@FantasticalEconomics @jwcph @breadandcircuses

There's also a "capitalism optimism" that is not well-earned, a belief that (a) can happen implies will happen if needed because (b) capitalism efficiently discovers need and connects it with supply. That has been the narrative all along, and it's just observably false.

During covid, capitalism neither efficiently nor in some cases really at all managed to connect the need for masks, vaccine, lysol, toilet paper, etc. with sufficient, timely, and cost-effective supply. There could not have been a clearer example of just how dismal capitalism rises to such an occasion. Capitalism is arbitrary, extractive, and unconcerned with completeness.

Indeed, it is all about discerning who can and should be simply ignored based on no other criterion than whether serving them is going to maximize profit. This is the reason never to claim government (which has a responsibility to all in a fair way) should be run like a business (which operates under a responsibility to no one with no fairness constraints other than those imposed by laws set by those reps who are bought and paid for by successful business execs, not the people they are said to represent).

We should aggressively watch for confusions of "can" and "will" in conversation about technology and insist that any reliance on "can" is accompanied by strong, non-reductionist legislation.

(Reducing a social problem to money or carbon credits is what I mean by reductionist. That will end up gamifying things and losing track of the original problem.)

#capitalism #ShareholderCapitalism #Markets #Society

@FantasticalEconomics @jwcph @breadandcircuses

For what it's worth, I think JW is the one making the most coherent points here, by quite a large margin.

Whatever theoretical claim can be made about technology bettering things is dim when seen in context because it's really clear that markets love an externality, and so if someone bent on growth can say that it's possible that somehow that growth can be compensated for, then that compensation becomes the responsibility of someone else or the market. The problem is that unless people are held to account in that, the theoretical balance that Kyle is claiming has about zero chance of happening. And we have far too little time to be waiting on such miracles.

In practical terms, which is all we can focus on in the extraordinarily limited time humanity has left on earth, it's more correct to say that the theoretical options Kyle sees are just smokescreen that will enable continued ills. Maybe your intent is better, Kyle, but if so it's blinding to to a practical effect that is likely VERY negative.

The problem is simple: We have an addiction to growth. We are practiced at it. We enjoy it. We have developed habits around it. But it is killing us. None of that will be fixed by creating theoretical discussions about how there's a world in which reform is not necessary. There might be such a world. But if we are not making plans to get there, taking steps aggressively that get us there within our window of healthy life, then the theoretical case is irrelevant. We're addicts who have rationalized not quitting.

But also, with every crank of the winch, creating more reliance on tech, we also create potential energy waiting to snap if something goes wrong, something slips, and the system unwinds. If an acre of land can support 10 people but we find tech to have it support 100, that's great but if that acre of land is lost to a storm, let's say, then 100 people will starve, not 10. Every time we rely on tech to help us live past capacity, we up the stakes that way. They noticed a similar thing in airplanes as they figured out how to pack them tighter and tighter: when a crash happens, more die.

So I decided at some point that the test of carrying capacity of the planet is not the steady state on a good day kind of measure, but rather the ability of that system to withstand crashes, the temporary unavailability of parts of it, etc. We are not prepared for disaster. Shareholder capitalism treats robustness and sustainability as economic inefficiencies to be removed because they generally don't show on the quarterly bottom line except as an expenditure with no benefit. It's hard to quantify a counterfactual.

We need metrics not of Gross Domestic Product but of Gross Domestic Sustainability, of getting ourselves to a system that is robust against the kinds of catastrophes that are potentially forseeable to encounter. Economic, political, and weather/climate. A company or product that does not measure up as highly sustainable and robust against potential problems should be taxed very heavily so that the state can make preparations in lieu, so that there is no way for a company to make money by shortcutting sustainability.

Presently the reason people like Trump so much is the sugar high he creates in businesses by allowing them to pretend to profit by eliminating safety and sustainability and other environmental "red tape" that he sees as superfluous. This serves a culture in which profits are regularly harvested from companies into private bank accounts that cannot be drawn back out of when we see what a horror these profiteers have left us. They are racing to suck all the value out of the world before it collapses.

