Such discussions always remind me of the short-sightedness of man. Anyone with a cursory understanding of history knows that if left to their own devices, the rich continuously consolidate wealth until there is a single Monarch, apparently chosen by God, who rules above everyone with impunity.
That this is not obvious shows how far we've fallen off the path of simple rational thought.
Yes history is full of monarchs but our current configurations of government in the West are also reactions to them. We are programmed from birth to revolt at the notion of an American King, and safeguards exist to prevent concentrations of power. What isn't always obvious is the ways that new abuses are being perpetrated, but once that reaches a certain level then the threshold for action is crossed, and new safeguards can be implemented.
True -- though the Republic lasted over 500 years and embodied a conscious understanding of the dangers of power concentration. Roman Senators demanded that foreign kings pay deference to them, and no self styled absolute ruler was allowed to set foot in the city limits. The power elite of the day saw themselves as custodians of an excellent system to some degree and took pains to maintain it. These days it does seem that very few at the top have that sense of responsibility.
>What isn't always obvious is the ways that new abuses are being perpetrated, but once that reaches a certain level then the threshold for action is crossed, and new safeguards can be implemented.
Why do you assume that the novel abuses of the system become non-obvious in time for anything to be done about them?
It's perfectly feasible that the creeping forces of darkness stay hidden until far after it's too late to do anything to stop them.
Life is not a movie. In reality, you sometimes lose; the hero sometimes dies alone; the person you love sometimes marries someone else and lives a happy, fulfilling life never thinking about you. In reality, you can't rely on literary clichés to save you. Nothing will save you. You are on your own.
In reality, when you lose you usually end up redefining the victory conditions so that you've won. Life's not a board game where you play it by someone else's rules. You are, to a large extent, free to make up the rules so that they suit you.
This is very true! But that doesn't make it right.
Life usually has objective victory conditions. Even if you're playing by your own rules, the rules tend to be objective, because humans tend to care about the real world, not what we can convince ourselves.
If your startup fails, you are not going to wave a wand in your mind and say "I've won!" If you do, you will not feel fulfilled. You will not feel happy. Even if your startup was viciously heaving its death throes for years and you finally, finally pulled the plug, you will not feel "victory" in the sense you would if you were bought by Oracle and made a millionaire, because of your stock options.
It's very true that people try to convince themselves, following a loss, that they in fact won. They try to convince themselves that now they're free to start the next company, which will surely be a success, or that the person who left them wasn't right for them anyways, and that they'll meet someone new.
But in reality, the next company is sometimes also a failure, and the person who left you sometimes was your only soulmate, driven away by your workaholism or your nagging or whatever else you did.
We can lie to ourselves, but it's hard to truly deceive yourself. Think back to the times in your life when you've lost; you know what they are, and you know how they feel. When you lose again, and you will lose again, you'll know that you've lost then too.
FWIW, my startup failed, and I ended up taking a job at Google.
I didn't exactly say "I've won!", but I did feel happy, and I did feel fulfilled for what I'd accomplished. Yes, I would've liked to have been bought (not by Oracle though, ick) and left a millionaire. However, I was hired by the best company to work for (according to Forbes) in the worst economy since the great depression (it was Oct 2008 when I applied). I know plenty of people who work their whole lives to do that. When I moved out to California, my friends and roommates were like "Well, I still have a job. I haven't been laid off yet." That puts getting hired in a somewhat different light.
I've had plenty of losses since - I've had projects canceled, projects succeed but been kicked off out of my leadership position, projects that succeed within the organization but fail in the marketplace - and a few genuine successes too. Ironically, it's often the successes that feel like more of a let-down, because suddenly this big ambitious goal that I thought was just a dream is now a reality, and...what next?
The key is to remember that the goals themselves are artificial. I set them because I like having a sense of purpose and ambition to my life, but then I remember that I set them, and they wouldn't even be valid if somebody else set them. And so if I don't reach the goal, one interpretation is that I'm a failure and a loser. But another, equally valid interpretation is that the goal was wrong in the first place - it was infeasible, or something I didn't actually want enough to trade away other things in my life, or too dependent upon external events. And then I've learned something too.
The goals that you set -- are they objective, dependent upon a real configuration of the real world such that your goal is achieved, or are they purely subjective, dependent only upon your opinion that the goal is complete?
