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PaperclipPerfector  1mo ago (text post)   24099 thread views

Culture War Roundup for the week of May 18, 2026

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(Trigger warnings: another AI post; Jean-Jacques Rousseau)

I want to talk about the economy in the face of the AI revolution, but let's go back to the basics first.

What is the purpose of a company? Not the stated one, the original one.

To provide value to its shareholders? Of course not, that's a very narrow view! It's like saying armies exist to kill people.

Do companies and markets provide a decentralized way to coordinate the efforts of large groups of people (choreography vs orchestration)? Yes, but what for?

Do companies and markets exist to maximize the economic output? Many would say yes, but the idea is wrong and will become more obviously wrong the more AI we inject into the economy.

Companies and markets exist to maximize the consumption! They exist so that more people consume more goods and services! The fact that these companies have to pay their workers is not an unwanted side effect, it's a feature! Companies exist to create and distribute goods and services to humans, and markets exist to ensure that each human gets a share that is sufficiently fair.

Both the industrial revolution and the transition to a service-based economy created millions, if not billions of new jobs, but is this an inevitable consequence of free markets? Will AI-fication of the modern economy do the same?

The correct answer is not "yes" or "no". It's "mu". If the economy reinvents itself again and people of the Global North find themselves new jobs, that's fine.

But if we suddenly start running out of jobs, accepting it as the inevitability of the market forces is the wrong way out. The right way out is retiring the market forces, not submitting to them. Creating shareholder value has always been the real side effect.

At its core the company is an entity formed by shareholders in order to generate profit. This is intrinsic purpose of any company, be it modern LLC, East India Company a pirate crew in Caribbean with its own charter, Hanseatic guild in Baltic or mercenary company in ancient Greece. From times immemorial, people banded together and pooled labor, capital and know-how in order to generate profit for themselves.

All of those things you mentioned such as distributing goods, creating markets, creating jobs and whatnot are externalities of certain type of regulated companies. It is a result if you make it easier for strangers to put together capital and create profitable business. But it would in some form work even without that, only it would be more costly and riskier to do that in unstable environment.

I wouldn’t call profit a necessary element. Lots of nonprofits were incorporated under Company House until we started creating special legal containers for them.

“A group of people who band together to do something with limited liability” seems to best cleave reality at the joints.

We mean different things, we have different definitions. To me it seems, that you look more into structure: is it limited or unlimited liability, is it solo owned or a group owned entity, is it for profit or non-profit, is it publicly traded or privately owned etc.

I look more on the function and need this institution serves. I'd consider a local mafia as a company in this sense, it is a group of criminals conducting illicit activities to earn profit. It's legal structure is immaterial to me, companies can exist absent of state. That is my point with OPs rant about what he thinks companies should or should not do - bad luck, companies are not bitches of states, they are manifestation of underlying reality of human nature.

Also profit is necessary component to me, doing something does not cut it for practical reason. For instance banding together with your wife in order to raise children is not a company, it is a different institution - specifically that of marriage forming a family. I guess we can extend the definition if we know what we mean, there definitely is some overlap especially if there actually is family business etc. But it is unnecessary.

Fair but that makes

At its core the company is an entity formed by shareholders in order to generate profit. This is intrinsic purpose of any company

an assertion and a tautology, not an argument or a rebuttal. I don't mean that in a rude way.

Sure, but I commented on the context that the OP introduced of economic relationships. Not about people grouping together to form a bowling league or moderating Culture Wars online forum etc. That is also an intrinsic social need, but of a different kind.

The purpose of a company or firm is to produce profit: to coordinate on Monday to be wealthier on Tuesday. There is generally little concern about the consumer except so far as the production of the firm is deemed desirable by the consumer.

It's like saying armies exist to kill people.

Of course armies exist to kill people. Any other statement of their purpose (e.g. "to secure a nation's borders") is just a euphemistic rephrasing thereof.

I have always found "fleet in being" an interesting way to look at this question: a bunch of ships can have strategic value even without leaving port, just to tie down enemy resources to use against them because of the implication.

Of course, if nobody ever sails their fleet, the hypothetical threat isn't quite as credible.

If nobody ever sails their fleet, the hypothetical threat is working as intended. Two fleets sit in port glaring at each other across the ocean until the end of time.

To win one hundred victories in one hundred battles is not the height of excellence. To subdue the enemy without fighting is the height of excellence.

