Businesses Do Not Create Jobs: 2

In the first part of this series, I talked about the fact that businesses do not employ people other than as a necessary evil.

Some of you might counter by pointing out companies like the old GE, IBM and Sony as examples who innovated and employed many people. My answer is- that only proves my point.

Old mega-companies like GE, IBM and Sony were run less like businesses and more as organizations.

Got it? They were not run for immediate profit and maximizing shareholder or management gains. Nor did they have extensive managerial (MBA-type) and legal (Corporate Lawyer) interference. Employees had good job security, pensions and were generally treated with a “hands-off” approach as long as the bottom line was not affected.

The mega-companies of old had more in common with government departments than present day corporations. Those old mega-companies were.. socialistic. It also helped that they made real stuff or provided real services as opposed to making most of their “profits” through financial shenanigans and accounting “rules”.

Compare any of them to the typical corporation today. Are they anything more than vaguely similar?

Organisations can innovate, create jobs and improve society. Whether they are public or private is both trivial and inconsequential. They exist and operate for reasons beyond scams, frauds and rent extraction.

Businesses, on the other hand, cannot create jobs nor innovate because their sole purpose of existence is to enrich their “managers” and maybe their shareholders. They have no responsibility to the society they exist in, nor to the people who work for them.

Nameplates can be misleading, but internal mechanism don’t lie.

Comments?

  1. Ron
    October 26, 2010 at 5:51 pm

    In order to prevent bankruptcy, GE, IBM and Sony still had to minimize waste of their resources. Government departments can survive while wasting resources for a long time.

    I agree with you about innovation. The government is responsible for big infrastructure innovations such as the Internet.

  2. Chris
    October 27, 2010 at 12:02 am
  3. the dude
    October 27, 2010 at 7:58 am

    until they went out of business, so there goes your socialist company.

  4. the dude
    October 27, 2010 at 8:00 am

    or your country for that matter (Soviet block).

  1. April 1, 2011 at 9:46 am

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