Private corporations acting in quasi-government ways is risky at best and terrifying at worst. While some of the checks & balances in civil+legal society have been broken, many are still there and there are repercussions when they're broken.
A corporation doesn't have the same mechanisms - public rules (aka laws), processes, appeals, accountability, etc, etc - built in and there's limited recourse when their definition of "right" and others' conflicts.
Based on this new assumed role, it's begging for more government regulation. And unfortunately, it makes sense for governments to say "as you take a more active role in society, you need more public oversight."
And once a corporation takes on the roles of government, it naturally needs to be protected from competition lest the essential government functions it provides get threatened.
We shouldn’t be demanding more from our corporations, we should be demanding less. Companies should produce goods and services at the highest quality for the lowest price, and let free citizens choose between them - and if the goods for sale are subpar - let the same free citizens start their own competitor.
History is a never ending see-saw, and we are now sawing back towards protectionism, big government, and less freedoms for the individual. At the very least it will once more teach painful lessons to a new generation that doesn’t remember the past.
>let the same free citizens start their own competitor.
Except that starting a competitor often requires far more capital than the incumbents needed to reach their position. I don't support protectionism, but "true free market" economics are an illusion used to prevent and tear down regulations.
SpaceX is mainly alive because NASA/government poured tons of money in it, so not exactly the best example:
"As a company, their total contracts are worth $12 billion including commercial satellite launches as well as NASA and U.S. government missions. Of that total, $5.5 billion is from government contracts from NASA and the Air Force."
Basically what could have been done (and was done, and reached the moon and built the space bus etc) on government money, is now paid to a private constructor to do (plus profits, minus the patents going to the state).
Indeed, SpaceX nearly went bankrupt in the early days because they couldn't get a contract until they successfully launched a rocket. That first contract after their first successful launch was from NASA.
NASA didn't do that out of the goodness of their hearts though. Pound-for-pound (which, to orbit is pretty pricey), SpaceX was cheaper.
Blue Origin, a different space corporation, was not even in consideration, but if they had something competitive, NASA would have considered their bid as well. (Tbc, Blue Origin isn't shooting for that market at all, so this is in no way a dig at them.)
>NASA didn't do that out of the goodness of their hearts though. Pound-for-pound (which, to orbit is pretty pricey), SpaceX was cheaper
Well, that's how you do it: you mismanage a state organization to make development costlier, and then you give the project + profits to private industry pals...
I knew that but I'm specifically asking about "starting a competitor often requires far more capital than the incumbents needed to reach their position", not where the money is coming from
>I'm specifically asking about "starting a competitor often requires far more capital than the incumbents needed to reach their position"
Well, isn't that self-evident? You can't beat Google or Amazon or Apple starting from the money Apple had at its times, or Amazon had when they started (adjust for inflation).
They have tons of billions of cash at hand to stomp on you, tons of special deals, economies of scale, can buy the best talent undercutting you, have friends in government and media, have huge network systems of third parties, and so on.
>And yet Apple beat IBM, DEC, HP, etc. which nobody anticipated.
In a totally different market. IBM wasn't making Apple I and II equivalents before, or Mac OS equivalents afterwards, and Apple wasn't making mainframes and workstations, and targeting enterprise (in fact, in the 90-96 period that it did try that, it almost tanked).
And the IBM PCs ended dominating the world (market share wise), IBM just didn't have exclusivity on building compatible devices.
But even all of those are beside the point: we're talking about now, not the 80s. At the time the home PC market didn't exist, companies started from scratch. And even enterprise computing (except for the big systems catered by IBM, DEC and co) was the Wild West.
It's like entering the search engine space in 1998 (when there were around 10 competing engines) vs today.
That's more about the poor performance of predictions. And a reminder that companies can and do fade.
Not really relevant as to whether a small company can beat an incumbent in their own game today. If Google fades eventually it wouldn't be because a new search company beat them at search, but because the industry changed and search is not longer as relevant, ad revenues are marginal, etc, for example.
> Not really relevant as to whether a small company can beat an incumbent in their own game today.
Except I've heard that argument for my entire life (I'm old). And it never pans out. Then there's a new crop of companies with "this time it's different". You can go back through a couple centuries of US companies and you'll find endless examples.
Yes that's exactly the point. The fiction under which corporations are granted their strange and powerful place in society, is that the invisible hand of the free market results in the best, floating to the top. Unfortunately, that invisible free hand is more imaginary than real, giving incumbents far more power than intended - assuming that you view pure competition as the ideal state, rather than a malignant state.
But they have to be different - that's how things improve. If they were exactly the same then what difference does it make for the consumer which product they buy? They're identical.
better, yes. the issue is that it has to be monumentally better in order to complete. Say I came up with a new algorithm for search, and an angel funded me at the same level that Google started off at. In order for MyNewSearchCo to be able to competitive, my algorithm needs to be 1,000% better; 10 or 50 or 100 percent isn't enough. Considering that I'd also have to build my own ad-network and crawl all of the Internet, I'm not sure it's even possible to compete at this point. Especially once Google sees me as a threat, the sheer amount of resources (and not just technical) they could bring to bear against a small dozen person start-up is ludicrous.
That is where the harm comes in - as a consumer, I'd love a 50% better search (insofar as thats readily quantifiable), but the current architecture of the market ends up preventing this from happening!
Most corporations aren't big and don't have a lot of power -- laundromats, machine tool manufacturers, and so many other businesses are formed as corporations (and not as sole proprietorships). How fictive is the invisible hand on that scale?
Lots of money confers lots of power, sure, though this is not anything peculiar to corporations. Corporations are a strange kind of ownership -- since shareholders "own" the corporation but have almost no control of it or any direct access to its assets -- but what is the "strange and powerful" place that corporations are granted?
Competing against price-cutting, product-dumping, employee-luring, FUD campaigns, bundling and tying, exclusive dealings arrangements, legislative lobbying, patent lawsuits, bribery, forced acquisitions (e.g., Luxottica & Oakley) and any of the numerous other tactics that are not "pure competition" but are and have been used against challengers, is exceedingly difficult.
