Marc Benioff: We Need a New Capitalism

> Legislation to close loopholes in the Equal Pay Act have stalled in Congress for years, and today women still only make about 80 cents, on average, for every dollar earned by men. But congressional inaction does not absolve companies from their responsibility. Since learning that we were paying women less than men for equal work at Salesforce, we have spent $10.3 million to ensure equal pay; today we conduct annual audits to ensure that pay remains equal.

If Benioff is going to quote the .80/$1 statistic, then the equal pay audits of SalesForce need to use the same comparison which is to take the average pay of all women in the company regardless of position or job and compare it to the average of all the men in the company regardless of position or job.

If you actually do the comparison taking into account job and position, you get something like .93/$1

https://www.politifact.com/truth-o-meter/statements/2018/apr...

He identified the problem being "companies shouldn't wait for government to take action".

Then, he proposed solutions that still seem to involve increasing taxes.

If government is inefficient in allocation of resources and has disincentivizes to actually solve problems in reasonable timelines with reasonable red tape, then perhaps letting private companies take on improving infrastructure or providing care easier might be a good solution.

Look city governments have huge cash chests: neither homelessness nor poverty had ever been addressed by throwing government/money at these problems. You need the right inventives to tackle these challenges. And frankly governments need to reduce the friction in terms of money allocation and regulations to get things done.

> When government is unable or unwilling to act, business should not wait.

I hope this is all based in good intentions, and have no real reason not to believe so, other than past experience.

I just had this idea though: Seeing the current state of US regulatory capture; I wonder what would happen if companies that felt the way Marc Benioff claims he does (as well as the other companies in that roundtable) would just start paying the same lobby money as business has done previously, but instead ask for sane regulation, aiming for what they claim to be working towards.

If I was a politician beholden to corporate money, but also still had a sliver of a soul left in me, and was given the option of the same money, but to work for the people that elected me, I could actually get some real legislative work done. At least if the same was true for other representatives and senators.

Or campaign finance reform and outlawing outside payment to politicians, but that's a catch 22 given the above.

The extremely wealthy keep talking about how to tackle inequality, many of them pledge to do something about it but nothing ever happens.

We all know how this plays out, we'll get lip service until we start to kill the rich. Then they'll apologize, reform, and do it a little more subtly next time.

In conclusion: buy my overpriced Salesforce products because I'm a good billionaire with a private jet.

I often wonder why people who write these things don’t start with donating the mass of their fortunes first. Benioff could donate 5b to address poverty causes and still have more than a billion left over for himself.

I agree with Marc that many of the things he'd like to do will take money. Solving homelessness in San Francisco, for instance, will cost a lot. But that doesn't mean all we need to do is spend some money. We've tried that - we're already up to a conservatively estimated $300 million a year. But plenty of people, hardly all on the right - including Gavin Newsom, who admits he was behind some of these failed attempts, for instance - opposed Benioff's initiative on the grounds that if we keep spending money they way we've been spending it, another 300 million will just make things worse off.

And while San Francisco may be a wealthy city, there's only so many times we can go to the well. As an example, every year there's a story in the Chron about how low and middle income San Franciscans sit at their computers with a list of affordable city run summer programs for kids, looking at the international clock, desperate to hit "submit" as if it's tickets to a Stones reunion tour - and the aftermath and scramble for where to put their kid this summer if they don't get them, which is about half the time. 300 mil would go a long way to helping with the middle and low income families that San Francisco is, frankly, bleeding away.

If I thought 300 mil more would solve homelessness, I'd happily spend it - hell, I'd triple it. I grew up here and I still love this city, but things are bad. The main difference between me and the people who bash SF here on HN is that to me, it's extremely painful, I don't get the gleeful thrill of pointing out how shitty SF's policies have made things, it hurts. I'd be willing to dig pretty deep into my limited financial assets if I could see it get better. But unfortunately, I really do think that 300 million more of the same will produce, well more of the same, which is things getting worse and worse.

> ...we need businesses and executives to value purpose alongside profit.

Profit is purpose. Profit means the value of the outputs of your business exceeds the value of its inputs. It means you've added something to society, it means you've provided a service to the public. It means when people actually have to choose what's important to them they value what your business has done for them.[0]

> ...where businesses...don’t just take from society but truly give back and have a positive impact.

See above.

I don't know why people think this thought process is new. Read The Road To Serfdom by Hayek. It was written in the 1940's about why these ideas don't work.

The free market is the best invention we know of for a society to express what it actually wants and to achieve those goals. Without it you have a small group of enlightened elites deciding what it is that people want.