For a brief parable on this, see my 2009 essay "Hollow Support". It's not about climate, but about how markets under shareholder capitalism like to invest and what the consequences of that are:

http://netsettlement.blogspot.com/2009/03/hollow-support.html

#Capitalism #ShareholderCapitalism #HollowSupport #Climate #Consumption #Growth #DeGrowth #Economics #Sustainability #Environment

We Found The Guy Who Invented Mass Layoffs | The Class Room ft. FDSignifire - YouTube
https://www.youtube.com/watch?v=qr3sAWIpFeU

Apr 13, 2023
"Elon Musk didn’t pioneer the mass layoff or the celebrity CEO. Jack Welch did. The CEO of General Electric is the reason companies off-shore jobs, do massive cost-cutting and layoffs, and pour all their profits into stock buybacks. He invented the American CEO."

#Capitalism #ShareholderCapitalism #Neoliberalism #StockBuybacks

@teemo

Markets are wonderful tools for efficiently distributing resources (perhaps including wages) that get a bad rap because of the neoliberal push for demanding free, unregulated markets.

I'd like to find a way to keep most of the good while removing the downsides. A push in that direction (but insufficient in itself) is a move from #ShareholderCapitalism to #StakeholderCapitalism where company ownership (and profits) are shared by employees rather than those wealthy enough to own stocks.

@tarmoamer @jackofalltrades @Nonya_Bidniss @MarkBrigham @breadandcircuses

I'm not an "-ism"-ist. If anything, I'm a hybridist -- right tool for right job. But my point is I am not saying any of this to advocate some specific system over some other. I am instead observing that to have any coherent discussion, we must speak honestly about what we're up against. Even systems we like have flaws we should be honest about, and Capitalism certainly has flaws. It matters to know them so one can at least understand what even might be a fix or improvement.

Maybe the right solution is to replace it, but you'd want to know what you were replacing it with. And honestly, I don't think there is enough time left in the history of humanity (which is about to be wiped out by climate change). So we have the system we have.

We CAN regulate it, for example. (That's assuming, of course, we can get our political representatives to care, which is a problem for another day.)

I seem to recall Adam Smith saying this we the solution. He wasn't talking about capitalism but I think maybe employment law. I saw the quote but didn't mark it and have had trouble finding it. But I recall it was a suggestion that if you wanted morality in capitalism, it had to be encoded in law, and that if capitalists were left to their own devices they would likely turn to tyranny. So a well-regulated capitalism is one approach.

But ALSO, stakeholder capitalism is a variant that we had and worked better. Everything went to pieces when we converted to shareholder capitalism. Clyde Prestowitz tells the story of this in quotations I capture in my essay Losing the War in a Quiet Room.
http://netsettlement.blogspot.com/2019/09/losing-ground-in-environment.html
Interestingly, Naomi Klein in her book The Shock Doctrine also traced the modern downward slide to the same place, the actions of Milton Friedman in the 1970's. I tend to believe this account, even though some have traced other influences to earlier (and not without good reason).

Elizabeth Warren and Bernie Sanders both had proposals for returning to Stakeholder theory during the run-up to the 2020 election, and the notion of Stakeholder capitalism seems like, while it wouldn't fix everything, would be a big incremental improvement. It would make the Fiduciary Duty standard more flexible.

Right now you can do that for B-corps, but the bug is that you can't make the competitors of the B-corp do the same, so you're just putting yourself at disadvantage. People suggest that somehow a well-meaning B-corp has a market advantage, but that's not credible with me. If it had market advantage, all corps would do it anyway, and they don't. In my mind, B-corps are a license to lose money for the sake of being honorable without getting their principals sued. Others would surely characterize them differently.

Some sort of solution that involves an achievable rules change without overturning our basic systems seems like the approach I'd focus on if only for tactical reasons. We can talk forever about a world in which we did things entirely differently, but I just don't see how we get there. Climate Change will extinguish us long before that.

Bernie Sanders: Corporate Accountability and Democracy
https://berniesanders.com/issues/corporate-accountability-and-democracy/

Elizabeth Warren: Accountable Capitalism Act
https://en.wikipedia.org/wiki/Accountable_Capitalism_Act

#capitalism #ShareholderCapitalism #StakeholderCapitalism #LegalPersonhood #LegalPerson #LegalPeople #conscience #ethics #morality #BernieSanders #ElizabethWarren

@alter_kaker @breadandcircuses Regarding the metaphor of sociopathy, I'm using it because it specifically is associated with lack of conscience. I have no mental health credential, so my use is purely descriptive from a lay point of view.