Sneaking up under the radar, making a lateral move, or finding a patron or sweetheart deal as an entry into a market is frequently required. Microsoft's break was its exclusive, per-CPU licensing deal with IBM, later extended to other OEMs, and followed by bundling (Office) and tying/dumping (Internet Explorer). Government contracts (national, state, or local) can be a path. Emerging during a period of general economic panic works for others -- both Google and Facebook effectively emerged during financial squeezes (and legal impairments) on incumbents or potential spoilers (2001, 2007-8).
Bernhard J. Stern's "Resistances to the Adoption of Technological Innovations" (1935) details numerous instances and methods of such dirty tricks, and is rapidly becoming among my favourite references to these:
Google / Alphabet have prove unable to displace telco / cable monopolies.
Or, for that matter, Facebook's social networking monopoly, despite dumping billions into Google+.
Since the 1920s, it's been virtually impossible to start a new consumer automobile company in the US, with several notable flameouts (Tucker and DeLorean notably). Tesla is a remarkable exception, though they are innovating on energy storage and traction.
The aviation industry is similar.
Likewise, banking.
Despite ongoing consolidation and failures in Big N consulting firms, new entrants have not emerged in the space. What are now the Big Four had been the Big Eight as late as the 1990s.
There are occasional cases of disruption. The emergence of discount retailers (Dayton, Kresge, and Wal-Mart, today Target, Kmart, and Walmart) all expanded greatly in the 1960s. I was stunned though to learn a few years ago that the Hudson's Bay Company still exists, and is the parent of Lord & Taylor and Saks Fifth Avenue, among others.
It's also notable that some of the biggest names in technology are comparatively old: Apple was founded in 1976, Intel in 1968, and IBM formed in 1911 by companies dating to the 1880s. AT&T has at least persisted as a brand, if not an entirely continuous corporate legal structure, since 1885. (The current company operating under the name is a separate legal entity, though also an RBOC spin-off of the original company.)
I'd thought of adding a few cases in which disruption does or has happened.
Changing regulatory environments is one. Tobacco, freon, lead paint, asbestos, and numerous other concerns are lo longer with us, or are vastly diminished.
Changing fundamental technologies. Vacuum tube to transistor, transistor to IC. This is a classic Christensian Innovator's Dilemma: do I cannibalise my own existing product base, or wait for someone else to come along and do it for me? To an extent, RCA lost out as television and radio became electronic and flat.
Labour outsourcing is another major driver, especially in labour-intensive activities. So long as the product can be moved, odds are good that the manufacture of it will be as well. Textiles, appliance manufacturing, auto manufacturing, electronics manufacturing (RCA again), and more.
Patent expiry. RCA was itself formed as or in conjunction with a government-mandated patent pooling, one of several such instances.
Reaching the end-run of some fundamental technological capability. Steelmaking, xerography, film-based imaging, instant film-based imaging, telegraphy, various other chemical-based processes, a whole slew of 1960s "-onics" and "-tron" firms, etc., have their day in the sun and then fade. Finding some service or capability and continuing to serve that by some ongoing set of means seems to be more durable.
Long and slow carve-outs from underneath. Television and Internet are finishing the eviceration of print news which began in the 1950s. Television and radio are themselves being undermined by packet-switched, on-demand, streaming, and App-based alternatives. Lower cost and greater flexibility or ease of use (even for a manifestly worse product or experience) very often (though not always) wins. Getting hung up on quality is generally a Bad Move.
Social, economic, political, and cultural changes can drive major shifts. Wars have been known to markedly delimit "before" and "after" phases, likewise economic turmoil. That the two not infrequently go hand in hand doesn't soften the impact but amplifies it.
By mention in Google's Ngram database, RCA hit its peak about 1982. That corresponds to a few of the trends I've described: the 1980s recession, the Reagan Revolution, the beginning of mass-consumer microchip-based electronics (if not computers), a switch from broadcast to cable as a predominant television transmission mode, and the growing dominance of Japan, with lower labour costs and higher quality reputations, especially from Sony, JVC, Panasonic, and other brands, which were competing on their own home turf and with the benefit of the Japanese focus on a active and deliberate government roles in economic and business policy and activity.
I didn't even realise that the company went defunct (acquired by GE) in 1986.
There are tons of examples of this. Basically any company with a real competitive advantage is very expensive to unseat once established. Try to unseat Amazon, Google, Facebook, or Apple with the capital that launched those companies.
Google unseated Altavista and Yahoo, Facebook unseated MySpace and Friendster, each with less capital than its predecessor had available.
It might seem inconceivable today that these giants could fall, but they absolutely can.
Even if these giants don't fall, they can't just act as they wish, just because they have a dominant market position.
They're kept in check by the fact that their products are easily replaced if they raise prices well beyond cost of replacement. As a result, they don't raise prices and the potential competition never emerges - which in terms of the social outcome is just about as good as active competition.
There's an exception to this which the article mentions: Companies that sell themselves as "too big to fail" or "socially important" to gullible or corrupt politicians. The market can't fix this, only politics can.
Isn’t it different though? A lot of people are reading your comment on an OS developed by Google, and mostly everyone they know is a user of Facebook, a company working on creating its own currency. Altavista, MySpace, and Friendster were never so powerful. They felt less like companies and more just like websites, if you know what I mean.
> Altavista, MySpace, and Friendster were never so powerful.
They weren't that "powerful" because the web wasn't used as much. It took a while for us to adopt the digital lifestyle. Ultimately, they're just platforms though. Of course they have a lot of inertia, but user habits can change. Younger users in particular aren't engaging with Facebook that much anymore:
> They felt less like companies and more just like websites, if you know what I mean.
Google certainly has moved beyond being a website by creating many products. However, I feel that a lot of these products are rather crappy and wouldn't be competitive if they weren't given away. How dominant of a player can you really be, if you must give your product away for free?
Most companies aren't in the business of giving away free stuff, so in that sense it is hard to compete. That's not necessarily a bad thing for the consumer though, they get all the free stuff after all.
Those companies, and Google and Facebook themselves were all miniscule compare to what Google and Facebook are now. Once you get that big, no scrappy startup is going to take you down. It would take dozens of smaller companies chipping away for years or decades. And plenty of times they would just get purchased by the big huys. Just Like what happened with IBM, and even then IBM is both still around, very big, and very entrenched within some areas of industry and Enterprise. And generally not because they out compete with better products.
No scrappy startup is going to take them down at every level of their business at once, but they can still create competition, even if they're just out there to be acquired.
