[Superman]

This is an important subject to me. As most of you know. Let me begin by stating that I do not lament what I am about to say. That is, I am about to make statements of brute fact that I accept. I do not begrudge 'business,' but it is important to not have mythological assumptions. Let's call it what it is.

Corporations do not have any social responsibility. At least, their only motivation toward social responsibility is, and must be, profits. If it is a good business decision to behave in a fashion that would be acceptable to the public, then fine. But here it comes.....business cannot, and cannot be expected to, have a conscience. Expecting business to have a conscience that outweighs its profit responsibility......is naive and factually incorrect.

And so.....we have these units, which are granted pseudo-citizen status (corporations are legal entities that exist apart from their owners) that can be expected to pursue profits at all costs. Technically, legally, CEO's have a feduciary responsibility to maximize the value of a share of common stock. They are legally constrained to make decisions that will do this. Maximize the value of a share of common stock. Even if those decisions are otherwise harmful to society (subject to the financial risk of becoming responsible for the cost of that harm).

And so.....this bunk about corporations being good citizens......is simply not true. They are not. We hope their actions will benefit society overall, but that is not their agenda. And indeed, their agenda can be, and often is, contrary to the public good. Regulation of business behavior is absolutely necessary. Opinions to the contrary are misguided to say the least.

One last observation. I found it interesting to learn in my last academic endeavor that stockholders and management have different risk agendas. Management would tend to be a bit more careful than stockholders require. Management's perspective is that they lose their jobs if the company goes bankrupt due to excessive risk. Stockholders prefer that excessive risk because their portfolios are diversified. It's okay for business to go bankrupt occasionally. If all businesses are pursuing the most aggressive (within limits) investments and projects, then the cost of a bankruptcy by one company will be offset by the maximization of profits by the surviving 39 other stocks in the portfolio.