The real problem is that there are huge incentives for company leadership to maximise their own earnings, even if - or especially if - it destroys the company.
Beyond a certain social level failure no longer counts against you. But income certainly counts for you.
So there's a small but unrealistically influential group who can hop from consultancy to executive job to consultancy. They're never held to account in the same way that employees of lower social status are.
Shareholders have no incentive to support a company either. They can sell up at the first sniff of a difficult quarter and look for higher returns elsewhere.
>Long-term growth is secondary to this goal.
Not always, but CEOs need to inspire investors with confidence and charisma to keep them from selling up.
Sometimes this works, but it's rarely related to the actual commercial value of a strategy.
Basically it's all about perceived status and social signalling, not about objective ability.
That disconnect is the big failure. It means the wrong things get rewarded for the wrong reasons, collective and strategic intelligence happens by exception, not by design, and the economy as a whole suffers badly.
I think you're blaming capitalism for a bad incentive structure internal to companies. Yes, many decisions are made to further the interests of the stakeholders of the business, and many of these things damage the business itself. But without paying people in stock, this problem largely goes away (not that improving executive compensation is so near-perfect that one change makes it immune from agency problems or conflicts of interest -- clearly other things need to be done).
I blame capital based thinking, twisting existing system toward burning themselves until the point of being fruitless, then being camouflaged to sell the remaining parts and pieces. It's not far from addictive behavior.
Is it a reason to stop searching for better models ? Capitalism is a bad use of resources for an absurdly local increase. I guess it will last as long as it works and then something new will pop out of necessity.
Beyond a certain social level failure no longer counts against you. But income certainly counts for you.
So there's a small but unrealistically influential group who can hop from consultancy to executive job to consultancy. They're never held to account in the same way that employees of lower social status are.
Shareholders have no incentive to support a company either. They can sell up at the first sniff of a difficult quarter and look for higher returns elsewhere.
>Long-term growth is secondary to this goal.
Not always, but CEOs need to inspire investors with confidence and charisma to keep them from selling up.
Sometimes this works, but it's rarely related to the actual commercial value of a strategy.
Basically it's all about perceived status and social signalling, not about objective ability.
That disconnect is the big failure. It means the wrong things get rewarded for the wrong reasons, collective and strategic intelligence happens by exception, not by design, and the economy as a whole suffers badly.