For instance, Facebook is losing engagement to Snapchat, Snapchat is losing engagement to TikTok, and so on. As a result, there is constant pressure to evolve.
IBM may still be around, but it's a totally different company now. Nobody uses "IBM PCs" anymore. Remember, back in the day those were very expensive, relatively speaking. IBM was as big as it ever was, relatively speaking. Yet, cheap clones by smaller companies drove down profits to make IBM give up on the market.
Also, IBM may still be a big company, but you'd be hard pressed to find a segment where they are absolutely dominating, unlike back in the day. I never said small guys will bankrupt and annihilate the giants, I'm saying competitive pressure from below is there at all times, no matter how big you are.
not "at every level of their business all at once" This is pretty much exactly what I said in saying it would take many companies a very long time to chip away.
And sure, competitive pressure is there, but it can be at such a low level as to be nominally meaningless. Whether or not IBM dominates any segment, they are still around, despite being in many products and use cases, not at all the best option. That says to me the idea that competition will results in the best products at the lowest price points (the great-great etc comment that started this) is simply not the case except in a sort of platonic idealization of capitalistic competition that only imperfectly, when at all, plays out in reality.
I'm not even saying we should ditch that model of capitalist competition, though I clearly think it should be subject to regulation & oversight that a pure free-market libertarian wouldn't like. I don't know that there's a better alternative than a hybrid competition-with-oversight model. I just think we should keep our eyes open. We shouldn't blindly act from a position of philosophical assumptions that such competition will solve all problems. Or when it might solve them, that it will do so in an acceptable time frame, e.g., more than a century of industrial pollution without a competitive solution until the (less than perfect, better than nothing) implementation of the EPA.
Heck the entire concept of path dependency in economics exists to help explain why inferior choices may persist despite the possibility of better alternatives in a way that defies the "competition will provide" mantra. [0]
> Whether or not IBM dominates any segment, they are still around, despite being in many products and use cases, not at all the best option. That says to me the idea that competition will results in the best products at the lowest price points (the great-great etc comment that started this) is simply not the case except in a sort of platonic idealization of capitalistic competition that only imperfectly, when at all, plays out in reality.
I think you have trouble with the distinction between "the best" and "good". In market terms, "the best" is that which the market chooses. If the market decides that cheap junk shall succeed, so it will. Quality and cost are at odds, obviously. In some cases the market will even choose expensive junk, that's generally the success of effective marketing.
To understand why this mechanism is nevertheless desirable, we need to look at the alternative: A planned economy and design by committee. Those mechanisms tend to result in products that are neither good nor cheap. The real argument for capitalism isn't that market economies are great (though they are), but that none of the alternatives have ever worked out any better.
Perhaps a technological revolution can usher in a better system at some point, but whoever advocates for that had better done an elaborate computer simulation first.
> I'm not even saying we should ditch that model of capitalist competition, though I clearly think it should be subject to regulation & oversight that a pure free-market libertarian wouldn't like.
The first thing to note is that regulation rarely fulfills its purpose without unintended consequences that require further regulation later on. Furthermore, regulation usually benefits the big guys, who can afford to deal with it.
That's not to say you shouldn't have any regulation. Market externalities can not be dealt within from within a market framework alone. It is to say that regulation should be a last resort.
I'm not having any trouble distinguishing anything here. I understand the market allows for gradients in quality. But I'm arguing against the premise that started this thread. It was that a free market would result in the highest quality goods at the lowest price. The mere presence of cheap junk does itself undermine that argument. The free market isn't especially efficient if massive resources are used to produce short-lived items when they might instead be used to produce more durable ones. The incentives of the free market tend to align to choose near-term benefit whether or not it might result in long term harm, or simply greater cost.
Anyway, your comments on the potential for a better system and market externalities show we're probably not too far away from each other on the general issue. Somehow we just ended up on opposite sides of this particular thread. There's not much of a better alternative on the table. I agree regulation shouldn't be the first course of action to any issue that might reasonably be solved by the market within a reasonable amount of time. What is "reasonable" being dependent on any particular issue's circumstances. (as examples, the market might be left to resolve issues of consumer inconvenience, but ones of public safety should get much closer scrutiny). The pendulum between the excesses of capitalism and those of regulation will swing back and forth, hopefully better approximating the ideal balance with each pass. And maybe at some point we'll be able to do better than this messy method.
> I'm not having any trouble distinguishing anything here. I understand the market allows for gradients in quality.
I haven't made myself clear enough then: "The best" can still be awful, it's just better than whatever the next best alternative is, from a market perspective.
The market, at the end of the day, is people. If people reward short-lasting and cheap products over long-lasting and more expensive products, those are the "best products" in terms of adaptation to market demand.
They're never the best products in terms of resource usage or the environment or some other externality. That is unless that's what the market rewards, which it does to some degree, see "green advertising".
> The free market isn't especially efficient if massive resources are used to produce short-lived items when they might instead be used to produce more durable ones.
Nevertheless, market economies tend to be more efficient than non-market economies at allocating resources to where they are needed. This is because of local information advantage.
As I said, perhaps some future technology can be even more efficient at allocating resources than a market made out of people.
> But I'm arguing against the premise that started this thread. It was that a free market would result in the highest quality goods at the lowest price.
You didn't read that right. The OP started out by saying what companies should do: Produce the best products at the lowest prices. It's a prescription, not a prediction.
Of course what companies actually would like to do is sell the worst products at the highest prices. It's just that the market won't let them get away with it, unless they have really good sales and marketing, which is a big cost in and of itself.
In effect, the tendency with mass market products is to lower prices towards marginal cost and improve (or reduce) quality to acceptable levels, but not beyond. In the niches, for those people who really care and are ready to pay the price, there's still room for excellent products, maybe with a "lifetime warranty"
History is a never ending see-saw, and we are now sawing back towards protectionism, big government, and less freedoms for the individual.
The reason we are moving back toward regulation is that we forgot how irresponsible and destructive corporations can be when they are underregulated. The notion that as long as people can express their preference by buying stuff no regulation is necessary is a libertarian fantasy, completely unsupported by the historical record. The reality is that as corporate power and reach increase, corporations cause more and more destruction when left to short-term profit motive as their only control system. Corporations are all publicly chartered, and their continued existence should always be conditional on a broader conception of the public good than can be captured in a balance sheet.
