5 ms·

So in a reductionist view: greed.

by libraryatnight 1y ago

aidenn0 1y ago
Are you suggesting greed was absent in the US prior to 1973?
- sorcerer-mar 1y ago
  It was absolutely put on overdrive in 1970. The dominant business philosophy from the late 40s to the 70s was stakeholder capitalism, then this asshat came along and said quite specifically: greed is not just a force we'll co-opt for pro-social purposes, it is not a mitigable downside of economic growth, it is actually the entire purpose of any commercial enterprise. https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine It is shamefully antisocial and un-American. Today it's so baked-in that many young entrepreneurs don't even realize it's a goofy ass meme that only a moron could expect to yield good outcomes.
  - gruez 1y ago
    From your link: >Friedman argued that the shareholders can then decide for themselves what social initiatives to take part in rather than have an executive whom the shareholders appointed explicitly for business purposes decide such matters for them That seems... fine? Is letting Ford shareholders decide what political causes to fund really that much worse than delegating that to Henry Ford, which subsequently decided to support nazi-adjacent groups?
    - sorcerer-mar 1y ago
      The best way to understand this change is to understand it in relation to what it was changing. Prior to this, corporations explicitly sought to generate value for shareholders, employees, managers, customers, and their communities. Since shareholders were always one of the stakeholders, the only delta – Milton's breakthrough – was to assert that a corporation need not even consider the other stakeholders. So yes, going from "corporations should aim to be a positive force on everyone they affect" to "corporations need only aim to generate returns for their owners" is a significant downgrade. With regard to your specific set-up, even there yes it's actually worse. It's better that the shareholders (who ultimately control the company's allocation of capital) feel an obligation to benefit all stakeholders than just giving as much money to themselves and Henry personally so they can all pursue their own pet projects which would themselves be operated under the same self-enriching philosophy. Just to clarify since people can be confused by the excerpt you've pulled: the prior state of affairs wasn't that shareholders named someone to allocate corporations' money into various political projects. It was that shareholders (and society writ large) expected executives to be a positive impact on all relevant stakeholders. Dumping toxic material into the river is bad even if it improves margins, not because it's illegal, but because it's damaging to the other stakeholders you are supposed to benefit. Milton came along and said no actually that's fine. Don't do illegal things to the extent it harms shareholder returns, but in general you need to do whatever it takes to generate shareholder returns.
      - gruez 1y ago
        >the prior state of affairs wasn't that shareholders named someone to allocate corporations' money into various political projects. It was that shareholders (and society writ large) expected executives to be a positive impact on all relevant stakeholders. Dumping toxic material into the river is bad even if it improves margins, not because it's illegal, but because it's damaging to the other stakeholders you are supposed to benefit. This seems like you're viewing the past with rose tinted glasses. The whole point of the passage of the clean air act (1963) and the EPA was that companies were dumping toxic materials into rivers, even under "stakeholder capitalism" (your article says that the Friendman doctrine was introduced in 1970). Same goes with all the other example of corporate malfeasance, such as The Jungle (published 1906), or Unsafe at Any Speed (1965).
        sorcerer-mar 1y ago
        Nope, I'm saying that all things being equal, you would expect a philosophical shift from stakeholder capitalism to shareholder supremacy to yield wage suppression, runaway wealth inequality, and hijacking or destruction of government by private interests. Prior to stakeholder capitalism, industrialization was downright inhumane. After stakeholder capitalism, it's trending toward social and political instability. During stakeholder capitalism: considered the glory days of American civilization (despite its serious flaws, which we need not ignore). Could be a coincidence! But I actually think people's beliefs shape their actions, and "my god-given duty is to generate shareholder returns, all else be damned" looks like a prime candidate for all sorts of post-1970 corporate misbehavior. (The Jungle predates stakeholder capitalism. The Jungle, Silent Spring and Unsafe At Any Speed were forces within that philosophical movement)
        gruez 1y ago
        >Prior to stakeholder capitalism, industrialization was downright inhumane. When did stakeholder capitalism magically pop up and made industrialization not "downright inhumane"? The end of stakeholder capitalism can be traced to Milton Friendman's works, what evidence is there of stakeholder emerging after the "downright inhumane" period before? > After stakeholder capitalism, it's trending toward social and political instability. >During stakeholder capitalism: considered the glory days of the American society. Again, rose tinted glasses: the same period had Cuban Missile crisis, Vietnam war drafts, and the Kent State shootings. Granted, most of them probably didn't have anything to do with stakeholder capitalism, but it's laughable to call it "the glory days of the American society". Moreover have things really fared better in places with "stakeholder capitalism"? For all the talk of "common prosperity", China isn't doing too hot either, with its cratered housing market, high youth unemployment, and low consumer confidence.
- const_cast 1y ago
  No, presumably there were just more consequences for being greedy. You could do it, but it would probably bite you later, so better not. Now, you can be greedy over and over again at every decision point and it's probably fine. See: the short-term thinking of most US companies.

