> the Dodge vs. Ford court case that ruled Ford had to operate his company in the interests of its shareholders above all else.
That case is from 1919 and it doesn't say what most people think it says.
The problem there was that Ford was trying to claim he could do whatever he wants because he has the most votes, minority shareholders be damned. In practice what companies do now is that they do whatever they want and come up with some explanation for why it's in the interest of the shareholders, e.g. charitable donations are tax deductions and strengthen the company's brand with customers, instead of explicitly telling the other shareholders to eat sand.
The real problem with modern companies is diffuse ownership. You invest your retirement money in some fund, the fund is the thing that actually elects the board and what the fund wants is to increase profits, and typically short-term profits at that, so they elect a board to do it and that's what happens. It's not because the law requires them to do that, it's because that's the result of that incentive structure. And then all the companies that you own as a shareholder are out there screwing you over by double when you're their customer.
Whereas if you have a company owned and operated by the same people, then they can say "hey wait a minute, this is only going to increase short-term profits by a small amount and it's going to make everyone hate us, maybe we shouldn't do it?" Which is the thing that's missing from large publicly-traded companies.
> stronger antitrust enforcement
This is the other thing that's missing. Even if companies are trying to screw you, if they have a lot of competition then they can't, because you'd just switch to one that isn't. But now try that in a market where there are only two incumbents and they're both content to pick your pocket as long as the other one is doing the same.
> The real problem with modern companies is diffuse ownership.
And inheritance taxes and the hate directed at billionaires [1] make any other kind of ownership a rare exception. So every company is headed not by a person with a goal and a conscience, but an amoral board that can agree on only one thing - make more money.
[1] Not specific bad things specific billionaires have done, but their existence in general.
The hate against billionaires wasn't nearly as staunch even a decade ago, let alone two or three. This has nothing to do with the reason why things ended up this way.
The billionaires thing really has the causation reversed. What made people into billionaires? They were the early shareholders of companies that became megacorps. So what caused those companies to become megacorps, instead of developing into competitive markets?
That case is from 1919 and it doesn't say what most people think it says.
The problem there was that Ford was trying to claim he could do whatever he wants because he has the most votes, minority shareholders be damned. In practice what companies do now is that they do whatever they want and come up with some explanation for why it's in the interest of the shareholders, e.g. charitable donations are tax deductions and strengthen the company's brand with customers, instead of explicitly telling the other shareholders to eat sand.
The real problem with modern companies is diffuse ownership. You invest your retirement money in some fund, the fund is the thing that actually elects the board and what the fund wants is to increase profits, and typically short-term profits at that, so they elect a board to do it and that's what happens. It's not because the law requires them to do that, it's because that's the result of that incentive structure. And then all the companies that you own as a shareholder are out there screwing you over by double when you're their customer.
Whereas if you have a company owned and operated by the same people, then they can say "hey wait a minute, this is only going to increase short-term profits by a small amount and it's going to make everyone hate us, maybe we shouldn't do it?" Which is the thing that's missing from large publicly-traded companies.
> stronger antitrust enforcement
This is the other thing that's missing. Even if companies are trying to screw you, if they have a lot of competition then they can't, because you'd just switch to one that isn't. But now try that in a market where there are only two incumbents and they're both content to pick your pocket as long as the other one is doing the same.