Winehole23
07-03-2016, 11:58 AM
One of the most telling statistics that I came across in researching the book was a difference in how much investment a company made in CapEx, R&D, factories, and in worker training when you compared private companies with similar public ones. The private companies made twice the investments into the real economy as public companies did.
To me, that blows out of the water all of these arguments that large corporations and business lobbyists make about taxation and regulation. “Oh, if only the tax rates were so much lower, we would invest,” or, “Oh, if only this or that red tape was different.”
Private companies are out there investing under the same tax and regulatory frameworks. They see plenty of opportunities. But the public markets make it impossible for CEOs to take these long-term decisions. It’s interesting to track the public companies who buck this trend. Like Howard Schultz at Starbucks, who says “I’m going to offer health care for every employee,” or “I’m going to pay for every employee to get a college degree.” He’s only able to do that because he’s got a cult of personality — coupled with being an owner/founder who still has a big stake in the company. Jack Ma from Alibaba has explicitly said his corporate mandate is “to serve our company and our workers first, our customers second, and shareholders third.”
http://evonomics.com/makers-and-takers-adam-smith/
To me, that blows out of the water all of these arguments that large corporations and business lobbyists make about taxation and regulation. “Oh, if only the tax rates were so much lower, we would invest,” or, “Oh, if only this or that red tape was different.”
Private companies are out there investing under the same tax and regulatory frameworks. They see plenty of opportunities. But the public markets make it impossible for CEOs to take these long-term decisions. It’s interesting to track the public companies who buck this trend. Like Howard Schultz at Starbucks, who says “I’m going to offer health care for every employee,” or “I’m going to pay for every employee to get a college degree.” He’s only able to do that because he’s got a cult of personality — coupled with being an owner/founder who still has a big stake in the company. Jack Ma from Alibaba has explicitly said his corporate mandate is “to serve our company and our workers first, our customers second, and shareholders third.”
http://evonomics.com/makers-and-takers-adam-smith/