Thom mentioned this case during the first hour of yesterday's show. There's a description of the case here - I don't know how accurate it is.

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Henry Ford started the Ford Motor Company in 1903. By 1916, the company was worth $130 million and was paying regular dividends of over $1 million per year. And it was growing exponentially. Between 1911 and 1915, it paid out a total of $41 million in "special dividends" to its shareholders, on top of the regular dividends. In today's money, that's roughly $800 million; not a bad return over four years.

Ford himself owned over half of the company's stock. This meant that he controlled the company more or less single-handedly. And, as many history students will know, Ford wasn't a particularly profit-driven businessman; he was expansionist. He would rather sell more cars than sell more expensive cars, even if more expensive cars would be more profitable. He believed that profits weren't everything—that they were incidental to core goals of employing people and making cars.

To this end, in 1916, Ford decided that the company would not pay another special dividend. Instead, it would reinvest its profits. Ford wanted to double the size of the factory in Highland Park, purchase iron ore mines in northern Michigan, and build a new smelting plant in River Rouge. He planned to cut the prices of Ford cars to increase sales and keep the expanded assembly lines busy.

Looking at the article, I have sympathy with the Dodge brothers in this particular case, if they had been led to expect a share of the profits on car manufacturing and Ford decided to do something different, depriving them of the return on their money, at least in the short term. Perhaps he should at least have bought them out, so they could invest their money elsewhere. However, the case does raise a couple of more general questions for me.

Should this one case mean that all companies and all shareholders should have as their only aim the maximisation of profits? Shouldn't an entrepreneur be able to choose what the aim of his corporation is and how much of the profits to reinvest in building for growth or in diversifying? And shouldn't the minority shareholders, provided they have not been misled, either support the majority owner or sell their shares?

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Should this one case mean that all companies and all shareholders should have as their only aim the maximisation of profits?

That should be the stated goal of every public company. It's why investors buy stock. Stock prices rise in growing profitable companies.

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Shouldn't an entrepreneur be able to choose what the aim of his corporation is and how much of the profits to reinvest in building for growth or in diversifying?

Of coarse. Share holders invest for a couple of financial stratagies. Some stocks pay dividends and some stocks hopefully increase in value. As long as the company doesn't lose track of it's primary focus which should be producing a quality product or providing a quality service they are fulfilling their primary duty to shareholders of creating value. Creative accounting to manipulate stock price doesn't serve shareholder value in the long term.

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And shouldn't the minority shareholders, provided they have not been misled, either support the majority owner or sell their shares?

That's not a duty of minority shareholders. It's certainly an option.

Franz Segber's "Another Economy is Possible" is available at
http://portland.indymedia.org/en/2007/12/369879.shtml

"The world economy increasingly has the character of a plutonomy, a wealth economy where the rich appropriate an ever larger share of the social wealth."

Imagine an economy that serves justice, peace and creation, where competition and cooperation coexist, where the economy is only a part of life and not a steamroller leading to narcissism and traumatization and where the future is safeguarded.

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That should be the stated goal of every public company. It's why investors buy stock. Stock prices rise in growing profitable companies.

Perhaps if there were companies with different stated goals, there would be investors for them too. Not everybody puts financial gain, particularly short term financiial game, before everything else. But thanks to Dodge v. Ford, they have little choice.

Sue, if I started a company to help clean up the environmnet as a stated goal, and it had no chance of turning a profit, do you think the company would be sustainable and would you be encouraged to invest in it with the assurance that your investment would be worthless eventually?

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That should be the stated goal of every public company. It's why investors buy stock. Stock prices rise in growing profitable companies.

Here's the philosophical problem I have with corporations. You basically have four players: Stockholders, Management, Labor, and Customers. Putting aside for the moment that there is some admixture between the four components, let's look at the roles of these four players.

The Stockholders are partial owners. The Management makes the decisions. Labor does the actual work. Finally, the Customers purchase the product or service.

Without Customers the Corporation is dead.

If Management is clueless the corporation is dead.

