Guiding question: What is the rate at which we are making the world / people worse off vs better off when it comes to business – the evolution and survival of the corporation?
I think a lot about companies – the company as a concept. For now I will only summarize my mental framework around companies / business, and go into more detail another time. Companies are not real. Life should be focused on improving the welfare of the real, such as humans, not the welfare of things that are not real, like companies. Today, at least in the capitalist free world, EVERYTHING is geared towards promoting the welfare of companies, the corporation, business. Business is the master puppeteer pulling all of the invisible strings in society, it is the ultimate cause, the driving force, one could say the God of the religion that is capitalism. Business sets political agenda directly through lobbying, but it also indirectly sets cultural and societal agendas through accumulation / distribution of wealth as all initiatives (arts, film, literature, education, medical research, etc) require funding, and it is up to the holders of wealth to decide what to fund.
We know survival of the fittest, natural selection. ‘The’ company wants to ensure its survival, and it is SO good at doing this by any means necessary, mostly adhering to the law (or law at the time as we see how quickly companies have flip-flopped regarding diverse hiring initiatives for example). It’s not that companies are evil (they can’t be anything since they’re just the name for a group of people, but can be led by evil-ish people). They are impersonal, just doing objectively possible stuff with the primary selecting filter that that particular stuff leads to profits. Almost every business decision is an extension of this principle, it just may not be so obvious since we have become adept at tricking people that we are ‘doing good’ (hence increasing our long term ability to make profits) or ‘caring about the right stuff’ (like employees) etc. while we do business. It’s an important messaging game a company needs to know how to play to compete in today’s world, but the point is to compete. Companies make this clear enough when rubber hits the road. It’s why we see mass layoffs, inadequate insurance coverage / payment, lack of affordable housing – when it comes time to pay up to protect people there doesn’t seem to be a lot of companies in line.
A company does not exist to help people, it exists to organize factors of production and make profits. Like I said, a company is not real, and as such it requires the input of real things (human time, labor, life energy) to create real value in the world. The goods and services provided often do enhance our quality of life and are so helpful I will agree many are indispensable. People need to give up some ‘freedom’ to organize their efforts such that they can produce these goods and services – this is always the case, but for many basics of living it’s a great tradeoff – big gain in quality of life and relatively low impairment of freedom.
In older times humans lived in relatively more isolated, less populated, less interconnected societies (think tribes or initial trade-based urban settlements). This served as a natural insulator of the loss of real human freedom to the non-real system of commerce. For example, in a pre-technology society the loss of freedom was more for things like making tools, clothing, and simple goods – not enough people / capacity for specialization to enable production of more complex things (like the Internet). Quality of life was not as good materially as it is now but most of the value was retained within a society / culture that produced it (even in the face of intense inequity such as ancient societies that used slaves -> it’s still more equitable on a macro / gross level than today). If we imagine a metric that captures the value available per capita relative to the amount of freedom sacrificed to create that value (call it Value Fairness), then in these old societies that metric should be pretty high. People gave something up and mostly got something back on a near one-to-one basis. The point is not much value ‘left’ the system (we can think of it as entropy, or a fee / cost of doing business).
In modern capitalist globalization, the world economy / commerce system grew exponentially and became highly interconnected -> think global supply chain, specific duties of certain countries / areas to (i) produce certain raw materials (ii) provide labor for production (iii) provide land for contamination and (iv) provide end markets for consumption as examples. The process of ‘creating value’ is so efficient and optimized that in many cases a whole society may be more or less assigned to a single facet or step of the value chain – it’s entirely possible that some people mostly sacrifice freedom while some people mostly benefit from created value. This is the idea behind the 1% ‘controlling’ the world. Yes, the 1% are people, but ultimately they will die, and what remains living and breathing, growing, is the corporation – the machine that organizes it all. Some of the 1% will use their wealth for philanthropy, but even if it’s left behind to spoil future generations, it’s such a small pool of humans that it’s almost irrelevant if that minuscule percentage of people enjoys absolute luxury. What is more important is the objectively degraded quality of life of the overwhelming majority.