Since you seem intelligent, I entirely disbelieve that you think an "equally valid interpretation" is that any failed goal was misguided. Presumably you've written buggy code -- do you want to convince yourself that you didn't want correct software enough to trade other things in your life? The only way we improve is by acknowledging mistakes.
(You can always blame external events, so I'm not going to touch that, except to say that for the responsible person, everything is their fault.)
The goals I set are objective, dependent upon the state of the outside world at some future point in time. The meta-goal I set, of living a happy life, is subjective, dependent upon only my own experience. I don't always achieve it, but I take failure to be happy at any given point in time as a signal that I need to change something in either the internal or external world.
The point I'm making - and this is pretty much straight out of a few philosophy courses in college - is that there's a fact/value distinction. Whether or not you achieved a goal is a fact - if you're setting them right, it's measurable and externally verifiable. Whether that goal is good or not is a value - there is no possible way to answer that question other than resorting to your personal value system (or adopting someone else's personal value system). Your personal value system might decree that "It's a good thing when I achieve my goals" - but there is nothing inherent about that, only that you have decided to live your life in a goal-driven way. Other people may hold different values. I do, for example - after much self-examination, I figured out that I'm really discovery-driven, and for me, learning things is an inherent good and achieving my goals is only instrumental.
Also, there's a distinction between inherent and instrumental values. An inherent value is something that's intrinsically good, based on your value system. An instrumental value is something that helps you achieve an inherent value. Many of your goals will be to satisfy instrumental values - if they fail, then you try another approach, you don't think of it as a failure.
To answer your (rhetorical) question: yes, I've written buggy code, and sometimes I've written buggy code deliberately. The reason - in the instance I'm thinking about - was because writing the correct code would've increased latency (this was Javascript, where all the program logic has to be shipped to the client). User happiness was the inherent value, and performance was judged to be a more effective instrument to get there than correctness. So the decision made was to ship the buggy code despite it being buggy, because that actually achieved our purposes much better than making it correct.
That's the sort of flexibility you get from understanding what you're really going for and what are just steps to get you there. You can swap out the steps if they don't work out.
Yes, there always is the possibility of "full fail", but look at how difficult it is for autocratic regimes of the world today to suppress human curiosity. My faith is in the endless reaching and searching embedded in the human DNA, though one worry is that we could reach a future state which may not be obviously dystopian but still represents a far from optimal resource configuration. We may in fact we approaching that now. One trump card humans have always held is violent revolution, but the TV shows keep getting better and better, and as long as they aren't murdering union members and forcing children to work in dangerous factories, our corporate overlords may be able to escape a new round of safe guards.
>but look at how difficult it is for autocratic regimes of the world today to suppress human curiosity.
Westerners say that, as if the Reganesque march of progress will destroy any and all nation-states not ideologically subservient to the US of A, but in reality, China is never going to fall; Iran is never going to have free elections; not even Myanmar or even North Korea are going to shift.
The greatest and most heralded revolt of the 21st century replaced an autocratic president with a military dictatorship. But we pretend that Twitter can solve the dire social problems we face; that autocratic regimes can never suppress human curiosity; that one day, maybe not this day, maybe not the next day, but one day, freedom will ring.
But again, life is not a movie; you are not Mel Gibson; you live in reality, and in reality sometimes you lose.
I wasn't making a jingoistic point, but you can take the opposite side of 'never' quite easily. China already has fallen, the communist revolution took place in 1949. Iran recently (from a historic perspective) had free elections in 1951, see Mohammad Mosaddegh. Ideas really are the most powerful things in the world.
The Soviet Union did actually fall, as well; that was before globalization. Iran will never fall while the world buys its oil. China will never fall while it makes your computer.
But this point is too far afield to be useful here.
I saw that -- it was an amazing reversal. Apparently those limits have stood for almost 50 years, surviving a challenge in 1979 even on the grounds that campaign contributions can quickly turn into legalized bribery.
It does seem like something that needs to run its course though. At some point people have to think for themselves, and learn to ignore or deconstruct the commercials which result.
"I recommend that you refuse to buy as much as a guitar pick from any company currently owned by a private equity firm, or any financial entity that does not come from the music industry itself."
The problem is that any boycott initiative needs both a datasource and a UX that integrates into our buy habits. Something like a "PQ" - a parasitic quotient.
