[RobotToaster]

>Does private ownership always short-change customers, like the subtitle insinuates?

Corporations literally only have one goal, to generate the maximum profit for shareholders.

By definition profit is money not spent on making services better.

[dghlsakjg]

Please don't spread this meme about corporations being required to maximize profits/shareholder value. There isn't a requirement or law that says corporations to maximize profits.

The legal obligation is to act in the best interest of the corporation on behalf of the shareholders. There are limited situations where the only goal is to get a higher stock price, like in a buyout, but in general business there is no legal obligation to chase profits over other values.

Corporations can do things that actively remove value from shareholders, and they do it all the time. Donating to charitable causes, benefits packages that are incredibly generous, sending employees home early on the day before a holiday, providing discounts to employees, etc. All of these things would be illegal if profit-maximizing was law, but it isn't. Instead corporate officers can say that the long-term benefits of acting as a responsible corporation is in the best interest of the company.

Anyone saying that screwing people over for the benefit of the corporation is a requirement of corporate governance is full of it.

See here for more: https://insight.kellogg.northwestern.edu/article/shareholder....

[RobotToaster]

Isn't that just buying "goodwill"? Which is a form of long term profit maximisation.

[dghlsakjg]

You could try saying that. I would say that goodwill isn’t profit maximizing because you can’t account for it, you can’t sell or convert it to profits reliably, and it has benefits other than money.

Or you could just say that having goodwill is in the best interest of the company for a variety of reasons.

The point is: even for-profit corporations have no legal obligation to profit maximize. They simply must act in their best interest. What is in their best interest is intentionally fuzzy because it allows corporate officers to act in ways that aren’t directly profit seeking.

Corporate types like to try to hide behind the rule saying they legally have to do the shitty profit maximizing thing. But they don’t.

[esarbe]

"Goodwill" is just greenwashing.

No CEO has ever been fired for maximizing profits, so CEOs are incentivized to do anything - everything - to maximize profits. Many a CEO has been fired for not doing everything possible to maximize profits.

What's worse; the structure of corporations alienates the ones making malicious (but profitable) decisions from the ones executing the decisions. So that even if everyone in the chain-of-command is painfully aware that they are acting maliciously.

So even if corporate types don't have to do the shitting thing to maximize profit, they are usually incentivized to do so and provided a fig leaf for their moral qualms.

See; Exxon and Global Warming.

[dghlsakjg]

You're missing my point (and using the term greenwashing in a way that I don't understand).

I'm not saying that corporations won't act in morally wrong ways in the name of profit maximizing.

I'm saying that there is no legal requirement that they act in this way. There is a meme/idea that goes around saying that there is a legal requirement to profit-maximize or maximize "shareholder value" over acting morally. That is false. Anyone claiming that is wrong and probably trying to cover for something terrible they've done. The fig leaf isn't real, and we need to call it out. Doing shitty things for higher profits is not a requirement, and never has been.

Of course it is legal to profit maximize in unethical ways, and some companies will do this, even though they don't have to.

Many a CEO has been fired for not profit-maximizing, but many a CEO has been fired for profit-maximizing while trashing the reputation of the company. Boeing and Equifax are two immediate examples of CEOs who got fired for making extremely profit-focused decisions that were severely unethical. It happens.

[RobotToaster]

>I would say that goodwill isn’t profit maximizing because you can’t account for it

https://en.wikipedia.org/wiki/Goodwill_(accounting)

[skinnymuch]

I don’t think that’s true of all corps like cooperatives.

That’s not all profit is. How would labor theory, surplus value, and so on, be explained?