Comment by drweevil
7 days ago
No, companies indeed have no soul. This is all about perverse incentives. While companies are setup/run by people, the (publicly owned) company as a whole only has one incentive: profit. If any person on the inside stands against that, they won't stand long. Investors, executives whose pay depend on it, etc. will make sure of that.
So the problem here is to transform a moral incentive into a financial one. A strong outside regulator who will stand its ground can do this, by imposing a meaningful financial penalty to punish the legal/moral transgression. This is why regulations and regulators with teeth are vital in a capitalist system.
I'm not holding my breath here. Regulatory capture is a thing. OTOH, Trump's undiplomatic approach to the EU may wind up costing Meta. We'll see.
> If any person on the inside stands against that, they won't stand long. Investors, executives whose pay depend on it, etc. will make sure of that.
Not in my experience. Even investors are people too ( or the investment companies reflect the values of the people running it ).
Sure there are people who believe the only role of a company is to make money ( eg Milton Friedman ). However that's an opinion - not a fact.
Other people have different views and run their companies, or place their investments, accordingly.
Even if you believe all that matters is the bottom line - you still might take the view that doing reputational damaging stuff like this is bad for the long term bottom line.
That's not to say that I don't agree with you that companies will face pressure over the bottom line, and outside regulation is absolutely important. However you should realise that part of running a large public company is aligning your investors to how you want to operate. If you want to take a long term ethical stand then you attract those type of investors and try and get rid of the short term money men.
Like, attracts like.
>This is why regulations and regulators with teeth are vital in a capitalist system.
Why do you separate regulators from describing incentive system? The incentive system is also woven into them, and if anything, the incentives for regulators go in a much more sinister direction than for any capitalist company.
Profit-seeking companies are forced to satisfy customers that have their economic freedom. But what about regulators? Their primary incentive is to remain in a position of power, their primary tool for achieving their goals is forcing.
The economic freedom of all agents is a powerful disincentive. And even with it, we see abuses by capitalist companies. But what about regulators, whose disincentives are much weaker, and whose main tool, moreover, allows them to destroy even this weak disincentives? Fixing capitalism's incentives with regulators is like curing a cold with cancer.