Its a perfectly reasonable question. HN is so harsh on people who question capitalism. And corporate capitalism in particular is well deserving of criticism.
For all its issues, that’s one thing the U.S. got pretty right: the states are essentially competing small governments (and why we should work to minimize the federal government).
Voting with your feet always beats voting with your hands!
This is always my argument when I explain to people why I'm so rabidly against a large federal government responsible for ever more aspects of our lives. With 50 states, you have 50 different experiments and if one of them finds success, the other 49 are free to copy those successes. With the federal government, any failed experiment eventually becomes a fact of life that is impossible to unseat and replace with something better. Federal government is essentially a local maxima that we get stuck in.
Except in a market with competition consumers will have the power to make choices.
I don't have the power to easily move to other cities or states. It costs thousands of dollars and takes a ton of time and stress. It separates me from my family. And if I struggled to find a job might not be able to move at all.
This kinda makes it sound like the ultimate outcome of corporate growth is socialism. At some point, many of these functions fulfilled by corporations are essential, might as well nationalize it and have it function for the public good right? Then maybe you won't have stuff like the despicable state of the printer industry
> might as well nationalize it and have it function for the public good right?
No. If I don't like the "socialism" from one company, I'm free to defect and join another company to get the better "socialism" from some other company. If you nationalize it, I no longer have anywhere near the same degree of freedom to pick the "socialism" that works for me. The only option I have is fleeing to another country and starting anew.
Also, with a company, I'm specifically associating with others who are productively contributing to that socialism in a way that is comparable to my contributions. If you nationalize it, the freerider problem becomes far more of an issue. It's not like there aren't people who can get away with freeriding in a company, but it is a lot easier to avoid any kind of accountability to contribute if things are nationalized.
All "socialism" should start small and local among those that can hold one another accountable to the greater good and then if their flavor of socialism works and scales, it will. If you have to force it upon people from above, it's almost certainly the wrong solution.
Many (but certainly not all) externalities are process waste and an often an opportunity for margins improvement if you can figure out how to eliminate that waste.
Now, if you can take those externalities that are not process waste but are still bad for the environment and you can put a price on them that needs to be paid, competition is going to drive businesses to figure out how to reduce the externalities. This is the premise behind buying carbon credits/offsets.
The problem is that we don't yet have good ways to price in all externalities into the final cost of goods sold. That should be the problem we tackle.
Well as much as I am a advocate for converting to a cooperative economy, I do understand that logic. Our corporate capitalism today relies heavily on monopoly like power especially with things like intellectual property and businesses like ISPs. If Comcast was forced to provide commodity access to its network as well as interconnects with other line providers, then the monopoly like power Comcast has over internet access would be dramatically reduced. More competition would enter the market and theoretically lower prices. Or if intellectual property law was significantly weakened then we would see more competition as well.
I think you might have misunderstood my comment. I'm arguing that more competition may be good for consumers, it's not doing any favours to the environment. Cheaper stuff means people consume more, more consumption means more environmental damage. Any effort to restructure our society and economies that doesn't put environmental impact first, is the wrong change.
IMO if companies were structured more democratically (co-ops) you wouldn't need as much regulation (long view taken by workers more often than short term profit), and therefore smaller government.
I agree with this. I wonder what prevents there from being more co-ops in diverse industries? Capital requirements? In banking there are credit unions. I wonder what the tech equivalent of credit unions look like.
Lack of support infrastructure. Traditional startups being so common have a large market of services, grants, financing, lawyers geared towards them. More of an uphill battle for a co-op. I think even licensing can be an issue in some areas.
Also, there's a significant tax advantage for shareholders (long-term capital gains) vs. income you receive as a worker.
Or change the structure of corporations in practice to many more cooperatively owned and democratically operated businesses. In this way, the actions of the corporations will much more reflect the needs of the people instead of reflecting the needs of an elite board of directors. And in that world, the government only needs to do things like provide legal support for new cooperatives, laws that allow/require employees to purchase the company via right of first refusal laws, etc. Obviously moving control from elite company owners to government bureaucrats is not going to be much better for society.
And who funds these cooperatives? They'll still get some money, but probably not though to run many of them. I'm certainly not going to be as free investing in cooperatives. Most probably won't be run well and die off.
This would probably lead to single large companies as very few could run themselves efficiently.
The same people who invest most of the money -- big funds that invest in a diverse portfolio instead of one or another company's specific strategy per se. Investors are always happy when they hit a Whole Foods or an Amazon but you can't invest a whole pension in companies like that.
The check on corporations is competition. Don't like what they do, take your business elsewhere.
The huge problem is that this check isn't really working, because the FTC is asleep at the wheel. We have anti-monopoly laws on the books; they exist to ensure that consumers have adequate degrees of choice and companies have a check on blatantly abusive behavior. It's time to start enforcing them.
Break up giant corporations and prevent them from gaining a stranglehold on the market and much of the need for government regulation goes away.
Corporations (or really, their staff) end up policing things because nobody else wants to do the work. You don't see governments volunteering to handle all the flagged posts on Facebook.
One of the checks and balances that we have worsened since 911 is the division of powers. No group had a monopoly on many aspects of your life and so you could “shop around” if things got bad.
And this is why you need antitrust laws. I need an option to use another provider if this one is treating me unfairly for dystopian or other reasons.
Existing Govts around the world have allowed global monopoly's to grow as part of the New World Order, its a wonder how the major political parties continue to be elected, doesn't matter if you look at the US, UK or EU, all are guilty of pandering to the global elites who continue to get richer off our backs.
Oddly enough, I was just in the process of writing the following in an adjoining window for a blog post:
"The modern business corporation is not just an investment vehicle, but is also an integral part of civilization. We spend as much has half our waking hours working within these organizations, tend to find purpose in them and make many of our social relationships through them, so it is not incorrect to consider them social institutions, not unlike school or marriage. As such, corporations are best structured and operated with the wellbeing of all involved stakeholders.
One can think of a corporation as being built on three pillars: the investors, the employees and the customers, with employees as the conduit that connect investors and customers. Contrary to the theory of shareholder value maximization, sole focus on the investor does not, on the long run, lead to good outcomes for the investor."
> sole focus on the investor does not, on the long run, lead to good outcomes for the investor.
