Let's Redefine Capitalism

Posted by Maphesdus 10 years, 6 months ago to Economics
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I thought this was a pretty good article. It discusses how many companies these days are orienting themselves towards higher purposes, rather than simply focusing on turning a profit. I think that's a good mentality to have, and it refreshing to see more and more businesses operating under that model.

There's also a really good book on the subject of social capitalism titled "The Social Capitalist," by Josh and Lisa Lannon. Here's the Amazon link:
http://www.amazon.com/The-Social-Capital...
SOURCE URL: http://www.huffingtonpost.com/jeff-cherry/lets-redefine-capitalism_b_4268448.html


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  • Posted by flanap 10 years, 6 months ago
    "orienting themselves towards higher purposes, rather than simply focusing on turning a profit"

    Ok, let me make sure this isn't a joke...you really believe this is a "good" thing? Are you sure you are in the right forum?

    From where I sit, it is up to each individual business to determine why it is in business as there are non-profits and for-profits. Since you appear to be talking about for-profits and their purposefully limiting profit "for the greater good," that is their choice altruistically, and this is fine just as long they they don't call it "good" since that begins to create a standard which means not doing so is "bad." When using valuational terms such as "good," you define "bad" by default of doing the opposite.
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    • Posted by $ 10 years, 6 months ago
      Sure, if companies don't want to do this sort of thing, there's nothing wrong with that. But companies that do should certainly be praised for it.

      It's the sort of thing that I would say is good to do, but not bad not to do.
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      • Posted by Hiraghm 10 years, 6 months ago
        No, they shouldn't.

        Companies are not human beings. A human being who wants to help others is probably a pretty good human being, provided he doesn't take from others or require others to also help.

        A company who wants to help others *is imposing its controller's values on the employees and customers*.

        Whoever makes such decisions is deciding for the whole company. Suppose, for example, the company I work for decided to donate to the Nature Conservancy? Now a tiny portion of my paycheck goes to support something I oppose; money that could be used to hire more people, to expand the business, to add a new product line, to reward me for my exceptional contribution not only gets wasted... it gets wasted on something I oppose!

        Companies are in the business of making money. Note the Randian term in there: *making money*. They are NOT in the business of remaking the world in an image which corporate officers like.
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        • Posted by XenokRoy 10 years, 6 months ago
          Well written.

          If I could I would say its criminal for anything other than an individual to provide funds to a charity or cause of any kind. Once its in a entity that has stock holders some of those stock holders may be being forced to contribute to something they do not support and would stand against. That is an initiation of force against that stock holder and should be a criminal act.
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          • Posted by Rozar 10 years, 6 months ago
            So sell your stock, or don't buy from that company. No one has a gun to your head.
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            • Posted by XenokRoy 10 years, 6 months ago
              Nice thought. Do you always know everything a company does you invest in before they do it?

              If you all ready own the stock and the company gives a bunch of money to something you don't want to support without announcing it first, to late. You were just forced to support it against your will, that action should be criminal.
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  • Posted by khalling 10 years, 6 months ago
    The premises the social entrepreneurship are based on are flawed. It would be immoral for a company to engage in projects based on incorrect science such as water scarcity as a way to demonstrate some sort of kinder gentler capitalism. This is a bunch of feel good nonsense. And those who refuse to use their brains to vet the worthiness of such social projects should not be indulged. For the record conservation of water is is best established by accurately pricing water in a given market and ensuring proper infrastructure. The exact same amount of water exists on the earth today as in its creation
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    • Posted by XenokRoy 10 years, 6 months ago
      In some areas (use Utah for an example) there has always been some water scarcity. In the late 1930ies and early 1940ies there was a project called the central utah water project. Its an example of true capitalism at work in the water availability.

      The solution was not to conserve to capture and use. A series of dams were planned on several rivers, most on the severe river which starts and ends in Utah without ever leaving the state and the water end up in a salt flat evaporating away. The creation of these dams (only about 3 were ever made) would have provided more than enough drinking water, water for farming and every other need one could conceive. It was at that time considered more than Utah could ever use even if the population increased 1000%.