But that's about all he says, and it's coupled with this:
> There are dozens of industries that have been locked up by a few players in this way
I can perhaps see boycotting working for musical instruments, at least in the short term. They're crafted items that are infrequently bought, heavily researched, can be sent direct from manufacturers, and have a talkative and reputation-based community. But that doesn't really address any of the countless sundry-supplying industries that have been dominated in the same way.
Now, maybe I'm just one of the "people [who] believe that ... there is no other game in town", but I don't see that "voting with your wallet" works well in general. Perhaps with some automation it could, but similar automation would also help people compare prices, which is the thing your average person will be interested in. And at any rate, he really needs to expand on how he thinks boycotting can be made to work this time.
> but I don't see that "voting with your wallet" works well in general.
I agree. Would need to span all products - not just music - and mindlessly enhance my existing buying behavior. The problem is that boycott-able products are a small fraction of my total purchases. Could work, once I start buying everything with a smart phone. Then a plug-in, similar to those found on iPhone's Passbook, could pop up with a vendor rating. I would subscribe to such a service.
It also totally glosses over the issues of how indebted Guitar Center is to its major suppliers. Korg and Gibson (among other manufacturers) have been letting GC slide on payments for new product for years to the tune of several billion dollars. They've allowed it because they need to push inventory and GC pushes more than anyone else. The fates of manufacturers and retailers here are now hopelessly linked and a failure of GC will take those companies with them.
What the author is suggesting amounts to little more than "only buy boutique gear" which is ludicrous. For one, most of it is laughably and unnecessarily expensive and a lot not even that good (poor QC). You can't repair your own amps half the time because the small company enamels the whole damn circuit board so their competitors don't copy their (textbook EE) design. And there's no good alternative if you're someone who works on Keyboard Workstations.
People like cheap stuff more than they like brand/industry loyalty.
...so what wrongdoing did the banks do, exactly? Told another way, a failing company was headed towards bankruptcy, until the banks stepped in and saved the day by recapitalizing the company, saving thousands of jobs and a good brand in the process.
Yes, I think the gist of the article is that interest in outcomes evaporates with financing and consolidation. The creative destruction of capitalism becomes capricious destruction under those circumstances.
That's what he's saying, and it might be true, but he hasn't demonstrated that in the article. He's done all of this research which supposedly demonstrates that Guitar Center is going to be run into the ground, but he never actually goes anywhere with his research. He's just using this as an opportunity to gripe about banks, which is fine, but he shouldn't have fluffed up his vitriol by pretending like he has a scoop.
It's actually worse than that. Consider the fact that all of this financial crap is propping up Guitar Center who is undercutting all the local shops and driving them out of business.
So, until Guitar Center actually collapses, it is actually harming the economy because its existence is preventing the formation of companies that might actually make a profit.
So, if there is a large amount of money that is searching for risky investments to the extent that investors are willing to finance an obviously failing business, how come more of it doesn't end up in risky ventures that might actually go somewhere?
Is the problem a lack of information, the lack of better investments, or that investors don't care about their money?
I think what the author may be getting at, and I hate using this term, is moral hazard.
Those investing the in debt (most likely with someone else's money, mind you) are yield chasing. They probably aren't betting the farm on this company, just a small % of whatever money they manage.
If it works out and the company doesn't go under, great! They just make 8% in a low-yield environment, they look smart, they get bigger bonuses! If the company goes under, that sucks. But, they can rationalize it to investors as 'this stuff happens' and becomes a write-off. Imagine this is a hedge fund, the managers probably didn't lose their money, they lost their investors' money.
"...but in the meantime, you can help as an individual. I recommend that you refuse to buy as much as a guitar pick from any company currently owned by a private equity firm, or any financial entity that does not come from the music industry itself."
Well, ok, but how many people really pay attention to the ownership structure of companies they purchase products from?
I know that 'vote with your dollars' is a typical answer to problems like this. On average, I suppose I purchase ~5 individual items each day. I don't really have the time to make sure that each of these companies that make these products conduct themselves in a manner that I consider ethically sound.
Scan a bar code before you buy a product and see either a big red "EVIL" banner or a big green "GOOD" banner, depending on the ownership structure of the company who makes the product.
Version 2 could let you configure what things you consider evil (owned by private equity, venture-backed, owned by cigarette companies, etc.)
I used to work in Investment Management, primarily with wealthy clients.
Some clients would request that portions of their portfolio be devoted to 'Ethical', 'Socially Responsible', 'Green', etc. companies or funds. Ask them to elaborate on what exactly constitutes a 'Socially Responsible' company, and you get wildly different answers.