So in a reductionist view: greed.

aidenn0 1y ago

Are you suggesting greed was absent in the US prior to 1973?

sorcerer-mar 1y ago
It was absolutely put on overdrive in 1970. The dominant business philosophy from the late 40s to the 70s was stakeholder capitalism, then this asshat came along and said quite specifically: greed is not just a force we'll co-opt for pro-social purposes, it is not a mitigable downside of economic growth, it is actually the entire purpose of any commercial enterprise. https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine It is shamefully antisocial and un-American. Today it's so baked-in that many young entrepreneurs don't even realize it's a goofy ass meme that only a moron could expect to yield good outcomes.
- gruez 1y ago
  From your link: >Friedman argued that the shareholders can then decide for themselves what social initiatives to take part in rather than have an executive whom the shareholders appointed explicitly for business purposes decide such matters for them That seems... fine? Is letting Ford shareholders decide what political causes to fund really that much worse than delegating that to Henry Ford, which subsequently decided to support nazi-adjacent groups?
  - sorcerer-mar 1y ago
    The best way to understand this change is to understand it in relation to what it was changing. Prior to this, corporations explicitly sought to generate value for shareholders, employees, managers, customers, and their communities. Since shareholders were always one of the stakeholders, the only delta – Milton's breakthrough – was to assert that a corporation need not even consider the other stakeholders. So yes, going from "corporations should aim to be a positive force on everyone they affect" to "corporations need only aim to generate returns for their owners" is a significant downgrade. With regard to your specific set-up, even there yes it's actually worse. It's better that the shareholders (who ultimately control the company's allocation of capital) feel an obligation to benefit all stakeholders than just giving as much money to themselves and Henry personally so they can all pursue their own pet projects which would themselves be operated under the same self-enriching philosophy. Just to clarify since people can be confused by the excerpt you've pulled: the prior state of affairs wasn't that shareholders named someone to allocate corporations' money into various political projects. It was that shareholders (and society writ large) expected executives to be a positive impact on all relevant stakeholders. Dumping toxic material into the river is bad even if it improves margins, not because it's illegal, but because it's damaging to the other stakeholders you are supposed to benefit. Milton came along and said no actually that's fine. Don't do illegal things to the extent it harms shareholder returns, but in general you need to do whatever it takes to generate shareholder returns.
    - gruez 1y ago
      >the prior state of affairs wasn't that shareholders named someone to allocate corporations' money into various political projects. It was that shareholders (and society writ large) expected executives to be a positive impact on all relevant stakeholders. Dumping toxic material into the river is bad even if it improves margins, not because it's illegal, but because it's damaging to the other stakeholders you are supposed to benefit. This seems like you're viewing the past with rose tinted glasses. The whole point of the passage of the clean air act (1963) and the EPA was that companies were dumping toxic materials into rivers, even under "stakeholder capitalism" (your article says that the Friendman doctrine was introduced in 1970). Same goes with all the other example of corporate malfeasance, such as The Jungle (published 1906), or Unsafe at Any Speed (1965).
      - sorcerer-mar 1y ago
        Nope, I'm saying that all things being equal, you would expect a philosophical shift from stakeholder capitalism to shareholder supremacy to yield wage suppression, runaway wealth inequality, and hijacking or destruction of government by private interests. Prior to stakeholder capitalism, industrialization was downright inhumane. After stakeholder capitalism, it's trending toward social and political instability. During stakeholder capitalism: considered the glory days of American civilization (despite its serious flaws, which we need not ignore). Could be a coincidence! But I actually think people's beliefs shape their actions, and "my god-given duty is to generate shareholder returns, all else be damned" looks like a prime candidate for all sorts of post-1970 corporate misbehavior. (The Jungle predates stakeholder capitalism. The Jungle, Silent Spring and Unsafe At Any Speed were forces within that philosophical movement)
        gruez 1y ago
        >Prior to stakeholder capitalism, industrialization was downright inhumane. When did stakeholder capitalism magically pop up and made industrialization not "downright inhumane"? The end of stakeholder capitalism can be traced to Milton Friendman's works, what evidence is there of stakeholder emerging after the "downright inhumane" period before? > After stakeholder capitalism, it's trending toward social and political instability. >During stakeholder capitalism: considered the glory days of the American society. Again, rose tinted glasses: the same period had Cuban Missile crisis, Vietnam war drafts, and the Kent State shootings. Granted, most of them probably didn't have anything to do with stakeholder capitalism, but it's laughable to call it "the glory days of the American society". Moreover have things really fared better in places with "stakeholder capitalism"? For all the talk of "common prosperity", China isn't doing too hot either, with its cratered housing market, high youth unemployment, and low consumer confidence.
const_cast 1y ago
No, presumably there were just more consequences for being greedy. You could do it, but it would probably bite you later, so better not. Now, you can be greedy over and over again at every decision point and it's probably fine. See: the short-term thinking of most US companies.