One often hears that corporations have a “fiduciary duty to shareholders” to make money, such that we should not expect behavior out of corporations that fails to make money (for example, ethical behavior). There’s one problem, though — how to make money is not self-evident. It seems particularly clear that our current class of corporate managers have no actual idea how to run a company or make money, as opposed to looting money in various ways (through stock options, through “bonuses” approved by packed corporate boards, through altering corporate structures in random and ultimately meaningless ways, through firing all the people who actually do the stuff that makes the company money, etc., etc., etc.).
Over the long haul, the best way to make money is precisely not to treat “making money” as one’s direct goal. Again, this is the point of market competition — you do something well, and supposedly the demand and therefore money will follow. In this respect, the notion of cutting staff and overworking those who remain is directly counter to the goal of making money in the long run, because it means you will do a shitty job at the thing you’ve set out to do.
For instance, Best Buy has been furiously “cutting costs” (i.e., firing people and closing stores), and despite the fact that it’s supposedly the best possible way to “make money,” their profits have mysteriously fallen by 90% in the most recent quarter! Are their shareholders going to sue now? Are their managers going to jail for not making as much money as possible? No, I don’t think they are, nor would that make any sense.
Now it may be the case that Best Buy’s failure is due to inexorable trends like “the internet” and “globalization” or whatever. I don’t know. It could also be because visiting the stores is an actively unpleasant experience, where one is alternately ignored completely or patronized by overbearing salespeople. Surely it’s possible to run a retail store with knowledgable staff who are actually helpful, who have some sense of personal boundaries, etc. I mean, just theoretically — that should be possible, regardless of whether the internet exists, right? But none of our actual-existing retail chains are like that, as far as I can tell, and maybe that‘s what makes people prefer to order online despite the obvious advantages of in-person purchases (i.e., getting to see the item first-hand in real life, getting the item immediately instead of dealing with shipping, having someone who can help talk you through a major purchase, etc.).
Similarly with Borders — we hear that they shut down because of… ebooks! But guess what! Ebooks are a trivial portion of booksales. Borders may have actually gone under because their management team sucked and invested in stupid boondoggles (like the ability to buy music mp3s… but only from in-store kiosks!) while doing a half-assed job of getting their stores into actual high-traffic areas. But again, I don’t think the managers of Borders are in court because they failed to do the thing that would make the most money. Plus, as you may know, Barnes and Noble somehow still exists, against all odds! So this magical idea of, you know, selling books to people live and in person — maybe it has some life in it still!
As far as technological determinism goes, we have the example of Netflix, which boldly embraced the future by attempting to ditch its old-fashioned DVD business in favor of the awesome new technology of streaming video! Which everyone with a cable box has already enjoyed for well over a decade in the form of “on demand” video at this point, but never mind that! In doing so, they alienated millions of customers — despite the fact that world-historical forces were clearly on their side — and now they appear to be doing a much shittier job with the DVD division than was previously the case (viz., “very long wait”). I’m sure it’s only a matter of time before they start downgrading their product further, obviously in order to… make more money! Which, as you know, they are legally required to do — and it’s totally enforceable, because “how to make money” is a known formula and all you need to do is plug and chug.
Or we could think of airlines. Or the US auto industry. Or virtually every company on earth (other than maybe McDonald’s?).
Overall, I think we need to come to grips with the fact that the corporations that rule over us are run by idiots who are purposefully destroying everything that’s valuable about what those corporations do. And we are apparently eager to give them a free pass with this “fiduciary duty to the shareholder” nonsense!
Well, let me tell you — if a company wanted to behave ethically, its managers could make the argument that that would actually be the way to make the most money in the long run. If they wanted to keep people on staff during a downturn so that they’d be poised and ready to go when things picked back up, they could argue for that course of action. They could put it out there in the company’s publications and financial disclosures, and then see how it went.
If they wound up going out of business, then their shareholders would lose money — but shareholders lose money all the time! They would not go to jail. God would not smite them for failing to “maximize shareholder value.” It’d be a business plan that failed. Instead of taking those kinds of risks, though, our corporate geniuses consistently embrace the policy of degrading the company’s operations and looting it, i.e., actively destroying the long-term prospects of making money. And every fucking time there’s someone to pipe up and say, “But they have to make money!”