The question becomes, "How close do market processes approach the effects of the Golden Rule?" Think of how to apply Vernon Smith's price equilibrium models given a free and open bidding market which invariably showed that prices tend to approach the competitive equilibrium in such institutional scenarios.
One high-level thought I have is that in practice even in the current system most companies are not very profitable, in fact many of them (even big ones) don't even make consistently positive profits! In practice, employees (through insider knowledge and power, plus a competitive labor market) and customers (through competition for products) often get a large share of the gains and shareholders aren't left with a lot. I think the luxury of "should I maximize profits, after having made sure to be in a position of making consistent profits?" is probably faced by very few businesses, so I don't know what the practical import would be even if companies adopted your maxim.
Thanks Vipul! I think the end of profit maximization would have a lot more impact than that. I think it would change the culture of a company if it said, "we try to make enough profits to be sustainable without donations or subsidies, but our goal is..." something altruistic.
I advocate policy changes to antitrust at the end that would tend to increase the opportunity for profit, so that would make non profit-maximizing behavior matter more. But even without that, there'd be a lot more spontaneous collusion and cooperation if companies' missions were to "make great cars" or "make the internet run more efficiently" or something, which would logically point to alignment, versus now, when the profit maximizing mission drives them apart. If it were part of companies' missions and cultures to practice the Golden Rule towards other companies, there'd be more opportunity for profit, which their new missions would cause them to divert into public service aligned with their comparative advantage.
The question becomes, "How close do market processes approach the effects of the Golden Rule?" Think of how to apply Vernon Smith's price equilibrium models given a free and open bidding market which invariably showed that prices tend to approach the competitive equilibrium in such institutional scenarios.
One high-level thought I have is that in practice even in the current system most companies are not very profitable, in fact many of them (even big ones) don't even make consistently positive profits! In practice, employees (through insider knowledge and power, plus a competitive labor market) and customers (through competition for products) often get a large share of the gains and shareholders aren't left with a lot. I think the luxury of "should I maximize profits, after having made sure to be in a position of making consistent profits?" is probably faced by very few businesses, so I don't know what the practical import would be even if companies adopted your maxim.
I still like the spirit of your idea though!
Thanks Vipul! I think the end of profit maximization would have a lot more impact than that. I think it would change the culture of a company if it said, "we try to make enough profits to be sustainable without donations or subsidies, but our goal is..." something altruistic.
I advocate policy changes to antitrust at the end that would tend to increase the opportunity for profit, so that would make non profit-maximizing behavior matter more. But even without that, there'd be a lot more spontaneous collusion and cooperation if companies' missions were to "make great cars" or "make the internet run more efficiently" or something, which would logically point to alignment, versus now, when the profit maximizing mission drives them apart. If it were part of companies' missions and cultures to practice the Golden Rule towards other companies, there'd be more opportunity for profit, which their new missions would cause them to divert into public service aligned with their comparative advantage.