> just that it seems this unethical behavior is the expected outcome giving the incentives, so maybe the incentives need to be reworked.
Also culture. I'm not saying things were perfect in the past, but introduction of the "Friedman doctrine" (https://en.wikipedia.org/wiki/Friedman_doctrine) to business culture probably made things much worse:
> The Friedman doctrine, also called shareholder theory, is a normative theory of business ethics advanced by economist Milton Friedman that holds that the social responsibility of business is to increase its profits.[1] This shareholder primacy approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible.
> ...
> The Friedman doctrine has been very influential in the corporate world from the 1980s to the 2000s
> ...
> In Capitalism and Freedom, Friedman had argued that when companies concern themselves with the community rather than profit it leads to corporatism,[6] consistent with his statement in the first paragraph of the 1970 essay that "businessmen" with a social conscience "are unwitting puppets of the intellectual forces that have been undermining the basis of a free society".[2]
> ...
> Shareholder theory has had a significant impact in the corporate world.[8] In 2016, The Economist called shareholder theory "the biggest idea in business", stating "today shareholder value rules business".[9] In 2017, Harvard Business School professors Joseph L. Bower and Lynn S. Paine stated that maximizing shareholder value "is now pervasive in the financial community and much of the business world. It has led to a set of behaviors by many actors on a wide range of topics, from performance measurement and executive compensation to shareholder rights, the role of directors, and corporate responsibility."[7]
> ...
> The Friedman doctrine is controversial,[1] with critics variously saying it is wrong on financial, economic, legal, social, or moral grounds.[14][15]
> It has been criticized by proponents of the stakeholder theory, who believe the Friedman doctrine is inconsistent with the idea of corporate social responsibility to a variety of stakeholders.[16] They argue it is morally imperative that a business takes into account all of the people who are affected by its decisions.
"In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires."
I hate to prove Godwin's law but jfc that sounds like "just following orders".
I think incentivizing company executives with stock performance based pay really amplifies the amoral profit seeking behavior of large corporations.
In a better world executives would consider holistic shareholder welfare - "would our shareholders truly be better off if we took <society-destroying-action>?" - instead of mere shareholder value. They'd take home a handsome, but not exorbitant, salary. They would do the job because it's one of the top, most prestigious jobs in the field they've dedicated their lives to. Not because they can make obscene wealth by gaming some numbers.
It is a principle that applies to every kind of employee. If you are an employee of a company, you have a duty to do what the company wants you to.
This duty may be overridden by a higher duty, such as the fact that you need to follow the law and report violations of the same. But it is literally what you are being paid for.
If this requires you to do something that you don't approve of, you have a choice of leaving your employment. This is not a joke choice. Many people, including myself, have left companies because we objected to what the company wanted us to do.
And with this we come to a hard truth about capitalism. There is no system of wealth creation that has ever come close to capitalism. It would be impossible for capitalism to work if investors took on unlimited liability for what employees of the company did. Thus capitalism depends on a legal framework that enables LLCs - literally Limited Liability Corporations. But the obvious outcome is that LLCs enable bad behavior. They put a legal wall to allow shareholders to avoid liability for the natural consequences of their desires.
Thus our prosperity requires capitalism. (And by "prosperity", I mean the ability to not mostly be living at the edge of starvation. Which was the historical norm from the rise of agriculture until a couple of centuries ago.) And our general wellbeing requires additional laws to curb the abuses that capitalism naturally tends to.
All systems have failure modes. The failure mode of non-capitalism is literally mass starvation. The failure mode of capitalism is abuse, followed by regulations to curb that abuse, followed by regulatory capture, followed by growing corporate power, leading the cycle back to abuse.
As much as I recognize the shortcomings of capitalism, I rather like not starving.
>If you are an employee of a company, you have a duty to do what the company wants you to.
