the human metaphor. Corporations are in a sense made of humans, and we feel a sense of respect towards fellow humans that we then unconsciously, and with horrible consequences, extend to the corporations they are part of. We need to consciously and decisively put that behind us. You don't have to be cynical about humans to accept that corporations are greedy and untrustworthy. That is their nature. How you square that with the nature of the humans who run them is irrelevant, as irrelevant as bovine neuroscience is to knowing that we should keep bulls out of our nurseries. We don't have to agree about humans to agree about corporations and stop giving them free reign to wreak havoc in society.