Interesting idea, and I’m glad to explore it a bit. I think in addition to your other reasons it’s not workable, it’s pretty questionable whether “corporation” is the unit of institution to focus on. I’m also pretty skeptical that slack is compatible with financial metrics as the primary optimization lever, whether amortized or instantaneous.
Also, it’s unclear (when discussed over the long term, assuming rational investors (which is broken for your proposal as well)) that theoretical stock value deviates much from perpetual bond value. Both are quite sensitive to perceived stability of company.
it’s pretty questionable whether “corporation” is the unit of institution to focus on.
I agree. AI Safety is a public good and so suffers from the https://en.wikipedia.org/wiki/Free-rider_problem and so even if you had eternal companies, they would have to co-ordinate some how. But I think it would be easier for eternal companies to coordinate on AI Safety compared to normal companies.
I’m also pretty skeptical that slack is compatible with financial metrics as the primary optimization lever, whether amortized or instantaneous.
I’m not sure what you mean by this. I think a lot of companies already give their employees a lot of slack? e.g. Apparently Google used to allow every employee to spend 20% of their time on pet projects (although I’ve heard this practice no longer exists).
Also, it’s unclear [...] that theoretical stock value deviates much from perpetual bond value. Both are quite sensitive to perceived stability of company.
Surely their must be a difference. A bond is not exposed to the “upside” of the companies profits only the “downside” of them defaulting. I think maybe a good analogy is how parents behave with their children. Parents are much less exposed to the upside of their children’s accomplishments (if you start a business and become a multi-millionaire you’re parents see very little of that money), but are much more exposed to the downsides of their children’s failures (if your business fails, then they might have to live with you, increasing rent and food costs). Understandably parents tend to push their children to go for safe jobs (accountant, doctor, lawyer, programmer) rather than doing risky jobs with high upside (actor, artist, musician).
I think in the same way an eternal company (if the incentives work) will behave in a less risky way.
I think we have different models of how upside and downside is experienced by parents and investors (which includes creditors for many purposes). Parents ABSOLUTELY benefit from childrens’ successes, perhaps more than they suffer from failures. Both shareholders and bondholders benefit from company profits—that’s the primary indicator of longevity available to outside observers.
“Grow or die” is far oversimplified as a management directive, but it’s not completely wrong. A pile of past retained earnings is not a long-term defense against business irrelevance. If the corporation isn’t investing in growth opportunities to replace the existing operations (which will eventually erode, as all things do), it’s not going to be around for long.
Interesting idea, and I’m glad to explore it a bit. I think in addition to your other reasons it’s not workable, it’s pretty questionable whether “corporation” is the unit of institution to focus on. I’m also pretty skeptical that slack is compatible with financial metrics as the primary optimization lever, whether amortized or instantaneous.
Also, it’s unclear (when discussed over the long term, assuming rational investors (which is broken for your proposal as well)) that theoretical stock value deviates much from perpetual bond value. Both are quite sensitive to perceived stability of company.
I agree. AI Safety is a public good and so suffers from the https://en.wikipedia.org/wiki/Free-rider_problem and so even if you had eternal companies, they would have to co-ordinate some how. But I think it would be easier for eternal companies to coordinate on AI Safety compared to normal companies.
I’m not sure what you mean by this. I think a lot of companies already give their employees a lot of slack? e.g. Apparently Google used to allow every employee to spend 20% of their time on pet projects (although I’ve heard this practice no longer exists).
Surely their must be a difference. A bond is not exposed to the “upside” of the companies profits only the “downside” of them defaulting. I think maybe a good analogy is how parents behave with their children. Parents are much less exposed to the upside of their children’s accomplishments (if you start a business and become a multi-millionaire you’re parents see very little of that money), but are much more exposed to the downsides of their children’s failures (if your business fails, then they might have to live with you, increasing rent and food costs). Understandably parents tend to push their children to go for safe jobs (accountant, doctor, lawyer, programmer) rather than doing risky jobs with high upside (actor, artist, musician).
I think in the same way an eternal company (if the incentives work) will behave in a less risky way.
I think we have different models of how upside and downside is experienced by parents and investors (which includes creditors for many purposes). Parents ABSOLUTELY benefit from childrens’ successes, perhaps more than they suffer from failures. Both shareholders and bondholders benefit from company profits—that’s the primary indicator of longevity available to outside observers.
“Grow or die” is far oversimplified as a management directive, but it’s not completely wrong. A pile of past retained earnings is not a long-term defense against business irrelevance. If the corporation isn’t investing in growth opportunities to replace the existing operations (which will eventually erode, as all things do), it’s not going to be around for long.