Hacker News Reader

Hacker News

Comment by FabHK | Hacker News Reader

Parent Full thread

FabHK

> That's any for profit company no matter what anyone believes. Any company its only purpose is profit.

That's a myth. See for example

1. this aptly titled article: Corporations Don’t Have to Maximize Profits

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

2. Tim Cook at Apple:

> The shareholder asked Cook about the company’s renewable energy efforts and told him that Apple should only undertake such efforts if they were profitable. In a rare display of anger, Cook replied that there were many things Apple did because they were right and just. “When we work on making our devices accessible by the blind,” he added, “I don’t consider the bloody ROI.” Then he added, “If you want me to do things only for ROI reasons, you should get out of this stock.”

https://hbr.org/2016/09/the-maximize-profits-trap-in-decisio...

View on HN

> Tim Cook at Apple.

Please, don't. Pushing CSAM, and removing apps for oppressive governments.

We as collective consciousness must stop idolizing corporations. Corporations are for profit. The lack of regulations and effective legislation is the problem. The biggest problem is that a lot of legislative mechanics are affected by shares ownership and lobbing.

And we find this "a normal behaviour".

Tim Cook is not a saint. Apple makes some poor ethical choices. That said, I’d still prefer that Cook rather than Zuckerberg ran Facebook.

There is no saints or sinners. This is naive view of the problem.

As I stated it before, the problem is legislative and law enforcement related. Facebook or any other company will use every lawful opportunity to gain ROI. The system in place is the reason corporations to avoid responsibility and this is not Facebook or tech company related. You cannot have expectations of morality or any form of ethics. You can project in your mind or imagination, but this will not make a difference at all. As we can see historically with tobacco companies in the past.

The first link is discussing whether directors have a legal duty to maximize profit, which, as the article describes, they do not (their duties are open to much broader interpretation, which the article also describes). But, of course, there are numerous nonlegal forces that incentivize profit maximization, some of which are noted in the aforementioned article, and these forces are so strong and ubiquitous that their result - profit maximization - should be taken to be the default, which is what GP was saying.

Second, a random statement from Tim Cook, which itself is the subject of numerous forces and incentives, is hardly a strong case against the argument that, almost universally, corporations act to maximize profits (which, we as Americans, also often pretend is a universally pro-social motivator).

I'll also note that both of your sources focus on short-term profiteering (e.g. ignoring long-term benefits of renewable energy in favor of short-term profits), but are actually supportive of long-term investments, which are, of course, made with the purpose of increasing future profits (e.g. " it is [...] not corporate law [...] that [drives] so many of today’s public companies to myopically focus on short-term earnings; cut back on investment and innovation [...]" and "thinking in terms of long-term profit and returns is an important way of putting society’s resources to their best uses"). Focusing on long-term investments, in both cases, is obviously also motivated by profit (with the second arguing that long-term profits are actually a social good, which is the case only when compared with short-term profits).

You're right (and I don't dispute) that almost all firms aspire to long-term shareholder value creation, and that there are both practical reasons (market forces, competition) and theoretical reasons (Econ 101 arguments such as the two welfare theorems, principal-agent theory, etc. [1]) why that is and should be so.

However, that is just a broad and fast rule, and it is neither empirically true, nor desirable, nor legally required that every firm at every opportunity "maximises profit". It is this over-simplification that I argue against [0].

If Facebook is shown to pursue profit at the expense of teenager health, or at the expense of democratic institutions, or Shell is shown to pursue profit at the expense of the environment, the appropriate response is not to shrug and say "doh, that's what companies do (and must do)!".

Instead, one ought to discuss whether A) the legal/regulatory framework within which the firm operates should be tightened (eg with rules that just prohibit certain things, or internalisation of externalities), or B) whether a firm should refrain from doing certain things even though they're (still) legal and increase profits.

[0] GP didn't state, as you sensibly do, that "profit maximization should be taken to be the default", but rather (my highlights) "That's any for profit company no matter what anyone believes. Any company its only purpose is profit.", which is just the facile statement I argue against.