Armies exist to further the interests of their employers, killing people is a common byproduct of pursuing that goal. To say armies exist to kill people is akin to saying that slaughterhouses exist to produce runoff, or that the purpose of driving is to wear down your tires.

The only reason an army exists is so that their employers (typically, the government of the nation they represent) can credibly claim that lethal violence will ensue if the need should arise. Thus, the purpose of an army is to kill people.

That's nuclear weapons. The army has a separate though overlapping purpose.

No, absolutely not. A primary reason that Country A doesn't invade Country B is because Country B has an army i.e. a group of soldiers who will attack Country A's soldiers should they cross Country B's borders.

Then why are there people still? Are armies so bad at their job?

Do screwdrivers exist to drive screws? Then why are there undriven screws still? Are screwdrivers so bad at their job?

No, they don't exist to drive screws.

Wow. You're telling me for the first time.

What are screwdrivers for?

To increase the production of goods.

Well just the other day I used a screwdriver to tighten a loose cabinet door. That didn't increase production of anything, in fact, it decreased the demand for new cabinetry.

Am I misusing my screwdriver?

You're right, it's to increase the consumption of goods. Without it you would've stopped consuming your cabinet sooner.

More comments

I think you’re agreeing with @ortherox. Screwdrivers exist to screw screws for a purpose. Screwing is their function.

Likewise armies exist in order to achieve certain things - border protection, having lots of gold, etc. This involves killing people.

Screwdrivers exist to screw screws for a purpose.

Is there anything that exists to do X for no purpose?

Some artists say art, though I don’t agree.

Armies have a purpose the way a tool has a purpose, and like a tool they don't decide when and where they are used or whether it's a good idea to use them as that type of purpose is decided by the state.

They can take on more functions like disaster relief, and they can threaten the state and overthrow it, but though a kitchen knife can be used as a screwdriver or a weapon it's still a kitchen knife.

Wait - is this distinction where Task and Purpose got its name?

Yes, and the purpose of a kitchen knife isn't cutting food, it's nourishment.

I don't think so. In the event that an army has a choice between securing the nation's borders non-lethally with 100% effectiveness, or killing people, we should expect the army to pick the former strategy over the latter. Therefore "the army exists to secure the nation's borders" has information value as more than a euphemism.

The means by which armies secure the borders of their respective nations is by killing people or by providing a credible threat that lethal violence will ensue if their demands are not met. Any purpose an army might conceivably have therefore ultimately boils down to killing people.

This is the means by which armies secure their borders given the current state of technology. But if an army had technology that was more effective than lethal force at protecting the nation's borders (eg, for the sake of argument, foolproof mind-control rays), it would use that instead of killing people. The tails eventually come apart. The better definition of the army's purpose is the one which correctly predicts their actions in all hypothetical situations, rather than the one which only works in the current context but breaks down outside of it, even if both definitions correctly predict armies' actions in the real world.

For example, you might think that an airline's purpose is to make money by conveying passengers from A to B as fast as possible, or you might think that an airline's purpose is to make money by burning jet fuel. In the real world, given the current state of aviation technology, conveying passengers from A to B is going to be done by burning jet fuel. But "conveying passengers from A to B" is a better statement of the airline's purpose than "burning jet fuel", not a euphemism for it, because if a technological breakthrough suddenly gave us a better, cheaper way of powering airplanes than traditional jet fuel, we would expect the companies to switch over in pursuit of more effectively conveying passengers, rather than giving up on conveying now-reluctant passengers and finding other reasons to set fire to jet fuel.

I think you should spend less time inventing pedantic counterfactual hypotheticals.

Is the purpose of nuclear weapons to use them?

The purpose is to use them in certain hypothetical situations. If there are no hypothetical situations in which they are to be used, then they are entirely useless.

Armies exist to provide deterrence at the geopolitical level through the threat of killing people, not to kill people. Auschwitz guards exist to kill people. There's a difference.

I agree that providing deterrence at the geopolitical level is a purpose that armies serve, but not the sole one (e.g. when an army invades a foreign country). But in any case, it's a distinction without a difference. The only reason armies are an effective deterrent is because they are willing and able to do lethal violence on their masters' behalf. Functionally, there's no difference between training someone to do lethal violence and training someone to be willing and able to do lethal violence should the need arise.

