The corporate Ring of Gyges

 The philosophy of what makes us act virtuously has long been pondered by society. As far back as the ancient Greeks, Plato brought up a valuable insight into whether we would still do right even if we weren't accountable for our actions. In his thought experiment, he imagined a ring with the power to make its bearer invisible and thus immune to social ostracisation and consequences. This ring would devour its wearer with amoral thoughts and exacerbate their flaws and sins. 

Now, what if you created a system that hid the decision-makers? A system where everyone is encouraged to let the power and greed corrupt them for their benefit. A system where liability is limited. 

Thousands of companies exist, and I'm not going to be the one to completely unravel the current economic system, for it does have some amazing benefits; the fact I can publish this article at all comes from the backs of millions following the system for what it specialises in. I simply want you, by the end of this to understand the cracks it forms in society and be more aware of the underlying attributes our modern-day capitalism creates. 

Companies are owned by millions of people and other corporations, most of whom strive to maximise the benefit they derive from taking the risk of buying their shares. Back before globalisation, the malign effects of this weren't as present as many people were not solely passive investors, but active stakeholders in each firm they bought.

when shareholders become defected from the decisions they are making and operations, they become much like the farmer in Plato's story and act with little consequence. The principal-agent problem is often used to denote when managers make decisions that are best for them over that of the shareholders, but I'd like to discuss a principal-agent-actors problem; this is where shareholders can influence drastic action from their managers or managers subconsiously perform these actions out of fear of being replaced, which leads to opperations which no party agrees with but due to the presense of the chopping block and forever rising expectations for growth in all businesses leads to a situation where every stakeholder of their action is worse off.

This is evident with the water industry in the UK, where Southern Water admitted to >8,000 illegal polluted water discharges, preached for subsidies due to their debt then paying off the nameless investors record dividend (~£72Billion since privatisation), this moral distancing gets paid by you, while managers of these companies insist on pay bumps.

As long as we are in a system that rewards these masked investors to puppeteer these managers, no amount if reform of control will reduce the amount of social pain caused, as the benefits of doing what they have will always be greater than the downside of any fine they deem fit.

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