I actually prefer to see companies as entities such as their only goal is maximizing profits, all else be damned. They will exploit every worker and will externalize every negativity in their profit-driven mandate. And typically short term profits will trump long term anything.
It's the role of governments, as representatives of society, to rein in companies so that they don't act in ways that damage the society where they are inserted in. Cue in labor and union protections, environment regulations, etc and so forth.
And yes, companies that break regulations should be treated as criminals, including termination.
We have seen all of these happening in modern times.
That is the standard of behavior.
Regulation is what stops companies selling you contaminated food, working conditions similar to slavery, factories polluting the air and water with dangerous chemicals, so on and so forth
> you need incredibly strong rules and almost perfect enforcement.
And that's what citizens should demand of their governments
They clearly don't do this though. There are less profitable and more profitable industries and companies don't move out of the less profitable ones. If they were out there exploiting anyone and everyone, they'd all be selling crack instead of furniture. Or at least mandating the employees be on it for productivity.
Entering a different market is expensive and takes a lot of time. It’s also not guaranteed you’ll succeed.
> they’d all be selling crack instead of furniture. Or at least mandating the employees be on it for productivity.
Selling crack is against the law and afaik so is requiring employees to use PEDs (see the parent’s idea of governments deciding what’s out of bounds). The tactics Purdue used to push OxyContin are a good example.
That's a strategy risk…
> Selling crack is against the law and afaik so is requiring employees to use PEDs (see the parent’s idea of governments deciding what’s out of bounds).
and that's a legal risk…
…but acceptance of risk is how profits are made and they know it. So basically this is just saying they're single-minded in pursuit of profits except for when they aren't. It doesn't seem to have predictive power.
I think a better explanation includes things like how, since most American companies are owned by the same retirement fund managers like Vanguard, their owners aren't necessarily interested in them competing maximally hard.
(and yes, Purdue is an example of _actually_ doing this, so are tobacco companies.)
Forgive me for perhaps being blind, but I fail to see it with the same clarity as you do.
Typically, what stops companies from ruthlessly exploiting workers, selling products that damage society, polluting the environment, et cetera and so forth is only government regulation, not the goddwill of executives and chairmen.
When the companies engage in the ordinary big-business practice of regulatory capture, absolutely nothing.
It is just treated as a game to be hacked. And hack it, they do.
Because according to your standards, companies don't need to treat everyone fairly (as a good citizen), but the govt must treat them fairly.
That's how earlier this week we saw headlines that Tesla employees in Buffalo NY were organizing a union drive. Then the very next day, we see headlines that Tesla has fired 10 workers, the ones organizing it.
It is illegal as hell, but they did it anyway. Why? Because Tesla knows that it'll take years for all the hearings to work their way through the courts, and the result will be a fine, which they can appeal, and delay further. Meanwhile, they figure the end cost will be less than having to deal with giving workers a fair deal. So, despite all the "excess govt regulation", the workers get exploited and screwed.
It is also how Norfolk rail donated to both Trump and the Ohio gov and had regulations eased, e.g., requiring fewer workers on trains and not needing to update their technology with "extra" brakes. And now we have an environmental disaster as a result. And those costs will be 'socialized' to the taxpayers and victims in the town, while the company keeps most of it's profits (it will not pay even a small fraction of the costs and it will be years from now).
So yeah, the govt structurally CAN NOT be as nimble as the companies, so the companies exploit that weakness. Great for them. Sucks for society.
I'm not saying they're all bad or evil, but this over-simplistic "shareholder value only" concept /structure is not good for a sustainable society or even for sustainable corporations.
I do not believe this is how NLRB enforcement works.
Though if the US had sectoral bargaining like other countries it just wouldn't be an issue in the first place.
The answer for that is more regulation, stronger and more independent institutions that can rein those companies in. Not wishing thay companies magically become nicer.
I fully understand that that will not happen by itself.
What I'm advocating is changing the STRUCTURE in which they operate so that "becoming nicer" is prompted by the system. The current system fully expects only the primary goal of maximizing profit/value for the shareholders/owners, and minimal compliance with anything else.
This is despite the fact that EVERY corporation enjoys massive benefits of operating in a country that provides everything from transportation infrastructure, a reliable legal system, an educated workforce, to military protection of global shipping lanes.
It would help to embedding into the law the concept of corporate responsibility, by providing a cause of action for irresponsible corporate actions. Expecting the corporation to take care of the workers, and the environment. E.g., In Germany, it is required that workers have seats on the boards and workers have much greater rights.
The point is that the law is now, as you say, just [corps are expected to take care of only their shareholders] and [corps are subject to some regulation].
This system has been tried for nearly 250 years, and is obviously lacking.
I don't think iron-fisted regulation will provide a solution. That's already been tried, everyone got annoyed at the overhead, and it was backed off (see Reagan administration), and the corp destruction has ramped up ever since. It literally just becomes a higher priority to corps to do regulatory capture then.
We need to make the system harder to capture, spin a wider web. And that can be done by broadening the social and legal compact with corporations ('tho they'll fight like hell against it).
Those are interested ideas. But it begs the question: How to enforce compliance without regulation?
For example, corporations are strictly creatures of law; they exist IF and Only If, and in the form that the law allows, at the pleasure of the government.
So, rewrite the enabling laws to state specifically and explicitly that corporations have affirmative responsibilities not only to the shareholders, but also to their workers, the community, the nation, and the environment, etc.
That alone immediately gives cover to any executive or board taking action that benefits those entities and perhaps not so much the shareholders. So they have a defense against shareholder suits that seek to force action or compensation away from corporate responsibility. Plus, there would also be a cause of action from the other parties for failure to take care of their interests. Obviously, this could go too far in either direction, so it must be carefully written, but this is the general idea.
There are many other ways, but that's the idea, don't rely solely on regulation.
Specifically, would you actually prefer to see people as individuals whose only goal is maximizing their personal interests, all else be damned? Should they exploit every interpersonal relationship and externalise every negativity in their selfish-driven mandate? Should short-term personal wants trump long term anything?
If yes, I don't like the society that would result, but I respect the consistency in the idea. And if not, why should individuals be subject to more stringent moral rules than companies?
People are already pretty selfish, and without any regulation and oversight they will definitely act in ways that are detrimental to society. That's why we have laws and law enforcement.
The only difference from corporations is that people do not only pursue money. They may have different goals (sex, pleasure, power, influence). That makes people notoriously difficult to parse, and dealing with them is extremely frustrating.
Corporations are easy, they are the incarnation of greed. For them money is all that matters.
But they are entities designed to pursue profits as their primary motivation. With proper regulation, when the pursuit of profits align with the needs of society, they can be great to have around.
Problems arise when regulation is insufficient, when regulators are complacent or corrupt, or when governments look after the desires of corporations instead of the benefit of the people.
When that happens, then yes, they become a threat to society.
This is the absolutely crucial core question that gets skipped over so, so often.
Is the goal to maximize profits this quarter, or shareholder value (share price) this quarter, or over the course of a decade, or a century, or a millennium ?
Merely changing the answer over those four options would entail massive changes in management goals and choices.
The entire pernicious concept merely enables exploitative behavior — exploiting employees, the people in the surrounding community/society, and the environment, externalizing costs on everyone else while internalizing profits.
If we are going to treat corporations as effectively persons, it is far past time to expect them to behave as good citizens.
(and if they do not behave as good citizens, then treat them as bad citizens, i.e., jail or execute them)