Today's PSA: (because, apparently, this is shocking to people). It's OK for corporations to make less money. It's OK for shareholders to receive less value.
No, they don't have to raise prices on their consumers. No, they don't have to cut wages or benefits. They're choosing to.
If your perpetually ascending profit model only works because you exploit your labor, then your profit model deserves no sympathy, fretting, or hand-wringing.
You can, and should, make less profit.
And if your business can't keep afloat without exploiting people, that's the "free market" you're always harping about telling you the business isn't sustainable.
@Manigarm There is the problem that corporations have a fiduciary responsibility to their shareholders. For publicly traded companies they will be hearing from lawyers if they intentionally leave money on the table. This problem doesn't go away until the profit motive goes away.
Update: I have been corrected on whether or not that fiduciary responsibility is legally enforceable. Fine. They will still hear from their investors if they intentionally leave money on the table, and the problem still doesn't go away until the profit motive goes away.
@edyother @Manigarm whether shareholders would have a case seems to be questionable:
https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/
I think there's a difference between profit-motive and profit-motive run amuck. If private equity firms have shown us anything, it's that often the things that maximize profit in the short-term threaten the long-term sustainability of the firm.
The whole notion of investment implies the passage of time, so I think there's a legal case that a fiduciary responsibility to investors implies not being super short sighted.
@TonyaCanning @edyother @mmby @Manigarm the whole notion of investment implies profiteering.
Think about it: no business ever gets private funding unless it can convince a group of already-rich people that investing in the business will make those people even richer. The upwards transfer of wealth is woven into the very fabric of our society.
@edyother that doesn't work the way people think it does. It's absolutely not true that companies can be sued if they don't maximize profit. The legal duty to shareholders is not to negligently disregard shareholder value (such as by not bringing a purchase offer to the shareholders to consider)
Boards can absolutely decide to make less profit on the assumption that sustainable business is better value than short-term growth
The legal duty almost never comes up. The issue is greedy investors that get responsible boards fired and replaced (voted out, not sued). That's the fear that drives the "perpetual growth" mindset.
@edyother @calcifer @[email protected] of depends on the ethics of who is able to invest...
In the past I have invested in what I thought were socially responsible companies. I saw Phillip Morris making double what my little clean energy picks were doing, but didn't invest in that.
But I'm a normal human being: a small time individual investor simply looking for long term security. I (and I would argue millions of other healthy humans) have mindsets very different from the big (stunted greedy) groups of sociopaths that are the largest players.
I'm mostly out now because I have come to the reluctant conclusion that businesses who go public public rarely stay clean enough for my tastes.
@edyother @calcifer @Manigarm Dividends.
In a stable company, shareholders should receive smaller, but consistent payments from the company's profits.
Big increases in share value should be associated with companies that are either expanding, improving, and creating value, or are startups (and therefore high risk, high reward).
The problem is that the big investors have got used to receiving the returns usually associated with said rapid growth indefinitely, but don't want to bear any risk.
@edyother @Manigarm there are investors who would care about sustainable long-term profitability; they would benefit over a long term with stock price and over the short term with dividends. This used to be the norm!
The problem is that there's an entire investing industry around short-term growth, and they have an outsized influence. They often have the ability to buy so much stock that they can effectively campaign to replace enough of the board to make sure they have a board that will serve short-term growth. It's fucked up. But the idea that the State will enforce that preference through findings of liability is mostly a myth and therefore a red herring.
There are retirees who bought mutual funds to pay for their retirement & are aghast at the consequences of that decision to their grandchildren.
They wanted a little surplus wealth to go their way, but not the end of the earth as a habitable planet.
There has to be a better way.
Then there's the 750 billionaires who have known the consequences for 40 years and instead accelerated it.
I just keep wanting to click boost on this over and over
I just reread Chris Hedges/ Joe Sacco’s book ‘Days of Destruction, Days of Revolt’. It is too optimistic about the revolt but right on about the destruction as the corporations continue destroying citizens and the world.
I recommend this book to all.
And WE should stop buying their stuff.....do we really need it?
@Manigarm The usual "excuse" being "but but, we HAVE to make all the money we can for our shareholders"
What they mean when they say that isn't your grandma and her 200 shares, it's the other billionaires who own the bulk of the stock.
It's just a smokescreen for their greed and nothing more.
@Manigarm Honestly it doesn't surprise me. We are inundated with capitalist propaganda from the moment we come out of the womb.
Though it is unfortunate that people don't stop and think long enough to realize just how bad things are as a direct result of said capitalism.
I kinda wish those animated Saturday morning PSA cartoons like "I'm just a Bill" were revitalized and promoted topics like, "Industry regulation is good for society", with a catchy tune, cute narrator character, and everything. I feel like we'd need to start there, with the next generation, after the last 43 years of neocon control skewing everyone's perception of "normal".
@Manigarm I know that. You know that. But a business is in business to make money. That's it. that i
s their whole raison d'etre. And the business of a political candidate is to get elected on a party platform, and if elected, to get re-elected.
Again, that's it.
For the rest of us, it's KMAG YOYO. Kiss My Ass Guys, You're On Your Own. No Santa, no Jesus, no cavalry, no white knight.
Just us.
This. A ‘corporation’ does not exist through some natural law. It exists as an entity because society says it can, presumably because society benefits from it. If society *isn’t* benefitting from it, either because it is not making money, doing illegal things, impoverishing it’s employees, destroying the environment, etc, we should revoke it’s right to exist!
@Manigarm ... THEY REFUSE TO LIVE WITHIN THEIR MEANS AND THINK EVERYONE ELSE SHOULD BOW TO WHAT THEY WANT OR HOW THEY WANT IT...DICTATORSHIP
TOO MANY COOKS IN THE SOUP ! LOBLAWS Galen Weston dropped CEO for next 3 yrs, because HE knows he is wrong and ashamed of giving himself a 3 MILLION RAISE...
TAKING Government money to do renos again which were also paid for by the government 3-4 yrs ago
JUST WHAT GIVES THERE AND WHO SITS ON HIS BOARDS !!
@Manigarm Similarly, the business model of "Only 10% year-over-year growth?? The company must be failing! Expect massive layoffs" is completely toxic.
It's okay to hold the line, or grow just with inflation.
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