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Corporations, at their core, are profit-generating engines—nothing more, nothing less. The corporate board’s one legal imperative is to ensure the shareholders see a return on their investment, by any means necessary. Morality? A marketing gimmick when convenient- not an operating principle.
All companies are evil. Google is not any more or less evil than any other company. The difference is they have a significant power base and therefore have a lot to gain or lose in the transition to fascism. They understand that Trump is spiteful and willing to bend and even break the law to punish those who defy him. They also understand he rewards those who bend the knee. Therefore, the most profitable path of action is bending the knee.
This should not surprise anybody. You substitute Google for any large corporation and they would have done the same thing. Don’t believe me? Google around (while you still can freely search for information) for the Coca-Cola saga in Colombia, where union leaders were getting forcibly suicided by narco-paramilitary death squads hired by Coca-Cola.
You know- the commercials that make you feel all warm and fuzzy around Christmas time with the polar bears and Santa Claus? Yeah, they'll murder you if you threaten their bottom line. It's just what they do.
There's a simple math equation:
Let
P = Probability of getting caught,
F = Expected fine or penalty,
R = Potential revenue or profit,
Constants
α = The weight assigned to the probability of getting caught ( P ). If this constant is high, the corporation is more cautious.. if it's low, the corporation is willing to make more risks. In Colombia, this is much lower than in the US.
β = The weight assigned to the probable size of the penalty ( F ). A high β means there's a serious potential danger. However, if β is low (like when Ford decided the cost of simply paying lawsuits from deaths due to known car malfunctions was probably lower than the price of recalls) then they'll be more likely to push forward
γ = The weight assigned to the impact on their bottom line ( R ). For example, if Boeing thinks they will lose a lot of money from whistleblowers, they will find a way to suicide them. If the impact is small, then it's not worth the potential risks.
C = ( αP ⋅ βF ) − γR
Let's give an imaginary example. Let's say a corporation is considering dumping toxic waste illegally into a river, potentially giving thousands of people cancer. Let's say they're gonna save $10M a year from doing this.
R = 10,000,000
The probability of getting caught is 10%
P = 0.10
The expected fine is $5M
F = 5,00,000
Let's try out some constants
α = 1.5 ⇒ they're somewhat cautious about getting caught
β = 1.2 ⇒ they're moderately concerned about the penalty
γ = 2.0 ⇒ they're really motivated by profit (maybe their profits went down 10% last year, a big no-no)
Plug in the values
C = (1.5 · 0.10 · 1.2 · 5,000,000) - (2.0 · 10,000,000)
C = (900,000) - (20,000,000)
C = -19,100,000
C is less than 0? Dump that toxic waste, baby. It's the logical position if you're trying to maximize profit. Sometimes you will get caught, but imagine you did this in a simulation 1,000 times. Most of the times, you will be more profitable because of it and therefore you dump the waste.
It's like a poker player. If you get AA, you raise pre-flop. Sometimes you will lose on the flop to some dunce who goes in with 2-7... but in the long term, most of the time, you will win. Therefore it's the right move.
This is what companies do. People need to realize and internalize this. They are profit generating engines. Nothing more, nothing less. They are not your friends. They don't care about the environment. They don't care about the future of the world or anything. Literally nothing at all.
They are a math formula and if destroying everything you love happens to be the most profitable move most of the time, they will do it without second guessing. Because they aren't people. They are a machine.
All companies are evil.
Disagree. Publicly traded companies are amoral, so whether they do something good or evil depends on what's profitable.
Healthy competition tends to make "evil" actions unprofitable. Google doesn't have healthy competition, hence the current situation.
These companies aren't the bad guys in the same way that weeds in your garden aren't "bad." If you don't want weeds to take over, make sure there's sufficient competition and incentives so desirable plants crowd them out, and stay on top of the handful of weeds that take root. We've neglected the garden for decades and allowed some truly nasty weeds in, but that doesn't make the weeds "evil," that means we were poor gardeners.
To me, apathy and amorality when the consequences are harm towards others is evil. It's sort of like if a driver was in a rush and ran over a protestor on his way to work.