This is something that the market can sort out, isn't it? Amazon is famous for being customer-focussed, not shareholder-driven, and they dominate the industries they compete in -- to the benefit of their shareholders. Nobody needs to pass a law telling companies not to focus on short-term shareholder gains if companies that do are naturally out-competed.
Nothing here is "contrary to the theory of shareholder maximization" in any way.
> As such, corporations are best structured and operated with the wellbeing of all involved stakeholders.
Grammar notwithstanding, the same goes for this statement. It is not clear that a focus on stakeholders benefits stakeholders. Maybe healthy, profitable and competitive companies better serve employees and consumers in the long run than companies that directly optimise for those people.
They provide shitty jobs for a lot of desperate people. If we don't work towards a world with good working conditions, we won't work in good conditions.
false choice. I would rather see the profits to shareholders reduced sufficiently to pay for fair working conditions.
Actually I lied. I would rather see a network of cooperatively owned companies replace Amazon where all workers in that system have good jobs, no one is a billionaire, and money spent stays more local.
That is assuming those employees aren't desperate for work. Had we adequate social welfare, or a glut of unfulfilled good jobs, I might agree, but when your choice is "die or work at the level we want", they aren't really given a real choice.
This is incredibly naive (or disingenuous?). When the alternative is just not having a job people will take a lot of shit, that doesn't mean it's okay.
The more filters you add to companies the fewer successful ones you'll have. Filtering out companies from our current selection would leave you with fewer of them, not more.
If the stakeholders don't include the environment, it's still possible to justify polluting as long as it's not in the backyard of stakeholders.
To me, any corporation considering stakeholders to be anything less than all living beings is a myopic & potentially dangerous organization. It also won't be prepared to take on extraterrestrial customers without making a major cultural shift, should aliens ever present the opportunity.
Every good (ie. efficient) regulator of a system must model that system.
Corporations are poor regulators of the environment because they do not model the environment. These slow-moving AI aren't being designed with the environment as part of their model and we're seeing the impact of this all over the world.
This is mostly only true for the tech bubble. Living in Europe, I felt like most people just went in to work to do 'a job'. The notion of it being their company, that they had an integral role in making something, that notion was absent.
Obviously it frustrated me quite a bit, but perhaps that allows them to dissociate themselves from the job and make it less of their identity.
Speaking as a German, it's really curious that Americans are so emotionally attached to their companies (which Germans mostly aren't), but they also switch companies way more often whereas Germans tend to stick with a job unless it's outright horrible.
Great observation. My thinking is that management cultivates emotional attachment to work as a means of motivation, which is important to productivity, which is important for growth. Until your comment, it did not even occur to me that being emotionally attached to your profession may not be a good idea. Worth thinking about.
Really well said. If you think of it as a --social-- capital enterprise, every part of the chain can benefit. Like other social entanglements, though, there is a need to break them up from time to time.
Although a corporation is soulless entity, the people working in an organization are not. I'm fairly certain that the corporations I've worked for technically had only shareholder value optimization as an objective, but that doesn't mean that the managers treated me unkindly. I was given leniency with partial days off, working from home and leisure time when things were slow. The managers wanted to make me happy because they wanted me to continue to work there. Also my job consisted of problem solving which required a creative element that cannot be extracted by force. The same is true for the corporations I do business with (e.g. fast food restaurants have to obligation to give me free water)
For that reason, I don't think there needs to be an explicit statement of maximizing stakeholder well being.
I'm not surprised that many managers and business owners like this idea, as it gives them more flexibility, but that's not necessarily a good thing. It allows them to finance pet projects, grow bureaucracy and overall be immune from business concerns.
A corporation (like any large group of people) certainly has a "mind of its own" as an emergent property, so calling it "soulless" is kind of odd (unless you have a narrower definition of "soul" than I do).
It would have been odd if corporations were democratically run and had internal mechanisms for reflecting the values and aspirations of the large group of people that work for it.
At a traditional corporation however the emergent "mind of its own" is there but it is effectively only influenced by the minuscule group of people who control it. And in this sense it is soulless in the same way that an army is soulless.
I don't necessarily disagree with you, but for sake of argument I think one difference between corporations and social institutions is that no one owns social institutions.
I think that actually it's quite relevant to consider that social institutions actually are owned (in the practical sense, not in the legal one) by someone, and that it matters by whom and how they are owned.
Yes, there's the common scenario of social institutions that are owned (controlled, funded, etc) by the whole community they're serving. But there are cases also of important social institutions (for example, education) "owned" by particular subgroups of that community e.g. the various historical examples of key social functions being performed by churches, or funded by particular wealthy individuals for their community, or social institutions implemented by a foreign government/elite for the locals (both in the case of conquests and colonial empires) - in which case the ownership mattered quite a lot; because in this case the social institutions run for the local people weren't controlled by the locals and were significant instruments of political and social influence and control by the "owners" of these social institutions. Which has interesting parallels with the current megacorps controlling much of the information flow.
This is a very interesting idea that I hadn't really considered before.
Under this system would it still be possible to fire people without cause? Would there be some mechanism to share profits with the employees? Without those I think it would still be a situation where some of the stakeholders are more "first class" than others.
I’m not sure if I’m about to get laughed out of here, but what do folks think of something like the Uniform Code of Military Justice being required for executives of publicly traded corporations - not literally the UCMJ, but I mean a separate legal system that is designed to ensure more accountability for executives of these large businesses?
To an extent this does exist in the form of the listing requirements for NYSE, NASDAQ etc. Matt Levine has talked previously about how the coupling between "higher standards of operating", "selling your shares to the public" and "being listed on a specific exchange" are kind of weirdly conflated at the moment and there's no particular reason they all need to be linked in such a manner.
It’s not going to go over well. Many people believe there’s different enforcement of the law for rich and poor. I expect it will promptly backfire when you actually introduce something like that unless executives suddenly get a reputation for being poor people. You would need to build a ton of trust and everyone will watch it closely for clickbait fuel.
Even if this somehow cracks down harder on execs than the current system, it could also be seen as a separate track to justice for rich people.
I'm not sure I buy into the idea, but maybe you could deal with this particular objection by stipulating that this is purely an extension of the regular rule of law?
Executives would still be subject to all the normal laws everyone else is but also had to comply with another system set up specifically to deal with those who wield disproportionate levels of power in society through their control of capital.