If Labor doesn't work the corporation is dead.

But aside from the initial IPO, which injects financial capital, what do the shareholders do to forward the corporation? Nothing.

Yet, BY LAW, the utmost aim of Management is to maximize shareholder value. It's a fiduciary duty. So the folks who have contributed the least are first in line for the benefits.

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As long as the company doesn't lose track of it's primary focus which should be producing a quality product or providing a quality service they are fulfilling their primary duty to shareholders of creating value.

Producing a quality product or providing a quality service are actually, BY LAW, secondary to the goal of profit. Whatever product or service a corporation produces is merely incidental to the real goal. It's just a means to an end. Much of the time this distinction doesn't really matter; the goal of profit provides the incentive to produce a good product. But what really matters to that end is sales and perceived value can serve just as well as actual value. The difference often isn't apparent until farther down the road.

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Sue, if I started a company to help clean up the environmnet as a stated goal, and it had no chance of turning a profit, do you think the company would be sustainable and would you be encouraged to invest in it with the assurance that your investment would be worthless eventually?

You wouldn't start a company like that obviously. But that's why environmental protection has to be the purview of government. Why does the environment need to be cleaned up in the first place? Because pollution control is an externality that, absent government mandates, a corporation has a fiduciary duty to avoid in order to maximize shareholder profit. So prior to the the Clean Air and Water Act and the EPA and all the other stuff that conservatives and libertarians hate, factories weren't committing some kind of sin by polluting the environment, they were simply doing what corporate law practically required them to do to fulfill their fiduciary duty to the shareholders.

It's all about how you set up the playing field.

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Sue, if I started a company to help clean up the environmnet as a stated goal, and it had no chance of turning a profit, do you think the company would be sustainable and would you be encouraged to invest in it with the assurance that your investment would be worthless eventually?

We have charities which which have no intention of making a profit, and non-profits which try to break even, with just enough reserves tocarry on. So why should all corporations be right on the extreme of money above everything? Why can't we have corporations that put ethics before profits, yet still try to make a profit?

Very well put, Randomthots.

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We have charities which which have no intention of making a profit, and non-profits which try to break even, with just enough reserves tocarry on. So why should all corporations be right on the extreme of money above everything?

Can you think of a company that people just donate money to like a charity so they can continue to operate? You do know that non profits can pay their employees anything they want to pay them? Certainly there are people who work for charities that work for less than the market demands but as a Catholic nun once told me, "everyone is as nice to you as they can afford to be."

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So prior to the the Clean Air and Water Act and the EPA and all the other stuff that conservatives and libertarians hate, factories weren't committing some kind of sin by polluting the environment, they were simply doing what corporate law practically required them to do to fulfill their fiduciary duty to the shareholders

This is a classic strawman. You can't in good conscience make the statement that conservatives and libertarians want a dirty environment. They don't. What we are talking about here is who gets to decide what a companies goals are. Public companies are responsible to the public, private companies are responsible to private individuals with respect to goals. Both are responsible to their communities to be responsible stewards of the community and community resources.

Nobody is suggesting that laws designed to protect the environment be broken, except your strawman.

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You can't in good conscience make the statement that conservatives and libertarians want a dirty environment. They don't. What we are talking about here is who gets to decide what a companies goals are. Public companies are responsible to the public, private companies are responsible to private individuals with respect to goals. Both are responsible to their communities to be responsible stewards of the community and community resources.

In a bookkeeper's sense, though, cutting costs to increase profits creates a perverse incentive to race to the bottom.

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In a bookkeeper's sense, though, cutting costs to increase profits creates a perverse incentive to race to the bottom.

Here's a rule of thumb Kate. Technologies which help improve the environment are never employed unless they are affordable. Profit is what makes them affordable.

