I am very grateful and delighted with your serious and thoughtful engagement with my thoughts.
Firstly, I would note that Guided Consumption is not a panacea. A world of Guiding Producers/âCompanies could still be one in which structural relations between labor and capital result in workers not getting their due. It is unlikely that all corporate behavior of Guiding Producers would be totally unimpeachable. However, although Guided Consumption does not solve every problem, it tends to direct the fruits of economies from the least needy (wealthy shareholders who have the capability to own components of the means of production) to the most needy (beneficiaries of charities such as the global poor or potentially the billions of animals that are tortured through the factory farming process). In my view, allowing the perfect to be the enemy of the good, thus choosing not to explore the possibilities that Guided Consumption may allow, is dreadfully mistaken. That being said, even in a world where Guiding Producers/âCompanies that serve excellent and effective charities, there are likely going to be other political and social projects to engage in to work for an even more just and happy world!
You appear to have two premises, one unbolded, another bolded. Your unbolded premise, that Guided Consumption does not solve every injustice in our economy, is one I agree with, as noted above. As for your bolded premise, I would disagree because your claim is too strong. You contend that âI donât believe that this factor alone is a deciding business advantage over another business with similar products. It would be one factor of many at best.â A business advantage, like advantage in other competitive contexts, has the potential to be decisivedepending on the other factors involved. Certainly, there are contexts in which profit destination is less likely to effectuate a large market advantage; I used a restaurant as an example where profit destination will often be lost in a crowd of other factors. However, even in that context, charitable profit destination (âDesignated Funding Destinationâ, or âDFDâ as I define it in the longer paper) would provide some advantage. But the strength of that advantage would depend on that context, some of which would be imply greater advantages that would imply greater profit opportunity.
âStructurally, there is no reason that a Guiding Producer would produce goods and services at a higher cost.â
This statement is true, albeit more modest than you appear to be suggesting. You correctly note that actors in our economies have different competitive advantages based on the factors such as vendor relationships, payment history, location, distribution mechanisms, and many more. Consequently, the results of competition between the actors that compose firms, including investors, depends on a wide variety of factors. What I mean when I say there is no reason a Guiding Producer would produce goods and services at a higher cost, I simply mean that having a popular charity as recipient of producer surplus instead of wealthy shareholders confers an advantage. This advantage is not balanced by any other structural disadvantage. A firm with a popular profit destination is strictly superior, competitively speaking, to the same firm with a neutral or unpopular profit destination. Of course, a Guiding Producer does not get to compete with its pre-acquisition self, and it may not outcompete the other competitors with a less popular DFD. So, status as a Guiding Producer is not a magical aura that will automatically optimize for all the factors, and thus success is not guaranteed, but it does create an unalloyed competitive advantage along one dimension that is broadly applicable across market sectors.
I believe that a metaphor may be helpful in conveying the power of charitable profit destination. Consider the economy of metal goods in the fictional medieval world of Profitos, where, on the island of Popularis, the metal Charitium is discovered. Charitium is as strong, durable, and otherwise useful as the other available metal, iron, but is significantly lighter, making it more useful as a component in the vast majority of applications. Now perhaps, in some contexts, this advantage is hardly important, such as regarding horseshoes. So, incumbent talented blacksmiths can produce better iron horseshoes because their superior skill and/âor other available resources can make for the best offerings, even though, theoretically a Charitium horseshoe would be better. However, in the context of a sword, the significant weight difference implies a battle advantage that allows the swordsmiths with access to Charitium to monopolize the sector such that iron swordsmiths can only produce swords that are useful for resistance-training.
Very high amounts of Charitable Equity in firms in our world will be like Charitium in Profitos. Although in many sectors the advantage conferred will not necessarily imply dominance given other firmsâ short-term advantages which proceed from their incumbencies and economies of scale. However, in some contexts, Charitable Equity in firms would allow for decisive advantages. For instance, maybe you could fund the salary of realtors or life insurance salespeople in exchange for their commissions with resultant Guiding Producers that are no less competitive (I know there are a variety of adverse selection or other arguments here, which I could address at another time- my point simply is that in some contexts Charitable Equity could be more potent or lack issues that may affect other economic contexts). As the public becomes more aware of Guided Consumption, the advantage of Charitable Equity will become more potent, and I anticipate that Guiding Producers will proliferate even to sectors where its advantage is not as important. One of the functions of the Consumer Power Initiative will be researching and reasoning so that we can identify the contexts in which Guiding Producers can thrive in the early stages of Guided Consumption so that an even more fulsome presence in the economy can soon be achieved.
