Some thoughts on the The Good, The Bad, and The Ugly
What better to read on Fathers Day than Alexander Waugh's Fathers and Sons

When profit is no longer the motive

I'm old enough to remember when "corporate greed" was regularly denounced as the greatest of all evils.  The profit motive was synonymous with environmental destruction, unsafe working conditions and every manner of harmful behavior.

This was exemplified during the 1980's movie Wall Street, when arch-villain Gordon Gekko (played by Michael Douglas) famously pronounced "Greed is good."

The context of the film was that Gekko was a ruthless corporate raider and he was using labor concessions on a recently-acquired airline to boost its stock only to break it up and sell off its assets.  The maintainers, support staff and pilots would all lose their jobs to that a rich man could make himself even richer.

With the benefit of hindsight, the problem was not greed per se (which will always be with us) but an incentive structure that laid a premium on short-term gains over long-term profitability. 

Now, however, we have a new problem, which is that greed is competing against social virtue-signalling, creating an even more toxic situation.  This is a species of Yard Sign Calvinism, where the primary goal is to show the virtue of the people in charge; whether this benefits society as a whole is besides the point.

For example, No Mow May was supposed to boost pollinators, but the lawns that went wild have since been cut and - thanks to a mild drought - are now dead.  A far better option was to simply plant flowering plants and let them remain year-round.

What if the same skewed values prevailed in commerce?  Well, one would see profitable enterprises - and the jobs that sustained them - squandered merely for a passing boost in social status.  Gekko's corporate raider capitalism shifted wealth from one group to another; Yard Sign Calvinism destroys it for "likes" on social media.

I think the former is therefore preferable to the latter because the final determination of profit can be shaped by legislation (such as the tax code) but also by people voting with their dollars.  A robust customer boycott can not only cause the company directly affected to change course, but influence others as well.

But if the company's leadership sees itself as being part of a great moral cause, the boycott might actually harden their determination to maintain their fixation.  I think this is the case in entertainment, where CEOs are incapable of course corrections on failing franchises because they covet social approval more than dividends.  In their case, greed would be a virtue.

G.K. Chesterton long noted the fanatical devotion of many alleged "free thinkers" to various causes, and their willingness to use any amount of someone else's money to feel good about themselves.  He wrote satire, but now it's all to real.

I miss the robber-barons.




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