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Originally posted by Sawdust:

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So prior to the the Clean Air and Water Act and the EPA and all the other stuff that conservatives and libertarians hate, factories weren't committing some kind of sin by polluting the environment, they were simply doing what corporate law practically required them to do to fulfill their fiduciary duty to the shareholders

This is a classic strawman. You can't in good conscience make the statement that conservatives and libertarians want a dirty environment. They don't. What we are talking about here is who gets to decide what a companies' goals are. Public companies are responsible to the public, private companies are responsible to private individuals with respect to goals. Both are responsible to their communities to be responsible stewards of the community and community resources.

Nobody is suggesting that laws designed to protect the environment be broken, except your strawman.

Indeed, Don, the question is: who gets to decide?

One never hears any of the free marketeeers suggesting the laws be broken, true; after all, that contradicts the libertarian argument that government is there to set and enforce laws and that's the limits to its role in maintaining a fair playing field. Minimal government intervention is the ongoing mantra, therefore minimum regulations.

So who decides?

We don't like democracy, so not the people.

A monarch? An elite from the revolving doors of business and government, like say a Bush? A Cheney?

If what's necessary is an open entrepreneurial free market playing field, then what's generally suggested is that the "big" inefficient and expensive government be broken so the laws don't get created that might inhibit that field in the first place. So it's the argument of: who "decides" -- or in this case, what "mechanism" makes it possible, i.e., the profit incentive of the free market -- what a clean environment is supposed to look like when you step back and see the system and what it creates. Business has no incentive to add overhead and clean up after itself, so how does an incentive get created? And that conundrum is supposedly solved by the argument free marketeers keep chanting about profit.

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Here's a rule of thumb Kate. Technologies which help improve the environment are never employed unless they are affordable. Profit is what makes them affordable.

The generality you state there is a logical truth, perhaps, i.e., that the technologies must be profitable or there is no incentive to create and employ them, but the specific is also a logical truth: i.e., that such technologies won't even be developed because it costs money to clean up after ourselves.

Who is going to expend capital on the clean up of their piece of property if they don't have to? In fact, if their legal mandate is to make a profit, as much a profit as possible, the law then supports them in their desire for the profit incentive by mandating that corporations serve their shareholders by returning a capital gain on their investment. Your free market argument keeps running into this sort of paradox, because overhead features like clean up, and long term planning (in the case of the conditions we discussed regarding Atlanta and the drought), which puts off the immediate padding of the bottom line, are contradictory to the long term needs of a society and its relation to the environment.

As a logical system, the market is reactive, not proactive. Anything, like government regulations, which inhibits the market's necessary reactive flexibility, in principle, must be struggled against by the entities that make a profit, even if we all watch helplessly as our environment gradually degrades in the process. So we get the principles of "neoliberalism" imbued in government policies, a set of policy principles that began in earnest with the smiling face of Ronald Reagan.

Profit is what makes technologies "affordable" in the short term, of course, but crisis makes them necessary in the long term, and with a crisis, who makes the profit then?

The argument Randomthots put together implies the problem of profit disincentives that regulations create, which of course adds a legally induced cost to business and reduces the overall "health" of an expanding and entrepreneurially inventive marketplace, which has been logically determined by the free market advocates to be the best way to harvest resources and distribute goods, the crux of a healthy civilization in their world view. I don't see where he's saying anyone wants a dirty environment. He summarized the conundrum well with this, I thought:

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Randomthots: But what really matters to that end is sales and perceived value can serve just as well as actual value. The difference often isn't apparent until farther down the road.

"Actual" value to the whole of society can be perceived on different levels, and in a time spectrum that includes a point "much further down the road." What that value may be can be difficult to measure and determine.

What businesses logically need to make their needed profits is freedom to do business in ways that will enable them to make as much profit as they can, and Randomthots notes that they will satisfy the law as well in doing so. If anyone introduced a strawman, here, it was you, Don.

This message has been edited. Last edited by: /rén,

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Indeed, Don, the question is: who gets to decide?

There are a couple issues here, one is what the thread is about which was who decides company business strategy and the other is who decides what environmental measures are taken to protect the public.

I suppose the answer might be the same in both instances. The responsible party. The government has the right to dictate to business and private individuals how businesses deal with quality of life issues are managed. Business can't dump waste into a stream and an individual can't hook a sewer into one either.