      Today people talk conservation rather than capture and use. Sounds an awful lot like atlas shrugged to me.
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    • Posted by CircuitGuy 10 years, 6 months ago
      Many people consider water to be the commons, owned by all, but I find these same people don't care for full private ownership / control of any means of production. There's nothing really special about water in that regard. It's just an easy case for nationalization, so they latch onto it. I agree about accurate pricing. Subsidizing it is not good for the environment.
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  • Posted by n8life 10 years, 6 months ago
    It's really quite suprising that even this group has missed this: This IS good. Not because the businesses have decided to do good or not but because business is ALWAYS good. It is societal and customer demand that fluctuates from good to bad. Meaning, if the people want low prices (at whatever cost), companies like Monsanto can create products that will increase the harvest that a farmer can get out of his fields. That crop will have some features to it that will be bad for the environment and bad for the health of the consumer but will have a low cost. If the people decided what they want more is food that they can feel good about eating and feeding to their kids and are willing to pay more to get it then organic farmers can produce that. Business ALWAYS goes wherever they feel the dollar will flow. That's all these companies have done. Their leadership feels that, presumably because it is important to them personally, others will choose to pay more for whatever they produce because it is environmentally friendly/responsible. IF they did not feel that their were customers willing to pay enough for that often enough for them to make a profit doing it, I assure you, they would not do it that way for long.
    Where this breaks down is when governmental regulation steps in and says "you now have to do it this way." If we are talking about utilities that are governmentally owned/subsidiezed then I think that still may be the right thing to do but if I can't care for my patients the way I feel is best and the patients want to be cared for because of regulations then that is always BAD for the society.
    It's my opinion that the right way for society to change in the environmentally responsible direction is for our tax dollars that are allocated for that to be used for educating the public so that those that can will choose to make their dollars flow towards environmentally responsible companies. The Energy Star rating is probably a decent and successful example of this. I can hardly find an appliance anymore that doesn't have that Energy Star on it. Hopefully that is not because you can just buy a rubber stamp for it but because it gave the companies a profit incentive to make them that way because the consumers felt it was better and sometimes got a tax credit for buying an energy star rated appliance.
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  • Posted by $ Susanne 10 years, 6 months ago
    It's a flawed philosophy - if a company focuses on what they can give away, there won't be much left when all is said and done to grow the company.

    Usually these "Socialist-ly (ir)responsible" companies look at one thing - can I use this cause to make me money? Worked for one of thse - the stated "primary purpose" was to promote Arab-Jew harmony in the middle east... realized after a few months the real purpose was to use this as a means to get customers to generate business - by the time it was over, they not only didn't do much of anything toward this "great socialist program", they missed the mark entirely (not to mention, numerous payrolls, supplier payments, and equipment maintenance funding needed to stay in business).

    It's a great and noble thing for a wildly successful company to support an alturistic goal... but first, you have to become a wildly successful business. Starting a business to give it all away builds nothing except a hole.
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    • Posted by XenokRoy 10 years, 6 months ago
      Susanne,

      I agree and gave you a thumbs up, but for me there needs to be a point cleared up in your statement.

      Its a great and noble thing for the owner of a wildly successful company to support an altruistic goal with his/her money made from that wildly successful company.

      I do not believe it a great thing for the company to do (unless the owner is the only owner) because they may have some goal that I as a stock holder in that company do not agree with and should not risk my money on that venture. If they have stockholders its a form of theft.
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    • Posted by CircuitGuy 10 years, 6 months ago
      Yes. And if the CEO of a wildly successful company gives away money, it's not her money to give away. The company should do a stock buyback or dividend so that the shareholders can choose to give their money away. They may chose to keep it, give it to a national charity, or give it to a neighbor they know is struggling. In any case, that's better than the company being generous with shareholder wealth.
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    • Posted by Hiraghm 10 years, 6 months ago
      Remember how Ray Kroc started the Ronald McDonald House quietly, with no fanfair, and ran this worthwhile charity the company created for years, doing much good providing a service that was in need?