I guess what I am getting at is any definition of 'EVIL' or 'GOOD' is highly subjective. For example, not everyone would consider cigarette companies to be 'EVIL' ;)
This happens on its own and is helped along by brand positioning, because people's attention spans are quite limited and they're generally fighting yesterday's battle. Witness the wildly differing attitudes towards Walmart vs Target, when they're basically the same thing.
I tend to dislike pieces like this. Advice like this: ... but in the meantime, you can help as an individual. I recommend that you refuse to buy as much as a guitar pick from any company currently owned by a private equity firm, or any financial entity that does not come from the music industry itself. tends to not be very practical or helpful. It means that for many people their choice is do this evil immoral thing that the author is decrying as the downfall of civilization or go without entirely. Given that choice, most people will do this presumably immoral, evil thing. Because people have needs.
Stuff I would prefer to see: A list of websites helping to support alternative business models that the author thinks is not all evil and immoral. A list of businesses that try to source their products from approved, moral places as much as they can. Other pro-active things that one can actually do (other than "just don't buy from Bad Guys" -- I mean more in the vein of "here are the Good Guys you can and should buy from").
Last, "parasite" economies tend to kill themselves. Historically, Greece, India and Persia all placed extremely high value on bees as a naturally occurring mental model for business, basically: Bees neither kill flowers nor get killed by them. They exchange their service (pollination) for product (pollen, with which to make honey) and both sides gain something of benefit without being harmed. This is a brilliant thing to value culturally when most of your examples from nature fall into the category of "kill or be killed".
It is brilliant because it is the only paradigm that is sustainable. If you are enough of an asshole, you can and will be taken out eventually. Even Roman emperors sometimes got offed by their own Praetorian Guard for being too assholish to put up with. No one is beyond reach. You learn to engage in a symbiotic exchange where both sides gain something or you eventually get a Darwin Award. That's just how it is.
>Last, "parasite" economies tend to kill themselves
Yeah, the problem is that there are a lot of good people who depend on this economy. This is why its last near-death experience resulted in a bailout sponsored by "the rest of us".
I don't see how that is really any kind of response to any of my points. The author is suggesting we basically kill that which we do not approve of rather than telling us how to better foster something they think would be good. There are other things going on in the world. The business he criticizes is not the be all and end all of the economy. Advocating killing that which you do not approve while not promoting or fostering that which you do approve is absolutely not a solution to the problem you posit. In fact, it is part of the problem.
>I don't see how that is really any kind of response to any of my points
I wasn't addressing all of your points; just the one I quoted. The implication that "parasite economies tending to kill themselves" is somehow helpful because the problem is thus self-limiting has a major flaw. That is, the death of such an economy can be catastrophic for everyone; not just the bad actors.
Otherwise, I agree 100% with your sentiment that we should promote positive solutions vs. simply attempting to punish businesses we don't like. I have long believed as much myself, and have worked to that end. In the meantime, we do also have to be aware when an economy threatens the greater good and take specific measures (regulatory, activism, and otherwise) to directly address the threat.
There is something funny when you have an entire post about supposed "parasites", that then try to sell you $800 dollars conference seats ("Transition Economics", "Book Now!").
Who exactly are the parasites, who is the host, and how did the parasite benefit at the expense of the host?
If the parasites are investment bankers, and the hosts are the investors with 401(k)s, then fine. But that has nothing to do with music.
If GC is the host and the investment bankers are the parasites, that doesn't quite make sense. GC apparently sought out the "parasites" at every turn, and that doesn't sound like a normal parasite/host relationship.
It sounds to me more like a business that just used too much leverage/debt, presumably to grow quickly. That works sometimes, and sometimes collapses. This time it collapsed. The times it works it doesn't make the news.
This piece is entirely incomplete. It purports to examine the entire ecosystem from the angle of a single company, and writes an article not unlike painting eagles (or vultures as the case may be) as the villain conspiring against the innocent rabbits.
Let's go through this logic again. So a hedge fund comes in, buys a company, levers it up with a partner's money, leaving a pile of toxic debt on their neighbor's lawn.
With you so far.
The company issues more junk bonds in order to pay it's existing creditors, and that gets snapped up by other PE firms / Hedgefunds, who need it in order to fulfill a never-ending quest for returns.
Yup got it.