It's an interesting thought experiment if nothing else.
I've never considered that to be honest. Why do you think a separate legal system is necessary? What additional laws would these executives be subject too that say an employee or executive of a small private business not have to comply with?
I’m just sketching around here, but maybe you give up certain rights in return for being a high level decision maker at a large company. For instance you’re the CEO of a big oil and gas firm, but you don’t get to lawyer up and hide behind the fifth amendment when there’s an oil spill... people are willing to submit to an alternate legal system in return for veteran’s benefits, I’m sure they’d be willing to do it in return for the opportunity to make millions as the CEO of a big publicly traded company.
Just being able to hold people individually responsible for their decisions could be enough. Did you decide that your company should poison a dozen people? You're a criminal and should be charged as such in court.
Would this apply only to executive when they are directly aware of or actively encouraged/engaged in illegal activity?
What I wonder about when people suggest these things is what happens if a CEO takes every procedure possible to ensure the company he or she runs is engaged in no illegal behavior, but illegal behavior still occurs?
Interesting that liberty is irrelevant. It's only shopping whatever system produces the most prosperity for certain voting blocks. Just the framing of the discussion signals dark times ahead.
I'm not sure it's possible to have liberty without prosperity. If the only way someone can provide for their needs is to conform then they don't have liberty. This is probably even more the case as it becomes less and less realistic for people to go off and provide for themselves (e.g. by homesteading).
The adjective liber in Latin is what the slaves are not, that is, "unrestricted [people]". The root 'lewdh-, from which it comes, is also in Leute and ljudi (people). Liberty today seems to be often used to mean unrestrictedness of capital/property/contracts, so the connection I see with its semantic history is the idea that some people can be more people than others, and that the government should be strong enough to deter anyone from threatening this state of liberty (e.g. back then by fleeing from slavery, now by ... well the list is too long). Remember the words of Laozi, long and short give rise to each other.
It could be reasonably called inciteful, but it's not ideological. It's a factual observation that liberty is diminished by power structures of all kinds. Monopolies and unfair economic arrangements can exist without any explicit restraints on human decisionmaking, but they do not maximize human freedom.
The concept of property is predicated on the existence of government, and we've just completed the circle.
"Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days labour, civil government is not so necessary.
Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property. "
The !Kung live in a society without laws and without private property. The are incredibly poor, but don't know it, and so they are incredibly happy. Until one day a bottle falls from the sky...
Yes, that is almost verbatim what Marx said: "'theft' as a forcible violation of property presupposes the existence of property."
So to put it more clearly: Proudhon was clear that his opposition to property did not extend to exclusive possession of labor-made wealth. Proudhon was describing the fact that people do not start out on an equal footing and are subject to power imbalances throughout their lives.
Whether you accept the obvious fact that economic exploitation is a real thing (monopolies all the way to gunboat diplomacy) or just the historical fact that wealth is inherited, property is clearly not distributed in any ethically reasonable way. People are robbed of an equal footing from the start, which robs them of their ability to empower themselves, which robs them of liberty.
Proudhon was an anarchist and libertarian- both things I disagree with personally, but it's absolutely bizarre that his ideas are controversial in the modern day. They're concise, obvious, and fit in well with the common canon.
But how much of the economy can be truly competitive? I mean, from autos to laundry detergent there seems to be very mature products and little room for innovation. The result is either compete on price (that has limits) or assume a sense of parity and coast (in a way where you don't muck it up).
I'm not claiming all is discovered. We've reached the end of history. That's foolish. But for a fair amount of the economy competition/innovation is simply not possible.
I would disagree. Conditions keep changing. keeping to the sectors you mentioned. Tesla and electric cars are clearly examples of innovation that was favoured by external elements (e.g growing concerns for climate / environment, increase of pollution in urban areas). In laundry detergents (and also personal care) , the big companies are racing to acquire small brands that were faster than them to go to market with more natural cleaning products (less chemicals, no parabens, traceable / sustainable ingredients...). Large Consumer Goods (P&G, Nestle...) companies are facing a backlash by consumers that are shifting to more local / smaller companies.
This is more difficult in the automotive industry (there are some massive investment in assets that are simply impossible for companies that are not well funded).
EDIT: I can not think of one segment where there are less products today than there were 30 years ago. Even when companies become fewer, they don't stop expanding and innovating the portfolio. The penalty for doing so would be either some competitor selling the same for less or selling something better.
The problem with many of the consumer brands, particularly cleaning and laundry, is the sheer amount of pointless innovation.
Convincing a generation that liquid soap is better than a simple bar, despite being vastly more wasteful in both product and packaging. Same for laundry in working to replace a cardboard box full of powder with all sorts of tablets, sachets and gels in plastic boxes. Or new recipes that replace original ingredients with super cheap palm oil or HFCS - sold for the same price. It's endless, and brands have burnt 95% of their former goodwill by being too damn clever for their own good.
Unless consumers are, in aggregate, entirely idiotic, buying up dozens of small brands won't pay off as they hope. We've had decades of large companies buying up brand and niche leaders and completely ruining the product in just a year or two. Leaves them cynically trading on the name only and damn near profiteering. Surely people are wising up to this finally? Success of discounters like Aldi and Lidl against major brands says they are.
> "Surely people are wising up to this finally? Success of discounters like Aldi and Lidl against major brands says they are."
Right. But the products themselves are essentially the same. And as mentioned, there can be competitive pricing, but that has its limits.
So back to my originsl question: What percentage of the economy can be fully and truly competitive? Or, have we, for a fair amount of the economy "maxed out"?
> What percentage of the economy can be fully and truly competitive?
You need to give us your definition of competitive. The grand parent already answered the examples you provided. The competing products being "essentially the same" does not detract from their competitiveness.
This is especially true. In fact, a "perfect competition" actually specifies homogeneous goods. Technically, differentiation (i.e. no longer just powder in a cardboard box) is what enables all the screwiness being discussed.
I'd say a good part has passed its limit and the results we see are proof of that. To stick with laundry, of all the brands seen in a supermarket, they are all made by just two multinationals. Washing isn't better or easier than when I lived with my first partner, in our first flat in the eighties. I can't ever remember anyone in all that time expressing a wish for better detergents, or struggling to get things clean enough. They've worked, essentially perfectly - or at least well enough, for nearly the whole time since WW2, maybe 50s or 60s on.
