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The Dumbest Idea In The World: Maximizing Shareholder Value

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Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#71

Earlier quoted context omitted.

It's your type of cynicism that is actually an apologetic for the dishonorable behavior. If you stopped saying "everyone does it" then we could start punishing the dishonorable. It's NOT TRUE that everyone is a liar. Rockefeller and Carnegie were liars, sure, but they had to keep it quiet, they had to buy up newspapers and physically intimate people so their lies would not be exposed, or they would lose face. Our ent…

Sources? beagle3 offers concrete examples, you don't. I'd love to be proven wrong here, but I've found nothing that suggests honor was ever valued in the united states and certainly not the way you say it was. Japan, certainly...

"There is no question what the roll of honor in America is. The roll of honor consists of the names of men who have squared their conduct by ideals of duty."

- Woodrow T. Wilson

Unfortunately the internet is an intellectual ghetto and so there are no good links that describe honour. But cmon you ignorant computer scientists, read a fucking history book. Honor was the most important code of conduct for American aristocrats and lasted until the mid-20th century. If they were publicly dishonoured they could lose everything they cared about.

This is why people fought duels to defend their honour. People were willing to die to maintain their honour.

http://artofmanliness.com/2010/03/05/man-knowledge-an-affair...

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#72
post #11

There is only one valid definition of a business purpose: to create a customer. No. The one valid definition of a business purpose is this: A business should do what the owners want it to do. Otherwise, the notion of ownership loses meaning. If the owners want to create lots of customers, they do that. If they would rather have a smaller number of highly profitable customers, they do that. If they want to create a ni…

Saying your business can do whatever it damn well pleases because you own it is like saying I can drive my car any way I want. Not so. Your actions affect others. You are using public infrastructure and there are rules. Move to an island where you can be all by your lonesome and run a business any way you want there.

I'm pretty sure that mhartl means that there (is|should be) no universally mandated goal of a business (e.g. maximize stock price, maximize market share, grow quarterly). Not that businesses should be allowed to break laws.

The goals of the business should be the goals of the owner not the goals of some economist or capitalist pundit.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#73
post #32

Earlier quoted context omitted.

It's your type of cynicism that is actually an apologetic for the dishonorable behavior. If you stopped saying "everyone does it" then we could start punishing the dishonorable. It's NOT TRUE that everyone is a liar. Rockefeller and Carnegie were liars, sure, but they had to keep it quiet, they had to buy up newspapers and physically intimate people so their lies would not be exposed, or they would lose face. Our ent…

First, I'd question what you think "honor" means. There are people who think stoning their daughter over dating someone outside their social group is the honorable thing to do. So concepts of "honor" are wishy-washy at best. Your second sentence sounds like it's suggesting that Rockefeller and Carnegie knew what honor meant & that this is somehow a good thing. They probably had a concept of their image & perhaps even…

"There is no question what the roll of honor in America is. The roll of honor consists of the names of men who have squared their conduct by ideals of duty."

- Woodrow T. Wilson

Aristocrats had to preserve their honor or face reprisals: They could be ostracized, humiliated, publicly shamed, lynched, challenged to a duel, convicted of crimes they did not commit, have their property taken by force and then have the police look the other way, etc.

Whether you like codes of honor is a separate question from whether it existed.

Codes of honor are all about vigilante justice and public humiliation.

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

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#74
post #35

Earlier quoted context omitted.

This is a much more civilized response than my initial reaction, which was "go fuck yourself, mhartl". The reason for that indignation was, as you pointed out, the obvious truth that without society's extension of limited legal liability, there would be no business in the first place - or, at least, not one with the scale and structure of a publicly traded company. And no, society does not grant this liability protec…

I think you may have valid criticisms, but were out of line to call mhartl a man of "no real ethics, a sociopath, dangerous, self-serving, and someone to distance yourself from." I have only exchanged emails briefly, regarding his book, and he is nothing short of an honest, well-intentioned, and generous man. Let's avoid the attacks and keep the conversation civil.

Please note, I did not call mhartl a man of "no real ethics, a sociopath, dangerous, self-serving, and someone to distance yourself from."

I did say his ethics are weak, and I stand by this. Assuming he believes what he says, his anti-social position on the obligations of the corporation speak for themselves. And I did note that, when carried to the extreme, blind spots like the one shared by mhartl do, in fact, produce the litany of wrong that I mentioned (a position I REALLY stand by, having worked for people I wish I hadn't).

I did not, however, say that mhartl himself represents these extremes. That's an important distinction. And if, as you say, he is an honest, well-intentioned, and generous man, then perhaps he arrived at his current position for some benign reason - a lack of careful thought, or maybe an insufficiency of experience. In any case, people who share his lack of concern have become responsible for some very major damage. This aspect of his thought is not incidental to the problem, it IS the problem. Or, rather, it is an essential component of the problem.

Just consider what the OP is arguing. The faults of shareholder capitalism are not minor. Indeed, they have demonstrated a destructive power that has decimated companies, portfolios, and - at this late stage in the experiment - entire economies. This is not "creative destruction". It's shoot-yourself-in-both-feet-then-wonder-why-you-can't-walk destruction. And while we can demonstrate how bad it is now, there was no need to learn by doing. Had we considered the ethical failures inherent in mhartl's arguments sooner and more seriously, the crash of 2007/8 may have never come to pass.

Again, we're talking about a line of thought that has produced deep and lasting harm in the lives of billions - but not without racking up billion dollar gains for a microscopic minority who have responded by using their inordinate power to capture and corrupt the government we all depend on. This is really bad stuff. Historically speaking, this trajectory reduces citizens to subjects, and the weakest to slaves. Whether he realizes it or not, thinking like martl's supported the wrong side of political situation that has made itself the dominant evil of the day.

