[chippy]

In terms of a large profit making company, the company has to make ever increasing profits for the shareholders or else it becomes pretty much illegal. Thus, currently these conditions are necessary, there is nothing to stop them, because to stop them means that a corporation is not operating properly. It is necessary because to not allow it means that a corporation is behaving badly. Like it or not, and in this example most of us hate it, a corporation has to make every effort to increase profit and decrease waste.

How do we change it? As consumers we make it clear to these companies that it's not on. We vote with our money. But the tried and tested solution is via our politicians. We have to make it possible for our corporations to improve the conditions of their suppliers and not incur the wrath of their shareholders.

edits - wow, please read both paragraphs.

[vetler]

> In terms of a large profit making company, the company has to make ever increasing profits for the shareholders or else it becomes pretty much illegal. Thus, currently these conditions are necessary, there is nothing to stop them, because to stop them means that a corporation is not operating properly.

This is just bullshit, for lack of a better word. First of all, increasing profits does not force anyone to do horrible things. Second of all, that a company has to maximize profits all the time, is a myth: http://skeptics.stackexchange.com/q/8146/230

[chippy]

Thanks for the link, I was wrong on the legal point, but it's not all bullshit.

From that thread: "They don't get punished for not maximizing shareholder value. But it is true that maximizing value needs to be their goal and they may not be negligent in the pursuit of that goal."

It also confirms that a corporation must in general make an effort to maximise profits, if that is what the shareholders want. So, we should make it clear to the corporations and the shareholders that reducing their profits by increasing the quality of life of their suppliers is an acceptable loss and may actually increase value and therefore something that the directors should aim for. That shareholders have to be confident to tell their directors that they will not be negligent if they try to improve sweatshop conditions in their suppliers.

[vetler]

It doesn't have to be the shareholders responsibility to tell directors that, the directors can even just assume that - as they should. Big companies don't all set out to ruin the world just to make money, and I'm not saying that is your opinion, but I get the feeling that this is sometimes implied when discussing how to maximize profits.

Companies even donate money to charity, without any concern for short term profits.

[pizza234]

> Companies even donate money to charity, without any concern for short term profits.

"Donating money" is not an indicator of "morality" at all, because it has tax and PR advantages.

It's not about doing or not doing it, but they fact that business are complex, and this specific choice doesn't tell anything in general.

Even a, let's say, a fictional company "Momsanto", which corrupts politicians and violently silences researchers and farmers, surely would have a (again, fictional) foundation for "making difference in someone else's life" [any resemblance to real companies is purely coincidental].

[ptaipale]

> "Donating money" is not an indicator of "morality" at all, because it has tax and PR advantages.

Do you imply that tax and PR advantages completely make it impossible that some companies still might want to give money away to good causes for moral reasons?

In other words, you think that moral choices are solely based on money?

[TeMPOraL]

Big companies don't all set out to ruin the world just to make money, but companies don't set business practices, Moloch does[0]. Those that don't sufficiently optimize for profit get replaced by ones that do, so in the end you have a drive towards ruining the world.

[0] - http://slatestarcodex.com/2014/07/30/meditations-on-moloch/

[alextgordon]

I'd argue the Germans have the best solution. Employees must be involved in running the company. https://en.wikipedia.org/wiki/Co-determination

[jsprogrammer]

What if companies were scheduled to deliver all shares to the employees and customers over a period of time which was fixed at the time of incorporation?

[alextgordon]

I'm not opposed to it, but the brilliance of the German solution is to notice that full worker control is unnecessary.

The workers don't need communism or full cooperatives. You can still have private owners and a profit motive. But the workers have to be equal to the owners, not subordinate.

[jsprogrammer]

How does this eliminate private ownership or profit motive? This model puts the ownership in the hands of those who execute the business and those who provide it with continuous capital (customers) while over time eliminating the rent-collectors.

[gwys]

There actually was this kind of system in Sweden in the 80s. Of course it was very unpopular with the right and was abolished as soon as they got into power. Since then, like in most of the western world, the productivity gains has to a large extent favored owners rather than employees.

http://en.wikipedia.org/wiki/Employee_funds

[jsprogrammer]

It's interesting that the link describes the critics argument as increasing the power of labo[u]r over the company. Why is it a bad thing for the people who are actually doing the work of the company to have control over the company? Why should labo[u]r be controlled by a third party force (neither labor nor the customers).

[gwys]

People tend to say it's about control, but companies give up control all the time. I think it's mostly because they don't have to. I'm not sure how good a plan it is, but I do think it was visionary. I think the Nordic countries a losing much of their raison d'être by not taking care of their middle/working class.

