[maiar]

This. The entire point of corporations is to shield individuals from penalties, but they don’t work. Business failure in good faith, where the shielding makes sense, is not really protected because bank loans require personal liability and because it’s impossible these days to recover from a damaged reputation unless you come from a family rich enough to hire its own PR firm. On the other hand, when it comes to letting rich people get away with absolutely unambiguous criminality, corporations work very well.

[ryandrake]

The corporate veil should provide enough protection from random and unforeseeable failures to encourage entrepreneurship, but not enough that it shields wrongdoers from consequences. Currently it shields nearly everyone from everything in nearly all cases from run-of-the-mill business failure all the way up to straight-up fraud.

[maiar]

It doesn’t shield small business owners in practice, though. Bank loans tend to require personal liability, and there are ways to pierce the corporate veil when the company is provably one person. So individuals get only a small amount of protection in practice. Even if you fail in good faith, there’s a good chance that your life and reputation are ruined.

On the other hand, large companies are basically private armies in which the presumably passive shareholders are so distant from the actions taken on their benefit that people almost never go to jail unless they are deliberately thrown to the wolves by shareholders or superiors.

[gruez]

>Currently it shields nearly everyone from everything in nearly all cases from run-of-the-mill business failure all the way up to straight-up fraud.

Tell that to Bill Hwang or Sam Bankman-Fried.

[pclmulqdq]

Bill Hwang and SBF committed the cardinal sin of business: losing other rich people's money. They both ran out of friends very quickly. Elizabeth Holmes was the same.

[steveBK123]

Came here to say the same.

Had they been scamming small investors, even for the same total dollar value, they might have actually gotten way with it.

Not only did they lose other rich peoples money, they lost money for people that were richer than them. Important distinction ..

[dbalatero]

ding ding ding

[maiar]

The problem is that only 0.01% of the people who need to be held accountable are. The number isn’t zero, clearly, but how many of the people who caused the 2008 disaster ended up in prison? My point exactly.

I also think it’s clear that SBF was jailed for his effects on the rich rather than on average people. Worse than fleecing billionaires, he made them look bad. Clearly he’s a scumbag who deserves prison time, but people worse than him are free.

[gruez]

>but how many of the people who caused the 2008 disaster ended up in prison? My point exactly.

>I also think it’s clear that SBF was jailed for his effects on the rich rather than on average people. Worse than fleecing billionaires, he made them look bad.

"The rich" was upset enough at SBF losing $32 billion to throw the book at him, but are totally fine with the GFC causing $2 trillion in damage to the global economy?

[alt227]

I get the feeling this was the plan from begining.

[lesuorac]

Sure, the plan (of LLCs) was always to limit liability but initially _who_ could incorporate wasn't literally everybody.

Like the founding fathers ran their business as themselves. There isn't some Monticello LLC that Thomas Jefferson was CEO of so if TJ did something bad then he's personally liable for it. This is what's changed and is the problem, people get LLCs in situations they really don't deserve them in.

[datavirtue]

What are you talking about?

[brookst]

While the lack of accountability for corporations is crazy, I’m a firm believer in the Cube observation: there is no master plan.

[namaria]

There is one master plan tho: might is right. It gets pushed back, but it seeps through every contention wall we have put up so far.

[brookst]

A flaw in human nature, but not a plan. There was no board meeting where people came up with it and set out a roadmap and had milestones and KPIs.

It’s an emergent property and it sucks, but there’s no conspiracy.

[namaria]

The owning class everywhere has always gotten together trying to figure out how to keep things the way they are.

[wahnfrieden]

Then what is coordinated lobbying

[JumpCrisscross]

Countries with might is right systems don't have corporate ownership, they have personal fiefdoms.

[contingencies]

IIRC the modern corporation as a legal entity was created in response to the high capital and high risk requirements embodied in early western shipping ventures. The first stock exchange ("bourse") for this was actually French(?) (hazy here, possibly Belgian or Dutch, and probably roots in Hanseatic League financing if not beyond). FWIW there's a whole subset of the antiques world which deals in share notes - promissory notes issued to people funding capital intensive ventures like new railway lines, often beautifully decorated and serial numbered for nominal security against forgery.

