4 ms·

Capitalism means ownership by investors, and it is the investors who ruin your product.

by philipov 7mo ago

recursive 7mo ago
From my naive point of view, it's not clear from first principles why they must.
- philipov 7mo ago
  It's a version of the principal-agent problem, with the added wrinkle that principals have low barriers to exit. Both the management and investors share the incentive structure of a con artist.
mindcrime 7mo ago
Capitalism - in principle - doesn't even require that investors as such exist, much less that they own everything. That our current system has evolved into a pseudo-capitalist system which introduces all sorts of State created constructs (like corporations), and borrows elements from fascism, socialism, etc., doesn't mean that it must be this way.
- account42 7mo ago
  It does mean that in practice - even in the name, capital is front and center.
jacquesm 7mo ago
Investors don't run the company, they don't make product decisions on a day to day basis. They may demand growth and they may be able to fire the CEO if enough of them band together but that requires them to convince the board first (and if they can't then they may be able to fire some or even all of the board). Anyway, as long as none of that has happened I think this is an academic position at best.
monooso 7mo ago
I believe capitalism is defined by private ownership (not necessarily by investors) of the means of production.
- account42 7mo ago
  Cool, but how is this theoretical fact relevant to the real world.
  - monooso 6mo ago
    I was responding to GP, who stated "capitalism means ownership by investors", and then used that definition to make the argument that "it is the investors who ruin your product." So in this context, the "theoretical fact" as you put it, is relevant. More generally, I would argue that such things are relevant because we're all using words to communicate, and it helps a great deal if we all understand what those words and phrases actually mean.
    - philipov 6mo ago
      I was talking about Actually Existing Capitalism, not hypothetical scenarios that don't obtain in the world we're subjected to. It is a diagnosis, not a theoretical law of nature. When it comes to communicating, the meaning of a word is how it is used in practice. Use creates meaning. In practice, capitalism means ownership by investors. In the world that exists, the Capitalist Class is the Investor Class, and the dynamics created by this reality have caused non-hypothetical products to be ruined time and again. Proprietorships and partnerships where the management is also the owner(s) are an older economic system that predates the innovations of modern capitalism. Even businesses that begin this way commonly seek investment capital, get bought out or go public. The ones that don't are considered stable and therefore uninteresting, such as lawyers, but private equity will eventually gobble them up too. If you look at the products that have avoided enshitification, they are the ones that have avoided or subjugated investors.

Capitalism means ownership by investors, and it is the investors who ruin your product.

recursive 7mo ago

From my naive point of view, it's not clear from first principles why they must.

philipov 7mo ago
It's a version of the principal-agent problem, with the added wrinkle that principals have low barriers to exit. Both the management and investors share the incentive structure of a con artist.

mindcrime 7mo ago

Capitalism - in principle - doesn't even require that investors as such exist, much less that they own everything. That our current system has evolved into a pseudo-capitalist system which introduces all sorts of State created constructs (like corporations), and borrows elements from fascism, socialism, etc., doesn't mean that it must be this way.

account42 7mo ago
It does mean that in practice - even in the name, capital is front and center.

jacquesm 7mo ago

Investors don't run the company, they don't make product decisions on a day to day basis. They may demand growth and they may be able to fire the CEO if enough of them band together but that requires them to convince the board first (and if they can't then they may be able to fire some or even all of the board). Anyway, as long as none of that has happened I think this is an academic position at best.

monooso 7mo ago

I believe capitalism is defined by private ownership (not necessarily by investors) of the means of production.

account42 7mo ago
Cool, but how is this theoretical fact relevant to the real world.
- monooso 6mo ago
  I was responding to GP, who stated "capitalism means ownership by investors", and then used that definition to make the argument that "it is the investors who ruin your product." So in this context, the "theoretical fact" as you put it, is relevant. More generally, I would argue that such things are relevant because we're all using words to communicate, and it helps a great deal if we all understand what those words and phrases actually mean.
  - philipov 6mo ago
    I was talking about Actually Existing Capitalism, not hypothetical scenarios that don't obtain in the world we're subjected to. It is a diagnosis, not a theoretical law of nature. When it comes to communicating, the meaning of a word is how it is used in practice. Use creates meaning. In practice, capitalism means ownership by investors. In the world that exists, the Capitalist Class is the Investor Class, and the dynamics created by this reality have caused non-hypothetical products to be ruined time and again. Proprietorships and partnerships where the management is also the owner(s) are an older economic system that predates the innovations of modern capitalism. Even businesses that begin this way commonly seek investment capital, get bought out or go public. The ones that don't are considered stable and therefore uninteresting, such as lawyers, but private equity will eventually gobble them up too. If you look at the products that have avoided enshitification, they are the ones that have avoided or subjugated investors.