It needs to end, and the generation that does end it will probably spend the remainder of their lives cleaning up the mess. The sooner people disabuse themselves of the notions that allowed shareholder capitalism to spin so wildly out of control in the first place, the better off everyone is going to be - mhartl included.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#75
post #67
post #33

Earlier quoted context omitted.

There was a time in America where if you committed fraud, no matter how "technically legal", you would be lynched. Until dead. And juries would acquit your murderer. Citation needed. Or more to the point - when exactly do you think think period was? For example, in 1804 the sitting vice president (Burr) was accused (probably correctly) of corrupt dealings. He challenged his accuser to an (illegal) pistol duel and kil…

Two hundred years later, the sitting vice president (Cheney) was accused[1] (probably correctly) of corrupt dealings. He just ignored his accusers and nothing came of it. Now, I realize you were responding to the statement about lynching, but it's worth noting that challenging someone to a duel is what you do when your honor has been questioned. In fact, the Wikipedia page on "Honour" includes an illustration of the…

I don't think that murdering your rightful accuser and getting away with it is really what most people mean when they say "honor" these days.

Maybe honor did used to be more important, but it's not the same concept, only the same word.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#76

"Meanwhile real performance was declining. From 1933 to 1976, real compound annual return on the S&P 500 was 7.5 percent. Since 1976, Martin writes, the total real return on the S&P 500 was 6.5 percent (compound annual)." Hmm...where have I seen those numbers before. Oh right! He's measuring his control period from the bottom of the great depression. Sounds legitimate to me! This is so hacky it makes me laugh. You ca…

Yes, I found this silly in all the same ways.

In the one talk I've seen Jack Welch give he said himself the only form of job security is customers. The article's author is attacking a straw man. He slams Welch's management of the GE as short sighted, but the only facts in support are the deterioration under Immelt's management.

Ultimately, in the long term customers and shareholders have aligned interests in most all cases.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#77
post #63
post #41

Earlier quoted context omitted.

> If you stopped saying "everyone does it" then we could start punishing the dishonorable. If you stopped putting words in my mouth, we might actually have a two sided discussion. I did not say "everyone is a liar" or anything that could remotely be interpreted to mean the same. > Our entire legal system is based on the concept of honor. What country is that? Is that the US system that a hundred years ago decided tha…

I think he is actually really bummed because his worldview is incongruent with how Darwinian and shitty the world actually is. Optimists take it the hardest. "the optimists don't make it out of vietnam" http://en.wikipedia.org/wiki/James_Stockdale

The reason I support punishing the guilty instead of letting them get away with it is because I'm a realist.

It's pacisfists who are the optimists. Pacifists who say we should just let Cheney and Blankfein off the hook. I say we should tar and feather them, precisely because I understand that if we don't, things will get worse. This is not an optimistic viewpoint.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#78
post #35
post #21

Earlier quoted context omitted.

Incorporation is a privilege granted by society; and property rights are never absolute. What you state is extremely individualistic, but it is unrealistic and naive for the same reason. I understand your exhortation, but it does not amount to an argument. For example, most large companies with broad shareholder bases have no owner interests that you can easily point to; the shareholder base has collective action pro…

This is a much more civilized response than my initial reaction, which was "go fuck yourself, mhartl". The reason for that indignation was, as you pointed out, the obvious truth that without society's extension of limited legal liability, there would be no business in the first place - or, at least, not one with the scale and structure of a publicly traded company. And no, society does not grant this liability protec…

Limited liability was initially intended to protect minority shareholders from being responsible for the misconduct of the general partners. Now it has been extended to general partners as well which is just stupid.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#79
post #75
post #67

Earlier quoted context omitted.

Two hundred years later, the sitting vice president (Cheney) was accused[1] (probably correctly) of corrupt dealings. He just ignored his accusers and nothing came of it. Now, I realize you were responding to the statement about lynching, but it's worth noting that challenging someone to a duel is what you do when your honor has been questioned. In fact, the Wikipedia page on "Honour" includes an illustration of the…

I don't think that murdering your rightful accuser and getting away with it is really what most people mean when they say "honor" these days. Maybe honor did used to be more important, but it's not the same concept, only the same word.

It's more accountability than what Dick Cheney faced.

The point is that even under primitive social codes like the honour system, public officials faced more accountability than they do now.

There is no accountability left whatsoever in ANY social leaders: not business leaders, not industry leaders, not political leaders, not military leaders, not scientific leaders, not legal leaders.

ZERO personal accountability. They can be as corrupt as they want, they can fuck it up as bad as they like, but there are absolutely no consequences to them.

This is what has changed. At least in the 1800s you could be challenged to a duel when you engaged in corruption. At least in the 1800s robber barons had to protect themselves from vigilante justice.

Re: The Dumbest Idea In The World: Maximizing Shareholder Value

#80
post #75
post #67

Earlier quoted context omitted.

Two hundred years later, the sitting vice president (Cheney) was accused[1] (probably correctly) of corrupt dealings. He just ignored his accusers and nothing came of it. Now, I realize you were responding to the statement about lynching, but it's worth noting that challenging someone to a duel is what you do when your honor has been questioned. In fact, the Wikipedia page on "Honour" includes an illustration of the…

I don't think that murdering your rightful accuser and getting away with it is really what most people mean when they say "honor" these days. Maybe honor did used to be more important, but it's not the same concept, only the same word.

I'm not saying Burr was honourable. I'm saying he cared about being perceived as honourable. As did Hamilton, or he wouldn't have accepted the challenge. Cheney, in contrast, doesn't give a damn what people think, as long as Halliburton keeps getting government contracts.

The point is not that people were more virtuous in the past. It's that virtue, or at least the perception of virtue, was considered important in the past, much more so than today.

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