Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Apple and Google embody two alternative models of capitalism

theatlantic.com

Post reply on HN
Print view View original

51–60 of 122 posts

Re: Apple and Google embody two alternative models of capitalism

#51

Post by rebootthesystem »

frgtpsswrdlame wrote: post #7

It'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...

> there is no legal (or historical) basis for the idea that maximizing shareholder value is the primary concern of a corporation

Please folks, stop posting comments if you don't have the slightest concept of how businesses work.

OK, let me demonstrate how flawed this is by using a hypothetical scenario.

A friend of yours has an idea for a business. She goes to you and two other friends. She needs $300K to launch the business. All three of you are really bold and give her $100K each. In your case you sell your your home to come up with the money. You end-up bunking with one of the other investor/friends because, while you have some money left over, you don't have a place to live.

You are a shareholder.

Ten years later the business has gone nowhere. You don't have your money back and your investor friend just got married and you have to figure out where you are going to leave because he wants you out of the house.

And then you read a comment on HN about there being no basis for a corporation maximizing shareholder value.

Re: Apple and Google embody two alternative models of capitalism

#52

Post by Tettrox »

tomjakubowski wrote: post #47
arcbyte wrote: post #45

Earlier quoted context omitted.

Born, raised, and living in Illinois and I'm seriously looking at leaving the land of Lincoln. Chicago is ruining this state.

I was born and raised in Illinois too, but live in California now. Mind explaining how the third-largest metro economy in the country is ruining our state?

How about having a massive murder rate? Having a great train system is great, but it's not exactly something to brag about and definitely something someone is going to overlook the murder rate for.

Re: Apple and Google embody two alternative models of capitalism

#53

Post by germinalphrase »

rebootthesystem wrote: post #48
skywhopper wrote: post #40

I'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 p…

> That means that 1) wages are too low, and 2) taxes are too low. No, it does not. There is no correlation there at all. Not one person I know who has ever run a business would make that connection. Why? Because they understand business reality vs. the fantasies floating around out there. I'll give you just one easy-to-assimilate example: Economic collapse Q4 of 2008. I was able to keep about 20 people employed becau…

Would you care to share your ideas/ideology as informed by your experiences?

Re: Apple and Google embody two alternative models of capitalism

#54

Post by robotresearcher »

krick wrote: post #46
skywhopper wrote: post #40

I'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 p…

I guess this may be not popular opinion here, but I don't see anything wrong with legally avoiding taxes. It might be wrong that the whole system is convoluted enough that this would be very hard for your average honest citizen, but easy enough for resourceful corporation, if anything. But avoiding taxes seems only logical, if you think you can manage and allocate resources better than your government. And rest assur…

> if you think you can manage and allocate resources better than your government.

This phrase gets used from time to time to give some moral or net efficiency argument for avoiding taxes. I don't think it's useful. A corporation and government have completely different responsibilities and constituencies. Of course Apple can allocate resources better for Apple than the government would choose to, because Apple has no duty to care about most of the issues the government is tasked with.

> And rest assured: somebody always does.

We only have to consider the bizarrely inefficient US healthcare system compared to the rest of the developed world to see that 'always' is not true.

Re: Apple and Google embody two alternative models of capitalism

#55

Post by rhizome »

dv_dt wrote: post #49
joeyo wrote: post #44

Earlier quoted context omitted.

> Pensions aren't portable - in the modern labor market > where people are expected to have multiple emplyers and > possibly even career arcs, that's a pretty limiting. Which is the cause and which is the effect? Do workers want to have multiple employers and career arcs?

I don't think they necessarily want to, but I think it's often needed for reasons mostly tangential from pensions. But if you accept that multiple jobs/careers are a reality, then pensions plans, as traditionally constructed, don't do much for workers.

I think it's often needed for reasons mostly tangential from pensions

Such as?

Re: Apple and Google embody two alternative models of capitalism

#56

Post by rhizome »

jmull wrote: post #28
eldavido wrote: post #11

There 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…

Uh-uh. This is an excellent article because it accomplishes 100% of what it set out to do: Put the words "Apple" "vs." and "Google" in the headline to generate some pretty good clicks. The rest of the words are just to fill the rectangle the headline sits over. They just need to be formed in a way that doesn't distract from the main purpose.

Pretty cynical, but The Atlantic has indeed taken a turn that supports your analysis, at least since Jeffrey Goldberg was made EIC.

Re: Apple and Google embody two alternative models of capitalism

#57

Post by objectivistbrit »

eldavido wrote: post #11

There 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…

This is a really weird comment.

I re-read the article and it only mentions labour vs capital once, in passing. Mostly it talks in terms of owners vs managers, and the principal-agent problem. You refer to "greedy pigs" and exploitation making it sound as though the author is anti-capitalist, but that does not seem to be the case).

(I was curious enough to look him up. He's a finance professor at HBS. That probably explains the different slant compared to other Atlantic articles).

Re: Apple and Google embody two alternative models of capitalism

#58

Post by dustingetz »

eldavido wrote: post #11

There 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…

Given the state of the IPO market its not obvious to me that you are right about public markets. MSFT is trading at 30000% IPO price. Facebook, having delayed its IPO to the last possible minute so private equity & VCs can maximize their returns, is trading at 500% IPO, so will need to grow 60x for the common man to see similar returns as MSFT, is that possible in any amount of time? I'm no economist and my analysis is surely bunk but am i in the ballpark? Income inequality is a tricky issue and parent analysis doesn't even come close to a compelling argument in either direction.

Re: Apple and Google embody two alternative models of capitalism

#59

Post by dv_dt »

rhizome wrote: post #55
dv_dt wrote: post #49

Earlier quoted context omitted.

I don't think they necessarily want to, but I think it's often needed for reasons mostly tangential from pensions. But if you accept that multiple jobs/careers are a reality, then pensions plans, as traditionally constructed, don't do much for workers.

I think it's often needed for reasons mostly tangential from pensions Such as?

Companies used to provide pensions as an incentive to stay at the company long term and not change employers, but really most of them don't care to plan for employees to stay and be developed long term.. so accordingly no pension plan is offered either.

Even ones that still offer pensions, if the support isn't there then it's in conflict with how a pension matures it's benefits. Many companies treat workers as interchangable cogs and don't provide/encourage for any exceptional wage or career growth or training. So to move upward one has to change companies - dropping (or at best pausing) the pension.

Not all companies are like this, but many (most) are. I thought this all was pretty widely understood?

Re: Apple and Google embody two alternative models of capitalism

#60

Post by frgtpsswrdlame »

jpttsn wrote: post #38
afthonos wrote: post #24

Earlier quoted context omitted.

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 cour…

>It's just tiresome to rebut opinions with "you can't prove that!" or "does the law say so?"

My original comment is a rebutting of popular opinion with law, is it not?

Post reply on HN