Sure, he did not wish any harm on the protestor. He just simply needed to get past them and chose the most effective and efficient path.
It's an amoral act but the act (and the driver) is still evil. Evil is not just a mustache twirling genocidal dictator or sadistic serial killers.. In fact, the amoral does infinitely more harm than the malicious. The Nazis did not come to power because of malice. They did not kill millions of Jews because of malice. They got there through apathy and amorality.
They didn't want to kill the Jews at first- they wanted to deport them. But once they got them in the camps.. it was impractical to supply enough logistical power to actually move them all. So while they figure out a plan, let's have them do slave labor.
And then after a while, since we can't move them, we may as well just kill them. It's the most effective path to where we want to be. The driver driving over the protestor.
If this isn't "evil", what is?
Healthy competition tends to make “evil” actions unprofitable
Competition helps. I agree that this negative aspect of capitalism is exponentially magnified when monopolies form.
The thing is, in capitalist the wealth tends to snowball. Wealth is power and wealth buys influence. Look at how Disney singlehandedly changed copyright law when Mickey Mouse was about to enter public domain. Once you reach a certain size, you can modify the rules of the game. So it creates a self-perpetuating cycle.
This position we are in is the natural consequence of free market capitalism. I agree that free market is better. But this is the grown up version of free market. There was never going to be any other scenario but the one we are in.
We’ve neglected the garden for decades and allowed some truly nasty weeds in, but that doesn’t make the weeds “evil,” that means we were poor gardeners.
We can debate on the ontology of the world evil. It really is an interesting debate. But for all practical purposes, if the weeds are killing the crops that feed your family.. what is the difference? Whether they want to kill you indirectly through starvation or don't want to kill you- you're dead either way.
The issue with your driver analogy is that the driver has to make a conscious decision that their convenience is worth more than a human life. I don't think anyone would disagree that the driver is evil.
Likewise for your Nazi example, the choice to arrest and deport people because of their religious, ethnic, or cultural affiliation is evil. That should absolutely go without saying, as should killing people for convenience or profit.
Corporations are rarely in that situation, and if they actively choose to kill people, the decision makers should join the driver and Nazis in prison.
wealth tends to snowball
As it should. And snowballs tend to burst on impact. Look at GE or Sears, they used to absolutely dominate, but they imploded because they couldn't adapt to the competition.
That's how it's supposed to work, innovators profit massively from the value they create, and when they stop innovating, they fail.
The problem is that large businesses rarely fail and get bailed out. We should've had a ton of banks close in 2008, but instead their execs got golden parachutes and failing businesses just consolidated into even larger entities. The message that sends is that companies can get away with murder, as long as they are "too big to fail." The problem there wasn't the cheating (it was a problem, don't get me wrong), but the lack of consequences. We should've seen execs being carted off to jail, having their assets confiscated to help make restitution for their crimes. But instead we rewarded them.
This isn't a failure of capitalism, it's corruption in government.
Once you reach a certain size, you can modify the rules of the game.
And that's the problem. My point is: don't hate the player, hate the game. Demand better representation, and real consequences for corruption.
I'm guessing if you looked into Google/Alphabet, you could find dozens if not hundreds of crimes committed that helped them get the market share they have, and most of those likely went unprosecuted or had ineffective penalties. Likewise for other large orgs like Microsoft and Amazon.
Yet everyone seems to blame the corporations and not the government. You blame Disney for our terrible copyright laws, yet Disney didn't pass or sign that law, they merely lobbied for it. The problem isn't Disney, the problem is Congress.
, if the weeds are killing the crops that feed your family… what is the difference?
Weeds killing your crops is a symptom of the problem, which is the lack of maintenance of the garden. The weeds didn't kill your family, your lack of preventative action did.
Likewise, corporations taking advantage of an ineffective government isn't the problem, the ineffective government is. Fix ththe gardener and the garden will prosper. But a bad gardener is worse than no gardener, because nature at least finds a way for crops to survive without anyone plucking the weeds.
You blame Disney for our terrible copyright laws, yet Disney didn’t pass or sign that law, they merely lobbied for it. The problem isn’t Disney, the problem is Congress.