Lots of wars don't have much to do with deterrence. The purpose of armies has as much to do with potential gain (more geopolitical and ideological than resource related in the modern day) as it does with defence.

I know some offensive wars can legitimately be justified by the logic of self-defence, but if you want to spread democracy, or communism, or set up some colonies, or intervene in some far away atrocity, you need a bigger army than if your sole concern was defence.

Both gain and deterrence rest on the ability to kill your enemies, and the more credibly you can show your ability there the better you'll do at both. Armies don't go on killing endlessly because it's generally a stupid idea and they ultimately exist to achieve the goals of the state.

Corporations or companies function is different across time and space. A company that exists in France must hold up to very different standards than America or China. This is one of the myriad reasons why when people criticize "capitalism" it's incoherent.

But in America, the purpose of a corporation is basically up to the owners. Usually that means maximize profit, but usually that's enforced by lawsuits from angry shareholders, not a strong explicit legal criterion. (although to some limited extent thar exists). However there are lots of exceptions. If you have a private corporation, then the goal of that corporation is whatever the owner(s) want. Anyone who has worked for a small or mid sized corporation with dictatorial owners probably knows well that sometimes profit isn't the singular motive.

We should rightly note that there are tons of "capitalist systems" (hereby defined as to some extent directed by a market) that don't seem to strive to full employment. Southern Europe has been at high unemployment for decades and chugs along without ever changing anything.

Business interests more generally are a natural part of society. Commerce is an unavoidable system of interaction between humans. The more complex it becomes overtime, you begin to see the formal institutional emergence of functions and bylaws that specify purpose and regulatory guidelines for the expectations of how businesses are supposed to behave.

You’ve sort of weaved multiple questions here into a single thread that doesn’t make it easy to answer. As it relates to AI specifically, it could entirely turn out to be the case that significant sectors of the industry become nationalized outright or fall under a strong regulatory regime that changes the nature of the industry entirely. People have said for a long time for instance that ISP’s should be nationalized as a public utility, and the same has been said of our industrial control system network (which a lot of it is actually in private hands). But a lot of the AI speculation is all predicated upon the assumption that the day is coming when it’s going to hit us, and its arrival will be unmistakable once it’s here. I’m still skeptical of that.

I have a slightly different answer from what seems to have been offered so far. Companies, as a legal form, are a carrot-and-stick deal offered to the individual by society in order to channel his ambition into pro-social or at least less harmful ends.

  • The carrot are tax advantages, paperwork benefits, legal perks such as being able to claim unique use of a recognisable artificial trademark, and some degree of shielding of the individual behind the enterprise from repercussions (such as debts far in excess of what the enterprise could be expected to make up for, or legal responsibility for side effects and damages caused by it), as long as he plays by the rules.

  • The stick is, often, outright lawfare against individuals who pursue their ambitions without signing up to the form (in Germany for example you can not even, as a private person, make and sell software to the public without registering a company).

  • The means by which the goal (of channeling individual ambition to pro-social ends) is pursued are legal requirements to make the activities of the company legible in particular ways (bookkeeping, charters, records) and adhere to all sorts of restrictions on shape, purpose and behaviour. If there is an obligation to "maximise shareholder value", on the flip side this means that a company can not actually have the terminal value to "maximise paperclips", and there may be legal ways to mobilise society against if it appears to do the latter over the former. Also, the things that a company can command its employees to do are a subset of the things an individual can force another individual to do with a legal contract, which are a subset of the things an individual can force another individual to do with legally unregulated compulsion such as individual or communal violence.

The alternative to companies, the thing that there would be more of if someone erased the concept of companies from reality with a memetic Death Note, does not look like people no longer getting together to achieve things, or less consumption. It looks like more instances of things like the Mafia, cults and Genghis Khan's hordes. If you only erased companies narrowly writ, you might also (at least) get medieval guilds, which are really an older, rougher attempt at the same thing.

If there is an obligation to "maximise shareholder value"

As far as I'm aware, there are few countries where this is actually true. Yes, it's the default but if the charter of the company says otherwise, the obligation can be something else (as long as it's legal).

Well, a banker just got himself into hot water for using terms I've seen thrown around freely here and elsewhere regarding high and low value human capital. Mask off moment where AI adoption en masse is going to rip back the curtain as to how our owners really feel about the mass of us peons?

