What Liberals Don’t Understand About Business and Profit
How’s this for a nicely polished gem of irony? Liberal blogger Matthew Yglesias today authored a piece poking fun at Barnes & Noble for attempting to diversify its bookstore model by venturing into the world of digital with its “Nook” e-reader. (Stay tuned for the irony, below.) For Yglesias, the notion that a corporation wants to innovate and change in order to survive is a laughable one:
Barnes & Noble the organism doesn’t want to die, so it makes a desperate effort to launch a new book-related businesses (sic) —the design and manufucter (sic) of e-readers—that it has no particular expertise in. All very understandable, but weirdly out of step with the ostensible idea of the for-profit business corporation. At the end of the day, there’s absolutely nothing wrong with investors capitalizing a new business venture, the venture making money for a while, then its profits declining and eventually the business shuts down.
Nothing lasts forever, and a corporation doesn’t need to achieve immortality to have been a good business. But large firms essentially never behave like this. They never, that is, serenly (sic) accept the inevitable and just attempt to manage their existing operations as well as possible. Instead they want to live! They want to thrive! And this survival instinct is tied up in a weird way with the doctrine of shareholder value.