I think one thing we need to get out of the way is that the political system and the economic system are intertwined. There is no way to have a democratic capitalist society without having one influence the other.
If we go back to Adam Smith- he's seen as the father of economics. But he didn't consider himself an economist. He considered a moral philosopher and a political economist. The political system and the economic system are one and the same.
You believe these large corporations gaining too much influence is because of poor maintenance. Because of a corrupt government. You believe it's because we're not enforcing our anti-trust laws and so on.
I disagree and say this was always inevitable. It is impossible to keep your garden free of weeds starting from a free market economy. Again- wealth snowballs and wealth buys influence.
It's a simple cause and effect. As long as the profit incentive is the main motivator in our political economy, the political system will be shaped by those with the most money. And they have the incentive to remove those free-market systems in order to maximize their own profit.
It's a deterministic cycle. Free market capitalism -> late stage capitalism -> fascism
the political system and the economic system are intertwined
Sure, but that overlap should be as small as possible while still ensuring a competitive market.
late stage capitalism
Socialists and other related academics have been throwing this term around since WW2, and every couple decades they move the goalposts. It's little more than a scary story they tell to convince people to go along with their authoritarian ideas. It's really not that different from Hitler blaming Jews for all of society's problems, just with a socialist flavor instead of a fascist one.
The truth is that wealthy people need the working class to buy their stuff, and buying their stuff increases the workers' standard of living. Standard of living has been rising pretty consistently in developed countries, especially those with relatively free markets.
Yes, wealth inequality is growing (which is a problem), but that doesn't mean the poor are getting poorer. Quite the opposite in fact, if you look at the data, people of all economic classes are better off year over year.
A lot of the problem is self inflicted IMO. The process goes something like this:
And then we have the corrupt two party system where most representatives don't have much actual competition for their seat, as long as they have more funding (conveniently provided by helpful lobbies from 3). The longer a rep stays in office, the more they tend to listen to the big players.
It's not impossible to fix the problems, we just need to stop trying to use government to solve everything. Government works best when it's simple, special interests love complexity, so we should simplify the law so it's easier for people to tell when they're getting screwed.
For example, the IRA is an incredibly simple retirement program. You open an account at a brokerage or bank for free and then buy stuff, and taxes are either up front or upon withdrawal. Some brokerages are cheaper than others, so you can shop around for the features and costs you want. The 401k is incredibly complex, and because it's negotiated by employers, a lot end up being expensive for customers (e.g. mine has a 0.10% asset fee on top of fund fees), all because financial institutions want a cut. The plan is selected by HR, and employees don't get a choice other than participate or not. Taxes are complex because Turbo Tax wants to keep their customers. And so on.
Here's a quote from the author of my favorite book:
Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
- Antoine de Saint-Exupéry
The problem isn't with corporations, they're largely a constant. The problem is with government getting bloated and losing the plot because everyone tries to use it to solve their pet problem and the net winners are the lobbies.
It’s little more than a scary story they tell to convince people to go along with their authoritarian ideas
This is where I think you may have misinterpreted me. I'm not trying to push socialism. I think we're genuinely fucked and there is no way out.
Sure, but that overlap should be as small as possible while still ensuring a competitive market
This is a fantasy. We talk about "free market capitalism" as if it's some pristine, untouched mechanism that would work perfectly fine if only the government followed the rules. But the moment big money arises, the entire political field is lured in. Wealth itself becomes a gravitational force that pulls legislators, laws, and lobbyists into its orbit.
This is not a bug, it's a feature. It's fundamental to the system. A free market can never remain a free market. For two very simple reasons.
a) economies of scale. It's cheaper to a lot of something per thing compared to a little of something per thing. so there is a financial incentive to get bigger and that is a self-perpetuating cycle. Eventually at the end of the game of Monopoly, there's only one landlord standing who bought everything else up.
b) wealth is power. if you have power, you will use it to ensure your position is improved. this is human nature. this works the same in any other political economic system.
It’s not that a pure free market is corrupted by government, or that a pure socialism is corrupted by incompetent central planners; both are myths in the sense that they never truly exist in the real world. We either get forms of crony capitalism or state-managed capitalism, but the “free” part is always an abstraction.
