Neo classical economics is a cult and this is a hill I’m willing to die on.
Comment on Does the government keep capitalist interests on the top ?
CaptObvious@literature.cafe 10 months ago
I think in the US, national laws require corporations to maximize shareholder profits at all costs. It’s disgusting, but Friedman economists still have the ear of Congress, so there’s not much to be done about it.
Nonameuser678@aussie.zone 10 months ago
CaptObvious@literature.cafe 10 months ago
Right there with you. I’d even go further and say that it’s the application of lessons the rich learned from the failures of their ancestors in the Guilded Age. This time, they intend to keep workers in their place by any means necessary.
Arxir@lemmy.world 10 months ago
Can you elaborate? I’m interested to understand this better, both what neoclassical economics exactly is what characteristics make it a cult.
Nonameuser678@aussie.zone 10 months ago
It’s hard to summarise in a comment but I’ll give it a go. I should also note that this is just my understanding and opinion so I encourage you to seek out more information and formulate your own views where possible.
Neo classical economics is the technical term I guess but you might be more familiar with a similar concept known as neoliberalism. As it’s associated with Reagan and Thatcher it’s also referred to as Reaganomics or Thatcherism. At the heart of neoliberal ideology is free market fundamentalism or the idea that unregulated, profit-motivated, markets are the best way to distribute resources. Doesn’t matter what these resources are (health, food, housing, iPhones etc), neoliberalism tends to see things as products and not human rights. If you’re in America this will sound pretty normal to you, but for us non-americans who have things like universal healthcare, it’s a strange way to distribute a human right.
Another key part is this idea that when rich people get richer it benefits society because wealth trickles down (you may be familiar with the term ‘trickle-down economics’). Therefore economies work best when those with the most capital (the rich) are left alone to do what they do best and government’s role is essentially to facilitate this. There’s a lot more to it than this and encompasses a range of issues.
Why do I think it’s a cult? Because we have all the data now to show that trickle down economics is not a thing, that equality is getting worse, that people are suffering because their human rights are not being met. And yet we are still using this approach. Sure, this is a situation where the powerful don’t want to give up power. But I also think the rich and their servants (governments) do actually on some level believe in the ideology. It’s very much a church of capitalism. The pandemic rely illustrated this on such a visceral level.
vegai@suppo.fi 10 months ago
I think a declaration that corporations should br making money primarily is a good one. But it must be coupled with legislation that gives them guardrails and promotes competition. Without theae things the economy doesn’t function as it should.
Unfortunately, that latter part is full of disagreements.
jungekatz@lemm.ee 10 months ago
I can see blatant disregard of the anti trust laws and big corps going monopolistic without any actual caps , idk when will it stop !
jeffw@lemmy.world 10 months ago
Most business ethics stuff I’ve seen from the past 10-20 years directly rebukes stakeholder theory and the Friedman purist view of “profits are all that businesses should care about”.
Although… how many CEOs have read books on corporate ethics?
CaptObvious@literature.cafe 10 months ago
Business is not my specialty, but I do have the sense that the ethical viewpoint is shifting away from Friedman. Unfortunately, the law is not. Shareholder supremacy is still mandated in the US, by my understanding, and ethics be damned.
jeffw@lemmy.world 10 months ago
But the ethics arguments do get into that a bit. For example, if you want to maximize value for shareholders (note that is a distinct term from stakeholders), do you give employees more benefits? That encourages retention. Turnover is super fuckin expensive, so you can make the argument that higher pay and increased benefits add shareholder value.
Basically, it’s not such a black-and-white legal argument
Rhynoplaz@lemmy.world 10 months ago
Although everything you say is true, most businesses believe that it’s better to hold on to that money, just in case they “need it more” than the people that make it for them.
Rhynoplaz@lemmy.world 10 months ago
There’s business, and there’s ethics.
Pick one.
bobs_monkey@lemm.ee 10 months ago
It’s not hard to run a business ethically. I own a business myself, and I know a number of small business owners that do the same. The problem is when you have shareholders, especially as a publicly trade corporation, then you’re legally required to put shareholder demands above your personal operational philosophy.
Huxleywaswrite@lemmy.world 10 months ago
It’s possible to run a small, private business ethically.