I think AI is going to make things very interesting, because it'll be the lower echelons (at first) of those who like to think of themselves as 'high value' human capital getting replaced. But I think there's no reason - at least in the medium term - why the CEO or group chief executive (as in this case) could find themselves replaced by AI (it can do all the analysis and forecasting and reporting to the board and as for leadership, there are only a few upper managers remaining since the lower levels were all automated out) but the guy doing electrical maintenance at the headquarters keeps his job because he's not currently replaceable by a computer or robot.

Mask off moment where AI adoption en masse is going to rip back the curtain as to how our owners really feel about the mass of us peons?

The mask has been transparent since the change from "Personnel" to "Human Resources".

I felt that back then, but was deemed too cynical for the view "yeah, and what do you do with a resource? Exploit it. Strip mine it until there's nothing left to dig out, then dump it on the rubbish heap".

Before that it was “Manpower” which really doesn’t seem too different to “Human Resources”.

tbh manpower is at least honest.

I feel like "human resources" is even more honest. You have your coal resources, you have your electricity resources, you have your human resources...

So, are we already seeing the AI effect on the white collar jobs, or is it just companies using this excuse to shed excess headcount?

The tech employment sector in Ireland is starting to feel the hit (and we put a lot of our eggs into the basket of "American multinationals investing here and creating employment", moving from pharma to computers/IT, encouraging people to go get those degrees and get a high-paying job in the industry of the future):

For years, Ireland has had a straightforward arrangement with multinational tech giants.

We provide low corporate taxes, an educated English-speaking gateway to the EU, and offer various state grants and support schemes.

In return, the country gets two big benefits. First, thousands of people working in high-paid jobs. Despite only accounting for 3% of all enterprises, multinationals employ about a quarter of the workforce. These staff tend to earn good salaries and pay lots of income tax and USC, helping out with state spending.

Second, multinationals typically shift much of their international profits through Irish corporate entities.

As these profits are so enormous, Ireland’s 12.5% cut adds up to tens of billions each year, which has massively boosted the public finances.

...Meta is of course the reason we’re talking about this. During the week, the company announced plans to cut 350 roles in Ireland. Once the latest round of layoffs is complete, its Irish workforce will be less than half the size it was just a few years ago.

It’s worth noting that this came just after Meta announced profits of $27 billion (€23.29 billion) for the first three months of 2026, up 61% compared to the same period last year.

So why is an enormously profitable business cutting staff? Two main reasons have been put forward. The first is that Meta, like many tech companies, ‘over-hired’ during Covid and this is a kind of natural pruning back.

The second is that Meta is going big on AI and it expects the technology to be able to replace many of its workers.

CEO Mark Zuckerberg has said that AI has enabled projects “that used to require big teams, now being accomplished by a single very talented person”.

This is one of the first major AI-related rounds of job cuts which has impacted Ireland. The fear is that it’s a sign of things to come.

Several other large tech firms with operations in Ireland, such as Cisco and Oracle, are also trimming their workforce amid a shift to AI.

The dreaded 4 a.m. email seems to be how people found out Meta were letting them go:

The termination emails from Meta management landed at 4am.

It may have been early but most workers were probably already awake, waiting to learn their fate.

Of Meta's 1,800 Irish-based staff, around 350 received emails outlining how they were "potentially impacted" by global redundancies.

It was a high number of Irish layoffs, double the 10% cut that was being applied to the worldwide workforce.

The announcement has sparked concern in both business and political circles amid fears that the great AI job displacement is already under way.

My own feeling is that Zuckerberg has not in fact provided reassurance; the way this is worded, it could be "we don't expect" means "but it could still happen" and "not company wide" means "selected areas not everywhere":

Zuckerberg wrote that meta did “not expect other company-wide layoffs this year” – the closest thing to a stability guarantee anyone at the company has heard in months.

…The no-more-layoffs commitment comes with a footnote written by Meta’s own CFO. On the company’s’ Q1 earnings call on April 29, finance chief Susan Li told analysts she doesn’t know what Meta’s ideal headcount looks like anymore. Zuckerberg made the trade-off explicit on the same call. If a team used to need 50 or 100 people and now needs 10, he said, keeping the bigger team around becomes counterproductive.

That isn’t the language of a company that has finished restructuring. Meta is spending between $125 billion and $145 billion on capital expenditure this year – nearly double its 2025 spend – with most of it pouring into data centres, custom chips and model training for Meta Superintelligence Labs. The 8,000 jobs being cut are explicitly meant to offset that bill.