AFAIK the follow-on concern of manipulation of the modern legal environment as a tool for unencumbered multinational greed really began with entities like the East India Company being empowered by pontificating rulers back home granting because-I-said-so immunity for arbitrary actions outside their borders, thus establishing the ground work for industrial scale opium trading, piracy, slavery, and banana republics. We're in a period of relative reckoning now where the cash-piles thus accrued are facing some popular scrutiny, but there'll never be recompense. As we've reached the ends of the earth and new wealth to seize has become scarce, we've turned to speculation and beyond earth to mars, the metaverse, and media in general. Stock markets are largely society's greed temples and in some cases designed for money laundering (eg. Singapore stock market for the Burmese junta). Even small companies on the public markets are worth orders of magnitude more than you can earn in a lifetime, leading to an intellectual drain toward speculative systemic value extraction instead of productive ventures.

IMHO a naive hope of crypto was a reckoning, instead we received the opposite: increased speculation, libertarian multinational economics and now abject political profiteering. No action on critical issues like climate. Less international trust and diplomatic potential than we've had since WWII - truly, we are lost. But it's less a conspiracy than a back-scratching piggy trough of reverent greed-inertia, in which all pigs are created equal but a cabal of investment bankers are more equal than others. Meanwhile everyone else slave for their locally dangled currency carrot, backed primarily by golden handcuffs of mortgages, an inertia of ignorance, a charade of democratic process, increasing global population dependence on multinational trade to meet quality of life expectations, and conveniently captured choke points like identity (The End of the Nation State: The Rise of Regional Economies), food (Stuffed and Starved: The Hidden Battle for the World Food System), regulation (Preventing Regulatory Capture: Special Interest Influence and How to Limit It), international logistics (The Outlaw Ocean, International Shipping Cartels), energy (Energy Revolutions: Profiteering versus Democracy), education (Privatizing the Public University), media (Selective Control: The Political Economy of Censorship) and weaponized finance (Confessions of an Economic Hit Man, Mortgaged Democracy).

It is perhaps not overly hyperbolic to state that the challenge of our era is to determine a mode of capturing the power of emergent technology to undo this situation, and nothing less than the fate of the planet rests on doing so.

[maeil]

> It is perhaps not overly hyperbolic to state that the challenge of our era is to determine a mode of capturing the power of emergent technology to undo this situation, and nothing less than the fate of the planet rests on doing so.

Eugenics that select for altruism, empathy and cooporation and against greed and egotism. It's absurd to keep this subject taboo as we're staring down the apocalypse. Rather everyone goes down with the ship than consider something drastic that might go against what I was taught as a kid

[contingencies]

Haha :) I think evolution shows centralist solutions don't end well. GATTACA comes to mind. It'd be nice if we all did something positive and chillaxed a bit instead of fervently lining our piggy-troughs to the detriment of all other piggies, non-piggies and future piggies. So practically, that means, like - don't marry an investment banker, a politician, or a sociopath corporate ladderite.

[maeil]

The current solution has been leading to the worst possible end.

[miohtama]

Corporations are owned by people. Profit is distributed back to the society thru dividends. The largest shareholder category is pension funds, not billionaires. So effectively boomers are robbing younger generations.

[whatevaa]

Most profits are distributed by capital (like share price) increases rather than dividends.

[pwg]

Stock dividends and stock price appreciation are two sides of the same coin. Both are "money returns to investors in the business".

All that differs between them is the tax treatment each gets come tax time.

[lesuorac]

> All that differs between them is the tax treatment each gets come tax time.

And that if you hold a stock for say 10 years and somehow sell during a recession you could make ~0$ on that stock if it only did buybacks. While with a dividend you'd have come out ahead.

Conceptually they have very different incentives as well. With buybacks you want a company to have high volatility as well as to make short term decisions so that you can buy a dip, ask for say lay-offs, and sell as it goes up. With dividends you want the company to make longer term strategic decisions so that their revenue goes up and you get a larger dividend.

[toast0]

> And that if you hold a stock for say 10 years and somehow sell during a recession you could make ~0$ on that stock if it only did buybacks. While with a dividend you'd have come out ahead.

A stock with buybacks should be compared to a stock with dividend reinvestment.

If you do something other than reinvest dividends, you should sell some shares every year.

[miohtama]

Share buybacks and dividends exist and are used in the approx same ratio, so it's probably incorrect to say most profits. Also buybacks do not change the pool of dividend receivers.

[kklisura]

Data from 2023, by Aswath Damodaran, says that 40.87% of companies are doing buybacks and that buybacks are 64.28% of all cash returned [1][2]. US is leading in this segment here wrt to rest of the countries.

[1] https://aswathdamodaran.blogspot.com/2023/03/data-update-7-f...

[2] https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg...

