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Comment by rhelzerman | Hacker News Reader

You say "profit is always the priority" like its a bad thing. Aren't we all maximizing our profit? Isn't that kind of the point of being in business?

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>Aren't we all maximizing our profit? Isn't that kind of the point of being in business?

The full sentence is maximize profit no matter anything else, like profit first , honesty later, family later, friends later, happiness later , health later.

Not everyone gets off by increasing some numbers, sometime there is enough.

But once a company is public, then maximising profit is really the only goal. If you don't do that as a CEO, aren't you being negligent (doing something illegal).

That really is a myth that needs to die.

No it's really not. Thinking that it means "maximising short term profit is really the only goal" is a myth that needs to die, but maximising net discounted profit is really the only goal of public companies.

They're obligated to act in the interest of shareholders. That usually means profits, but could very well be other things.

this here is the real answer.

So, if a majority of Apple's shareholders feel a different way from just maximizing profits then changes could be underway.

Is it really illegal to not maximize profit? I suppose we have capitalism to thank for that, where companies like PG&E can cut corners on maintenance and yet the C-level executives get to take home millions in bonuses.

Just because it's legal doesn't mean it's the right thing to do, you know? Or perhaps I'm just naïve and everyone should be out for themselves, the community/society be damned.

The "illegal" thing they're referring to is fiduciary responsibility. The board and officers of a public corporation have a duty to do what is in the best interest of the shareholders. The question then becomes what horizon is "in the best interest" of the shareholders.

What happens when the best interest of the shareholders actively harm the public or the community? I used PG&E as an example but telecom companies have accepted government grants to improve their infrastructure but they end up not doing any of it. Our government doesn’t seem to care about these things either, as PG&E continues to not face any consequences and I can’t take my business elsewhere as there are no other energy companies. I rent so I don’t have the option of going off the grid either.

My parent comment got downvoted but I don’t know why - just because you disagree with me doesn’t mean it’s grounds for downvoting, as I’m only trying to facilitate a discussion.

I think some regulations and enforcement is sorely lacking in these areas.

I think you'd have a hard time as a shareholder arguing in court that an executive should have broken the law in order to get you a higher return.

Unrelated: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."

https://news.ycombinator.com/newsguidelines.html

There are many faces to profit. Amazon didn’t turn a profit for twenty years but no one would say Jeff Bezos was negligent. It is more accurate to say that CEOs need to create value. Even then, value can be at one point (liquidate all company assets) or oriented towards the distant future (invest in nuclear fusion tech).

> But once a company is public, then maximising profit is really the only goal.

You may want to research the growing trend of measuring companies against their impact, sustainability, etc., as well as increasingly popular indices that track companies based on that.

All of these measures are just trying to instrument on long term profitability. The idea being that sustainable companies are less likely to be abandoned in the future.

The point was made as to what Apple currently maximizes for, and explained as "no matter anything else, like profit first , honesty later". This is what we're arguing about.

Long term profitability that involves thinking ahead of time of what would become unsustainable is, logically, speaking not maximizing for profit NOW. Honesty (ethics in business) will become increasingly important for the next generations. The current generations, however, don't care that much just yet.

Not every, or even most, individuals no, I would hope not. But every for-profit company surely does. No matter whatever bullshit mission they may plaster on their walls, the moniker "for-profit" tells you what the goal is plain and simple, and any high minded ideals will ultimately become subservient to that.

Sure, and that's the problem. While capitalism may be better than the other systems we've tried, it's still not great. I don't think profit should take precedence over many high-minded ideals, but capitalism guarantees that will be the common case.

One of the (growingly scant) bonus side-effects of having social media is that consumers now tie brands to their identity.

This means that the brands of traditionally maximize-profits at all cost at least have to make efforts to demonstrably align with consumer ideals, if they want to continue to profit. It's far from perfect but still a far cry better than before.

> family later, friends later, happiness later , health later.

For these, it's the employee taking the stance of "profits at all cost".

It's almost never good business to optimise for profit. Or, perhaps more accurately to optimise for short term profit.

For example I can maximise profit by firing all the staff, but continuing to collect subscription revenue for a couple years. Lots of profit, perhaps even "more profit", but a dead business.

We spend money on all sorts of things, at the cost of immediate profit. Staff bonuses, end-of-year lunch, social donations, R&D, all come off the bottom line.

Now, you can argue that we do it to stay in business, and a business that exists infanitly creates infinite profit, in which case the goal of business is to stay in business. Or perhaps profit is best served by keeping staff forever, in which case the odd benefit increases profit.

Profit is important, without it a business will fail - but if that's the _only_ metric then its a very cold unpleasant place to work.

Nope.

Lots of people stay in business because they just like it AND it gives enough money for a reasonable life.

What makes you think their enjoyment isn't profit?

No one is saying it isn't. But that's clearly not what is being discussed here. This is just changing the definition mid argument.

I think the point of all this is, don't put the cart before horse. Money is a byproduct of what you do to enrich peoples lives. If you put money first, people suffer, and businesses end up suffering in the long run. If you put enriching lives first, real people want to compensate you, hell its kind of unspoken/unconscious law not to take advantage of people that create things that improve life. I can't count how many times I decided to compensate people that made software that enriched my life, not because the asked for it, but because they made something that deserves compensation.

If my profit comes at the cost of your profit eventually things are going to disintegrate. If you optimize for profit aggressively you can end up making decisions that maximize short term profit but destroy the long term viability of your business (or the entire market)

For example, Zynga's leadership eventually realized they were salting the earth and ensuring that in the future their genre/model wouldn't work anymore. They did it anyway. They've owned up to this

Taken to certain extremes, yes it is a bad thing.

In moderation — for example if you take a wholistic view that incorporates benefit to the society at large as well, then it can be very good.

It's about shifting the cost of growth to other things like employee health, environment, users, etc that is the problem.

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