Washing machines, thanks to chasing low water and temperatures, have got markedly worse on the other hand. Nowadays overfilling a machine, even slightly, results in the wash deteriorating - machines didn't used to care in the slightest about that. Keep packing stuff in while it still fits and get perfect results. I have to wonder how many extra "eco" loads are run in order to wash the same household's weekly wash with a modern machine compared to an older, "wasteful" one. I wonder if per lb of washing if it is actually more wasteful. It lasts perhaps 10%-20% of the life of a machine made in the 70s or 80s. How does that impact per wash?
We've had a lot of fake brands and competition just to move balance in the markets from 50:50 to 51:49. More complexity, higher pricing, less competition and less for the consumer. Billions advertising these fake innovations to achieve, well, nothing but a hair's movement in favour of P&G or not. Back handed arrangements in the way supermarkets sell premium shelf spots, end of aisle displays and supplier priority again takes away from real competition and just leaves the appearance of it.
The simple soap, from the decades old small maker, becomes harder and harder to find despite working just as well, being popular, and generating perhaps 1% of the waste of a year's bottles of shower or hand gels. Eventually it disappears because of Tesco/Walmart and P&G/Unilver shelf selling arrangements not because it was wasn't selling, crap or superseded.
Car manufacture still has dozens (just) of manufacturers. There is still real competition and differentiation, despite no end of emissions and safety legislation.
Most categories today are like detergents, selling us fake innovation, differentiation and disruption and forcing us to more profitable but profligate and wasteful ways, not like cars where there actually still some real choices. Even down to the commodities like vegetables - we're sold a 1kg bag, rather than loose buying just the few we might need for a week, there's infinitely fewer varieties but so many more (fake) options. We're all markedly worse off as a result.
And yes. Tesla. But again, what % of the economy is that? I'm not saying there isn't change and innovation here and there. There is. But on the whole what percentage of the economy can be fully and truly competitive?
It depends on what you consider innovation. There are the big leaps, certainly (combustion engine, electric engine), but also the small increments: seat belts, automatic gears, runflat tyres, ABS, traction control, speed control... And these smaller innovations contribute to people picking one model or brand instead of another. Innovation also means producing the same thing at a lower cost (different process, better equipment, automation...). All this is competition. The Toyota quality management process was a revolution that led to japanese car companies becoming world leaders, with the same cars that everybody else were selling. Autonomous driving may be doing the same for some brands now.
I would think that this comment could have been made in any point in history and a lot of people would agree.
I just watched a documentary on Henry Ford - in his time making cars was a “solved” problem - you’d have various highly trained and talented teams of craftsmen that would build a car using simple but versatile tools. It all worked rather well in europe and america, and is a model that has been around throughout most of human history - a “proven and reliable way” to do things.
And here comes Ford and invents mass production as we know it by applying principles already present in the military to the civilian sector. Not precisely new but applied and perfected in a different area. Changed the world.
Today I can see similar changes - people from the software world disrupting traditional industries by applying new methods learned in a different field. Sure a lot of the time they fail spectacularly and get the “I told you so” treatment, but there are some notable winners. Look at what Elon is doing for example.
So I’m rather hopeful to be honest - there is so much stress, unhappiness and efficiency problems present in the world, that I really doubt we’ll run out of things to do anytime soon.
FWIW, you just described Ikea. Their whole business model is shaving pennies off of each item by iterating on the manufacturing, shipping and selling processes.
Just take a look at the poor broadband provision in the US to see the effects of low competition. Given a chance companies will become fat and lazy and disregard their customers.
I have Comcast and Fios in my market, I can't say they are competitive. They are like airlines. They operate with a sense of parity. There's no incentive for them to be competitive. In fact, if one of them had too much market share might find themselves in legal heat.
That said, my original question is:
But how much of the economy can be truly competitive?
Fios and Spectrum in my area. The price is about half what coworkers pay less than 10 miles away where only one has built out. It's interesting that you think airlines aren't competitive. IMO, they're super competitive. New upstarts like Spirit don't show up everyday, but watch what happens to prices when a new market is opened up by Southwest, for example.
No one knows what percent of the economy can be truly competitive, but it's probably something like half. I'm hard pressed to find a single area of the economy that doesn't have competitive private entities.
Public transit has an incredibly strong pressure to monopolize. For rail-based systems like trams, it's just topologically impossible to have two competing systems with decent coverage in the same city. And even for busses, having two competing tariffs is so confusing that public pressure will force both competitors to offer a shared tariff system, at which point they're not really competing anymore.
When there seems to be little room for innovation it generally means we need to "refactor the tech tree", i.e. find a technology that qualitatively replaces the incumbent ones instead of making marginal improvements.
The current narratives for autos is self driving cars and more walkable/bikable urban design. For laundry detergent there's probably textile innovation that makes them require less/no washing. Etc.
What parts of the economy do you think can't innovate?
For sake of argument, I'd argue that most innovations in textiles since automated weaving have been steps backwards in the name of cost. The only fabrics that I can think of that are clear improvements over natural alternatives are ballistic nylon, kevlar, nomex, elastic, and maybe synthetic fleece (although I'd still argue that boiled wool is a superior alternative).
I guess it just seems to me that a lot of the "innovation" is really just sacrificing quality in the name of price.
Natural fibers are great--including ones like Merino Wool that aren't modern innovations although a lot of the way it's used mostly is.
But if I look through my outdoor gear and clothing, there have been huge strides in just the past few decades. Not all of the new stuff is great. And some definitely trades durability for light weight (or cost). But overall, what I can buy today is pretty great compared to what I had in Boy Scouts even if some of the older clothing fabrics (like boiled wool as you say) still work quite well.
Finding the balance between quality and price is innovative. It is extremely difficult. But in the end it means more people across the globe get more and better quality clothes.
You can always go pay for higher end clothing. Nothing stops you expect... price. Lol
I definitely think that there's truth in that. Particularly, as you mention, for people who otherwise wouldn't have access to the product at all.
I think my frustration is that I've found that the price to get clothing made out of higher end/traditional materials is often much dramatically higher than even the difference in material costs account for. For example, I would not only have to pay for the more expensive materials, I would also have to pay to get the clothing custom made. Even finding the materials can be difficult since textile manufacturers often call cheaper alternatives by the same name (e.g. "linen" that isn't made out of flax or "wool" that is really a wool blend).