I think that people who don't understand libertarians have a difficult time grasping what limited government means. Libertarians believe that individuals can form communities which act for the common good but don't believe that those communities should act in favor of one group to the detriment of another. They don't believe that government should interfer in the market to give any group a price advantage at the cost of people who own the government. Price supports for milk are a good example. A person who doesn't drink milk shouldn't have his tax dollars used to subsidise dairy farmers so that someone who does drink milk can buy it at under fair market value. The market alone should set the price for milk.

It doesn't mean that government should allow one company to buy all the cows and charge what ever they want for milk. Monopolies work against market forces. Libertarians like free markets but that doesn't mean no regulation and limited government doesn't mean no government.

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The generality you state there is a logical truth, perhaps, i.e., that the technologies must be profitable or there is no incentive to create and employ them, but the specific is also a logical truth: i.e., that such technologies won't even be developed because it costs money to clean up after ourselves.

Technology doesn't have to be profitable, it has to be affordable. Stack scrubbers don't turn a profit but if they were unaffordable they wouldn't exist because people who needed them would move to were they weren't required instead of installing them.

The costs of keeping property clean or regulatory compliance is overhead or just the cost of doing business. It's not a profit center but it's the last task accomplished in a business that isn't profitable. That's why profit is important. It not only provides the incentive to do business but it makes businesses possible to operate within the mechanisms in place to provide a safe and sanitary work place. The first place non profitable businesses cut corners is non producing overhead. Rather than remediate spent chemicals which is expensive, they dump them illegally and take the risk. Profit makes that liability unnecessary.

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The argument Randomthots put together implies the problem of profit disincentives that regulations create, which of course adds a legally induced cost to business and reduces the overall "health" of an expanding and entrepreneurially inventive marketplace

Ramdomthots simplistic argument indicates that he's never owned a piece of commerical property and gone through a phase 1, 2, or 3 audit, never been through an OSHA inspection or never had to get a permit from the EPC. I have and in the real world his theory just doesn't stand up.

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What businesses logically need to make their needed profits is freedom to do business in ways that will enable them to make as much profit as they can, and Randomthots notes that they will satisfy the law as well in doing so. If anyone introduced a strawman, here, it was you, Don.

Attempting to establish that libertarians don't like regulation is the strawman that Randomthots used to establish that business put profit above a clean environment. That's just nonsense. Clean technologies are made possible because of profit, not in spite of it. Even evil libertarians like clean air and water. Imagine that. Limited government doesn't mean the elemination of regulation so that you can dump mineral spirits in a sewer.

This stuff is so obvious, I've lost track of why I even bother to write it.

"The Empire of Debt" by Dee Hon published in Adbusters #74 Nov/Dec 2007 is available at
http://adbusters.org/the_magazine/74/The_Empire_of_Debt.html

"Money for nothing. Own a home for no money down. Do not pay for your appliances until 2012. This is the new American dream, and for the last few years, millions have been giddily living it."

The rich, Voltaire said, require an abundant supply of poor.

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Can you think of a company that people just donate money to like a charity so they can continue to operate? You do know that non profits can pay their employees anything they want to pay them? Certainly there are people who work for charities that work for less than the market demands but as a Catholic nun once told me, "everyone is as nice to you as they can afford to be."

There are some people who are willing to take greater risks with their investment funds to invest in a company that they believe in, though I don't know of any who actually give it away. If I wanted to invest in renewable energy, for example, at present the only choice is a corporation that has to put competing in the marketplace first, and therefore would be strongly tempted to cut corners. I don't know of any non-profits. If a non-profit tries to so the same things as a for-profit, then the for profits are likely to target them.

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This is a classic strawman. You can't in good conscience make the statement that conservatives and libertarians want a dirty environment. They don't. What we are talking about here is who gets to decide what a companies goals are. Public companies are responsible to the public, private companies are responsible to private individuals with respect to goals. Both are responsible to their communities to be responsible stewards of the community and community resources.