I don't by using this term mean to suggest per se irrationality (an inability to reason) as might come with some actual mental disorders. We're speaking metaphorically here, and metaphors are not literal equivalences. But rather I mean the kind of reckless indifference and appearance of actual cruelty that results in a weirdly logical way if you steadfastly fail (or refuse) to consider moral questions.

This is an artifact particularly of shareholder capitalism. Stakeholder capitalism is better. See my essay Losing the War in a Quiet Room.
http://netsettlement.blogspot.com/2019/09/losing-ground-in-environment.html

#capitalism #ShareholderCapitalism #StakeholderCapitalism #LegalPersonhood #LegalPerson #LegalPeople #conscience #ethics #morality

@gwagner @FinancialTimes

Yikes. It is getting twisty.

I'm not a fan of the B-corp idea anyway bevause it accepts unfair fights. All companies should be accountable to stakeholders, including the environment, not just to shareholders. If only certain companies do this, their competitors have a market advantage so the odds of B-corp survival are poor. If it's a successful market strategy to care about the environment you don't need to be a B-corp to do it.

As I read it, a B-corp is authorization to spend, even lose, shareholder money doing good for the world and not have your stockholders sue you for breach of fiduciary duty. Indeed I'd think they should be able to sue you for not doing well by the social benefit promises you've made.

However here I see FT characterizing it as a "movement" as including "thousands of companies around the world who are certified as 'a force for good'.' This does not mesh with my understanding of their role.

Wikipefia says of B-corps that they
Include "positive impact on society, workers, the community and the environment in addition to profit as its legally defined goals, in that the definition of "best interest of the corporation" is specified to include those impacts".

My reading of them is that they aren't, or shouldn't be,, "blessed as good" but rather that they open themselves to criticism-with-teeth if they fail to make good on their promises of good.

People differ on what ethics is, but my personal definition of ethics isn't that there is a specific set of rules you comply with. That's just law and compliance is not ethics at all in my book. Ethics, to me, is a living process of continually asking hard questions of yourself, starting with "am I today right now ethical, and what makes me sure I've not drifted?" The answer to that can never be "I was blessed at birth as ethical."

To me, any notion that B-corps are blessed as ethical or that any one agency can certify unambiguously that someone is ethical is suspect. Organizations can perform independent audits and offer opinions, but that ought not end all discussion. Anyone founding a B-corp has asked for any stakeholder to challenge them.

We should be asking hard questions of the auditors as well.

#BCorps #capitalism #corporations
#StakeholderTheory #StakeholderCapitalism
#ShareholderTheory #ShareholderCapitalism
#ethics #compliance #law #FiduciaryDuty
#environment #labor

@davidstirrup

I doubt anyone will _actually_ implement those three laws, though I appreciate your support of them.

Restoring stakeholder theory to capitalism would at least allow more voices at the table and would give CEOs a valid reason not to just only care about shareholders, so it might at least be a pragmatic push in the right direction.

For example, Warren and Bernie both had credible plans for how to do something along those lines in the 2020 election.

The Accountable Capitalism Act was proposed as part of Warren's campaign:
https://www.warren.senate.gov/download/accountable-capitalism-act-one-pager

Bernie offered Corporate Accountability and Democracy:
https://berniesanders.com/issues/corporate-accountability-and-democracy/

#politics #capitalism #ShareholderCapitalism #StakeholderCapitalism #morality #economics

@davidstirrup

Somewhere I recall Adam Smith making the point that if morality is to be had in capitalism, it must be encoded in law because those of means will become tyrants if just left to manipulate their power without rules. Maybe it was when he was talking about relationships of employers and employees, though really it's quite a general point. (If someone does know the quote I've been trying to find, please let me know because I often cite this observation, but from only vague memory.)