> I mean, from autos to laundry detergent there seems to be very mature products and little room for innovation.
Telsa would beg to differ. They popularized the idea that an electric vehicle was even possible, and now you can but not only a Tesla, but other EVs like the Hyundai Kona.
Then you've got things like self-driving, which automakers are scrambling to be the first to crack.
Or consider the various safety features. My car will yell at me if I get too close to the vehicle in front of me, or if I try to back out of a parking spot and the radar detects someone coming my way, or if what my hands are doing to the steering wheel makes the computer think I'm starting to doze off. All of these are relatively recent innovations.
The managers and the board, in this version of the corporation, are the only ones representing all of the constituencies, so they are the only ones qualified to evaluate their own performance. If an activist shareholder comes in and says “we should replace the board because performance is bad,” the board and the CEO can respond “no you are just saying that as a greedy shareholder and we shouldn’t listen to you.”
Another way to put it is that the corporation really does have to serve many different stakeholders, but in practice most disputes over corporate governance are not between shareholders and employees or shareholders and polluted watersheds, but between shareholders and managers. And these disputes tend to follow a stereotyped pattern in which disgruntled shareholders say “the stock price is low” and the managers say “ah but in the long term it will be high.” Because—on the agency-cost view—it is just harder to measure the long term (since it hasn’t happened yet), so you can’t hold the managers to it. Similarly, if managers can respond “ah but the stock price is low because we are serving other constituencies,” that gives them another argument against the shareholders.
... So when an association of big public-company CEOs gets together and declares that corporations should serve the community, take care of the environment, and be responsible to employees and customers, not just shareholders, that might be because the CEOs have thought it over and decided that employees and the environment are getting a raw deal, but it is also possible that the CEOs have thought it over and decided that shareholders are annoying.
The part about dynamism echoes a thought that I had earlier today. As far as I can tell, socialism as an economic system largely failed [1] because of a lack of dynamism. Because everything is state-owned, everything is "too big to fail" and all management structures petrify. It doesn't have the same regenerative properties that exist in all living and evolving systems, the controlled killing of old parts of the system without killing the entire system that in capitalism is provided by competition on the free market.
The question is: Is there any socialist theory that provides a solution to this lack of dynamism? I'm asking not necessarily because I want socialism, but because pure free-market capitalism has some obvious flaws when it comes to natural monopolies and the pricing of externalities, so I'd like to know if there is a better system that doesn't devolve into the real-world socialism we've already seen.
[1] I'm not disputing that socialist regimes did horrendous things to their subjects, but I'm focusing on the economic perspective here.
Markets and free competition don't have to be synonymous with capitalism (private ownership of economic resources). I think that's a historical accident. The recent book "radical markets" has examples, such as common ownership self-assessed tax (cost) where nobody owns any private property, each person rents everything they use from society, rates are set by competitive market mechanisms, and rent is redistributed. Just one extreme example.
As I understand the companies have one superpower. If they do wrong thigs they can die without killing their employees and destroing their equipment.
This one thing is their secret strength and that's where the strength of capitalist economy comes from.
Any mechanism that prevents companies from dying or makes their deaths more destructive than it needs to be makes the whole system weaker and less valuable to humanity.
I would say the superpower is even greater. If you’re a mom and pop business, you can die — we will protect you so that like, your children’s children’s children aren’t still paying your debts. And if you’re a small or mid cap company you can also die but the timelines are a little different. Large cap companies I think house a unique placement because they shouldn’t regularly be going to 0, and some level of backstopping may be strategically necessary. I think the reason for making that “design tradeoff” if you will, is that in return you gain a wider spectrum on investment risk tolerances that makes the market stronger. And there’s also great utility in the real-world consequences, I think the auto bailout proved you could make a good investment for the taxpayer, for workers, and for the shareholders. The real world is a different place from the textbook so anything dogmatic sets off alarm bells for me that we are maybe leaving money on the table out of a sense of a form of religiosity.
That's not a bad article. A lot of people seem to confuse capitalism with competitive markets. Competitive markets gave us most progress and innovation whereas pure capitalism gives monopolies and stagnation.
Many "pure capitalists" would argue that you only achieve competitive capitalism through "pure capitalism." The idea applies a cynical view to human nature but is interesting none the less. The idea can be boiled down to one simple point; everything can be bought for the right price. If there is a governing body that has the power to regulate any and every business then it only follows that the biggest of those businesses have every resource and incentive to guide regulation to enforce their monopolies.
We may think about these as backroom deals between senators and lobbyists but I'd argue that you actively participate in such deals by just sitting in front of your TV or surfing the web. In America the biggest governing body is voters.
Pure capitalism would have no institutions in place to stop society from switching to another government type in the aftermath of a successful campaign.
Disagree. A competitive market cannot really exist without profit motive. We can have capitalism without monopolies and global corporatism, it just requires a little regulation.
I'm not saying profit motive is the only thing that drives corporations, but it's like breathing is to living creatures.
Here in Greece we 'competitionized' state working cleaning ladies! Trust me we know how its done and some of us know damn well the grand scheme of things. U puppies keep on dreaming about progress and evolution under the present state of things. Have a little patience and keep your eyes open. You'll know soon enough what I mean.
PS @YC I ain't politically correct so u can downgrade my score all u want. Honestly I though u would better than -3
They are needed for feudalism to function without raising awareness of the serfs. Corporations are government arms, throwaway proxies.
They extract the power from the serfs and transfer it to the ruling class.
Government: Please kindly pay taxes with these papers that we print.
Serf: Where do I get those papers?
Government: Participate in involuntary servi... in economy. Maybe trade something to a... corporation. Let us know if they don't treat you fairly. <gently kisses in the forehead>
Private corporations acting in quasi-government ways is risky at best and terrifying at worst. While some of the checks & balances in civil+legal society have been broken, many are still there and there are repercussions when they're broken.
A corporation doesn't have the same mechanisms - public rules (aka laws), processes, appeals, accountability, etc, etc - built in and there's limited recourse when their definition of "right" and others' conflicts.
Based on this new assumed role, it's begging for more government regulation. And unfortunately, it makes sense for governments to say "as you take a more active role in society, you need more public oversight."