[roel_v]

Then what incentive would there be to start one, or to design a business model that will outlive said fixed time? Moreover, why don't the workers then just start the company in the first place?

[jsprogrammer]

>Then what incentive would there be to start one, or to design a business model that will outlive said fixed time?

Outside investors could still recoup their initial investment + gains. Those who start, design, and execute the business will be gaining the shares over time as they are employees (although, I'm not sure this would still be the right nomenclature) of the business. How about this question, "Why should an initial investor get an everlasting percentage of profits without continuous input?".

>Moreover, why don't the workers then just start the company in the first place?

Probably for the same reason they mostly don't now, they lack the financial resources.

[pluma]

> Probably for the same reason they mostly don't now, they lack the financial resources.

I'm self-employed, my family history includes a fair share of entrepreneurs. Even so, saying you intend to start your own company is met with strong skepticism.

Trust me when I say, the thing stopping most workers from starting their own company is not just the lack of financial resources (as a matter of fact, I became self-employed without any savings to speak of and no financial support at all).

Although it's becoming increasingly less realistic, a lot of people still have the mentality that having a regular job provides financial safety and a guaranteed income while starting your own company creates a huge risk.

[roel_v]

"Outside investors could still recoup their initial investment + gains"

But less, otherwise there would be no reason for the workers to want any part of it. Will the workers pay the investors back if the business goes tits up?

"Why should an initial investor get an everlasting percentage of profits without continuous input?"

Because it's his, and there is no reason to require ongoing effort to reap the benefits of something? Does an orchard owner only 'own' the apples from his trees if he has actively watered them?

"Moreover, why don't the workers then just start the company in the first place?" "Probably for the same reason they mostly don't now, they lack the financial resources."

So Mary down the street owns a hair dressing salon, which she financed with the savings she build up over her 10 years as an employee of another salon (where she, I presume, quit before she got any part of that salon - maybe because she joined too late? Period not yet up? Not sure how all this would work). In the 'plan' you are defending, she would have to give the ownership of that salon to her employees after, I don't know, 10 years? So she has 10 years to make back that investment, plus a certain risk bonus, plus whatever opportunity cost she incurred starting the business. Now I don't know how many balance sheets and profit and loss statements you have seen for businesses like this, but I can tell you that no sane person would ever attempt to do this.

I'm not even sure why I'm responding, really.

[jsprogrammer]

"Because it's his"

You pulled out a Nazi analogy on me last time, so this time I'll pull out a (more apt) slaveholder analogy.

Why should a slaveholder get the labor of a slave in perpetuity? By your logic, it's simple: because it's his. Most of the world has moved beyond that flavor of opportunistic logic and we'll eventually get past the current flavor of the century.

"Does an orchard owner only 'own' the apples from his trees if he has actively watered them?"

1) If the orchard doesn't get sufficient natural irrigation, then no the owner doesn't, simply by virtue of the trees not producing any fruit.

2) If the orchard does get sufficient irrigation (especially as a result of another's labor), then the orchard "owner" doesn't have much claim to the fruit. Yes, the owner may pull out a deed chain that goes back to a grant from the US government, or a Queen/King of the British Empire and attempt to argue that gives him absolute ownership over the fruit. The owner might even convince most with that historical argument. Depending on the exact circumstances in question, I might argue the claim is laughable.

"In the 'plan' you are defending, she would have to give the ownership of that salon to her employees after, I don't know, 10 years?"

I'm not defending a plan, I merely asked a question. I don't know what the specifics could, or should, be. It's a slightly different model to think about that allows for a more inclusive economy.

Anyway, in your example, Mary would still retain ownership, assuming she contributed real labor to the enterprise. Mary would just also be sharing ownership with all of the other people who also made that enterprise possible, instead of purely exploiting the other contributors for her own personal profit.

"I'm not even sure why I'm responding, really."

Slightly curious? It's OK to explore taboos. Sometimes you find out everyone else was full of shit.

[dublinben]

>why don't the workers then just start the company in the first place?

Lack of access to capital.

[DanBC]

I guess you're getting downvoted for repeating the myth that corporations must maximise profit.

[chippy]

Yes, fair enough, learnt something new today.

I was wrong about it being legal in law not to maximize profits.

There is still an obligation of directors to maximise value if that is what the shareholders want (and most of the time, all shareholders want a corporation to increase profit). But it's not illegal for a director to be negligent in the goal of the shareholders. They might lose their job or get a civil lawsuit, at the worst, I guess.