What we need to acknowledge is that the political and economic systems are not two separate worlds that only overlap by accident. They’re conjoined twins. Pretending one can neatly excise government from the economy is a fantasy—just as fantastical as imagining the perfect socialist utopia.
The trick is to recognize that the moment large-scale wealth accumulates, it necessarily accumulates political clout. And from there, the “free market” gradually becomes a marketplace that’s anything but free.
This is what people mean by late stage capitalism. It's capitalism that has eroded all of the public institutions and in a short amount of time fascism will take root. We're witnessing the transition right now as we speak.
This is a fantasy
It used to be reality. Copyright law was reasonable and largely unchanged for 180 years, it lasted 28 years, with an optional extension for another 28 years. Originally it was 14 years, with an optional extension for another 14 years. The same is true for a number of other stupid laws that large corporations exploit.
But the moment big money arises, the entire political field is lured in
Agreed, and maybe we should consider constitutional limits on what governments can do. You won't bribe someone who is legally restricted from helping you...
But honestly, the root of the problem, I think, is the two-party system, which encourages corruption, especially when state governments get to redraw federal districts. We shouldn't be pushing for individual changes to separate government from big money until we solve the problem with party politics.
Some suggestions:
Wealth itself becomes a gravitational force that pulls legislators, laws, and lobbyists into its orbit.
That's true of any economic system. You said you're not pushing socialism, but you didn't offer what you do support, so I'll speak broadly.
Power attracts money, and money attracts power. These are constants in human nature, and they need to be watched very closely. My point is that increasing the ability of governments to make changes that benefit or hurt the market attracts big money, so we should be very careful of anything we ask our governments to do. Having a political system that encourages entrenched politicians just exacerbates the problem. And moving more and more powers to the executive branch reduces the amount of work companies need to put in to get a desired result (e.g. Trump can be bought).
My opinion is that, in general, rules should be crafted and enforced as locally as possible, which would then dramatically increase the work required for a large entity to get what they want. Federal policy should be simple and limited to only what's needed for a functioning union, and likewise down the chain.
there is a financial incentive to get bigger and that is a self-perpetuating cycle. Eventually at the end of the game of Monopoly, there’s only one landlord standing who bought everything else up.
What you're missing is that as companies get bigger, they lose sight of their competitive advantage. Look at big household names from 50 years ago (or sooner!) that don't really exist today. Capitalism works by smaller upstarts finding a competitive advantage, exploiting it, and then the cycle repeats.
The way large orgs compete now is by buying small orgs. We could consider blocking corporations from buying other corporations, which should encourage more disruption vs larger orgs (i.e. erode wealth of the big players), since they can't just buy their competitors.
It’s capitalism that has eroded all of the public institutions and in a short amount of time fascism will take root.
I really don't think the two are related. Look at fascism before WW2, they didn't need to erode capitalism first, they just ran on a populist platform, identified a common enemy, and used the platform and enemy as an excuse to eliminate democracy, at which point they could nationalize whatever industries they want. The transition to fascism throughout history has been through political means, not the market.
I suppose it's possible for it to happen in the other order, but I don't think it's inevitable. We had a similar situation w/ Standard Oil taking over everything, and we ended up doing some trust busting to fix the issue. It's not too late to change course, we just need the public to recognize the problem and demand change.
You said you’re not pushing socialism, but you didn’t offer what you do support, so I’ll speak broadly.
I'm a bit of a pessimist here. I think free market capitalism is a terrible system that will inevitably crash and fail. It is also the best thing we have come up with so far. Essentially Churchill's quote. I only hope that after our next foray into fascism we will come out the other side with a new 21st century ideology that is somehow able to fix the fundamental contradictions.
I really support Liberalism (and I mean you know, freedom of speech, free market, pursuit of happiness, etc). I would always prefer to live in a society that gives me the freedom to live life on my terms. In theory, we could have a socialist version of this, but I think like we discussed it falls victim to precisely the same fate. When the Soviets initially took power, they were genuine in their desire for revolutionary emancipation. They did many great things- they created written languages for all of the local ethnicities that didn't have them. They put local leaders in positions of power. They increased literacy and invested in education strictly for altruism.
