I wonder if it influences Apple's common nasty behavior.
Apple and Google embody two alternative models of capitalism
31–40 of 122 posts
Re: Apple and Google embody two alternative models of capitalism
#32It's worth mentioning on a post like this that there is no legal (or historical) basis for the idea that maximizing shareholder value is the primary concern of a corporation. See these two sources: https://hbr.org/2010/04/the-myth-of-shareholder-capitalism [pdf] http://scholarship.law.cornell.edu/cgi/viewcontent.cgi?artic...
I don't believe in shareholder primacy, but your first link has no substance at all. Not the best source. And this argument is rather disingenuous, it is codified in law that directors have a duty to act in good faith. This all seems somewhat pedantic.
Re: Apple and Google embody two alternative models of capitalism
#33There is so much wrong with this article I hardly know where to begin. First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is a bunch of greedy pigs trying their damndest to exploit labor, with little crossover between the two groups. The modern reality is way more complicated. Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding, and even i…
> Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding Citation needed. I believe "almost every" is pure hyperbole. A quick search found a poll indicating 52% of Americans own stock. http://www.gallup.com/poll/190883/half-americans-own-stocks-... If you have better information, I'd like to see it, please.
Without a citation, that seems right, in the narrowest sense of "owning single shares in a company".
Keep in mind that "owning stock" isn't well-defined though, that could mean (a) own individual shares (narrowest), (b) owns shares or ETFs (broader), (c) owns mutual funds.
But that still doesn't address my point. It's a lot bigger when both private sector, and public, pensions are included.
This issue is near and dear to my heart because I grew up in Illinois (now living in California) and am watching the budget battle unfold there. They have a huge pension funding gap, and the returns of the stock market are going to have a very direct, real effect on how much tax the state has to collect to fund the pensions.
Re: Apple and Google embody two alternative models of capitalism
#34There is so much wrong with this article I hardly know where to begin. First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is a bunch of greedy pigs trying their damndest to exploit labor, with little crossover between the two groups. The modern reality is way more complicated. Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding, and even i…
> Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding Citation needed. I believe "almost every" is pure hyperbole. A quick search found a poll indicating 52% of Americans own stock. http://www.gallup.com/poll/190883/half-americans-own-stocks-... If you have better information, I'd like to see it, please.
and if you look at half the workforce at these companies,Labor- the ones not making 6 figures- like couriers, personal shoppers, cafeteria workers, content reviewers, helpdesk, customer support, admins, security- they are contractors that don't get 401k, IRA and live hand-to-mouth and always precariously poised to be fired anyday. They can't afford, can't buy and never benefit from stock price increases.
Re: Apple and Google embody two alternative models of capitalism
#35Apple got to this point by notoriously never paying out dividends. Paying out dividends obviously takes away money usable for growth. I don't see any competition between these two models. You issue stock to get capital to compete with other behemoths. If not for having contributed cash to the endeavor, the investors function more like parasites that want to extract the maximum they can from the host. Such massive payouts will probably stop Apple from becoming a major conglomerate with varied tech/science/engineering interests in the distant future and limit them to high end consumer electronics. They got to this point by acting more like Google, and they will likely degrade like HP or IBM now.
A very silly article comparing two companies with similar money-management history and acting like some competition exists between the models because investors recently got an upper hand with Apple. They wouldn't have gotten their market position doing this. It strikes me like comparing two athletes when one recently acquired a disability and suggesting that the disability contributed to their historical success and suggests some new model for the sport going forward.
Re: Apple and Google embody two alternative models of capitalism
#36There is so much wrong with this article I hardly know where to begin. First, it presumes a 19th-century separation of "capital" and "labor" where "capital" is a bunch of greedy pigs trying their damndest to exploit labor, with little crossover between the two groups. The modern reality is way more complicated. Almost every member of "labor" has some form of pension, 401(k), IRA, or personal stock holding, and even i…
80% of the value of stocks are held by the top 10%. The fact that 401ks which were initially retirement plans for executives have permeated labor is an indictment of the system. Capital owners have removed defined benefit plans forcing labor to jump into the same boat. But make no mistake about who really benefits from that convergence and who forced it in the first place.
For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension.
Have you seen the movie Casino? That actually happened, the Teamsters pension fund came under control of the mob.
What about Illinois, which is facing a $120 billion pension shortfall due to decades of accounting gimmicks?
What about the UAW guys, who were counting on pensions from the big 3?