> Americans overwhelmingly say C.E.O.s should take the lead on economic and social challenges, and employees, investors and customers increasingly seek out companies that share their values....When government is unable or unwilling to act, business should not wait.

No. We don't want businesses to become political entities. If the problem is businesses aren't using their power for good, the solution isn't to give them even more power. That's too close to Fascism.

This whole essay is an argument that businesses need more social power and governments need more financial power. The trade-off is an increase in power inequality (because we're giving the powerful even more power) to decrease financial inequality. At the same time we'd probably take on massive dead-weight losses from abandoning the profit motive which is essential for our economy to function. That looks like a bad deal to me.

There is historical precedent for societies accepting power inequality to the extent of dictatorship in the name of ending the ills of capitalism. It hasn't worked well: https://en.wikipedia.org/wiki/Dictatorship_of_the_proletaria...

[0] - Yes, you can also steal. That's why capitalism exists within a legal framework.

It’s very interesting to me that he didn’t mention the B Corp organization, who attempts to do exactly that. Is there a reason for this? Maybe he thinks the requirements/audits are too burdensome?

It's unrealistic to hope businesses do the right thing, especially when profit inherently wins out over all else, and it means you cannot do the right thing in your business without losing to the competition who doesn't care.

That's kind of a big issue with capitalism, and any revisionist/reformist take on capitalism has to try really hard to convince me this won't be an issue.

This article misses that point badly. If you're going to criticise capitalism at least try to understand what actually makes it bad.

Each time I read a billionaire criticizing the current capitalistic system, that reminds me of Jacques Attali's argument on how Karl Marx was misunderstood with Socialism.

https://www.newstatesman.com/node/195490

Extract: "Attali: What he tried with the international socialist movement was an amazing attempt to think about the world in global terms. Marx is an amazingly modern thinker, because when you look at what he has written, it is not a theory of what an organised socialist country should be like, but how capitalism will be in the future. Contrary to the caricature of Marxism, he is first an admirer of capitalism. For him, it is a much better system than any other before it, because he considers the earlier systems to be obscurantist. Once or twice he had the idea that it was going to be the end, but he very rapidly decided that this was not the case, and that capitalism had a huge future.

What is very modern also in his view is that he considered that capitalism would end only when it was a global force, when the whole of the working class was part of it, when nations disappeared, when technology was able to transform the life of a country. He mentioned China and India as potential partners of capitalism, and said, for instance, that protectionism is a mistake, that free trade is a condition for progress.

For Marx, capitalism has to be worldwide before we think about socialism. Socialism for him is beyond capitalism and not instead of capitalism. He has much say on globalisation, what is happening to movement of companies, delocalisation and everything that is linked to the way we live today. In a sense, the Soviet Union was destroying or interrupting the validity of Marx's thinking and the fall of the Berlin Wall is giving back a raison d’être to his work, because Marx was thinking of the world globally and the Soviet system was a nightmare that he did not forecast."

sigh. Benioff again with his convenient philanthropy. Berating the system he was happy to and remains happy to take advantage of. Whilst shaming others, that are in in less to much less good positions to demonstrate largesse, to act.

Honest question, why do people listen to this guy?

OK, he does try to start off strong: "Capitalism, I acknowledge, has been good to me." But it's not quite true, is it. It's not as if he was a disinterested 3rd party, strong in his belief of equality (socialism if we take it to extreme), that had capitalism foisted upon him.

Sorry, but for me the messenger has tainted the message. It's a clear do-as-I-say, not-as-I do.

https://www.businessinsider.com/salesforce-ceo-marc-benioff-...

It's behind a paywall, sorry. The headline is: Salesforce CEO Marc Benioff made $4,653,362 for fiscal year 2018 — a total made up of $1,550,000 in base salary, and $3,100,000 in non-equity insentive compensation. This means that the median employee got paid at a rate of 1-to-30, raking in about 3% of what Benioff made.

This is easy for Benioff to say because he's already wealthy. Let's table this until such a time as I become wealthy too. After that we can talk about dismantling capitalism.

Well, he gave a nice list of problems caused by capitalism, and said we need a new capitalism, but gave no reason why. Why a new capitalism? Why not something different, like market socialism, where the shareholders are the employees?

Sure it would be great for business leaders to change their ways, but the beauty of capitalism is that consumers can force businesses to change by their actions. Mark Zuckerberg could change Facebook overnight, but what incentive does he have? It’s still one of the most populous websites in the world.

It’s easy to blame to rich and wealthy for the problems but they cannot force us to give them money. Every time I buy Facebook ads, I’m telling Mark that it’s okay for him to continue what he’s doing.

It’s very fun these days to blame the 1% for societies problems. But the 99% enable them.