Corporate Incentives Are Diverging From Employee and National Incentives

The 1950s were not as perfect as people with red hats like to think they were, but there was one dynamic that was fairly healthy: it used to be that three primary incentives in the U.S. were aligned:

  1. Individual Families

  2. Corporations

  3. The Country

Corporations would hire workers, which they would pay enough to: live on, save for retirement, save for college, go on vacations, buy presents for Christmas, and maybe have enough left over for a movie or a family dinner at the restaurant. And somehow you’d also not be constantly stressed about healthcare.

And in turn, those thriving families would make up a thriving country, which was working generally together towards shared goals.

Corporations saw themselves as contributing to America. And people saw themselves as doing the same by contributing to companies.

We just grew apart

I’m sure there are hundreds of books on what caused the following changes, but here’s where we seem to have ended up.

  1. Most corporations are functioning either like sovereign countries within the United States, or like supernovas that are designed to make as much money as possible for early employees before exploding.

  2. The country is run by a combination of lobbyists for those companies, and self-serving politicians who function like their own corporations.

  3. The average family is left to battle for its own resources. Most corporate jobs aren’t nearly as stable, don’t pay nearly as much relative to the full costs of raising a family, and they’re always relatively close to being fired due to an “innovation” at work that makes their work redundant.

In short, we’ve lost the mutually-supporting structure of the family helping the corporation, the corporation helping the country, and the country doing its best to strengthen families and businesses. I think that structure is a major part of what made the country strong. But things are just different now.

The problem isn’t that corporations became evil where they used to be good. No. They were “good” in the past only in that their incentives just happened to align with those of families and the country. They needed people, and people needed jobs. So it was a great fit.

But most companies’ mission has always been to make a profit for shareholders.

Well, now there are simply better ways to do that, i.e., by automating human jobs away and lobbying to get laws changed in their favor.

Same goal—different ways of doing it. And these new ways just happen to be really bad for human work, human meaning, and for democracy.

Unsupervised Learning — Security, Tech, and AI in 10 minutes…

Get a weekly breakdown of what's happening in security and tech—and why it matters.

Breaking it down

And this leaves us with the following:

  • Families don’t have loyalty to companies or the country, because they don’t feel they’re advocating for them

  • Corporations don’t have loyalty to workers or to the country, because their primary goal is profit

  • The country doesn’t have any direction or morals because it’s run by people with short-term and selfish goals, similar to those in the corporate world

So the family is alone, the corporation has sold out, and the country has lost any identity or direction.

That’s a problem. It’s not a foundation on which to build a future.

It’s a foundation for revolution, basically. For unrest and then rebirth.

And that’s why I’m not sold on Steven Pinker’s optimism. It doesn’t matter how bad it used to be compared to what we have now.

What matters is how much worse it’s getting relative to how good we remember it—even if that positive memory is flawed.

If we want to return to a healthy state we need to decide who we are. As a country. As companies. As families. And as individuals.

Related posts: