Is maximizing corporate profits always in the public interest?

Question

What about when US corporations maximize profits by moving to cheap labor countries?

Tom, if that's what you'd ask, go ahead and do so. Meanwhile, could you please answer my question??

Galaxie girl, you mean if we didn't have unions, we'd all be making 80 cents a day and could compete with China? Brilliant...

Answer 1

No.

Believe it or not, my friend, I totally agree with you on this one.

Not only is there negative impact on former employees, there is 'collateral economic fallout' in the loss of revenue to nearby businesses (such as restaurants, dry cleaners, coffee shops), that benefit from the presence of other businesses, such as a factory.

Answer 2

Maximizing corporate profits is definitely NOT in the public interest.

You end up with a corporate economy.

It has been happening for the last 20 years.

We used to have a consumer economy. Just look at the quality of electronics and how they have become cheaper to buy but are also considered 'junk' on the inside by those of us in the industry.

By example....when CD's came out in 1986....there was one STANDARD set....it was set and never changed. Not even with the advent of recordable CD's.
While the DVD market has been ruled by the corporate economy...we have several formats which are not compatible with the others.

But....consumer want to pay less....and corporation will cheapen and cheapen until you are truly paying for junk.

Answer 3

No. I agree with you on this one longhair.

I know michael has a logical example. But that isnt the complete picture.

For instance if you make a product in the USA and you export it to China well China charges a import tax on that.
If China makes a product for sale in the USA then we have an import taxe, but you know what.. they arent equal. China taxes the USA more.
So a company can move somewhere else where they wont be levied as hard by taxes, skirting financial inconvieniences.
Well michael explains cheap labor. but its not completely about that.
What about tax revenues lost becuase they are in another country.
Its the taxes, the jobs and many more things.

Answer 4

They are looking at the investor interest, not the public interest.

And no, there is supposed to be more to a country than maximizing the profits of the few at the expense of the welfare of the many, particularly when the purchasing power of the many is used to get the overseas benefits for the wealthy few. I think we need benefit to the general population from trade agreements premised on opening up our consumer market to foreign countries.

Answer 5

Simply put: Yes, it's in the public's interest. The public invests in these "publicly held and traded" corporations. The savings created by finding cheaper labor are either passed on to the customers (which we normally are a large percentage of), or to the shareholders in the form of dividends or stock price appreciation.

Ex: I own half a dozen stocks which employ people outside the US borders. Their reported earnings have grown at generous rates, increasing the size of my portfolio proportionally. I had to pay taxes on any of the gains I realized, helping support all of the "entitlement" programs you love. I also used some of the profits to purchase a well-used foreign-made car from a second-hand dealer. That dealer had an obvious love of fast food. The profits he made off of my purchase helped support his need for meat-flavored goo on bread with an oversized drink and fries. The increase in orders helped maintain your position as fry-flipper. Everyone wins.

Without the motivation to gather wealth, no one would create corporations. They were NOT created to give people jobs. No one OWES you a job. If you're unemployed, it's your choice to remain so. I know a dozen people in their twenties running their own companies. All it takes is an idea and some sweat equity.

Answer 6

Un-American? No rather it makes you distinctly American to be able to express and live as your personal beliefs lead you in though and action. Those who try to quash your ability to do so are un-American change the system if you don't like it- research the products you buy and figure out what you are supporting financially by your spending habits - adjust accordingly watch NPR on PBS and listen on the radio- they are not profit driven because they're public supported besides Daljit Dhaliwal is hot and has a sexy voice I could jack off to her talking about the NASDAQ

Answer 7

A corporations, and therefore the CEO of the corporation's job is to maximize profits and cut costs. Keeping in line with public intirest is not what a company about, pleasing stockholders is. If you want to buy up millions of dolalrs worth of shares and the protest them outsourcing than you can, but everyone else will hate you when their stock portfolio's value goes down.

It does suck however and I do not support all of this outsourcing.

Answer 8

Yes, it is - read your Schumpeter.

They do this to cut costs so that they can sell the same goods at a much lower price.

In the free market, the people decide the allocation of resources. They do this through their purchasing decisions.

What you cite is a great example of the many making a decision that the few may not like but that they have no right to prevent the many from making.

It's not "corporations moving 1,000 jobs overseas" - it's millions of consumers wanting to pay less for things. And allowing the market to put that kind of downward pressure on prices raises ALL of our REAL wages.

See, the guy whose job is relocated overseas or is replaced by a robot has benefited hundreds of times a week from similar moves made by the companies that make the goods that he buys.

And the record is clear - on a net basis, free trade has CREATED MORE jobs than it has lost - and those jobs are for the most part the very high-paying, high-skilled jobs, white collar that people say they want created.

Problem is, generally speaking if you derived your livelihood from doing something that a foreign peasant can do, you probably aren't qualified to get one of those white collar jobs.

But again, whose "fault" is that? Are people entitled to make a living using the skillset of your average 11 year old?

Another problem is that while net manufacturing job loss is frequently overstated, many jobs have been lost in the rust belt and replaced by other manufacturing jobs in the Southeast. People don't want to uproot from Michigan and move to Georgia. But again, do you have a right to make jobs come to you? Are you entitled to that? The rest of us move for jobs - I moved 500 miles for a job, improved my skills, took night classes at a community college, passed the CPA exam, and then moved back. Why do other people feel entitled to not have to do that?

Answer 9

People here still benefit because we have access to cheaper goods, thus more consumption.

Based on your logic and that of other Socialists, the US economy would have collapsed a long time ago.

Instead half of the wealth this country has ever created has been created in the past 25 years.

Sorry Soci, but your models will not work!

Answer 10

Maximizing corporate profits is NEVER in the public interest.... well unless your a stockholder...