> This is quite simple and history bears it out: you can't rely on a for-profit corporation to operate in any other manner than optimizing shareholder value.

You can't even do that honestly. Look at Boeing. It got taken over by know-nothing managers that followed that religion of shareholder value, and what did it do? Destroy shareholder value!

I think we should instead say "we can't rely on any institution to be stable over time". That's a much more sane statement imo.

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nerdponx 4 days ago | parent | next [-]

They are kind of different statements.

For-profit institutions will almost always act in the interest of profit for the people who have an ownership stake and a claim to the prophet stream. That's definitionally why they exist, and we have enough evidence from the history of everything ever to assume that they will for the most part act that way.

You are saying something different. You are pointing out that the people making decisions aren't necessarily good at making those decisions. Or maybe the incentive structure is set up such that the people making the decisions do not share the goal of profit with the company, and so decide according to what's best for them, which might or might not be what's best for the profit objective.

The instability of institutions in general is yet a third characteristic.

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boxed 4 days ago | parent | next [-]

> For-profit institutions will almost always act in the interest of profit for the people who have an ownership stake and a claim to the [profit] stream.

But they won't. This statement is a declaration of faith/religion, not a statement of fact. It's a common belief, but that doesn't make it true.

	▲	nerdponx 3 days ago \| parent [-]
		It's a matter of historical fact. When has this not been the case. Can you think of any serious examples? Everyone everywhere all the time is just responding to the incentives in their environment. "Make a lot of money" is a very very powerful incentive. There are exceptions all over the place where businesses don't act like robber barons, sure. Take for example Market Basket up here in New England, where the CEO for years and years resisted raising prices and tried to treat workers well, in the interest of maintaining a long-term positive image and being a sustainable element of the region's economy. But guess what: he was just forced out for not being greedy enough. Lots of people seem to be expecting a private equity takeover soon.

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immibis 4 days ago | parent | prev [-]

> prophet stream

!!!

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overfeed 4 days ago | parent | prev [-]

The actual metric management maximizes management remuneration, which is dependent on short-term shareholder value.

Startups nominally care more about the long view, as they need to convince investors that they high long-term value and have to act accordingly. As companies grow from VC-funded, to fast-growing public, then to well-established public company, the culture shifts to match dominant shareholder expectations.