Any attempt to allow publicly traded companies to self regulate is obviously going to lead to this. They’re literally required to take every step to maximize gains and minimize losses. They will fire any CEO that won’t. Remove the rails and you are knowingly giving them license to rape and pillage at will.
It’s like people forget that a companies legal responsibility is to the shareholders. Not the customers. Not the employees. Not to anyone but the shareholders.
Technically they dont have to. If the board actually agrees the goal isnt to min/max finance and have the goal be the best whatever, then thats the result. But until that becomes a bigger selling point for investors (the public), we are going to get the bottom financial line still.
That’s like saying that technically you can drive your car into a lake; nobody’s going to do it except by accident. Investors invest solely and specifically to get a return on their investment, regardless of what they might say their reason was. They want as big of a return as quickly as possible, and will make whatever changes they need to in order to make that happen. They don’t even think hard enough to find other more ethical avenues that might not destroy the world if they don’t give as big of a return that destroying the world would give.
I think it’s more accurate to look at it as the same kind of survivorship bias as the companies themselves. Investors aren’t voters or politicians, they’re pools of capital. The bigger the pool, the more sway they have over things. If an investor were to consistently vote in such a way that did not maximize their returns, their pool of capital would shrink relative to those who do. Thus over time, the most influential investors will be the selfish ones and the less greedy ones will be naturally pushed out.
Thinking about it terms of them “wanting more money” makes it seem like they are a static entity with opinions and if only we could get better ones things would be ok. It ignores the way in which capitalism is a process that produces the outcomes we see. It’s an inevitability that an economy run on these principles will turn out this way.
Any attempt to allow publicly traded companies to self regulate is obviously going to lead to this. They’re literally required to take every step to maximize gains and minimize losses. They will fire any CEO that won’t. Remove the rails and you are knowingly giving them license to rape and pillage at will.
It’s like people forget that a companies legal responsibility is to the shareholders. Not the customers. Not the employees. Not to anyone but the shareholders.
People don’t consciously know that…and dislike be reminded of this.
Technically they dont have to. If the board actually agrees the goal isnt to min/max finance and have the goal be the best whatever, then thats the result. But until that becomes a bigger selling point for investors (the public), we are going to get the bottom financial line still.
That’s like saying that technically you can drive your car into a lake; nobody’s going to do it except by accident. Investors invest solely and specifically to get a return on their investment, regardless of what they might say their reason was. They want as big of a return as quickly as possible, and will make whatever changes they need to in order to make that happen. They don’t even think hard enough to find other more ethical avenues that might not destroy the world if they don’t give as big of a return that destroying the world would give.
Okay, but then line goes down and investors vote out the board.
And most stocks are held by a couple big Wall Street firms who own everything, not the public at large.
And technically never happens because investors like money and want money (After all, why they would invest otherwise?)
I think it’s more accurate to look at it as the same kind of survivorship bias as the companies themselves. Investors aren’t voters or politicians, they’re pools of capital. The bigger the pool, the more sway they have over things. If an investor were to consistently vote in such a way that did not maximize their returns, their pool of capital would shrink relative to those who do. Thus over time, the most influential investors will be the selfish ones and the less greedy ones will be naturally pushed out.
Thinking about it terms of them “wanting more money” makes it seem like they are a static entity with opinions and if only we could get better ones things would be ok. It ignores the way in which capitalism is a process that produces the outcomes we see. It’s an inevitability that an economy run on these principles will turn out this way.
And technically always loses to practically. 😞
All the CEO has to do is say, “I think knowingly causing a disaster is going to be bad for business long term”.
The shareholders the CEO is beholden to don’t care about long term in the slightest.
Well, sometimes they do.