GC then goes bankrupt and the banks are evil.
Whoa, wait a minute. Where is this whole process did anyone get hurt? The author seems to think Guitar Center, and YOU, the average consumers. But in order to really understand that, let's look back in time.
Guitar center, if were any other company, were started by a few enterprising individuals with a passion for what they do. In turn, they were able to build a great business, and grow it to serve the entire country. After a while, wanting to cash in their success, they sell the company to a buyer, knowing very well what they planned to do with the company. The rest is history.
Not as clear anymore is it? Now lets look at what happens in the future.
GC goes bankrupt. Or it doesn't but becomes irrelevant. The 800-pound gorilla in the space dies, and there's room in the space now for another innovator, a new group of passionate individuals who can now bring their vision to life.
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[ 3.6 ms ] story [ 108 ms ] threadBut now maybe Eric Garland should look into the capital structure of Fender Musical Instrument Company. Then we can all get really depressed.
That this is not obvious shows how far we've fallen off the path of simple rational thought.
Why do you assume that the novel abuses of the system become non-obvious in time for anything to be done about them?
It's perfectly feasible that the creeping forces of darkness stay hidden until far after it's too late to do anything to stop them.
Life is not a movie. In reality, you sometimes lose; the hero sometimes dies alone; the person you love sometimes marries someone else and lives a happy, fulfilling life never thinking about you. In reality, you can't rely on literary clichés to save you. Nothing will save you. You are on your own.
Life usually has objective victory conditions. Even if you're playing by your own rules, the rules tend to be objective, because humans tend to care about the real world, not what we can convince ourselves.
If your startup fails, you are not going to wave a wand in your mind and say "I've won!" If you do, you will not feel fulfilled. You will not feel happy. Even if your startup was viciously heaving its death throes for years and you finally, finally pulled the plug, you will not feel "victory" in the sense you would if you were bought by Oracle and made a millionaire, because of your stock options.
Your employees will not sit around a table clapping, like this: https://www.youtube.com/watch?v=3nObH1R9ONw
It's very true that people try to convince themselves, following a loss, that they in fact won. They try to convince themselves that now they're free to start the next company, which will surely be a success, or that the person who left them wasn't right for them anyways, and that they'll meet someone new.
But in reality, the next company is sometimes also a failure, and the person who left you sometimes was your only soulmate, driven away by your workaholism or your nagging or whatever else you did.
We can lie to ourselves, but it's hard to truly deceive yourself. Think back to the times in your life when you've lost; you know what they are, and you know how they feel. When you lose again, and you will lose again, you'll know that you've lost then too.
I didn't exactly say "I've won!", but I did feel happy, and I did feel fulfilled for what I'd accomplished. Yes, I would've liked to have been bought (not by Oracle though, ick) and left a millionaire. However, I was hired by the best company to work for (according to Forbes) in the worst economy since the great depression (it was Oct 2008 when I applied). I know plenty of people who work their whole lives to do that. When I moved out to California, my friends and roommates were like "Well, I still have a job. I haven't been laid off yet." That puts getting hired in a somewhat different light.
I've had plenty of losses since - I've had projects canceled, projects succeed but been kicked off out of my leadership position, projects that succeed within the organization but fail in the marketplace - and a few genuine successes too. Ironically, it's often the successes that feel like more of a let-down, because suddenly this big ambitious goal that I thought was just a dream is now a reality, and...what next?
The key is to remember that the goals themselves are artificial. I set them because I like having a sense of purpose and ambition to my life, but then I remember that I set them, and they wouldn't even be valid if somebody else set them. And so if I don't reach the goal, one interpretation is that I'm a failure and a loser. But another, equally valid interpretation is that the goal was wrong in the first place - it was infeasible, or something I didn't actually want enough to trade away other things in my life, or too dependent upon external events. And then I've learned something too.
Since you seem intelligent, I entirely disbelieve that you think an "equally valid interpretation" is that any failed goal was misguided. Presumably you've written buggy code -- do you want to convince yourself that you didn't want correct software enough to trade other things in your life? The only way we improve is by acknowledging mistakes.
(You can always blame external events, so I'm not going to touch that, except to say that for the responsible person, everything is their fault.)