All I'm saying is, look at how it _actually_ works, in practice, vs. how it _could_ work, in theory. The reality is, DB plans are getting phased out because they're too expensive to service, and too risky for employees.
You can make the argument that people aren't getting compensated enough, and maybe that's true, but that's not an argument about DB vs. DC.
The point is, there are no certainties in this world, and if someone tells you there are, they're lying.
Re: Apple and Google embody two alternative models of capitalism
#37Earlier quoted context omitted.
80% of the value of stocks are held by the top 10%. The fact that 401ks which were initially retirement plans for executives have permeated labor is an indictment of the system. Capital owners have removed defined benefit plans forcing labor to jump into the same boat. But make no mistake about who really benefits from that convergence and who forced it in the first place.
For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension. Have you seen the movie Casino? That actually happened, the Teamsters pension fund came under control of the mob. What about Illinois, which is facing a $120 billion pension shortfall due to decades of accounting gimmicks? What about the UAW guys, who were counting on pensions from the big…
And I vastly prefer the reverse. Pensions avoid the classic hopping you die before you run out of money.
Further, money enough to cover the basics is vastly more important than 'extra'.
Re: Apple and Google embody two alternative models of capitalism
#38Earlier quoted context omitted.
So what if there isn't? I see this trope thrown around a lot. I find it suspiciously vacuous: it seems like an attempt to dress up political opinions as "research." It's as trite as saying "there is no historical basis for the idea that getting a higher salary is the primary concern of an employee." What would that add to a discussion about wages? If you think corporations should do something differently, why not jus…
Depending on context, it can be important. Too often, corporate behavior is explained by saying that the “only responsibility” of a corporation is to “maximize shareholder value”. The words “only responsibility” are not descriptive, but prescriptive, meant to end debate about the morality of an action. In those contexts, it's useful to know that this is a fiction and a debating trick, not a description of law, natura…
If I say the responsibility of a corporation is to replant the rainforest, or to expand human wisdom, or to entertain the public with a compelling narrative of underdogs beating titans, then I'm clearly just expressing my opinion.
The question of what a company "ought to do" is obviously a question of values, not fact.
It's just tiresome to rebut opinions with "you can't prove that!" or "does the law say so?" Of course there's no natural or human law that proves blue is my favorite color. So what?
Re: Apple and Google embody two alternative models of capitalism
#39Earlier quoted context omitted.
80% of the value of stocks are held by the top 10%. The fact that 401ks which were initially retirement plans for executives have permeated labor is an indictment of the system. Capital owners have removed defined benefit plans forcing labor to jump into the same boat. But make no mistake about who really benefits from that convergence and who forced it in the first place.
For my money I would much, much rather own shares of stock in my retirement plan than have a state- or corporate-backed pension. Have you seen the movie Casino? That actually happened, the Teamsters pension fund came under control of the mob. What about Illinois, which is facing a $120 billion pension shortfall due to decades of accounting gimmicks? What about the UAW guys, who were counting on pensions from the big…
Sure but if you look at how 401ks and IRAs _actually_ work you'll see people being broke in retirement as well and the idea that DB is more risky than DC for employees is just totally backward. The fix here is more transparent DB, not shoving people into DC plans which were never meant for them.
Re: Apple and Google embody two alternative models of capitalism
#40I'm disappointed that two other large pieces of the economic puzzle are left out: workers and government. Corporations have more cash than they know what to do with? That means that 1) wages are too low, and 2) taxes are too low.
More specific to Apple's case, the hoarding of cash overseas to avoid paying US taxes on it is one of many poisonous symptoms of our international capitalism. The amount of tax Apple would pay if those profits did come to the US would make a not-inconsequential dent in the federal deficit. The whole take-on-debt-to-pay-dividends strategy is so skeevy that while I don't doubt it's legal, it's very questionably ethical.
All that said, I think US tax policy contributes to the problem. During the Bush administration, an effort was made to argue that taxes on dividends amounted to double taxation because the corporation had already paid taxes on that money, so why should the investors also pay tax on it. And while dividend income was not made tax free, it is now (or at least was for a while, I haven't kept up) taxed at a significantly lower rate than "earned" income. But the fix that makes the most sense to me, and which would solve Apple's problem, is to exempt corporations from paying taxes on the money they then pay out as dividends, and tax the individuals earning the dividends their normal marginal tax rate. This would encourage corporations to pay more dividends, end the "double" taxation, solve some percentage of off-shore hoarding, increase US government revenue, and put more money into the economy and not in corporate bank accounts.