For-profit corporations, as a matter of law, have the goal of making money and their boards are subject to all sorts of legal consequences and other unpleasantnesses if they don’t optimize that goal as a primary objective (unless some other goal is explicitly written into the corporate bylaws as being more important than making a profit—and even then, there are profit requirements that must be fulfilled to avoid corporate dissolution or conversion to a non-profit—and very few corporations have such provisions).
Translation
Corporations = powerful, intelligent entities with the primary goal of accumulating power (in the form of money).
It’s maximise profits under the constraint of obeying the law.
No, it’s maximize profits even after the costs (such as fines or lost business) of possibly getting caught violating the law. There are many cases where the fines for a given practice are less than the profit from said activity...
Mark Waser (above) was talking about corporations being legally compelled to maximise profit—in some juristiction or other. They are not legally compelled to break the law.
I know. The legality of an act is not a binary. A act can be completely legal, completely illegal, a civil violation with varying fines, ignored or swept under the rug for some actors, and heavily penalized for other actors.
Nor are the incentives of acting in a system that has a legal system quite the same as the incentives due just to the legal system.
Corporations are legally compelled to maximize profit in the sense that this is grounds for a shareholders’ suit. Even given this limited premise, operating officers are less likely to face such a suit if they do better by violating laws that they are unlikely to be caught at, or where the consequences of getting caught are minimal. The same holds, of course, for shareholder elections.
They’re also compelled to maximize profit in that that is one way individuals within the corporation are likely to do better. Again, this holds even when violating laws that are unlikely to have large bad consequences for the individuals.
I hear this point a lot, but I’ve never looked in to it. Are there any famous cases of companies being sued or prosecuted for being insufficiently evil in the pursuit of profits?
For-profit corporations, as a matter of law, have the goal of making money and their boards are subject to all sorts of legal consequences and other unpleasantnesses if they don’t optimize that goal as a primary objective (unless some other goal is explicitly written into the corporate bylaws as being more important than making a profit—and even then, there are profit requirements that must be fulfilled to avoid corporate dissolution or conversion to a non-profit—and very few corporations have such provisions).
Translation
Corporations = powerful, intelligent entities with the primary goal of accumulating power (in the form of money).
It’s maximise profits under the constraint of obeying the law.
The latter part is where some moral constraints are explicitly encoded.
No, it’s maximize profits even after the costs (such as fines or lost business) of possibly getting caught violating the law. There are many cases where the fines for a given practice are less than the profit from said activity...
Mark Waser (above) was talking about corporations being legally compelled to maximise profit—in some juristiction or other. They are not legally compelled to break the law.
I know. The legality of an act is not a binary. A act can be completely legal, completely illegal, a civil violation with varying fines, ignored or swept under the rug for some actors, and heavily penalized for other actors.
Nor are the incentives of acting in a system that has a legal system quite the same as the incentives due just to the legal system.
Corporations are legally compelled to maximize profit in the sense that this is grounds for a shareholders’ suit. Even given this limited premise, operating officers are less likely to face such a suit if they do better by violating laws that they are unlikely to be caught at, or where the consequences of getting caught are minimal. The same holds, of course, for shareholder elections.
They’re also compelled to maximize profit in that that is one way individuals within the corporation are likely to do better. Again, this holds even when violating laws that are unlikely to have large bad consequences for the individuals.
I hear this point a lot, but I’ve never looked in to it. Are there any famous cases of companies being sued or prosecuted for being insufficiently evil in the pursuit of profits?