[TriLUG] OT: PT One tech issue from tonight's debate

Scott Chilcote scottchilcote at att.net
Fri Oct 19 15:51:47 EDT 2012


On 10/19/2012 03:03 PM, Chris Merrill wrote:
> And why shouldn't they do that? That is their job, after all
> (delivering value to their stockholders). And it would be naive to
> assume that we don't benefit from this every single day. The
> relentless pursuit of higher profitability includes a drive to
> improved efficiency and cost-reduction. That requires technology --
> and our industry is one of the biggest benefactors of this drive. It
> also means that the products and services we consume get better and
> cheaper every day.

Hi Chris.

I did not say whether businesses should or should not look for the
cheapest labor forces they can find.  I was attempting to describe the
dichotomy that American knowledge workers are being forced to adopt. 
Obviously, they can't outsource their cost of living as easily as their
employers can outsource their jobs. 

But the business model you describe, where the only obligation
businesses have is to their shareholders, is not the one being followed
today by many global corporations.  If that were true, then our
investment portfolios in aggregate would look much more attractive than
the combined levels of executive compensation being awarded.  What we
have instead is enormously wealthy executives, and a pittance going into
our 401K retirement accounts.  So I have to wonder whether this business
model is worth defending.  I would like to either be compensated well as
an employee, or as a shareholder.  Neither option seems available.  Yet
we hear that many corporations sitting on stockpiles of wealth and not
hiring.  So who does this benefit?

The shareholder-centered business model is a relatively recent concept. 
It used to be commonplace for a business to focus on delivering value to
its employees and its customers, and if it did that well then it would
also benefit its shareholders.  Tim O'Reilly gave an excellent talk
about this at the OSCON 2012 keynote.  He has written an excellent book
on the subject, complete with detailed supporting data.  I recommend it
to anyone who's interested in a different take on how to conduct
business:
http://www.amazon.com/The-Shareholder-Value-Myth-Shareholders/dp/1605098132

    Scott C.



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