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Comment by erehweb | Hacker News Reader

Reminiscent of the business school joke - What does US Steel make? The answer is not "steel", but "money", that being the point of any company.

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Had a thought the other day, that the natural course of many businesses is towards becoming a bank and eventually a casino. If it were Pokemon, all corporations final form would be casinos with executives gambling investors money.

It fits the economy surprisingly well. Harvard, arguably a bank not a school. US Steel, joke is they produce money not steel. Airlines are trying to avoid flying airplanes, and operate air miles banks. Hasbro no longer produces toys, only money. Article today where the main commentary on Intel was the finance bros took over a long time ago.

Car companies making their money off of financial instruments only loosely related to the cars people drive off their lots ...

Although it's true, that's a hazardous way of thinking. If they had put more of their focus on making steel, keeping up with the technological advances rather than being dragged along grudgingly, perhaps they'd be making more money these days.

It reminds me of that old quote that democracies die when the citizens realize they can vote themselves money. It's the same with these companies, the upper managements realizing they can just give themselves more money and coast on their companies momentum.

It's not the innovators dilemma, it's the c-suite lines their pockets while the company burns dilemma.

It's the eternal principal/agent problem. Those things go in cycles. When management goes too far off the rails then corporate raiders and private equity eventually take over to replace management and unlock latent value. Unfortunately, the managers who caused the problem still often end up fabulously wealthy while regular employees get screwed.

This problem can be somewhat ameliorated by compensating executives primarily using equity with long vesting or lock-up periods. That keeps their interests aligned with long-term shareholders.

It doesn't really fit the modern collapse. Democracies seem to decline when oligarchs extract so much wealth that the entire economy suffers and common people flock to strong political figures to bring back order and prosperity.

> citizens realize they can vote themselves money

Although this certainly sounds true if you consider just the richest citizens and by "vote" you mean inflence the votes.

It's a very successful strategy in any corporate. Focus on the books, produce results, take the bonus and then jump.

When things go pear shaped do not be found holding the bag. If later questioned: "it was all great when I was there, it's so sad that it went south - it was a great place and there was a lot of value on the table."

Strangely the big investors don't seem to ever cotton on to this - the big pension funds and sovereign wealth seem to respond by getting out of the equity markets and investing in things like property.

The oposite is true as well so: don't focus on the books, bottom line and so on and the company goes bust as well.

Any successful company has to do both.

you are quite correct - it becomes a plague when one is addressed to the exclusion of the other. As they say "don't run out of cash".

This comment reads like it was written in the 70s. Even with the interest rate hike, this is still the age of VCs with infinite pockets, companies that don’t plan on going profitable for decades, every company in sp500 throwing money in the AI money hole, etc.

Yes, let us exclude tax scams and money laundering and address the real economy where things get made and real people get paid.

As other replies have pointed out, your problem is with the word "they". There is no "they" at a publicly traded corporation. The key decision-makers are only there for 2 to 5 years, however long it takes them to suck out the blood of the company before they scurry off to parasitize a juicier host. Nobody with decision-making power ever gave two shits whether US Steel was going to make lots of money in N decades.

Not a hazardous way of thinking.

Many years ago, I read some that some executive of General Motors had said that GM was not in business to make cars but to make money. At the time, that seemed acute. Since then, I have wondered whether it was where GM lost its way.

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