Thought of the day on corporatism

Thus reflecting the majority of the will of the collective. The majority will still have the ability to exercise authority over the minority, no matter how large that minority position. Steve Jobs can certainly relate.

In summary, corporates are no better or worse than the sum of the people that own that corporation. The same can be said for sole props, partnerships, or any other other form of social constructs (like states and countries).

Want corporations to be better? Then regulate them - just like we do with any other social construct. Seems silly to blame the social construct when it is the people, not the corporation, making the daily decisions.

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What you appear to be describing is not a problem of the corporation, but a problem of publicly traded companies. There are a lot of private corporations (and a lot of private sole proprietorships) for which there are no individual investors (or in some cases, private equity investors) so there is no “average investor” or mutual fund. Those companies can still be guilty of gross malfeasance.

As I stated above, if the complaint about corporations is really about protecting investors, then the solution is to more heavily regulate those companies that are publicly traded - either via the exchanges (each exchange has their own rules) or via the SEC. This process, while not easy, can be simple. Many countries do a much better job on this (Canada being one).

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Especially when those who dare to not fall in line behind management are purged. Only the management lap dogs remain. Upchurch wasn’t the first gone from Tandy’s Board. This is a snip from the linked article. Why was this other shareholder unwilling to say who he was? I saw, up close and personal, how vindictive Tandy management was.

Another shareholder, speaking on the condition of anonymity, said: ‘‘Jesse Upchurch is speaking for a large number of investors like us who would love to see new management. That we don’t have it is a function of the fact that no one is willing to lead the fight, and that you have an entrenched board.’’ Another board member, Donna R. Ecton, who was widely believed to share Mr. Upchurch’s view, resigned last year.

This thread makes me interested in the structure of capitalism in other cultures. For instance, I know Japanese corporations are quite different, if no less paternalistic. But they embrace company unions, govern more by consensus than dictat (with exceptions, of course), and seem to have a flatter pyramid, encouraging - for example - far more input from the factory floor. They are also, at least lately, less innovative than USian companies.

I understand the tone and tenor of corporate capitalism is also different in Sweden and in Germany, but I do not know enough about it to comment - but it leads to think that what we are seeing and are familiar with might not be the only - or even best - way to maintain the advantages of corporations and capitalism, it’s just that we’ve lived within this system for so long we accept it as “natural.”


Story told by a Firestone factory working, in a documentary about product quality, some 30 years ago. He took an idea to old, Shiny, Firestone management, and was told “Some are paid to think, some are paid to work. You are paid to work”, ie, flat refusal to even consider the merit if the guy’s idea. After Firestone was taken over by Bridgestone, he said management welcomes input from the factory floor, or anywhere else, that might improve quality or productivity.

I had an idea at the pump seal company, that reduced inventory, and improved customer choice, of service parts. Rejected out of hand by the National Sales Manager. A year later, they implemented my idea, with the Sales Manager taking credit for it.

Are we sure they are less innovative, in substantive areas, or are the Japanese less likely to jump on whatever hobby horse is popular at the moment?



Evolution vs revolution

I think this really illustrates my point that corporations are little more than the sum of their owners. Different cultures produce different corporations.

Reminds me of the movie Gung Ho.

The entire issue is accounting. An entire organization is responsible for the accounting.

A friend at work last week discussed with me a wrong someone committed in our group. I do not care about the labels wrong or right. I care about the accounting. If I cared about the nature of wrong then I might fault the executives if they borrow too much. In a work situation that is not the purpose of accounting until later. Interacting at work is has to boil down to just holding the accounting to a higher standard.

I call the MBAs out on some decisions as wrong. That is an accounting matter from the bird’s eye view.

From the worm’s eye view getting the numbers right is the sole focus.

Dirigisme - Wikipedia

As an economic doctrine, dirigisme is the opposite of laissez-faire , stressing a positive role for state intervention in curbing productive inefficiencies and market failures. Dirigiste policies often include indicative planning, state-directed investment, and the use of market instruments (taxes and subsidies) to incentivize market entities to fulfill state economic objectives.

and the pejorative
Crony capitalism - Wikipedia

Unions are a form of cronyism?

Many prosperous nations[clarification needed] have also had varying amounts of cronyism throughout their history, including the United Kingdom especially in the 1600s and 1700s, the United States[14][31] and Japan.


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Cronyism is a pejorative for getting a friend a job. Plus making sure she or he is well paid. That should include that the job is well done. Sometimes the best in the industry mess up.

What actually directly generates innovation and tech advances is economic competition, not necessarily a capitalist free market. Totally free markets tend to produce monopolies that stifle innovation.

That I think is the weakness of the Asian keiretsu system. The cooperative network of companies tends to create collectives that discourages competition. The same is typically true when there is a close association between the government and specific companies.

The problem with economic competition is that there are winners and losers. Therein lies the dilemma. Competition where there are significant consequences for winning/losing is one of the best motivators of creativity and effort. Yet it can lead to substantial inequality and angst.

The issue then is how to optimize economic competition while minimizing the negative consequences of being on the losing end.

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Not sure we need to minimize the consequences of being on the losing end, if you’re talking about what business enterprises get up to. The business is the business person’s problem. The only consequences of failed businesses, or too-powerful businesses for that matter, that must be ameliorated are the ones that affect people. You can call that a social safety net or make up a better name.

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