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Culture War Roundup for the week of August 18, 2025

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IMO these companies would benefit from having shareholders with very long-term focused horizons like governments.

It's not too unusual in Europe for strategic companies like Airbus and VW to have this.

This seems backwards. By their nature, private businesses tend to be focused on the long-term, since their value is equal to the net present value of all future cashflows from now until the end of time, whereas governments tend to focused on the short-term, since they just want to win the next election.

private businesses tend to be focused on the long-term

Private businesses aren't focused on anything, since they don't have minds. The people who make decisions on their behalf are quite often focused on the short-term. As a chief executive, I may be able to sell shareholders on a long-term plan, but often as not they're looking for a good quarterly report and I'm looking to keep my job and score a bonus.

Well, the shareholders care about the market's assessment of the long-term profitability of the company, and the shareholders elect the board of directors, so the company has a much stronger incentive to care about the long term than the government does. For the government to care about the king term, the voters need to be able to assess their performance and vote in that basis, and they just don't.

their value is equal to the net present value of all future cashflows from now until the end of time,

Totally false. The vale of an equity is simply an estimate of the future value of itself, ad infinitum. A perfectly rational trader will be perfectly happy to buy a stock if he thinks it will go up, even if the stock costs more than the expected sum of all future dividends and distributions.

The value of the company's assets, dividends, buybacks, hostile takeovers, etc prevent the company's value from reaching totally arbitrary values, but none of those can be plugged in to a formula to determine the current equity value of a company.

The entire value of the company comes from the money it eventually pays out to its shareholders.

By their nature, private businesses shouldbe focused on the long term if you consider a purely theoretical universe populated by homo economicus.

Private companies in the real world, headed by real humans, only rarely tend to be concerned with the long term.

No, I think that in practice, private companies are much more focused on the long term than governments because they have very strong incentives to be. Most real humans aren't paid millions of dollars to run large companies after going through an extensive filtering process disciplined by markets. Most companies don't even survive more than a few years. The market selects for companies that are unusually well-run and mostly only allows them to survive, at least in competitive industries. It's not perfect process but I think it works much better than politics.

Modern economic theory is founded on the premise of the rational actor. My economic theory is founded on the premise of the retarded actor.

That's why it's an actor, they're only pretending to be retarded. They're also method actors.

They went full retard. Never go full retard.

with very long-term focused horizons like governments.

Is 4 years really that long?

4 years > 1 quarter

It's not too unusual in Europe for strategic companies like Airbus and VW to have this.

And Germans are poorer than Mississippians.

The problem is that States are also extremely risk averse, and therefore terrible as shareholders in anything that requires flexibility and innovation.

Semiconductors are hard in part because you need levels of investment similar to large civil projects and that flexibility to be successful.

However USG is uniquely good at throwing money at zany things for long term strategic gains as States go, so maybe it will work out .

If in the future politicians start telling you we need to use the dividends of this ownership for social programs, that's your signal that Intel will become irrelevant.

Obviously the dividends are going to get plowed into social security if intel ever makes a profit.

Well then you'll get the same outcome as French Dirigisme: a very nice infrastructure and industrial base slowly rotting under the weight of uncertainty as all your competitors catch up and loot it until it can no longer support its own weight.