[BriggyDwiggs42]

What kind of evidence would you need to see to no longer view corporations in this light?

[PhasmaFelis]

Blaming all your problems on old people isn't any more attractive than blaming them on Jews/women/queers/etc.

You're reading this on a device made in an underpaid Asian sweatshop, wearing clothes that are the same. Old people with pension funds are no more or less complicit in the brutality of the system than you are. Try blaming the people who are causing this situation on purpose, not the millions who are just trying to navigate it as best they can.

[eesmith]

I hate that ever since I was a teen in the 80's I've been encouraged by government policy to put my retirement into pension funds which invest in the stock market, thus justifying all manner of immoral and unethical business practices in the name of protecting pensioner savings.

I am complicit in a rigged system with no escape.

[miohtama]

It's possible to save pension by investing without pension funds. However the trick is that most pension funds are underfunded and run like a Ponzi, thus constantly need larger and larger group of young people to fund them. If and when this system collapses is going to hurt the government and that's why the encounrage to keep the Ponzi going.

[klipt]

The whole concept of "retirement" where old people are allowed to relax and be supported by young people, compared to the old days when people just worked until they died, requires enough surplus productivity from young people to look after old people as well as themselves.

If the population pyramid inverts and there are too few young people, the whole concept of "retirement" becomes unsustainable, unless AI advances enough to make up the lost productivity.

Pensions are just a way of formalizing the obligation to old people, but they are not themselves the root source of the problem.

[eesmith]

Setting aside that 'too few young people' is by definition when there's a problem, thus making it a tautology, there's a lot we can do by changing our views of what retirement means.

Retirement should not mean a life of air travel and cruises, achieved by pension savings.

Retirement should not mean continuing to live in your 2,500 sq. ft. ranch house in the suburbs with only car access.

John Maynard Keynes famously predicted we would be working 15 hours a week due because of increasing productivity. Where did all that productivity go?

If it's because we believed we needed ('deserved') more, then change those beliefs. If it's because of the concentration of wealth into the 0.01% then AI productivity improvements won't fix things.

The AI-mongers sell the false and unsustainable promise that AI will magically solve things so people don't need to change their habits.

Yet we can achieve a lot of savings by building more compact areas to live which don't require a car, and by building mass transit with the needs of the elderly in mind (no steps, low-frequency lines which run through neighborhoods, for those with limited mobility, etc.)

We can save money and get better health outcomes with a tried-and-true single-payer health care system done in every other developed country (eg, "Medicare For All".)

That can all be done now.

Yet we aren't. Because it's easier, and more profitable to those with money, to ignore the festering problem, with the fig leaf of 'AI' or some other future technology, and let someone else deal with it,

[Ekaros]

Also in many cases we must accept the fact that people die. And some times keeping them alive is too costly or take too much labour. I admit it is horrible realisation, but I think inevitable one.

[Nasrudith]

You would have been dependant upon the market either way. Even if it was a public pension model via taxation guess where the funds would come from? The market. All matters of trade-offs would affect the viability.

[eesmith]

Not equally dependent.

Like, with the US privatized medical system and its parasitical medical insurance system, we can see how medical costs are higher and overall health outcomes lower than in countries with single-payer/national health care.

And if I happen to choose a health insurer which decides my cancer treatment is inappropriate, I'm either bankrupt or dead.

Yes, I'm still dependent on healthcare, but one is better aligned to my health.

Similarly, the personal pension system requires staff and/or custom software to handle customer relations, and the individual funds have marketing budget to convince people to join. This disappears with a nationalized system where it can all be part of the same social security system, and benefit from the economy of scale.

Furthermore, companies justify all sorts of unethical practices because they point to all the (abstract) pensioners who will lose their retirement, which relies on those pensioners not being able to say 'no, don't do it in my name.'

While something like the Government Pension Fund of Norway can select funds and influence the corporate governance in a way which is aligned with national goals.

Yes, there are all sort of ethical funds I could invest in. The paradox of choice and my complete lack of expertise means I must hire that expertise, like when I got advice when I set up my account.

Furthermore, if I happen to select green energy stocks, but they go down the toilet after the invention of Mr. Fusion, I'm currently screwed. While a public pension has the mandate of supporting everyone.

Yes, I'm still dependent on stock investemtns, but one is better aligned to my retirement.

Lastly, the government can raise money from taxes. The government can pay for more nurses and doctors, and training hospitals. The government can pay for high-quality retirement housing. The government can do a lot of things that a private pension plan cannot do.