When you run a business, what is your job? It's to make as much money for the owner as is possible under the law. It's not to give people jobs and it's not to play nice with the community. It's just to make money.

So, unless you want to give businesses a pass to do anything even if it has adverse effects on the community, you're going to institute some legal controls, which is socialism.

While conservatives tell us that we need to support business because business=jobs, they aren't telling you the whole truth. Businesses hate giving people jobs. Labor is a necessary evil until it can be eliminated through increased efficiency and/or automation.

Think I'm wrong? Tell me how.

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"...it's a legal obligation of management to maximize profits on behalf of the ownership (and I'll use "profits" in a fairly broad sense to include enhancing corporate value as well as excess income). This is US law. If you keep employees on board needlessly, you aren't simply cheating the ownership, you're breaking the law."

I'm not familiar with that US Law perhaps you could provide a link.

Looks like I might have been wrong about the legal obligation. Apparently, it's a common and oft repeated misconception.


Logically, shareholders expect their shares to increase in value either short- or long-term and this—not providing people with jobs or being good corporate citizens—is their mandate to management. To whatever extent they want their corporation to play nice with the community and provide jobs for workers, it is solely for PR purposes. 

There are some investments that specialize in environmentally sound and/or humane, etc, fields....and a business that is publicly held can operate in whatever legal fashion it deems appropriate, albeit the investors may, or may not, value its direction, etc, and go elsewhere if the profit is not there.

In a privately held company, etc, there are different operating parameters, albeit they too typically are going to try to optimize income, etc.

So, while both are typically profit driven, and both are typically sensitive to public/consumer impressions of them...they are actually free to be as socially conscious as they want to be.

If their business is able to locate where workers are plentiful, have the needed skills, and work cheap...that's typically where the biz goes.  If that location benefits from the influx of jobs, its good for that location.

From a PR perspective, most companies, if large enough to have that choice, do weigh the value of the perception of "Made in America" labels and so forth against the value of the labor costs/tax costs...and locate accordingly.


A shopper on July 3 goes to get an American Flag to display on July 4, and sees Made in China flags for $4.99 and Made in the USA flags for $19.99...and has to decide if they want to pay the extra $15 or so for the one made in the USA or not.

Or to get 4 flags for the cost of 1 USA version, etc.

SOME shoppers DO pay the extra to get the USA version, and, some do not.

If the company makes more selling fewer of the USA made versions than they would selling more of the Chinese made versions, they might keep production in the US...otherwise, they might not.

A family owned flag business with a longstanding presence as an employer in a US town is far less likely to move production overseas, even if they'd make more money, than a publicly traded company with share holders demanding higher profits every quarter.

So, there's no one size fits all scenario for a business to source labor.

Sorry, @Unseen, that's not U.S. law.  You are simply wrong about that.  What you are describing is one school of thought in business ethics.

I think it's a dangerously corrupt one, though it has become more common in the past 20-30 years.

The more traditional and sound notion of business ethics is that the board and officers of a corporation should act as agents of the shareholders, taking no action that the shareholders themselves would not.   So if the average folks who directly or indirectly own shares would not choose to screw their workers or mortgage the business for share buybacks, then it is unethical for the board and officers to do so on their behalf.

[edited to add since I didn't see it on the next page] 

@TJ describes this well, I think.  Businesses can make decisions for patriotic or ethical reasons.  Many still do, especially closely held businesses or smaller businesses as he describes.

Why do people risk their wealth in business enterprises? It's in order to obtain a return of some sort. 

If a manager asks a shareholder, "Should I streamline the operation by making it more efficient, even if it means cutting staff or by replacing current workers with ones we can pay less, should I do it?", I know what the reply will be even if you don't.


"...I know what the reply will be..."

Sorry buddy but since that answer will differ with each shareholder I don't think you do.

Besides that would be a very bad management decision.

Eliminating or reducing labor costs is a prototypical GOOD decision.

Hahaha... standard bean-counter mentality.

Once you actually own a company and hire people you will learn how to judge the value that different people bring to their job.

Of course, you get rid of the people you need the least, who contribute the least, who slack, who have skills you no longer need, etc.

I think it's inevitable because Gene Roddenberry says so.

By being probably the most extreme and immediate example of how the profit motive can screw things up royally, we are on our way to socialized medicine pretty much like it or not.


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