There must be something wrong with our current system, since there has been so much pollution and so many deaths.

Deaths?

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I don't know of any non-profits. If a non-profit tries to so the same things as a for-profit, then the for profits are likely to target them.

Sue, you realize that non profits strive to make profit don't you?

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Sawdust:

I think that people who don't understand libertarians have a difficult time grasping what limited government means.

I don't consider it all that tough to understand.

What I think libertarians have problems understanding is what creates the need for big governments. That's the point where I found I had to leave the libertarian thinking, which I once enjoyed, behind.

It feels to me that you missed the gist of what I said, and you don't recognize the essential conundrum that we are looking at here.

Here is what I set out as a kind of thesis paragraph:

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/rén:

If what's necessary is an open entrepreneurial free market playing field, then what's generally suggested is that the "big" inefficient and expensive government be broken so the laws don't get created that might inhibit that field in the first place. So it's the argument of: who "decides" -- or in this case, what "mechanism" makes it possible, i.e., the profit incentive of the free market -- what a clean environment is supposed to look like when you step back and see the system and what it creates. Business has no incentive to add overhead and clean up after itself, so how does an incentive get created? And that conundrum is supposedly solved by the argument free marketeers keep chanting about profit.

If we are talking about the free market system, there is no "who" that gets to decide about the system. But you said:

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What we are talking about here is who gets to decide what a companies goals are.

I'm suggesting that's the strawman you created.

When I look at what's involved in the free market concept, it turns out to be a system. A system that is not linear starting from a causal point of decision making, but one based on everyone making decisions about what they need for themselves, which ideally interactively works out in a dynamic free market as a perfect distribution system that rewards everyone according to their interests, their abilities, and the energy they put out, and keeps itself balanced as a thermostat keeps a room temperature balanced within a range. In that hypothetical, logical system, I asked:

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Who is going to expend capital on the clean up of their piece of property if they don't have to? In fact, if their legal mandate is to make a profit, as much a profit as possible, the law then supports them in their desire for the profit incentive by mandating that corporations serve their shareholders by returning a capital gain on their investment. Your free market argument keeps running into this sort of paradox, because overhead features like clean up, and long term planning (in the case of the conditions we discussed regarding Atlanta and the drought), which puts off the immediate padding of the bottom line, are contradictory to the long term needs of a society and its relation to the environment.

I'm not sure what you are responding to of what I said, so I'm not quite sure how to organize what I want to say from here. This is the comment that drew my attention in the first place, and why I tried to describe the conundrum I can't find you addressing, at least to my way of seeing it, I welcome your response to that and anything that will help me understand what I'm missing:

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Here's a rule of thumb Kate. Technologies which help improve the environment are never employed unless they are affordable. Profit is what makes them affordable.

To which I said:

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The generality you state there is a logical truth, perhaps, i.e., that the technologies must be profitable or there is no incentive to create and employ them, but the specific is also a logical truth: i.e., that such technologies won't even be developed because it costs money to clean up after ourselves.

To which you respond:

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Technology doesn't have to be profitable, it has to be affordable.

Well, if it's affordable, then somebody making the technology makes a profit, and somebody using it makes a profit. So it damn well better be profitable to have it around in a profit making business system. How do you see separating the issue of affordable from profitable serving you in any way here? I see the two together as a completing causal system. All parts are necessary and interrelated.

As some supporting explanatory experience, I can offer something about how regulations requiring this technology came about. I did research on the smoke stack issue back in the early nineties to provide a professor friend of mine with some arguments against the NAFTA and GATT agreements, with regards to the effects they would have on a global regulation environment. In my research I discovered that no business wanted to employ stack scrubbers of their own free will, and to deal with the complaints they were getting in their local areas, they had, before regulations, just built the smoke stacks higher and sent the fumes off in the atmosphere somewhere else. It took something besides the industries responsible for the pollution to figure out that the problems they were looking at far from the source, like acid rain, was even related to those industries, and then somehow the political system had to generate regulations and a bureaucracy of enforcement, including all the lawyers and everything else. The global environment itself is far more anarchistic, and the agreements were setting up legalities that would allow the industries to play states off against each other to minimize or even contradict set regulations if they were to inhibit profitability potential.