On the other hand, some sources are saying that this isn't in fact the dawn of AI replacing humans, it's companies laying off excess hiring that happened during the pandemic and putting the blame on AI.

So which is it - AI is coming for the formerly "high value human capital" jobs, with Zuckerberg's "We're starting to see projects that used to require big teams now be accomplished by a single very talented person," or only the low-level jobs are going, the expert and experienced are safe and people will be redeployed elsewhere (as here) or find new jobs, or it's just reducing excess and trimming the fat, there is no turndown in tech sector employment?

As 8,000 Meta employees were reading their layoff notices on Wednesday, 7,000 others opened a very different email. They had been selected to join a new AI initiative spun up directly by CEO Mark Zuckerberg — and it would be crucial to accelerating Meta's position in the AI race.

Many employees learned they would move into a group called Applied AI (AAI), which Meta created earlier this year, led by engineering vice president Maher Saba and reporting to chief technology officer Andrew Bosworth.

Others were recruited to groups more specifically focused on AI agents. These include a group named "Agent Transformation Accelerator," headed by Bosworth, and a team named "Agent Data and Optimization," according to internal messages shared with Business Insider.

I think we'll have to wait and see, but it will be darkly ironic if people are indeed currently training their machine replacements in the very industry that went all-in on Moar Tech Moar Better, doubly so as the job cuts are to free up funding for the AI push:

Meta is installing new software on its US employees' computers that will track their keystrokes and mouse movements to train its AI, and it's sparking backlash within the company, according to internal communications obtained by Business Insider.

Business Insider obtained the full internal announcement about the launch of the new AI training program. The post says that the software helps AI models improve how humans actually use computers, such as using keyboard shortcuts and choosing from dropdown menus.

..."This makes me super uncomfortable. How do we opt out?" was the top-rated comment in response to the internal announcement, according to a post on Meta's internal workplace communications site seen by Business Insider.

...Meta CTO Andrew Bosworth responded in the thread that "there is no option to opt out of this on your work provided laptop."

We can just as soon as redistribute the consumer tokens as we can ban the AI. Which is why I've been banging on about Universal Income with like a consumption tax this whole time. Banning AI won't work for many reasons, not least of which because other markets won't ban it.

Banning AI won't work for many reasons, not least of which because other markets won't ban it.

That's not a reason for it not to work. If a country refuses to ban it, blow up that country until it does or goes Mad Max. Repeat as necessary. Yudkowsky pointed this out years back.

We can't even keep the strait of Hormoz open dude.

I have multiple opinions about UBI.

One rationale for it that I see was it would replace much of the piecemeal welfare system we already have, and offset its net cost. Not just dollar for dollar, but also with every dollar moved, the administrative costs of those other programs will be eliminated. And as those tend to be conditions based, their overhead (in vetting and auditing) is much higher than a simple UBI program’s would be. The cost of even basic UBI is nevertheless quite high. And I think this is the only real criticism of it that holds up; like all the useful luxuries of civilization, a thing you should have, you only should buy only when you can afford it. We should as a community fund fire fighting, for example; but only if we as a community generate enough wealth that we can safely afford it. And so on down the line of every wise move civilizations have made.

It’d replace roughly $800 billion in other programs (from welfare to unemployment insurance), but it’d also replace about $800 billion in social security expenditures (since social security payouts wouldn’t add to UBI, but only make up any difference in average monthly benefits, which are already above $1,000) so UBI’s net cost in the U.S. would be “only” $1.4 trillion. But that’s without a national healthcare system, which we also should have, and also has to be paid for. That would cost roughly another 2 trillion dollars (after offsets and such are tabulated, e.g. such a system would replace medicare and medicaid altogether). So actually, we’re looking at $3.4 trillion a year in new spending, for a standard social safety net every other first world nation already has, and UBI.