It is frustrating how these things are always discussed. "The company" is used to deflect blame on any individual as if "the company" is some organism that acts of its own free will. When "the company" makes an immoral request of you, a person is doing that. You can respond to that person by telling them "no". In my experience, I have found this effective. And if I ever run into a situation in which it wasn't effective, that isn't the type of place I would want to work anyway. Sure, this is a stance somewhat made out of the privilege of the financial security my career has provided me, but the original company being discussed here is Meta, the average person making these decisions is likely much better off than me.
> It is frustrating how these things are always discussed.
I did not discuss things in the way that you say you are frustrated with.
If I had, then I wouldn't have said that your duty to the company will sometimes meet a higher duty. Or that you have the option of leaving the company if you do not agree with what it is doing. Or that I've actually done so.
Try giving it a closer read. In the end I'm defending capitalism as a lesser evil. And not saying that it justifies doing bad things.
You said "you have a duty to do what the company wants you to". "The company" doesn't have "wants". Maybe you have a duty to do what your boss wants, but assigning those wants to "the company" is perfectly in line with the type of behavior I was criticizing.
Assuredly you have encountered the idea that an organization with a culture, incentive structure, and specific financial incentives, will act sufficiently like a living being that people find it helpful to talk about it as one. While understanding the actual complexity of what is going on.
Apparently you've chosen to willfully refuse to understand what others mean when they such language. The result of which is a guaranteed miscommunication, and your ability to insist to yourself that you're right.
I will not bother attempting to discuss this further. If you choose to not understand why it is that organizations frequently and predictably act in ways that are not under the control of any individual within them, that is your prerogative. If you refuse to understand the kinds of language that people usually use to convey that idea, that's up to you.
What a weird response. You went from denying that you were discussing things this way to saying I'm willfully ignorant for not discussing things this way.
> The failure mode of non-capitalism is literally mass starvation.
Why does any criticism of how businesses are run today, no matter how mild, always come back to the Holodomor? Is there a communism equivalent of Godwin's law?
> It would be impossible for capitalism to work if investors took on unlimited liability for what employees of the company did
I'm asking for executives i.e. high-ranking employees to take more responsibility for their shitty decisions.
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.
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.
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"
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.
But the change is not just cultural, after Friedman et al. came a wave of deregulation and changes in the tax system. Deregulation that allows businesses to get away with bad business practices, and a tax system that resulted in the skyrocketing of CEO pay. CEOs became not just well-paid employees anymore, but actual part of the shareholder class.
We need to at least get back to post-war capitalism where businesses were more regulated, the tax system was progressive, and the economy grew more than ever.
Also culture. I'm not saying things were perfect in the past, but introduction of the "Friedman doctrine" (https://en.wikipedia.org/wiki/Friedman_doctrine) to business culture probably made things much worse:
> The Friedman doctrine, also called shareholder theory, is a normative theory of business ethics advanced by economist Milton Friedman that holds that the social responsibility of business is to increase its profits.[1] This shareholder primacy approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible.
> ...
> The Friedman doctrine has been very influential in the corporate world from the 1980s to the 2000s
> ...
> In Capitalism and Freedom, Friedman had argued that when companies concern themselves with the community rather than profit it leads to corporatism,[6] consistent with his statement in the first paragraph of the 1970 essay that "businessmen" with a social conscience "are unwitting puppets of the intellectual forces that have been undermining the basis of a free society".[2]
> ...
> Shareholder theory has had a significant impact in the corporate world.[8] In 2016, The Economist called shareholder theory "the biggest idea in business", stating "today shareholder value rules business".[9] In 2017, Harvard Business School professors Joseph L. Bower and Lynn S. Paine stated that maximizing shareholder value "is now pervasive in the financial community and much of the business world. It has led to a set of behaviors by many actors on a wide range of topics, from performance measurement and executive compensation to shareholder rights, the role of directors, and corporate responsibility."[7]
> ...
> The Friedman doctrine is controversial,[1] with critics variously saying it is wrong on financial, economic, legal, social, or moral grounds.[14][15]
> It has been criticized by proponents of the stakeholder theory, who believe the Friedman doctrine is inconsistent with the idea of corporate social responsibility to a variety of stakeholders.[16] They argue it is morally imperative that a business takes into account all of the people who are affected by its decisions.