That only lasted a couple short decades, however, because the wheels of power inevitably turn. I shouldn't have to go into detail on the horrific abuses of power that resulted from the developed Soviet state
Here's the thing, I think you make great points. And the solutions you propose would benefit the system both in the short and long term. But I think collapse is inevitable anyway, and specifically collapse into fascism. Perhaps in a system where the institutions are strong and we have policies in the line of what you're suggesting (campaign finance reform, proportional representation, etc. I'd even say higher salaries for politicians counter intuitively) the descent will be slowed for a long period of time.
But ultimately, it's the classic criminal versus police officer. You can put up a border wall to stop drugs coming in, they'll go under the ground. You put ground penetrating radar sensors, they build DIY-submarines. You invest in a coast guard, they build drones. Etc Etc
It's a constant battle that requires constant vigilance. However, here's the kicker. Here's the reason why it will always inevitably fail.
The people with significant wealth and by extension power- they will always have incentive to change the system to their advance and they will always have the ability to influence it. They will never stop trying to come up with new ways to either exploit current laws or create new ones.
The average people, the consumers and voters, they will sometimes have the incentive to change the system and they will sometimes have the ability to influence it. In times of trouble, people get upset and they start protesting. They start voting for new measures, different policies get enacted. Like you mentioned, we broke up Standard Oil. Or when we broke up the Bell Telephone Company.
During that time people were both discontent, which means they had the incentive to change the system and coincidentally that also gives them the ability to influence the system- politicians are only scared into making positive change for the average person when there is large scale dissent.
But what happened to both of those examples (and virtually every other anti-trust regulation we've ever tried to implement)?
Today, Bell Telephone's descendant is AT&T- a behemoth of a megacorp that participates in an oligopoly over the telecommunications market. Today, Standard Oil's descendant is Exxon Mobil and remains the largest oil and gas company in the US.
What happened here? Well, the public interest eventually fades. Some other crisis shows up on the news channels and people become content with their lives. If the economy is doing well, people are paying their bills, etc, they don't care. If they economy isn't, the politicians have become exceedingly proficient at redirecting that discontent towards scapegoats (today it's immigrants for example).
So, it's a simple math equation. Let's say the corporations win 51% of the coin flips and the free market / law abiding public wins 49% of the time. For a very long time, it can stay more or less even. Cops versus robbers- the equilibrium stays intact.
But imagine a limit that goes to infinity. What happens? Eventually the interest of wealth wins. Now, different societies can have different coin flip ratios.
I think our society is nowhere near 51% / 49%. I think your solutions would bring us closer to that 50 / 50 but due to again, the very nature of the capitalist system- the law will never be in the driving seat.
Two very simple axioms determine that, which we have discussed above
we could have a socialist version of this, but I think like we discussed it falls victim to precisely the same fate
Yeah, the most likely formulation is free market socialism, as in, lots of worker-owned co-ops, but goods are traded in a free market. Those co-ops need to be relatively small, to avoid any one org from having too much control.
I’d even say higher salaries for politicians counter intuitively
Agreed. And cops. You tend to get what you pay for.
Put up a border wall to stop drugs coming in, they’ll go under the ground
Sure, and the way to stop drugs from coming in is to make that trade unprofitable. Legalize drugs, and provide safe ways to use even the hardest drugs. If you do that, the few people who want it can get it in a safe way (i.e. trip out at your local pharmacy), and you don't get all of the violence that comes with black market trade.
But no, "drugs bad," and the public wants to control "bad" things. The government shouldn't be deciding what is "good" or "bad," but how to provide a desired service in a way that doesn't hurt others. Ideally, we end up with open borders because criminals no longer have an incentive to relocate (at least more-so than regular immigrants).
They will never stop trying to come up with new ways to either exploit current laws or create new ones.
True, and that's going to be the case regardless of the system you choose. The bigger the potential profit, the more care needs to be taken in crafting and enforcing laws.
Standard Oil’s descendant is Exxon Mobil and remains the largest oil and gas company in the US.