If you calculate from IRS data, the entire collective incomes of the top 1% of earners (which means roughly everyone who earns more than half a million dollars a year) is just over 2 trillion dollars. If we surtaxed all income above half a million dollars at a flat rate of 50% (which means in addition to existing income taxes subject to deductibles and so on, etc.) we’d bring in new revenue of about $1 trillion dollars. And a national sales tax (VAT) of 15% could raise about 1.73 trillion a year. There are other successful nations that have just such a tax, so we know its effects on economies aren’t prohibitive. So those two revenue streams alone would make up all but $670 billion of the dollars needed. We already know improved enforcement of existing tax laws would bring in hundreds of billions a year, [about] $500 billion (according to a study I saw). That then leaves only $170 billion to account for. So the question then becomes, is it reasonable to gain the corresponding national benefits with a 60% “insane income” tax instead of only 50%, adding another $200 billion dollars to our national revenue?

The already existing budget shortfalls of almost a trillion dollars a year would gradually be made up if we returned to a pre-Reagan income tax regime (canceling all Republican tax cuts then and would also raise over $380 billion a year in current dollars), and greatly cut our spending on useless foreign wars (to the tune of $300+ billion a year) and corporate welfare (by the narrower definition, in adjusted dollars, gaining us some $70 billion), and enacted a reasonable drawdown in overall military spending (earning back $100+ billion).

It’d also replace roughly $100 billion dollars in federal employee costs by simply not duplicating UBI to federal employees and pensioners (i.e., if a federal retiree is receiving a pension of $1,500 a month, or a federal worker is receiving a salary of $1,500 a month, they would continue receiving ‘that’, instead of UBI). UBI would simply be part of the already agreed upon compensation package.

A sort of tangential comment, but when reading that in one month we have Amazon and retailer price-fixing, 90% of poultry suppliers price-fixing, most of the world’s shipping container manufacturers price-fixing, and a new investigation into beef price-fixing, I’m thinking the model of consumer capitalism is simply wrong today. It’s easy and desirable for wealthy owners to coordinate together to maximize profits by agreeing on prices in unison and only changing this formula to prevent a competitor from gaining a foothold in the industry with the deployment of predatory pricing. You can’t do anything about this, and if they’re clever, they realize that it is in their collective interest to never lower prices and instead make more money through coordination without actually putting anything in writing. The system actually just sucks!

Meanwhile in the real world, Amazon has consistently had higher approval ratings than basically any other major institution, including the military like this from 2021. Even now Amazon is almost double the president in approval rating.

Maybe these companies still suck, but they suck less than everything else!

In the real world the consumer has no idea what price he could be getting without the corrupt tactics employed by Amazon. He has no idea that Amazon was secretly increasing prices. He has no reason to think that this was in the realm of possibility, and would assume that there were laws against price-fixing. He would have no reason to know any of this was happening, because the lawsuit showing this was only publicized last month.

For years, Amazon has reached out to its vendors and instructed them to increase retail prices on competitors’ websites, threatening dire consequences if vendors do not comply. Vendors, bullied by Amazon’s overwhelming bargaining leverage and fearing punishment, agree to raise prices on competitors’ websites, or to remove products from competing websites altogether. This price fixing scheme typically begins with Amazon demanding that vendors “fix,” “correct,” “increase,” “raise,” or “look into” the prices of products on other retailers’ websites. These directives to vendors are backed by the threat of significant penalties for failure to comply — ranging from advertising and promotion restrictions, to demands for financial compensation, to the removal of vendors’ products from Amazon.

https://oag.ca.gov/news/press-releases/naming-names-attorney-general-bonta-secures-public-access-evidence-amazon-price

Replying under myself to make an additional point: should it not in theory be easy to stop this behavior while retaining the basic structure of capitalism?

  • jail time for infractors and the expropriation of all of their wealth and property. Like, actual punishments. Why are we not actually punishing these people.

  • multi-million dollar payouts to whistleblowers, plus national honors. Place their portraits in the White House, they are model citizens.

  • a government program that sends out mailers and emails to every vendor in the country, asking them about their experiences with services in exchange for a small payment for their time (this is to know where to investigate)

  • Use AI to determine which industries should be lowering their prices (but are in an unspoken agreement not to), and then force them to or tax them

No. They just became good in price gouging - which is hidden and subtle.

They just became good in price gouging -

Price gouging is only after emergencies. And also a good thing because high prices in an emergency are a market signal to bring in more supply, which allows more people to get the stuff they need and want.

But all the capitalists say farmer brown will simply spin up a multi-billion dollar beef industry; using the power of his mind and his bootstraps to roll back climate change 15 years and materialise another Idaho's worth of grazing land from the ether!

But they don't say that, as you know.

