What social contract? Companies have always been for shareholders. Do you people have some kind of contract with Tesla that I don't know about?
This entire discussion sounds crazy to me. If you want socialism, vote for socialism. If you want raw unfiltered capitalism, vote for the billionaire. You can't vote for the billionaire and expect safety nets. That's madness.
> What social contract? Companies have always been for shareholders.
You are not wrong, but the contract is/was metaphorical.
For a long time people were able to make a living for themselves by studying hard (usually STEM) and end up with a career which payed off. That was the invisible "contract". Hell I went to university for things which seem like academic navel gazing, but I still got a good tech job on the other side. That's not the reality for a lot of graduates nowdays who take more practical degrees at masters and phd levels.
Again even if the literal statement is clearly false, it is the sentiment which matters, and this sentiment does not just apply to graduates. I think many just feel like working hard does not work anymore, especially in the face of housing, cost of living, job competition and social media flaunting the wealth of others.
I get the idea from my younger siblings, "Why try if you are already a looser."
> For a long time people were able to make a living for themselves by studying hard (usually STEM) and end up with a career which payed off
Recessions like the GFC, the Dot Bomb, the early 90s, the Asian Financial Crisis, the early 80s, Stagflation, and others show otherwise.
The extended bull run that SWEs had from the early 2010s to 2022 was an outlier, and the whiplash being felt today is comparable to what law and finance grads faced in the 2010s, accounting majors in the 2000s, and Aerospace/MechE majors in the 1990s.
Henry Ford for all his faults (and there were MANY) at least understood that you gotta have a customer base for your products, and that paying workers well helps everybody out.
Many of our current society's problems can be directly traced back to Reagan-era policies. Anyone who seriously believes in trickle-down Reaganomics is a fool or a liar.
Those economic policies were a backlash to the 1970s Civil Rights pushes. You can always count on racists to destroy themselves rather than to stop abusing others.
That LBJ quote rings true more and more with each passing year.
“If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you.”
Henry Ford wanted to raise salaries of his employees but the Dodge brothers (who owned only 10% of the company) successfully sued and "As of 2025, in Delaware, the jurisdiction where over half of all U.S. public companies are domiciled, shareholder primacy is still upheld."
My understanding is that that legal case really states that you can’t defraud your shareholders by funnelling money into other businesses they have no ownership in.
It doesn’t set the legal standard that profits must be maximized which is impossible.
Correct, a quote from the linked wiki article:
"Dodge is often misread or mistaught as setting a legal rule of shareholder wealth maximization. This was not and is not the law. Shareholder wealth maximization is a standard of conduct for officers and directors, not a legal mandate. The business judgment rule [which was also upheld in this decision] protects many decisions that deviate from this standard. This is one reading of Dodge. If this is all the case is about, however, it isn't that interesting."
— M. Todd Henderson
It is not socialism to note that in the past, some companies have believed that their optimal relationship with their employees required recognizing their value and awarding them accordingly, thusly allowing them to attract/retain the best employees as well as maximizing the quality of the output from those employees. There has always been such a spectrum, that's not socialism. The trend to notice is that the spectrum is so strongly weighted towards the merciless, cutthroat end of things that may actually not be optimal for long term survivability of those companies whilst also as I noted, be breaking the social contract that workers have assumed for decades, which is also not socialism.
Socialism has a specific meaning, it's not just a label we get to put on behaviors that we - or rather, specifically you in this case - don't like.
There's never been any such contract. You guys must not have studied the Great Depression at school.
Or more to the point, productivity has consistently outpaced pay for most of the US workforce since the mid-1970s. That's ~50 years that companies have been ripping you off. It's only now you notice, because rent/mortgage/school/medical have finally become so much larger than pay.
Well now you get to live through the Great Depression and study it up close.
> That's ~50 years that companies have been ripping you off. It's only now you notice, because rent/mortgage/school/medical have finally become so much larger than pay.
The alternate way of looking at it is that the 50s to mid 70s era saw a period of unprecedented prosperity and now we are just seeing a reversion to the mean.
What do you mean "we"? The rich are much much richer than they've ever been. The stock market is soaring. Companies are seeing record profits. GDP is through the roof.
Socialism is when the state (ie: the government) _owns_ industries.
A social contract is an implicit agreement that everyone more or less accepts without anything being necessarily legally binding.
For example, the courtesy of two weeks notice in the US is a social contract: there’s nothing legally requiring it, but there are _social_ consequences (ie: your reference might be less positive) if you don’t follow it.
