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Comment by dbingham | Hacker News Reader

No, that's not the alternative. The alternative is a system that isn't profit driven, where all the companies are worker cooperatives.

In that system, there are no stock holders demanding ever greater returns, those doing the work are always completely in control. They can choose to do "just enough" to live a good life. Or they can choose to focus on the more fulfilling aspects of their work, and not on the profit.

In that system, it's easier to pass regulations that prevent the worker cooperatives from externalizing, because the survival pressures aren't nearly as intense.

But it's not top-down centrally managed.

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“ The alternative is a system that isn't profit driven, where all the companies are worker cooperatives.”

Enforced by a central top-down bureaucratic organization.

In this hypothetical world would you let foreign companies motivated by profit compete in your country that only has worker co-ops? Or would you have a closed down market, similar to North Korea that only Approved Co-ops would be allowed to work in?

> Enforced by a central top-down bureaucratic organization.

The comment you selectively quoted ends with "But it's not top-down centrally managed.".

This is unnecessarily dismissive. The USG routinely enforces regulations and tariffs on companies and imports that fail to comply with US regulations. If this was extended to company structure or labor standards, so what?

Under your standard, all regulation is "top down bureaucratic driven". In practice this has not proven to be incompatible with market driven economics. Not that libertarians don't scream about it anyway.

The current structures we allow today are "top down bureaucratic". How do you think the C-corp and S-corp got defined? The LLC, the partnership, the sole-proprietorship are all organizational forms defined and allowed by the government. The government defines the shape of the market, and then actors are free to operate with in that shape.

This is the same thing, just a different shape.

Forcing no profits is central management at it's very worst - Setting prices causes many downstream derangements to markets.

A complex interconnected system will adapt in unforeseeable ways, causing novel externalities for which we have no built up immunity. Ask a soviet.

Forcing profits is bad too. Just look at Boeing to see where the naked pursuit of profits can lead. It literally kills people.

If they had pursued profits harder and more effectively, they would not have had the accidents whose effect was to reduce their profits. Although there are some examples of outright malice or criminality out there, Boeing is closer to an example of an ineffective management culture than an evilly effective one.

> If they had pursued profits harder and more effectively, they would not have had the accidents

I think this is a bit simplistic or at least too optimistic. The pressures of being listed on the stock market are such that management is more or less compelled to pursue short-term goals.

Indeed in the very long run a lot of corporations are harming themselves by harming the environment, impeding innovation etc. but in the short run firing people, cutting R&D budgets, digging up more coal, oil etc. can be very effective. And shareholders really only care about what your profits are gonna be in the next few quarters, not so much about what's gonna happen decades down the line.

If you buy a stock and then use your influence to destroy its value, you're punishing yourself for your own bad decision. A lot of real human tragedy is caused by self-destructive behavior.

Now, here's an interesting thing to consider. You bring up coal and oil - both industries that are on the way out in the long term. Would it be wise for shareholders to push these companies to invest in R&D to improve their long-term capabilities? No, if coal and oil are on the way out, then the best financial strategy would be to run the companies into the ground as you slowly liquidate them, ideally so that there's nothing left on the very day that fossil fuels are no longer needed. In that case, short-termism is the best strategy.

No. Whatever effect the 737 MAX grounding has had on Boeing's profits pales in comparison to the benefit gained by rushing the plane out the door to get in front of Airbus and thus making billions in sales contracts. There has been virtually no effect on Boeing's stock price, and the plane will probably be back in service within the year.

All in all, putting lives at risk was a good move for Boeing, and they'll surely do it again.

I'm assuming by "more effectively" you mean "less shortsightedly"?

In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated).

Most charitably, the executives perhaps felt they were making judicious, acceptable tradeoffs that would maximize business outcomes over the time horizon they were concerned with - periods measured in quarters or years or even decades.

How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? What happens when a black swan occurs and significantly drives down the effectiveness of prior decisions (which until then had been deemed quite effective)? Are profits clawed back?

>In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated).

If the judgment was really only clear in hindsight then no power structure could have altered it. What's clear only in hindsight to a CEO is clear only in hindsight to a union boss, or a collective, anyone else.

>How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window?

The corporation is already incentivized: in exchange for thinking about long-term profits, it is rewarded with long-term profits. However, executives often have different goals than the corporation they're supposed to represent. If you could figure out how to better align the interests of executives with their corporations, you would see more effective profit-seeking, which would include less killing due to blunders but more killing due to tobacco-industry style exploitation. Giving executives the freedom to put their own interests first (the source of next-quarterism and next-bonusism) is necessary if you want to give them the freedom to pursue ethical goals. You either trust them to make the right decisions or you don't.

>Are profits clawed back?

Yes! That's what happens when something causes you to lose money.

Some people will argue the issue there is time-horizons. If Boeing was worried about profitability indefinitely into the future, these sorts of repetitional disasters would factor in. But if everyone is looking quarter-to-quarter or year-to-year they won't.

The project timeline for the 737 MAX was at least 6 years. It was announced in 2011 and entered service in 2017. So you can run into this problem even when thinking 5+ years ahead.

Nobody is forcing profits. If you want to start a non-profit aerospace company, nobody is stopping you.

> Nobody is forcing profits.

Shareholders?

> If you want to start a non-profit aerospace company, nobody is stopping you.

Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.

> Shareholders?

The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets.

> Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.

My point is to contrast a system where everyone is forced to be a non-profit or co-op (@jp555's hypothetical), and our system, where you are free to be a non-profit or co-op, if you want to. If you can't raise capital or hire top-notch employees under that structure, then that's a problem with the non-profit/co-op organization, not a shortcoming of our economic system.

> The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets.

If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for the ride. You responded to a comment concerning Boeing, not some fresh-faced up-and-comer of your own creation.

We're not talking about Boeing, we're talking about economic systems, with Boeing being an example. @jp555's comment addressed economic systems that "force no profits." @spamizbad then states "forcing profits is bad too," using Boeing as an example. My comment clarified that our system (in which Boeing exists) does not "force profits" (as distinguished from @jp555's example of a system that "forces no profits"). Our system allows profit-seeking companies as well as non-profit-seeking companies. The fact that Boeing feels compelled to earn a profit is a by-product of the financing arrangement by which Boeing was created. Nothing about our system would have prevented Boeing from having been founded as a non-profit.

That's my bad, I did misread the chain.

https://en.wikipedia.org/wiki/Shareholder_primacy

You're begging the question. His point is that shareholder demands aren't relevant if you simply don't accept random shareholders, which is something a number of large firms have successfully done.

"not profit driven" does not mean "forcing no profits". The former means that your highest driving purpose and governing logic is not oriented around the accumulation of profit. The latter means you make it impossible to accumulate profit.

We can pursue self-organization that pursues escape from the pathological patterns of profit driven production without advocating for, striving for, or tolerating a totalitarian, bureaucratic nightmare. See, e.g., https://thenextsystem.org/start-with-worker-self-directed-en...

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