What is the purpose of a company? Not the stated one, the original one.

If you mean company in the sense of "for-profit corporation," then I think the answer is pretty straightforward: Companies exist to (1) encourage people to invest in business ventures by offering them limited liability; and (2) offer people a convenient, off-the-rack method of organizing a partnership.

If you mean company in the sense of "firm," I think it's also pretty straightforward: Companies exist because there are synergies in having a bunch of people working together on some joint project.

Companies and markets exist to maximize the consumption!

I'm not sure why you switched from just "companies" to "companies and markets," so I will focus on companies. Ok, suppose a company is faced with a choice between (1) maximizing shareholder value; and (2) maximizing consumption. For example, perhaps the company produces some luxury good or service and there is a clear choice between (1) selling limited amounts at a fat markup; and (2) selling large amounts with paper thin margins. Assuming the math clearly shows that choice (1) is far more profitable, I would expect the company to take that choice. (Obviously, things are rarely so clear-cut in the real world, but in a situation which really was that clear, a company CEO who chose (2) could expect to be sued by the investors.)

Of course, in theory society could step in and more or less redefine the purpose of companies. Seize the means of production, if you will. I think that's what you are basically arguing here, and I don't necessarily disagree with you. Logically it makes sense that once mankind's final invention takes place, there's no more need to encourage private capital investment. Perhaps This Time it's Different.

The original reason for companies is really simple to derive. People engage in mutual trade in order to improve their life. Guy A has two cows and no chickens, guy B has no cows but four chickens, they trade and now they both have a cow + two chickens, or whatever. Or you exchange labor, you'll mow their lawn (something they hate to do) and they'll do your dishes (something you hate to do). Or anything else like that. You trade for your own benefit and both sides (in free trade without coercion) gain overall utility.

There is no greater overall thought to your choice to trade a surplus pencil for a desired pen. You just would prefer the pen over a pencil and they prefer a pencil over the pen.

But uh oh, some tasks or goods that people want for trade are complex and require the coordination and labor of multiple people in order to provide. But the benefits of this trade will be so good that it's worth it, so someone who is smart and enterprising makes a group to do that and make/do something in order to trade it for their own profit.

There you go, that's the purpose of a company. It is to enrich the owner through engaging in trade just like everyone else engaging in trade is doing.

The pencil company doesn't make pencils "for the jobs" (in fact they want low labor costs) or for "the greater good", they do it to sell the pencils and make money. And people buy the pencils not for the jobs it creates, or for the greater good, but because they want a pencil.

The original reason for companies is really simple to derive. People engage in mutual trade in order to improve their life.

Yes, that's what I meant.

The pencil company doesn't make pencils "for the jobs" (in fact they want low labor costs) or for "the greater good", they do it to sell the pencils and make money. And people buy the pencils not for the jobs it creates, or for the greater good, but because they want a pencil.

No, corporations make money because it's currently a good (or maybe the best) way to ensure as many people that want a pencil get one. But it's not the ultimate goal of having corporations exist as a concept. Life improvement is. A company that manages to make money despite not producing anything and not having any workers is not infinitely good, it's infinitely bad.

This seems exactly the wrong way round to me. You were closest with choreography - corporations exist as a handy package to allow groups of people to coordinate to do whatever they want to do.

Or are you asking, “why does the government permit corporations to exist”? Beyond freedom etc.

Beyond freedom etc.

Freedom etc. doesn't get you limited liability for negligence. (A business in a world without companies could get limited liability for ordinary business debts by negotiating it into every commercial contract they signed, but thinking about the practicalities of that tells you why a standard-form deal of limited liability in exchange for transparency is something a government would want to create). "I absolutely cannot under any circumstances lose more on my passive investments than the amount I invested even if my business partner is evil" is a socially valuable deal to have available that you can't contract for at common law.

Limited liability is just freedom to contract. We write a contract where I owe you something, but with conditions that it can only come from this venture. You don’t need the government to do anything special other than respect property rights and the sanctity of contracts.

You can't contract out of tort liability - you can indemnify by contract, but that only helps if the party giving the indemnity is good for the money. If one of my drone startup's drones negligently flies into a nuclear power plant and forces the evacuation of a whole city, at common law every partner in the business is liable to to the point of bankruptcy. You can't contract out of this because most of the people injured would never be party to the contract. So you need statutory limited liability.

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