Comments on: “Those who can afford it the least.”

By: hank

hank — Mon, 03 Nov 2014 03:29:00 +0000

If opposing a regulation successfully will ultimately cost less than complying, they will do so. Otherwise, they will cave in. Its already been observed that if paying the litigation costs and settling lawsuits costs less than retooling their factories to correct a dangerous design flaw, they will do that, too. Although downright criminal activity to eliminate opposition (such as bribery, extortion, character assassination, or even murder) is rare, they are perfectly ready to do that too if they think they can get away with it. They figure in the bad press they get if caught actually breaking a law in their calculation, but if they can minimize the publicity exposure they are perfectly willing to take a chance.

You know how it works. You don’t actually write a memo ordering a subordinate “Do this and do it now!”. You say something like “I don’t care how you do it, just take care of it.”, while playing golf. Or, “If you can’t figure out how to make this problem go away I will find someone who can.” Again, the message is delivered verbally, untraceably, with full personal deniability.

Those who deliver do very well. The positions with the big bucks and high promotion potential are also those which have a lot of risk, personal responsibility, and “individual initiative” associated with them. Putting yourself in a position to take the fall pays very well. And in an organization like that, everybody has the goods on everybody else.

Government bureaucracies work in the exact same way. Think Teapot Dome, Bay of Pigs, Watergate, Iran-Contra, Bill and Monica and Bridgegate. Only a free and independent press, and a strong judiciary, can minimize this kind of adventurism, but they never can eliminate it entirely.

By: bowser

bowser — Mon, 03 Nov 2014 00:38:32 +0000

I was just saying that when megacorporations spend a fortune opposing a measure because it would adversely affect “those who can least afford it”, watch out.

Their concern is touching, and I, for one, don’t trust it.

By: hank

hank — Thu, 30 Oct 2014 17:34:05 +0000

At least, the ones which are publicly owned aren’t. They are machines for generating profit for their stockholders, and if their officers, managers or employees conduct themselves in a way that threatens that mission, they are replaced, just as any other defective part is replaced. A owner with 51% of the company stock might deliberately choose an unprofitable policy consistent with his own convictions. But if he sells 2% of his stock, he loses control and becomes just another employee of his stockholders. He has a vote on company policy, but he can lose. A corporation is a democratic collective.

This is not to say that corporations can’t serve a public good, or even recognize some imposed inefficiency or restriction as necessary to the public welfare and perhaps even of value to the corporation’s long-term benefit.

However, we can’t count on that happening. Corporations are somewhat like lawyers. Like attorneys, they are chartered and obligated to serve their clients, not to provide social justice. What you can count on is that publicly held corporations will usually act in a way that maximizes the profit of their stockholders, not the moral convictions of the executives, or what is best for society as a whole. A particularly virtuous and persuasive CEO may convince his Board of Directors that his moral position is better for everyone in the long run, but that is not necessarily the case. More often than not, the Board will just fire his ass.

Everyone who works for any collective, public or private sector, knows that, and if they value their job more than their convictions, their behavior will fall right into line, just as you would expect from any other machine component.