re: #710 reine.de.tout

Actually, corporations don’t have to show a profit. The company I work at just had its first profitable quarter in seven years.

Eventually, they do, but they can limp along for a long, long time. EA was going downhill with massive inefficiency about twelve years ago, but only in the last year, really, did they start to get hurt by it and if the downturn didn’t happen they might not have. You see, they were a huge company, so even as their overhead was ballooning, they were able to strongarm retailers into giving them huge amounts of shelf space, get good reviews, and do all those other industry-giant things that are done.

In addition, they still had oodles of cash from their success— and more still flowing in, since the inertia hadn’t begun to really drag them down. This allowed them to continue buying studios, bringing in bursts of new talent before they either got strangled in red tape or left for greener pastures. So that enabled them to go along even longer.

And now, they’re not dead, though they’re not feeling very well. They distorted the games market, destroyed a lot of great independent studios— okay, the studios destroyed themselves by selling out, but EA has enormous coercive power as a publisher, it’s not a normal relationship. They set a terrible standard for the treatment of employees in the industry, and yet most of the people responsible for those mistakes profited hugely and are now either still there or off at other large companies. It’s really only since the emergence of Valve that the industry has been revitalized.

Bad executives move from one corporation to another— it’s really not a meritocracy up there. There are some great executives, but there are also simply people who know how best to exploit a system for their own benefit. Look at how many CEOs leave a company in near-ruins and go on to another CEO job. Carly Fiona comes to mind.

So yes, it is worrisome for government programs to expand because of their permanence, there can be enormous problems with private industry’s handling of any market at any time, too. Efficiency is not defined by a platonic ideal, but by the actual shape of the market; and if you have massive coercive force, you distort the market. Wal-mart is the largest current example of this— anyone selling anything at retail wants it in Wal-Mart. Target is challenging them now, but for the past decade, Wal-mart could make or break you— and they used that to extort the shit out of industries.

Government and private industry, Scylla and Charybdis. Good people are the answer. How do we get the best people to rise, and the assholes to fail?

That’s the holy grail.