[1] Note that these Econ 101 arguments for the primacy of profit maximisation rest on many assumptions that don't hold, see for example James Kwak's book Economism: Bad Economics and the Rise of Inequality.

It is of course not a defensible position to say that all corporations only do things for profit (especially as it has not only to do with intent, but intent of an organization); even if it were true in all but a single case. Since that's what you've staked out your argument against, there's not much to discuss here.

That profit maximization is not legally obligated (or even "desirable") is not a particularly compelling counterpoint, many things are done that are both legally forbidden and undesirable (of course "desirable" for who is another discussion). Additionally, your Tim Cook quote, which I assume was your attempt at disproof by counterexample, is not particularly compelling either, primarily because it's simply a quote (especially considering there is abundant anecdotal evidence that corporations have the ability to do things for superficial intent other than profit, and many examples where that superficial intent is more defensible).

Also, what you read as "doh, that's what companies do (and must do)," I read as "it's naive to assume a for-profit company would prioritize anything over profit by choice." The second (but also the first) implies the necessity of a discussion about "the legal/regulatory framework within which the firm operates." They also both imply that expecting firms to simply "refrain" is naive, even if it superficially occurs.

>In a rare display of anger, Cook replied that there were many things Apple did because they were right and just. “When we work on making our devices accessible by the blind,” he added, “I don’t consider the bloody ROI.” Then he added, “If you want me to do things only for ROI reasons, you should get out of this stock.”

That anti-profit dollar, that's a good dollar.

Tim Cook was pushing some clever PR there. The reality is that if a company deviated significantly from it's primary goal of attaining profits for shareholders, the shareholders could easily sue to take control away from the CEO - and this indeed happens.

The example of a small feature here or there is a deflection since, like any do-good public effort, it's just good PR to do them when they're relatively low cost.

Nah, successful shareholder lawsuits are exceptionally rare, except in tiny family companies. Almost any waste of money can be justified as an attempt to support some intangible, immeasurable goal.

I mean, CEOs are allowed to do spend money in ways that improve the company's image. They're allowed to perform experiments that may not bear fruit, and gambles that may not pay off. They're allowed to do things that improve employee morale and retention.

CEOs can spend shareholders' money on buying other companies the CEO owns ("I thought it would be a good investment"), outfit themselves with a super-luxury office ("We need it for meetings"), even have the shareholders buy them a private jet ("I'm paid so much, the time savings are worth it") - with the right fig leaf, it's all legal.

Apple, and Cook in particular, is a member of groups that are actively working to stop the proposed environmental laws in the US. So yes indeed, deflection

https://www.theguardian.com/us-news/2021/oct/01/apple-amazon...

This is a completely bogus claim, and you really should not be taking content from the guardian seriously - this is a great example why.

Apple, in this case, is one of many companies that generally supports various lobby groups for various causes. In this article, they note that some (unspecified) groups that Apple supports oppose the current budget bill.

Nowhere in this article can you conclude that APPLE specifically opposes this bill BECAUSE of the climate change clauses in it. Nowhere. That's garbage reporting.

The Bill is massive with literally thousands of provisions - most having NOTHING to do with climate.

The title is so misleading, it's comical. Pure clickbait - and frankly, you should be more careful about posting misleading garbage like this on HN.

Bogus how? Sources?

> Nowhere in this article can you conclude that APPLE specifically opposes this bill BECAUSE of the climate change clauses in it.

That is a lot of caps.

Apple gives money to group A. Group A opposes a bill that contains environmental provisions. Apple will not refute the actions of group A.

Who cares if group A says their objection is for other reasons. They are still trying to sink a bill with environmental provisions while saying they are in favour of said bills. Apple can't have it both ways.

I dislike broccoli. Broccoli is a vegetable. Therefor I dislike squash.

This is the idiotic argument the article is making.

You are better than this.

Reply on news.ycombinator.com