I think that's just the way business works. It's not a matter of individual motivation to have a clean environment and to do good in the community. Business must profit.

Describing to me the process of how the profit motive works and how it is made, as you did:

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The costs of keeping property clean or regulatory compliance is overhead or just the cost of doing business. It's not a profit center but it's the last task accomplished in a business that isn't profitable. That's why profit is important. It not only provides the incentive to do business but it makes businesses possible to operate within the mechanisms in place to provide a safe and sanitary work place. The first place non profitable businesses cut corners is non producing overhead. Rather than remediate spent chemicals which is expensive, they dump them illegally and take the risk. Profit makes that liability unnecessary.

is not saying anything I didn't suggest. Yes, indeed, that's how the system works. I'd wager that even Randomthots knows that, as simplistic as you consider him to be. To most of them employing stack scrubbers, until they were required, stack scrubbers were what you call a non producing cost that allowed an environmental degradation elsewhere that many other's had to pay for with an expense no one calculated into their profit margin or the GNP, called a degraded environment. How would you sort out who is benefiting at the expense of others in this much more complex environmental problem issue this type of problem brings up? That's really what's being asked of you here. We already know about how the profits are made and how the accounting is done.

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It doesn't mean that government should allow one company to buy all the cows and charge what ever they want for milk. Monopolies work against market forces. Libertarians like free markets but that doesn't mean no regulation and limited government doesn't mean no government.

Well, then, the questions obviously become something like: What regulations are reasonable? What kind of government and how best can it be organized? And, still, "who decides" within this framework we call government? Those are the ongoing conundrums I keep seeing. What was it that the Reagan Revolution represented if it wasn't some notion of cutting the expense of government?

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Domestically, the administration favored tax cuts and smaller government, introducing the largest tax cuts in American history. The economic policies enacted in 1981, known as "Reaganomics," were similar to those of supply-side economics and advocated free markets. The policies aimed to reduce the growth of government spending through tax cuts, as well as reduce regulation and inflation. It is arguable, however, to what extent they were achieved. As well as the economy, Reagan ordered a massive buildup of the military amidst the Cold War. (source)

Doesn't your philosophy about all this go back to the early 1980s when your were struggling to put businesses together that worked for you?

I don't see that you've solved the conundrum, only that you've restated the problem. I still see this as a valid problem:

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The argument Randomthots put together implies the problem of profit disincentives that regulations create, which of course adds a legally induced cost to business and reduces the overall "health" of an expanding and entrepreneurially inventive marketplace

I don't see that he is being simplistic, as you suggest, because he's never gone through what you've described, and I don't see that it has any thing to do with the essential problem he's presented, which is that businesses need to make a profit and government regulations, taxes and all those messy things get in the way:

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Ramdomthots simplistic argument indicates that he's never owned a piece of commerical property and gone through a phase 1, 2, or 3 audit, never been through an OSHA inspection or never had to get a permit from the EPC. I have and in the real world his theory just doesn't stand up.

In the short term, in the real world, which has long term survivability problems as well as the short term competitive stresses related to business survival, that cost of doing business must be dealt with to allow the vaunted system to work. Reducing the costs is the goal of those who want minimum government and thereby minimizing the costs that government can represent. If that's not true, it will be news to me. I'll venture also, that the idea of what stands up in the real world may not have met it's biggest, long term test yet. The idea that this may all be an experiment that is in the making of its own failure is still a possibility. In general we need to look through history to recognize our potential for short term thinking. Of course, this could be the great advance in human existence many believe it to be, but it's also possible that it's not. Maybe the whole system doesn't stand up. Maybe many costs have been passed on and we are all waiting to pay them collectively at some point we don't yet understand that well enough to anticipate when or how.

