9 ms·

Treating cooperations like paper-clip optimizers who try to hack ones brain sounds very reasonable.

sillysaurus3 9y ago
Is there an alternative? Corporations were invented. Could we invent something better? Or is it just human nature to devolve into the current state of affairs?
- louithethrid 9y ago
  There could be a automatic break up mechanism after ten years.
  - JumpCrisscross 9y ago
    > There could be a automatic break up mechanism after ten years What do you do with the assets? Liquidate them? If so, you’ll just periodically kick out minority shareholders (or promote consolidation).
- beefield 9y ago
  > Could we invent something better? How about making just a small tweak to the limited liability corporation legislation/rules? Currently the main purpose of a corporation is to maximize the (long term) shareholder value. What if the purpose was to maximize the long term goods sold, taxes paid or salaries paid instead? Note that you would still need to pay a decent return to shareholders in order to maximize these other things, just like currently you need (usually) to sell goods, pay a salary and pay your taxes to maximize the shareholder value. (This may sound like a joke, but I am actually serious. Nobody has been able to justify so that I would have understood why it is the common stock holders whose value a corporation maximizes instead of other stakeholders. After all, the original reason limited liability was invented was to enable projects that bring good for the society, but are so damn risky that nobody is willing to take the full liability.)
  - xyzzyz 9y ago
    Note that you would still need to pay a decent return to shareholders in order to maximize these other things, just like currently you need (usually) to sell goods, pay a salary and pay your taxes to maximize the shareholder value. No, you would still need to grow to a large company with lots of revenue, but if the metric to optimize is salaries paid, then paying shareholders anything at all is in direct conflict with paying salaries to workers. The problem here is designing set of incentives that would encourage appropriate results, and the difficulty is that not all incentives work equally well, or even at all.
    - beefield 9y ago
      > paying shareholders anything at all is in direct conflict with paying salaries to workers Paying workers anything at all is in direct conflict with generating shareholder value. Key is "long term". If you want to maximize long term salaries, you must pay a decent return to equity.
      - xyzzyz 9y ago
        No, the difference is that you need to pay salaries in order for company to continue operating. If you don't, the employees will just quit. On the other hand, there's absolutely no need to pay anything to shareholders for a company to operate, other than legal obligation. Shareholders going on strike makes absolutely no difference for the company.
        mooneater 9y ago
        Promise of investor returns is what gets the company off the ground. Remove that and how do you get early investment?
        hamilyon2 9y ago
        Technically, you can tie dividends to, say 5% of salaries and make that unchangable clause in company rules. So, legal obligation, yes.
- pdkl95 9y ago
  How about limiting maximum number of people in any corporation to ~80%[3] of the Dunbar Number[2][3]? It wouldn't fix everything, but it would guarantee more competition and hopefully keep corporations comprehensible. [1] https://en.wikipedia.org/wiki/Dunbar%27s_number https://en.wikipedia.org/wiki/Dunbar%27s_number [2] Vsauce2 has a good introduction: https://www.youtube.com/watch?v=O2qjRG6iV8M https://www.youtube.com/watch?v=O2qjRG6iV8M [3] Why 80%? To allow room for family/etc. This number is merely a suggestion; better values require actual research.

Is there an alternative? Corporations were invented. Could we invent something better? Or is it just human nature to devolve into the current state of affairs?

louithethrid 9y ago
There could be a automatic break up mechanism after ten years.
- JumpCrisscross 9y ago
  > There could be a automatic break up mechanism after ten years What do you do with the assets? Liquidate them? If so, you’ll just periodically kick out minority shareholders (or promote consolidation).
beefield 9y ago
> Could we invent something better? How about making just a small tweak to the limited liability corporation legislation/rules? Currently the main purpose of a corporation is to maximize the (long term) shareholder value. What if the purpose was to maximize the long term goods sold, taxes paid or salaries paid instead? Note that you would still need to pay a decent return to shareholders in order to maximize these other things, just like currently you need (usually) to sell goods, pay a salary and pay your taxes to maximize the shareholder value. (This may sound like a joke, but I am actually serious. Nobody has been able to justify so that I would have understood why it is the common stock holders whose value a corporation maximizes instead of other stakeholders. After all, the original reason limited liability was invented was to enable projects that bring good for the society, but are so damn risky that nobody is willing to take the full liability.)
- xyzzyz 9y ago
  Note that you would still need to pay a decent return to shareholders in order to maximize these other things, just like currently you need (usually) to sell goods, pay a salary and pay your taxes to maximize the shareholder value. No, you would still need to grow to a large company with lots of revenue, but if the metric to optimize is salaries paid, then paying shareholders anything at all is in direct conflict with paying salaries to workers. The problem here is designing set of incentives that would encourage appropriate results, and the difficulty is that not all incentives work equally well, or even at all.
  - beefield 9y ago
    > paying shareholders anything at all is in direct conflict with paying salaries to workers Paying workers anything at all is in direct conflict with generating shareholder value. Key is "long term". If you want to maximize long term salaries, you must pay a decent return to equity.
    - xyzzyz 9y ago
      No, the difference is that you need to pay salaries in order for company to continue operating. If you don't, the employees will just quit. On the other hand, there's absolutely no need to pay anything to shareholders for a company to operate, other than legal obligation. Shareholders going on strike makes absolutely no difference for the company.
      - mooneater 9y ago
        Promise of investor returns is what gets the company off the ground. Remove that and how do you get early investment?
      - hamilyon2 9y ago
        Technically, you can tie dividends to, say 5% of salaries and make that unchangable clause in company rules. So, legal obligation, yes.
pdkl95 9y ago
How about limiting maximum number of people in any corporation to ~80%[3] of the Dunbar Number[2][3]? It wouldn't fix everything, but it would guarantee more competition and hopefully keep corporations comprehensible. [1] https://en.wikipedia.org/wiki/Dunbar%27s_number https://en.wikipedia.org/wiki/Dunbar%27s_number [2] Vsauce2 has a good introduction: https://www.youtube.com/watch?v=O2qjRG6iV8M https://www.youtube.com/watch?v=O2qjRG6iV8M [3] Why 80%? To allow room for family/etc. This number is merely a suggestion; better values require actual research.