      Then he died and McDonald's corporate took over and turned it into Ronald McDonald Charities, and advertised the crap out of it.

      How about McDonald's around here having "Hispanic employee of the month" posters in their drive-through? I don't know what the award is, but every time I see the poster, I want a Whopper...
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      • Posted by CircuitGuy 10 years, 6 months ago
        "How about McDonald's around here having "Hispanic employee of the month" posters in their drive-through? I don't know what the award is, but every time I see the poster, I want a Whopper..."
        Do they still do that? How is that different from just employee of the month b/c all their employees are Hispanic. Most people there are hispanic. I hear the non-hispanics speak proficient Spanish with an English accent. (I know b/c I speak Spanish with a moderate English accent.) I rarely hear English, except the people who deal with customers are very proficient in English. The McDonald's in my area are a MODEL of excellent customer service. I've never seen any of that employee of the month stuff here.
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        • Posted by Hiraghm 10 years, 6 months ago
          It varies. It goes from people who speak normal, "Americanized" English, and only look Hispanic, to people who barely understand English and don't speak it at all, who also look Hispanic.
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          • Posted by CircuitGuy 10 years, 6 months ago
            It's questionable if you can look Hispanic, since some people who have been in Latin America for many generations and speak Spanish with the normal accent of their country are light skinned. Sometimes they say Hispanic, non-European. The whole system of identifying race vs ethnicity is questionable.
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  • Posted by CircuitGuy 10 years, 6 months ago
    Thanks for the article.

    There are three issues that get confused IMHO in this article.
    1. Not pushing your negative externalities (e.g. costs of pollution) on to others.
    2. Being a good citizen in business, making decisions you're proud of.
    3. Providing humanitarian relief for the needy.
    #1 should be required by law. #2 is good practice. #3 borders on cheating your partners / shareholders. If you're the sole owner, it's not cheating but it confuses the issue.

    Public businesses often do a bad job of #2 b/c no one takes responsibility. People do what managements asks. Management does what the board asks. The board does what analysts and institutional investors ask. Institutional investors do what it takes to get retail investors the return they demand. Public liability-free ownership has many advantages, but it unfortunately reduces accountability. You get a whole society of people doing things they would not do if they were the sole owner of the business.
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    • Posted by Hiraghm 10 years, 6 months ago
      "#1 should be required by law."

      So... how do you feel about legalizing marijuana? (rhetorical question, don't answer).

      So, keep your "negative externalities" to yourself. Yup, give up pooping peeing and breathing.
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  • Posted by Grendol 10 years, 6 months ago
    There are three basic non human entities in an economy. A government, a business, and a charity. If these things confuse their identity then they stop working effectively. This goes back to the fact that you can only serve one master at a time.
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  • Posted by $ minniepuck 10 years, 6 months ago
    I worked for the corporate social responsibility portion of a very large multinational years ago. while it was a lot of fun, the ultimate purpose was still to turn a profit. these community outreach programs and other activities some corporations have to take care of their employees or give them a fun, team building day (like going out for a "treasure hunt" with people from various departments) are all shaped to build employee and customer loyalty. the thoughts are something like. "we care about our employees. come work for us. work extra hours, too" and "we do good for our community. buy from us and help us do more good." I'm not saying this is a bad thing, although the end product is more expensive for the consumer because of it. if customers are willing to pay for it, all right. the workplace IS changed because of them and lots of folks really like it and stay put because of them. employee turnover is very expensive and customer loyalty is a hard fight to win. but - the bottom line is always in mind behind all these programs. the moment they become unprofitable, they die.

    thanks for the link to the book. I find this social trend interesting and will be checking it out.
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