Comment by jerf
2 years ago
I think the "financialization" and the mindset it comes with is a major contributor to the ability of executives to sit in a board room and with deliberation choose to trade trust for money.
More old-fashioned and perhaps less "sophisticated" ways of doing business might just bluntly prioritize trust over many other things, and leave money on the table in the short term. It isn't just that they choose maintaining trust over making the most possible money, it is that they lack the toolset to even really conceptualize what they could make by breaking trust.
Not modern MBAs, though. They'll quantify how much trust you're trading away for how much money no sweat. Even if they're wrong about the exact values they sure are completely capable of conceptualizing the question, and if they notice the externality of transferring a general lack of trust onto the society around them, well, so much the better for being able to monetize an externality, which is the financialization equivalent of hitting the jackpot.
I wouldn’t entirely blame the executives though, there are 192 other countries in the world, and eventually their counterparts in at least one of them would do the same if they didn’t.
It’s a coordination problem since there’s no way to ensure honesty is 100% rewarded 100% of the time even within the US, let alone across the Earth.