Stats for nerds
3recommend
5mentions
3people
2008–2017years
80% recommend20% neutral
Mentions per year
What Hacker News says
- Two great books on this topic you may have already read - Robert Putnam's "Bowling Alone" as well as Supercapitalism by Robert Reich. Reading these two works has really shifted my view on regulation and govenment in general from "something other people do" to something I think about in a more participatory way.
Putnam especially makes the point that an entire generation of Americans is growing up (I include myself here) treating government and politics as a spectator sport -- the province of party hacks -- rather than something ordinary people do during their off-hours. I'd highly recommend reading both in case you haven't.
- You should take a look at the book 'Supercapitalism" by Robert Reich - it may give you a new perspective on how business has evolved over the past 30 years.
One of the major themes is that the focus went from people as citizens and unto people as consumers. Thus the reason for corporations changing their behavior. It's as much the consumer's fault as the corporations'.
- Just curious - have you read Supercapitalism by Robert Reich? He tries to explain the reasons for the various changes in American capitalism over the past 50 years.
- I think this theory is on track but not complete. It's correct that the risk and rewards for CEO are decoupled. However, the people who continue to hire and pay ridiculous amount to these CEOs are no other than the investors and consumers. Yes, that's us. As investors, we irrationally pump money into growth sectors during the boom, into companies that can outperform expectation and increase profit margins, directly voting for 'talented' CEOs who can cut cost and increase revenue by all means. As consumers, we chase the best deals. Would you go with banks who only let you borrow a tiny amount in line with your credits on strict terms? Of course not, not when you can flip for a quick 100% gain within the next 6 months. We go with the most outrageous deal and lenders in turns have to create more outrageous deals to compete. Market behavior reflects the behaviors of its participant (duh). As long as investors and consumers indulge in irrational exuberance like there's no tomorrow CEO will continue to be overpaid and bubble will burst. Robert Reich says it best in his book Supercapitalism.
- This is a very thoughtful comment. Thank you.
To expand a bit, I see business success as balancing the needs of four groups, whose needs are naturally in tension:
(1) Employees, who want the best pay, work conditions, job satisfaction, etc. (2) Investors, who want the best financial return (3) Suppliers, who want to be paid on time and want repeat business (4) Customers, who want great products at the minimum price possible
I'm American. One thing I've noticed reading economic histories of the US, such as Reich's Supercapitalism, is how shareholder/profit-oriented US business became, around say, the late 1970s/early 1980s. This was the heyday of leveraged buyouts, and I can't help but think that, in terms of operating quality of US companies, there was indeed much trash to be taken out. Business was too cozy; customers and investors were getting a raw deal. You hear all these Mad Men-esque stories of sexual harassment, two-Martini lunches, expense accounts, and I can't help but think, man, the customers and investors must have gotten a pretty raw deal that employees could get away with that stuff (working so little, being distracted, wasting capital, making shoddy products).
I also think Japanese and German capitalism are more employee/manager-oriented than the US for various reasons.
In the end I think it depends on which group (of the four above) are culturally privileged. We hold investors in pretty high regard in the US vs. employees; it's very "capitalist". I have no idea whether it's right, but I think it's a useful insight. In the end I think it comes down to culture, and that US culture is pretty capitalist compared to say, France.
It didn't dawn on me that investors are only one constituency. For owner-operators, investors and managers are the same person, so of course, businesses would be operated (managed) for benefit of their investors; they're the same people.
But you're right, investors are only one group, you need to keep them happy, and that's done with profit. It's not a very important insight when investors = operators (most small businesses), but as the two groups diverge, such as when entrepreneurs use a lot of outside funding, I think "permission to continue" is a good way of looking at it.