As one blunt example of how the commerce system feeds itself, consider how we can’t respect the self sovereignty of a people if they are “behind” – we will leverage them as low hanging fruit improvements to our collective bottom line (example, off-shoring factories to Asia). It’s not like a civilization or country these days can realistically ‘opt out’ of the globalized economy, especially less developed countries without sophisticated militaries or critical resources. We won’t let them be content with less (not that they can beat the temptations of using some of the products of the highly developed world), we will give them just a little bit more than they have in exchange for a big chunk of their freedom. As this happens, companies do well and make more money – it’s all a part of their adaptation, evolution, and survival. In this context, the Value Fairness metric would be comparatively lower – people are giving up progressively larger chunks of their freedom but are receiving objectively tiny slices of value.
In an interrelated system like the global economy, an initially low loss of value from entropy becomes a steady leak drawing wealth and freedom from the whole world into the pockets of a tiny class of humans representing the corporations. Value, power, wealth is ever concentrating. The reason it can keep growing is that we are using up more and more of the human freedom that exists, because remember, companies aren’t real so they can’t create this value themselves. In this context, AI is especially scary. We are at a point where inequality is at an all time high. The saving grace of capitalism is that someone of no means can acquire wealth. Once AI is fully up and running, we may not even need people’s freedom anymore, so my guess is that effectively the distribution of wealth will be ‘frozen’ at that point in time and the have-nots will never be able to have. Proponents of AI like Elon Musk suggest that the haves will (of their own free will) choose to redistribute wealth such that the world will be a better place – I don’t believe that and I don’t think they do either.
I’ll pick on Ray Dalio, the founder of a super successful hedge fund, just as a model. He has created billions upon billions of dollars of value in the world, and although he is not directly engaged in any nefarious activity (trading in the markets), the markets are made up of companies that are in a way ruining humanity. Again, companies are not real. In order for the markets (example, stock market) to yield real gains, the underlying companies need to be growing, and in their growth they effectively enslave humans as fuel. Even for people that make money when markets crash, the companies had to have grown first, and there’s the separate important element of people treating markets like a casino and gambling away funds which is its own dilemma.
I like capitalism and I don’t fault Ray Dalio for anything specific (given the limited view I have of his life), but we can still question the impact of how we exist. A big focus of his life is now giving back most of his wealth through philanthropy, but what is the impact of that gift? We need to think about the cost of human life, the cost too of shackling our species. My gut tells me he did more net harm making that much money (via a system supported by corporate growth) and then giving it all away than if he had been modestly super wealthy because generally we don’t go backwards. Once we see quality of life improvements, we aren’t going to be okay living like we lived before. So if Ray Dalio’s wealth necessitated the world to step forward so he could amass his pile, and the world can never revert to its pre-Dalio state, we are kind of in a permanently worse place – from the perspective of taking people’s freedom and not giving them a fair amount of value (because again, that value is in Ray Dalio’s bank account). Dalio isn’t evil for his choices but he should not kid himself that he is a world redeemer of any kind.
I applaud him for using his influence in our practical world for good. It’s because of initiatives like that that someone like myself could have attended Harvard and been exposed to this much opportunity – actually my scholarship was funded by billionaire Ken Griffin who made his money in a similar way to Dalio. That being said, if I’m being honest I still think he shouldn’t have done it. It’s better for the world that I don’t max out my life if it means we can keep a generally larger percentage of our peers more free. Even in such a hypothetical sacrifice there is still a problem – the idea of saving those that don’t want to be saved. It would be akin to helping people that just don’t care because they’re pressed for more urgent / basic needs. Ultimately, it’s a shame so many people are at a large probability of not exploring themselves and having to be satisfied (often unknowingly) or operate at a plane of life that the modern economy has deemed it useful for them to operate at.
In answer to the guiding question, I would think we are steadily making the world a more unfair place (in that sense worse) via large-scale, globalized commerce. Life certainly is nicer, but is it better? Is it more human? Is it what we should do? Practically it may even be too late to ‘change the system’ absent a restart of world order, but at least we can think about how we got here and know it’s not free.
