[dimal]

It goes deeper than that. All publicly traded corporations are morally obligated by the Friedman Doctrine [0] to do stuff like this. If something returns value for shareholders (and monopolies do) then a CEO must do it. This is how the whole system is supposed to work. Of course, there's no reason that capitalism must to work this way, but this is the toxic form of capitalism that we've unwittingly chosen. Thiel just gave a playbook for implementing this in the tech space.

[0] https://en.wikipedia.org/wiki/Friedman_doctrine

[mattbuilds]

That is not a moral obligation, it is in fact the opposite. It is a lie that people tell themselves and the world to allow themselves to make immoral decisions for their own benefit.

I’m not saying running a company is easy and I know that many gray areas exist in the decision making. I do think companies can exist, profit, and be a net good for the world. However, we need to remove the notion that the duty to shareholder profits is a moral duty. It’s a cowards way out of having to make actual difficult choices. It’s one of those things that sounds great exactly because it allows you do horrible things with no responsibility. It creates a system where you offload the effort and weight of your decisions. As long as you’re are acting in the interest of shareholders, you are in the clear. That’s a dangerous concept and the opposite of morality.

[shoeb00m]

It is the fiduciary duty of the CEO to do what’s in the best interest of shareholders.

In a working system it should be the governments responsibility to limit what a company can do

[mattbuilds]

According to your logic, a CEO should attempt to destabilize and influence the government's responsibility so they can maximize shareholder value. And guess what, that is exactly what happens in reality. You can't just simplify reality into rules like this because it leads to people using those rules as an excuse to skirt responsibility and make actual difficult decisions.

[AndrewKemendo]

Correct and this is why regulatory capture is the phase after market capture, to transition into legal monopoly.

[hgomersall]

In the best interest of the shareholders might reasonably interpreted as, say, not destroying the biosphere. Fiduciary duty is certainly not "maximise profits whatever the consequences".

[dazed_confused]

I would recommend reading about the Friedman Doctrine and the time period where it came about. It is only a theory and not necessarily a good one.

[heresie-dabord]

Unless Saint Friedman got his "doctrine" from some higher power, it's just the oligarchy's first commandment.

In the first line of GP's reference in Wikipedia:

"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."

[closewith]

It may be an obligation, but it's certainly not a moral one.

[p_l]

It's something untrue that people are told to believe - but it's in no way a real obligation, and isn't part of any fiduciary duty - it's just Friedman philosophying and selling it

[dazed_confused]

Exactly! Unfortunately people lap it up as some ground truth when it is a dude providing a theory and as you said “selling it”

[hobs]

Nobody is obligated to do this, its just that they say they are so they can extract the most amount of money from any situation and blame some vague principal. Plenty of companies leave money on the table because its terrible for everyone.

[JKCalhoun]

> All publicly traded corporations are morally obligated by the Friedman Doctrine to do stuff like this.

That's a strange way to put it. As though it is the Right and Good way to run a company — and also as though the Board's/CEO's hands are somehow tied.

[nailer]

But they are. You may consider it be terrible. There’s a good argument for that, the original Ford versus Dodge case we started by allegations from Dodge that Ford paying its workers more was not in the interest of Ford’s shareholders. But there is no rational reason to pretend the obligation doesn’t exist.

[JKCalhoun]

If I'm reading this correct, there is no law that says they have to do this, but they have to do this.

[nailer]

The law says they have to do this. See https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

[JKCalhoun]

Apparently, from my research, it's not the law.

There's fiduciary "duty", but not law. Judge's apparently give wide berth to management to decide what, perhaps long term, is going to be profitable.

[nailer]

Fair enough that makes good sense. What bothers me is that Ford’s actions probably were in a good long-term interests of Ford. It seems the ruling was very much focused on the short-term interests.

[Juliate]

> If something returns value for shareholders (and monopolies do) then a CEO must do it. This is how the whole system is supposed to work.

Disagree. Shareholders are not the all and everything of a company. Neither they, neither the company exist in a void.

> Of course, there's no reason that capitalism must to work this way, but

How is that not a contradiction with the above?

[dimal]

> Shareholders are not the all and everything of a company.

I agree with you. But what you or I think doesn't matter.

> This is how the whole system is supposed to work.

My point is that our current form of capitalism is designed to work this way, but there's no requirement that capitalism must work this way. This is just the toxic form of market economy that we ended up with.

[Juliate]

> But what you or I think doesn't matter.

1/ It does (because, it's false to say that "a CEO must do this or that" - or that's not a chief, a CEO, just an algorithm).

2/ it's less a matter of opinion than a matter of observing facts: shareholders are not the all and everything of a company. But my perspective may be that, being French, we have a history of having demonstrated the reality of this in actual actions, that USAmericans haven't yet.

[jampekka]

> Of course, there's no reason that capitalism must to work this way

There kinda is. Capital is allocated to where it makes most profits, and most profits go to companies maximizing shareholder value. In aggregate this makes the profit maximizing companies more likely to survive.

Sure this can be perhaps mitigated by e.g. legislating other duties to companies, but I'd say it's very hard even in theory, let alone in practice, to have capitalism without lopsided profit maximization.

[sgc]

> Capital is allocated to where it makes most profits

We have worked ourselves into this frenzy over the past several hundred years, but especially over the past 25. We even describe it like you did, as an axiom or a law. But human action is people doing things, and modern economics masks unbridled greed as rules of 'science'.

It is enough to make a good living doing something worthwhile. There is no need to constantly seek highest returns. Nobility in action is possible. Capital does nothing, people do things with capital. Better choices are possible. All is not lost.

And of course, roughly 30% of all modern work-related activity is government. That part of our societal activity should be focused on creating guide rails to make sure that people do not pursue modern economic theory in the real world, but actually work to do good things.

[realo]

So... Capitalism is bad for the people , communism is bad for the people.

What _is_ good for the people? Canada?

[deeThrow94]

Man, more people should read Schumpeter. Capitalism is really good for rapid growth. The second the profit motive negatively affects the quality of the product or efficiency of its production a company should be nationalized to prevent the profit motive from destroying part of our economy (the actually-useful part, that is, not investors or shareholders or dividends).

[Juliate]

But rapid growth is not necessarily _good_. Cancer is rapid growth.

[Rzor]

That's exactly the point of his follow-up.

[Juliate]

My point is that capitalism, as a system, has to adapt to survive, either its own demise through rapid/unlimited growth (like cancer), either through its replacement by something else (public service or some other structure).

[lud_lite]

Technology ironically. The stuff Peter talks about where Y=0. The covid vaccine inventors for example.

Other Y=0 things are people giving their lives for the greater good and basic rights. Geneva convention. Rights for black people, rights for women.

Infact the world runs on Y=0 stuff.

[mk_chan]

Not sure why OP is getting downvoted. Going the premise of the cited doctrine, it follows precisely that even doing illegal things are acceptable as long as there is net gain until the expected future.

OP doesn’t even claim this is the one true doctrine or anything of the sort.

[p_l]

People are gaslighted to think Friedman's Doctrine is a legal or moral obligation, because it makes money for capitalists.

But in fact, in USA there's even a SCOTUS ruling that says it is a bogus idea