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It always astounds me how stupid economists are. Like only an economist would use reasoning using terms something like epsilon to infinity to describe something

It always astounds me how stupid economists are. Like only an economist would use reasoning using terms something like epsilon to infinity to describe something that is a context dependent feedback loop in a closed system. Like these guys are literally idiots that studied real analysis then said maybe we can just apply that to an oil and gas company, without thinking about how it requires people and social consensus etc. to actually carry out these activities and they exist in a finite closed system with feedback. "Increase shareholder value" ... yeah until the company subsumes the planet... duh, so natural and rational. And obviously if you act that way forever it won't ever effect shareholder value. It's so stupid of a theory it's basically a non-statement. It's utterly obvious that companies want to make money and obvious that stakeholders want that too. This theory is just saying that goodwill is worthless but like, clearly it's not. Apple didn't have to make it's products beautiful, but it did, because it's cool.

idiomat9000 1y ago
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rapht 1y ago
Sorry if that sounds offensive, but you are being a bit shortsighted here. The theory just says that shareholder value serves both as a guide to what a business should do, and as a measure of how good it has done, because that measure encompasses all others. Which is debatable but far from stupid: do you really think Apple would have sold so many i* had they been ugly? Do you really think that angry people demanding taxes, regulations, etc don't affect how businesses decide to actually go and maximize shareholder value? The actual real absent in Friedman's reasoning is "eventually": externalities always come to haunt the shareholder value, the question is when do they become tangible enough that this aligns with society's perception of those externalities.
- stanfordkid 1y ago
  Friedmans theory is basically a non-statement. It’s so banal as to be vacuous, except as a justification. It’s like saying the point of life is to procreate. Like no shit, but that’s not all that it is. To put it in AI terms: you could dimensionality reduce a 1024 dimensional vector into 1 dimension and train a model on it. It may be the case that it’s the best reduction you could compute, but that doesn’t mean your entire idea isn’t shitty.
- stanfordkid 1y ago
  To further explain: No, they didn't build iPhones to be beautiful because they would sell more, they did because they wanted to. Ferrari didn't design sports cars because he wanted to sell the most cars. Armani doesn't design the most profitable suits. It's all completely absurd to say the point of "a firm" is to "maximize shareholder value". It's just so utterly stupid and inane... like... what about time horizon? At what level of variance? Its a lot like an unfalsifiable claim. You could say anything and say "well it maximizes shareholder value according to me"

idiomat9000 1y ago

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rapht 1y ago

Sorry if that sounds offensive, but you are being a bit shortsighted here. The theory just says that shareholder value serves both as a guide to what a business should do, and as a measure of how good it has done, because that measure encompasses all others. Which is debatable but far from stupid: do you really think Apple would have sold so many i* had they been ugly? Do you really think that angry people demanding taxes, regulations, etc don't affect how businesses decide to actually go and maximize shareholder value? The actual real absent in Friedman's reasoning is "eventually": externalities always come to haunt the shareholder value, the question is when do they become tangible enough that this aligns with society's perception of those externalities.

stanfordkid 1y ago
Friedmans theory is basically a non-statement. It’s so banal as to be vacuous, except as a justification. It’s like saying the point of life is to procreate. Like no shit, but that’s not all that it is. To put it in AI terms: you could dimensionality reduce a 1024 dimensional vector into 1 dimension and train a model on it. It may be the case that it’s the best reduction you could compute, but that doesn’t mean your entire idea isn’t shitty.
stanfordkid 1y ago
To further explain: No, they didn't build iPhones to be beautiful because they would sell more, they did because they wanted to. Ferrari didn't design sports cars because he wanted to sell the most cars. Armani doesn't design the most profitable suits. It's all completely absurd to say the point of "a firm" is to "maximize shareholder value". It's just so utterly stupid and inane... like... what about time horizon? At what level of variance? Its a lot like an unfalsifiable claim. You could say anything and say "well it maximizes shareholder value according to me"