Everything that’s kind of in an employee’s favor is not socialism. You don’t have to like the idea of “work hard, help the company do well, get rewarded,” but that isn’t socialism. It’s just a thing you don’t like.
There has never been an understanding that rising profits = no layoffs. Zero idea where that came from. Companies will reduce workforce when they dont think those workers are providing value, that has always been the case.
This was not the case for much of the 20th century, where layoffs were seen as an embarrassment.
For decades, engineers at IBM, HP, Xerox, etc assumed that they had a job for life; because they did.
The management culture you describe may predate Jack Welch, but certainly came into vogue with him. It has all the well-known downsides: management often lays off critical staff because they can’t really measure productivity, it destroys morale, many of the remaining high-performers leave, and is often followed by hiring replacements in the next year or two because the people cut were actually necessary.
So it is odd to see it happen for highly profitable companies.
It's not that I don't like it. It's more that I think you're being lied to. Inequality has been going up in the US for a very long time, which means a lot of people are not being rewarded as much as they should. But they still buy into the system that is impoverishing them.
Inequality going up means the situation is changing and that is what people are complaining about. There definitely has been a culture shift as MBAs took over executive leadership and their compensation packages skyrocketed. Companies were always for the share holders but there used to be more consideration of the longer-term value for the company that amounted to appreciation of and fairer treatment for both employees and customers.
I also think though that individual experiences of this kind are more about specific companies maturing than a widespread culture shift. A lot of people on these forums worked in tech companies that are relatively young and have changed a lot over the past two decades.
"Inequality has been going up in the US for a very long time, which means a lot of people are not being rewarded as much as they should."
The second part of your sentence is not necessarily true. It might be true in some or even many cases, but it's certainly not something you can just assert & move on, as if it's a physical law.
I'm just tired of re-litigating this issue. Discuss with your favorite frontier model. Roughly, productivity has been outpacing pay since the mid 1970s, and I wrote about this in another comment here.
There's just so much confusion here. Some people like you don't get why a world where a handful of billionaires own everything is a bad idea. Madness. I think nothing less than another depression will get through to most.
If I lease tools that triple your productivity for the same cost as your wage, how much more do I pay you?
My point is increases in productivity can be caused by capital investment, not totally attributable to the worker. That money has to come from somewhere.
Ideally there's a fair balance. This isn't it but you can't look at the number you referenced blindly.
You're not thinking at a systems level. Check this out - https://data.worldhappiness.report/chart. The US is increasingly a miserable place to live in - in large part because of pay not keeping up with housing/school/medical/etc.
Correct systems-level answer to your question "how much do I pay you" is "as much as it takes to stabilize the US curve". Happiness correlates with financial security, which we won't get if the rich get richer from those capital investments then buy up all the housing.
Fun fact: Fit 2 lines on that data and you can extrapolate by ~2030 China will be a better place to live. That's really not that far off. Set a reminder on your phone.
I don't care if you are tired or not, it's not something you can just assert and move on.
Also, you know nothing at all of my opinion on whether "a handful of billionaires own everything" is a bad idea or not. All you know about me is I don't agree with you that rising inequality AUTOMATICALLY means some people haven't been rewarded as much as they "should", whatever that means. Reading comprehension, combined with not assuming others' POV, for the win.
Dude go figure it out yourself, it's not that hard. I remember discussing inequality with friends in 2014, and probably knew about it since Occupy Wall Street (2011). Or earlier. At this point if you still don't get it, with a billionaire in office, surely it's on you.
well we can trace that back to the 1920's, for one example.
>Do you people have some kind of contract with Tesla that I don't know about?
Are you aware of what a "social contract" is? There's nothing wrong with seeking to fill in gaps of knowledge.
>This entire discussion sounds crazy to me. If you want socialism, vote for socialism.
I'd be down for it, but this is almost orthogonal to the main point of the discussion. Social contracts exist in all forms of governing. Even rampant capitism has the bare bones social contract of "don't make your customers TOO angry so you can maximize extraction".
When billionaires own the media companies that influence public opinion and have legal avenues to essentially bribe elected officials, does the public have a meaningful avenue to vote anti-billionaire?
This entire discussion sounds crazy to me. If you want socialism, vote for socialism. If you want raw unfiltered capitalism, vote for the billionaire. You can't vote for the billionaire and expect safety nets. That's madness.