The point I'm making - and this is pretty much straight out of a few philosophy courses in college - is that there's a fact/value distinction. Whether or not you achieved a goal is a fact - if you're setting them right, it's measurable and externally verifiable. Whether that goal is good or not is a value - there is no possible way to answer that question other than resorting to your personal value system (or adopting someone else's personal value system). Your personal value system might decree that "It's a good thing when I achieve my goals" - but there is nothing inherent about that, only that you have decided to live your life in a goal-driven way. Other people may hold different values. I do, for example - after much self-examination, I figured out that I'm really discovery-driven, and for me, learning things is an inherent good and achieving my goals is only instrumental.
Also, there's a distinction between inherent and instrumental values. An inherent value is something that's intrinsically good, based on your value system. An instrumental value is something that helps you achieve an inherent value. Many of your goals will be to satisfy instrumental values - if they fail, then you try another approach, you don't think of it as a failure.
To answer your (rhetorical) question: yes, I've written buggy code, and sometimes I've written buggy code deliberately. The reason - in the instance I'm thinking about - was because writing the correct code would've increased latency (this was Javascript, where all the program logic has to be shipped to the client). User happiness was the inherent value, and performance was judged to be a more effective instrument to get there than correctness. So the decision made was to ship the buggy code despite it being buggy, because that actually achieved our purposes much better than making it correct.
That's the sort of flexibility you get from understanding what you're really going for and what are just steps to get you there. You can swap out the steps if they don't work out.
Westerners say that, as if the Reganesque march of progress will destroy any and all nation-states not ideologically subservient to the US of A, but in reality, China is never going to fall; Iran is never going to have free elections; not even Myanmar or even North Korea are going to shift.
The greatest and most heralded revolt of the 21st century replaced an autocratic president with a military dictatorship. But we pretend that Twitter can solve the dire social problems we face; that autocratic regimes can never suppress human curiosity; that one day, maybe not this day, maybe not the next day, but one day, freedom will ring.
But again, life is not a movie; you are not Mel Gibson; you live in reality, and in reality sometimes you lose.
But this point is too far afield to be useful here.
It does seem like something that needs to run its course though. At some point people have to think for themselves, and learn to ignore or deconstruct the commercials which result.
The problem is that any boycott initiative needs both a datasource and a UX that integrates into our buy habits. Something like a "PQ" - a parasitic quotient.
> There are dozens of industries that have been locked up by a few players in this way
I can perhaps see boycotting working for musical instruments, at least in the short term. They're crafted items that are infrequently bought, heavily researched, can be sent direct from manufacturers, and have a talkative and reputation-based community. But that doesn't really address any of the countless sundry-supplying industries that have been dominated in the same way.
Now, maybe I'm just one of the "people [who] believe that ... there is no other game in town", but I don't see that "voting with your wallet" works well in general. Perhaps with some automation it could, but similar automation would also help people compare prices, which is the thing your average person will be interested in. And at any rate, he really needs to expand on how he thinks boycotting can be made to work this time.
I agree. Would need to span all products - not just music - and mindlessly enhance my existing buying behavior. The problem is that boycott-able products are a small fraction of my total purchases. Could work, once I start buying everything with a smart phone. Then a plug-in, similar to those found on iPhone's Passbook, could pop up with a vendor rating. I would subscribe to such a service.
Until then, I’ll just boycott Guitar Center.
What the author is suggesting amounts to little more than "only buy boutique gear" which is ludicrous. For one, most of it is laughably and unnecessarily expensive and a lot not even that good (poor QC). You can't repair your own amps half the time because the small company enamels the whole damn circuit board so their competitors don't copy their (textbook EE) design. And there's no good alternative if you're someone who works on Keyboard Workstations.
People like cheap stuff more than they like brand/industry loyalty.
So, until Guitar Center actually collapses, it is actually harming the economy because its existence is preventing the formation of companies that might actually make a profit.
Is the problem a lack of information, the lack of better investments, or that investors don't care about their money?
Those investing the in debt (most likely with someone else's money, mind you) are yield chasing. They probably aren't betting the farm on this company, just a small % of whatever money they manage.
If it works out and the company doesn't go under, great! They just make 8% in a low-yield environment, they look smart, they get bigger bonuses! If the company goes under, that sucks. But, they can rationalize it to investors as 'this stuff happens' and becomes a write-off. Imagine this is a hedge fund, the managers probably didn't lose their money, they lost their investors' money.
Well, ok, but how many people really pay attention to the ownership structure of companies they purchase products from?
