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Culture War Roundup for the week of April 7, 2025

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You're coming at this from the perspective that the current dominance of stockholders is a just a natural feature of society, but it's not. Joint-stock companies are a useful economic innovation, and stockholders a necessary feature of capitalism, but their power is completely distorted by their ability to extract rents from using IP. If the government didn't enable that, stockholders would have less money, and consumers would have far more, and consequently consumers themselves could provide the capital investment required to create-- for example-- new vaccines.

And I'm absolutely sure that should be possible all capital investment ultimately derives from consumers paying for things anyway. The money required is already in the economy. Have no fear of free-riding stifling innovation. If people want a product, they'll pay for it, and financial-services whiz kids will figure out how to connect buyers to sellers regardless.

executives are paid massively, but are so few in number that they constitute a tiny fraction of corporate spending

They constitute a tiny fraction of corporate spending (ignoring stock compensation, which I'm lumping in with "stockholders"), but they determine a massive part of it. And specifically, they determine it should go to all sorts of middlemen-- layers of layers of lawyers and middle management and HR. Not because that actually enables them to make more products, but because those are the people that let them extract their economic rents.

Joint-stock companies are a useful economic innovation, and stockholders a necessary feature of capitalism, but their power is completely distorted by their ability to extract rents from using IP.

All businesses can profit from creating useful IP -- whether they are joint-stock, private, sole-owned or otherwise. This ability is completely independent of ownership structure.

If the government didn't enable that, stockholders would have less money, and consumers would have far more, and consequently consumers themselves could provide the capital investment required to create-- for example-- new vaccines.

That would be great. I wonder though, if consumers wanted to provide the investment required to create something that was capital intensive, whether they could come up with some kind of fractional ownership system whereby each consumer that wanted to fund a given endeavor could pledge some amount of capital and receive a proportional share of whatever profits derived from it.

They constitute a tiny fraction of corporate spending (ignoring stock compensation, which I'm lumping in with "stockholders"),

Even counting stock compensation, the entire suite of executives and all their hangers on correspond to a single digit percentage of all personnel compensation at the median firm.

but they determine a massive part of it.

Uh, they determine all of it -- that's what they do -- mange the company on behalf of the board.

And specifically, they determine it should go to all sorts of middlemen-- layers of layers of lawyers and middle management and HR. Not because that actually enables them to make more products, but because those are the people that let them extract their economic rents.

This makes no sense. Executives would, as a general rule, only pay layers of expensive-as-all-heck white collar employees if they added value to the firm. Of course lots of firms are inefficiently run, but that's true across a wide spectrum of the world.

This is one good reason startups are so common and so profitable -- they run extremely lean and create lots of products (and lots of rich shareholders) without using lots of labor (and hence not paying employees as much) because of simplified processes. They eventually displace inefficient firms.

All businesses can profit from creating useful IP -- whether they are joint-stock, private, sole-owned or otherwise. This ability is completely independent of ownership structure.

But if there was no IP, the valuation of a business becomes more independent of its past accomplishments, and rests more on its ability to keep producing new ones. It would destroy the ability for vulture capital firms to buy up a business with promising IP, fire all the innovators, run it into the ground while extracting maximum rents, and then sell of just the IP later, for example. Removing IP law would change the balance of power between middlemen and producers, to the benefit of producers.

You say that executives determine all of corporate spending, but that's missing the deeper point-- that some proportion of business spending is allocated towards productive investments, but that executives use the power inequalities between them and their consumers/producers to claw away rents for their own personal benefit. I'm talking about corporate money spent on making impressive executive offices, building new corporate headquarters closer to where they live, buying prestige-enhancing charity products, etcetera. And like you mentioned, re: inefficient firms, the ability for executives to do this is a direct result of corporate bureaucracy and much of corporate bureaucracy exists because of IP law. Paying people to file IP claims raises the "value" of a company, but has no material effect on its ability to actually produce a product.