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Attempting to establish that libertarians don't like regulation is the strawman that Randomthots used to establish that business put profit above a clean environment. That's just nonsense. Clean technologies are made possible because of profit, not in spite of it. Even evil libertarians like clean air and water. Imagine that. Limited government doesn't mean the elemination of regulation so that you can dump mineral spirits in a sewer.

No, if anything he may have personified the notion by saying they "don't like" such things. Other than that, I see that Randomthots accurately pointed out that regulations are costs, costs are what corporations with stockholders avoid if they can, because they are in business to make a profit. This is somewhat mechanistic in nature and it also appears you have agreed with that. You've gone a bit further to add all businesses into his formula, where I believe he was talking about corporations and their legal requirements to their stockholders. So I'm not sure he would agree with your formulation, I wouldn't if I were him.

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This stuff is so obvious, I've lost track of why I even bother to write it.

It's so obvious to just about anyone, you didn't need to. What was asked of you was something else, which you I don't see that you have addressed.
rén

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What I think libertarians have problems understanding is what creates the need for big governments

Understanding and accepting are different. I understand how government grows. I don't accept as fact that it has to.

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I'm suggesting that's the strawman you created.

And I'm suggesting that the name of the thread is Dodge vs. Ford and Sue asked the question "who gets to decide what company goals are?"

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If we are talking about the free market system, there is no "who" that gets to decide about the system

That's an irrelevant conclusion, logically speaking. Markets are collections of people who make all kinds of decisions. In truth, few free markets exist. Most are governed by anti trust and trade sanctions. The issue that you've avoided is that when we talk about free markets, what we are really talking about are markets free of external price manipulation or subsidy by government. The market should set price, not financial manipulation using tax dollars.

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When I look at what's involved in the free market concept, it turns out to be a system. A system that is not linear starting from a causal point of decision making, but one based on everyone making decisions about what they need for themselves, which ideally interactively works out in a dynamic free market as a perfect distribution system that rewards everyone according to their interests, their abilities, and the energy they put out, and keeps itself balanced as a thermostat keeps a room temperature balanced within a range.

Overly simple and missing key elements but basically true. Complex industrial societies exert control over markets preventing monopolies and use markets to drive government revenue, thus exerting additional controls.

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Who is going to expend capital on the clean up of their piece of property if they don't have to?

Anyone who owns commercial property and has a relationship with a bank. Have you ever had to commission an environmental audit on commercial property? I've had to do several.

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Well, if it's affordable, then somebody making the technology makes a profit, and somebody using it makes a profit.

To address your conundrum. It's in the accounting. Remediation, the purchase and implementation of anti pollution procedures and technologies is overhead. Overhead falls into three classes, controllable, fixed and semi controllable. Overhead is necessary but it's not revenue producing in a manufacturing environment. The purchase of technology is semi controllable it's implementation is fixed. The best you can achieve by efficiently managing industrial waste is controlling excess overhead. It's not a profit center.

Sometimes accountants think that the reason companies make things is so there can be accounting. It's kind of like that.

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Reducing the costs is the goal of those who want minimum government and thereby minimizing the costs that government can represent.

I repeat. Free markets are market in which government doesn't use tax dollars to influence price. There are instances where government has gone overboard with regulation as well but when talking about markets, that's what I'm talking about.

With respect to regulation, I know several people involved with public companies. Every one of them says Sarbanes Oxley is impossible and adds hundreds of thousands if not millions to unnecessary overhead.

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Other than that, I see that Randomthots accurately pointed out that regulations are costs, costs are what corporations with stockholders avoid if they can, because they are in business to make a profit.

Compliance costs are overhead. Overhead is necessary. They are controllable, semi controllable or fixed. They are managed like material cost and labor costs, not eliminated. They are regulated by banks and Federal agencies. They are permitted and often inspected and audited. Saying they are costs that companies try to avoid is ridiculous and simplistic. The unnecessary costs are fines and penalties for breaking the law. There isn't a movement in the business community to create dirty air or water. We all live here for the love of God. The assertion that there is a dirty air and water lobby is insulting to anyone's intelligence.

This message has been edited. Last edited by: Sawdust,