Genuinely curious—what do you think is most likely to go wrong? I imagine there would be quite a lot of corporate pushback via lobbying… is that what you mean?
Based on Alexander’s response “What could possibly go wrong?” with the smiley face emoji, it appears he was being sarcastic. When someone says “What could possibly go wrong?” in that way, they typically mean that many things could go wrong with the proposed idea.
The proposed law would effectively nationalize any successful company by forcing them to hand over ownership to citizens once they reach a certain revenue threshold. Some potential issues Alexander may have been hinting at could include:
Companies would likely try to avoid reaching the $500M threshold by splitting into smaller entities or moving operations to other countries
This policy could strongly discourage businesses from establishing or maintaining operations in that country
It could lead to capital flight and economic instability
The sudden transfer of control to millions of citizen-shareholders could make corporate governance extremely difficult
It might violate international trade agreements and property rights laws
Companies might manipulate their reported revenues to stay under the threshold
So while John interpreted the comment as possibly referring specifically to corporate lobbying pushback, Alexander’s sarcastic response was likely suggesting there would be numerous fundamental problems with implementing such a policy, beyond just corporate resistance.
Thanks for the detailed response Alexander! This is definitely more helpful. A few follow ups to your numbered responses
Splitting large corporations into smaller entities doesn’t seem like a bad thing to me—in the US the Antitrust Laws are specifically set up to do this.
Hm, yea, I see your point. In my head the shareholders were simply the financial backers of a company it was the board members who make decisions like when and were to relocate a company. But I realize now that shareholders are the ones that elect (and can remove) board members so never mind.
(same response as #2 above)
Hm, yea, but I see many of the expected difficulties as ultimately beneficial: e.g. companies may put more value in things that are long-term important to people, like the environment and well-being of future generations; rather than purely economic value
The international trade agreements thing is really interesting! I definitely did not know that.
That could be. But there are financial instruments that are pretty good at finding this type of fraud. A company may be able to fudge the numbers by a percent or two, but not in a major way.
Points #2 and #5 you bring up are definitely deal-breakers so thanks for explaining those. I do think the idea would still be much better than the capitalist “money-before-all-else” & “growth-must-never-stop” mentality we’re in today though. And it seems both #2 and #5 would be a non-issue if such a system ever made its way into some sort of global economic policy, applying to all companies, and benefiting all people (regardless of country.) Obviously a dream very far fetched, but still one I see as possible and worthwhile in the long-term.
These seem right, but more importantly I think it would eliminate investing in new scalable companies. Or dramatically reduce it in the 50% case. So there would be very few new companies created.
(As a side note: Maybe our response to this proposal was a bit cruel. It might have been better to just point toward some econ reading material).
I was about to delete my message because I was afraid it was a bit much but then the likes started streaming in and god knows how much of a sloot i am for internet validation.
Sounds like a great idea! With the best of intentions ! What could possibly go wrong ?
See also: Great Moments in Unintended Consequences playlist.
Not sure I understand… Can you elaborate?
Genuinely curious—what do you think is most likely to go wrong? I imagine there would be quite a lot of corporate pushback via lobbying… is that what you mean?
Based on Alexander’s response “What could possibly go wrong?” with the smiley face emoji, it appears he was being sarcastic. When someone says “What could possibly go wrong?” in that way, they typically mean that many things could go wrong with the proposed idea.
The proposed law would effectively nationalize any successful company by forcing them to hand over ownership to citizens once they reach a certain revenue threshold. Some potential issues Alexander may have been hinting at could include:
Companies would likely try to avoid reaching the $500M threshold by splitting into smaller entities or moving operations to other countries
This policy could strongly discourage businesses from establishing or maintaining operations in that country
It could lead to capital flight and economic instability
The sudden transfer of control to millions of citizen-shareholders could make corporate governance extremely difficult
It might violate international trade agreements and property rights laws
Companies might manipulate their reported revenues to stay under the threshold
So while John interpreted the comment as possibly referring specifically to corporate lobbying pushback, Alexander’s sarcastic response was likely suggesting there would be numerous fundamental problems with implementing such a policy, beyond just corporate resistance.
Thanks for the detailed response Alexander! This is definitely more helpful. A few follow ups to your numbered responses
Splitting large corporations into smaller entities doesn’t seem like a bad thing to me—in the US the Antitrust Laws are specifically set up to do this.
Hm, yea, I see your point. In my head the shareholders were simply the financial backers of a company it was the board members who make decisions like when and were to relocate a company. But I realize now that shareholders are the ones that elect (and can remove) board members so never mind.
(same response as #2 above)
Hm, yea, but I see many of the expected difficulties as ultimately beneficial: e.g. companies may put more value in things that are long-term important to people, like the environment and well-being of future generations; rather than purely economic value
The international trade agreements thing is really interesting! I definitely did not know that.
That could be. But there are financial instruments that are pretty good at finding this type of fraud. A company may be able to fudge the numbers by a percent or two, but not in a major way.
Points #2 and #5 you bring up are definitely deal-breakers so thanks for explaining those. I do think the idea would still be much better than the capitalist “money-before-all-else” & “growth-must-never-stop” mentality we’re in today though. And it seems both #2 and #5 would be a non-issue if such a system ever made its way into some sort of global economic policy, applying to all companies, and benefiting all people (regardless of country.) Obviously a dream very far fetched, but still one I see as possible and worthwhile in the long-term.
These seem right, but more importantly I think it would eliminate investing in new scalable companies. Or dramatically reduce it in the 50% case. So there would be very few new companies created.
(As a side note: Maybe our response to this proposal was a bit cruel. It might have been better to just point toward some econ reading material).
I was about to delete my message because I was afraid it was a bit much but then the likes started streaming in and god knows how much of a sloot i am for internet validation.