Morality is not something that would be discovered by capitalism, which is nothing more than window dressing on a gradient descent optimization engine. Any morality that is discoverable by capitalism is unnecessary because profitability will compute the same thing. But morality and profitability clearly come into conflict, and capitalism has no mechanism for recognizing that morality should win. Presently it does not.
"Fiduciary Duty vs The Three Laws of Robotics"
http://netsettlement.blogspot.com/2009/02/fiduciary-duty-vs-three-laws-of-robotics.html

Even a mathematical optimization engine has limitations. It tends to prefer local optima (the hillclimbing problem, for those who want to google that) and they compute nonsense solutions if you don't bound them well. The same for capitalism. The problem with capitalism as practiced now is what I refer to as reductionism, the idea you have an abstract goal and that it's OK to substitute a model even though that model only approximates the abstract goal.

So you decide that a market solution to global warming is some sort of carbon offsets or a carbon tax or both, and then you stop caring whether the planet is warming and assume (wrongly) that it is sufficiently only to care whether you're making money. Doing so usually leads to regulatory capture as the answer, leading to you getting loopholes or lax enforcement that then make you richer and sure you're solving a problem you've never actually been trying to solve.

Regulation is needed, but also meta-regulation that makes it clear that while you can establish profit goals, other measurables must matter. To that extent, I think shareholder capitalism needs to go and stakeholder capitalism needs to be part of a solution (given that it's unlikely that capitalism itself can be removed). I'm not big on -isms (capitalism, socialism, etc). If I were, it'd be hybridism (right tool for right job).
"Losing the War in a Quiet Room"
http://netsettlement.blogspot.com/2012/01/losing-war-in-quiet-room.html

There's also just the issue of what we value. Right now the public conversation is always that we value growth. That is unsustainable and we need to somehow change that discussion to value sustainability. Until we recognize that sustainability is more important than growth, we're going to be investing in the wrong things. I don't have a specific writing on this, though it has involve taxing megawealth and making sure that if we're going to be a rich society, that wealth is better distributed, so maybe:
"Tax Policy and the Dewey Decimal System"
http://netsettlement.blogspot.com/2009/02/tax-policy-and-dewey-decimal-system.html

It probably also involves UBI. I didn't write the following to promote UBI (or any solution), just to analyze a particular issue from the bottom up. But after-the-fact it has seemed to me to function well as a partial defense of UBI because I think people's inability to know they'll survive regardless of their life choices, and their subsequent need to scramble for a job, even a sociopathic one, just to make sure they can eat, causes a lot of problems. If people felt more secure they'd be fed and housed and all that, they could afford to make more moral decisions. Morality tends to become more practical with surplus:
"Corny Economics"
http://netsettlement.blogspot.com/2012/05/corny-economics.html

Sorry this was so long, but I hope you find something useful in those articles.

#politics #capitalism #UBI #taxation #sociopaths #sustainability #environment #socialism #ShareholderCapitalism #StakeholderCapitalism #morality #economics

And I teach business at the U of Michigan, and have many rude things to say about #shareholdercapitalism and #patriarchy and other flavors of authoritarianism.

@Pampa
I doubt you could find a workable wholesale replacement for capitalism, at least on the necessary timescale.

But I think there are things that can usefully be done to make a dent in that space.

1. Regulate the ill effects. As long as the regulations apply uniformly, they still make for fair markets. Environmental and safety regulations, for example. But it wouldn't hurt in health care to outlaw "pooling", since each attempt to subdivide the market gives individuals worse bargaining leverage and Big Pharma more.

2. Socialize markets (i.e., convert to things like universal single payer) where fair prices are not achievable and/or where the public is better served by aggregate bargaining. Health care is an example. People cannot fairly walk away from extractive pricing if their life depends on a solution at any price. They have to take what's offered. So market pricing cannot be expected to converge on fair prices. Also, the timelines and levels of volume individual buyers have is not enough to bargain fairly, where collective bargaining would be.

3. Get rid of pressures in capitalism to only respond to shareholders. Here's a summary of why reverting to stakeholder theory instead of shareholder theory would improve things. (Bernie and Warren both had plans to do things like this in the US 2020 election. Their ideas could be used elsewhere.)

4. Get big money out of politics, so that those with large economic interest cannot purchase regulatory favor.

http://netsettlement.blogspot.com/2012/01/losing-war-in-quiet-room.html

#Capitalism #ShareholderCapitalism #StakeholderCapitalism #ShareholderTheory #StakeholderTheory #RegulatoryCapture #SinglePayer #EnvironmentalRegulation