I know that 'vote with your dollars' is a typical answer to problems like this. On average, I suppose I purchase ~5 individual items each day. I don't really have the time to make sure that each of these companies that make these products conduct themselves in a manner that I consider ethically sound.
Scan a bar code before you buy a product and see either a big red "EVIL" banner or a big green "GOOD" banner, depending on the ownership structure of the company who makes the product.
Version 2 could let you configure what things you consider evil (owned by private equity, venture-backed, owned by cigarette companies, etc.)
Some clients would request that portions of their portfolio be devoted to 'Ethical', 'Socially Responsible', 'Green', etc. companies or funds. Ask them to elaborate on what exactly constitutes a 'Socially Responsible' company, and you get wildly different answers.
I guess what I am getting at is any definition of 'EVIL' or 'GOOD' is highly subjective. For example, not everyone would consider cigarette companies to be 'EVIL' ;)
Add info about country of origin, political affiliation of owner, or things like that, and you have a nice tool for boycotts.
Didn't something like this already exist?
Stuff I would prefer to see: A list of websites helping to support alternative business models that the author thinks is not all evil and immoral. A list of businesses that try to source their products from approved, moral places as much as they can. Other pro-active things that one can actually do (other than "just don't buy from Bad Guys" -- I mean more in the vein of "here are the Good Guys you can and should buy from").
Last, "parasite" economies tend to kill themselves. Historically, Greece, India and Persia all placed extremely high value on bees as a naturally occurring mental model for business, basically: Bees neither kill flowers nor get killed by them. They exchange their service (pollination) for product (pollen, with which to make honey) and both sides gain something of benefit without being harmed. This is a brilliant thing to value culturally when most of your examples from nature fall into the category of "kill or be killed".
It is brilliant because it is the only paradigm that is sustainable. If you are enough of an asshole, you can and will be taken out eventually. Even Roman emperors sometimes got offed by their own Praetorian Guard for being too assholish to put up with. No one is beyond reach. You learn to engage in a symbiotic exchange where both sides gain something or you eventually get a Darwin Award. That's just how it is.
Yeah, the problem is that there are a lot of good people who depend on this economy. This is why its last near-death experience resulted in a bailout sponsored by "the rest of us".
I wasn't addressing all of your points; just the one I quoted. The implication that "parasite economies tending to kill themselves" is somehow helpful because the problem is thus self-limiting has a major flaw. That is, the death of such an economy can be catastrophic for everyone; not just the bad actors.
Otherwise, I agree 100% with your sentiment that we should promote positive solutions vs. simply attempting to punish businesses we don't like. I have long believed as much myself, and have worked to that end. In the meantime, we do also have to be aware when an economy threatens the greater good and take specific measures (regulatory, activism, and otherwise) to directly address the threat.
I upvoted that comment, by the way.
If the parasites are investment bankers, and the hosts are the investors with 401(k)s, then fine. But that has nothing to do with music.
If GC is the host and the investment bankers are the parasites, that doesn't quite make sense. GC apparently sought out the "parasites" at every turn, and that doesn't sound like a normal parasite/host relationship.
It sounds to me more like a business that just used too much leverage/debt, presumably to grow quickly. That works sometimes, and sometimes collapses. This time it collapsed. The times it works it doesn't make the news.
So what's special about GC?
Let's go through this logic again. So a hedge fund comes in, buys a company, levers it up with a partner's money, leaving a pile of toxic debt on their neighbor's lawn.
With you so far.
The company issues more junk bonds in order to pay it's existing creditors, and that gets snapped up by other PE firms / Hedgefunds, who need it in order to fulfill a never-ending quest for returns.
Yup got it.
GC then goes bankrupt and the banks are evil.
Whoa, wait a minute. Where is this whole process did anyone get hurt? The author seems to think Guitar Center, and YOU, the average consumers. But in order to really understand that, let's look back in time.
Guitar center, if were any other company, were started by a few enterprising individuals with a passion for what they do. In turn, they were able to build a great business, and grow it to serve the entire country. After a while, wanting to cash in their success, they sell the company to a buyer, knowing very well what they planned to do with the company. The rest is history.
Not as clear anymore is it? Now lets look at what happens in the future.
GC goes bankrupt. Or it doesn't but becomes irrelevant. The 800-pound gorilla in the space dies, and there's room in the space now for another innovator, a new group of passionate individuals who can now bring their vision to life.
And the cycle starts anew.