They don't also own the railroads and whatnot. The issue w/ Standard Oil was the sheer amount of infrastructure they controlled, not that they were the biggest player in their market. As long as the profit motive is to produce goods at competitive rates, it's not a problem that they're raking in crazy profits. But once they get a monopoly, the incentive changes to killing competition so they can raise prices, which also gives them massive leverage against government (no more oil unless I get <concession>
For a very long time, it can stay more or less even.
The way it seems to work like the typical boom/bust business cycle. In the stock market, we tend to get 7-10 years of boom, followed by 1-2 years of bust, and the cycle repeats. Likewise, we get a build-up of problems, and then we pass some key legislation or do a high-profile anti-trust breakup, and the system kind of resets.
The issue we're left with is whether these corrections are sufficient, or if, like stock valuations, there's an upward trend of giving corporations too much power. I worry there is, because we don't seem willing to make the painful changes we need to get a deep enough correction (e.g. we should've let more banks fail in 2008, fix election process, etc).
I guess the main difference is that I think things are salvageable. However, we need to rethink the interaction between government and the market, and stop expecting government to solve all our problems. Government is a pretty big hammer, and we need to be very careful breaking it out since it can cause a lot of problems in a hurry.
I guess the main difference is that I think things are salvageable
To be honest, I think we are very ideologically aligned. I agree that government power is something that should be used with very precise care. Look at what happens for example when we introduce Pell Grants, giving lower income kids the opportunity to go to college.
That sounds great, right? Who doesn't support that? Well, I sure want poor kids to be afforded the opportunity to go to school.
But look at what actually happens. Now you have a whole new class of people with a sizable chunk of government money. The demand for college goes up. Tuition rates skyrocket. The few thousand you get from the Pell Grant is now meaningless and it counter intuitively costs you more even with the grant.
Who benefits? Not the kids. Not the working class. The college administrators.
Kamala was campaigning "taxes incentives for first time homeowners!" Great. Who is going to say to no to that, right? Support young families. Sure.
What would inevitably happen? Large increase in spending => large increase in price. So if they get a $10,000 tax credit but the houses are $15,000 more expensive- what's the difference? These are arbitrary numbers, obviously, and not borne out of some analysis.
But who would benefit? Not young families. Banks and land owners.
Government action, usually disguised as something to help is almost always going to be twisted to hurt average people.
But yes, I agree 100%. I rather like Chomsky's take on this. I'm not an anarchist but he has advocated before for a system where every single use of government power should be consistently and continually challenged. Every single time the government spends a dollar, it needs to be transparent and justified and there needs to be a way to challenge it.
The thing is, government spending is not inherently a bad thing. Government action sometimes is exactly what is needed. For example in an economic crisis, government stimulus can be enough to turn things around or at least ameliorate the situation for the working class.
But and the big but - and the but that basically had made me lose all faith in democracy over the last 10 years or so is the way you put it
But no, “drugs bad,” and the public wants to control “bad” things
Politicians do not do what is rational. They do what is popular. These are two separate things entirely. And even worse, they can modify what is popular with a variety of mechanisms. For a simple example- look at the death tax. You ask average Americans whether they support a death tax, they will say of course not. It sounds absurd, right?
If you call it an inheritance tax, all of a sudden majority of people support it.
So yeah, I think you're right in that we more or less align on what the ideal system should be but you still believe in the ideals of the Enlightenment and believe that egalitarianism and liberty is possible.
I think humanity is brutal and stupid by nature and we are bound to be ruled by people with strength. I think all government systems eventually deteriorate into fancy feudalism.
For a bit of an absurd statement- I think what we need to do is create a constitution that is very explicit. And then what we need to do is let an AI enforce it. Assuming the AI is objective and not able to be influenced, I think then and only then would we have a free society. And the irony is- we wouldn't be in control of it.
Maybe I'm just a pessimist about human nature. Don't misinterpret me, I consider myself a humanist. I like humans. I feel empathy for others. I want the best world possible for everyone.
But I think humans in a group are stupid. The crowd is like a locust swarm, destroying without thinking. It's sad
Great write up, I appreciate the modeling.