So, to summarize on that quote, I think you took my statement as being stronger than it actually was, and Charitable Equity does not magically eliminate all other competitive factors. It does, however, add a dimension on which a firm can be almost alwaysâstrictly superiorâ, which I believe will allow for general economic proliferation.
âIn low-differentiation sectors, it may be easier to construct a âno-brainerâ where a consumer is genuinely ambivalent as to two products.â
This issue is one that I address more fully in my longer post, particularly in Section III. So, you are correct that it is unlikely that we can create the perfect no-brainer situation, however, this does not mean that we canât get close enough to obtain large market-share capture or even monopolies in some contexts. This is even more evident when one considers the advantages from positive discrimination from other economic participants (see BOASâs free consultants, lower advertising fees, higher commission from suppliers) and essentially tons of free advertising from a social movement for companies that serve charities. I believe what this critique fails to appreciate is that Guiding Companies will have the benefit of professionals managing and directing their affairs just as normal companies would. Why would not these structurally advantaged entities not tend to outcompete normal firms?
âPeople all over the world choose the âlesser of two evilsâ in the political contexts routinelyâ
I think that your formulation of my thesis is a strawman consisting of a stronger thesis than I am making (no attribution of bad faith or any ill will here, I most appreciate your comment!). Like you say, Charitable Equity is only one factor in the competition among firms. Thus, it is not, by itself, a guarantee of success, but rather a broadly applicable structural advantage. However, this broadly applicable structural advantage, in conjunction with tactical and strategic participation in the economy by charitable investors working in conjunction with the Consumer Power Initiative, can still be transformative and revolutionary.
Is a given sector, such as the cost-competitive production of chicken products, fraught with moral obscenity? Then enter the vegan and cultivated meat space, using profits to promote systemic changes that can create a more just relationship between humans and animals. There is one question as to whether significant moral impurity would be ruinous for Guiding Producersâ competitive advantages (I am inclined to think that they are not), but this question is besides the point. Charitable investors can choose the sectors in which Guiding Producers/âCompanies operate!
The positive or negative competitive advantage of acting badly is also contextual. In some, such as factory farming, evil is profitable. But in other contexts, consumers pay premiums for companies that behave scrupulously. This phenomenon is known as conscious consumerism. More generally, the tendency of economic actors to do good or ill is largely a function of the features of the systems in which they operate. The utilization of charitable equity to create structural competitive advantages to do good is a way to construct sustainably virtuous systems.
As for why Newmanâs Own and Bosch are the exceptions that prove the rule? I just think thereâs something very counterintuitive about the notion that the best way to solve global poverty would be to buy out a ketchup company for rich countries. There have been long-running mores requiring modesty and forbidding flaunting etc. regarding charitable activity. The merging of the philanthropic and business, so flagrantly using charities for marketing merges clashing worlds in a way that is almost forbidden magic. There have been isolated cases of Guiding Producers, but not a concerted effort to weaponize identity in the manner I propose.
Hi Jo!
I am very grateful and delighted with your serious and thoughtful engagement with my thoughts.
Firstly, I would note that Guided Consumption is not a panacea. A world of Guiding Producers/âCompanies could still be one in which structural relations between labor and capital result in workers not getting their due. It is unlikely that all corporate behavior of Guiding Producers would be totally unimpeachable. However, although Guided Consumption does not solve every problem, it tends to direct the fruits of economies from the least needy (wealthy shareholders who have the capability to own components of the means of production) to the most needy (beneficiaries of charities such as the global poor or potentially the billions of animals that are tortured through the factory farming process). In my view, allowing the perfect to be the enemy of the good, thus choosing not to explore the possibilities that Guided Consumption may allow, is dreadfully mistaken. That being said, even in a world where Guiding Producers/âCompanies that serve excellent and effective charities, there are likely going to be other political and social projects to engage in to work for an even more just and happy world!
You appear to have two premises, one unbolded, another bolded. Your unbolded premise, that Guided Consumption does not solve every injustice in our economy, is one I agree with, as noted above. As for your bolded premise, I would disagree because your claim is too strong. You contend that âI donât believe that this factor alone is a deciding business advantage over another business with similar products. It would be one factor of many at best.â A business advantage, like advantage in other competitive contexts, has the potential to be decisive depending on the other factors involved. Certainly, there are contexts in which profit destination is less likely to effectuate a large market advantage; I used a restaurant as an example where profit destination will often be lost in a crowd of other factors. However, even in that context, charitable profit destination (âDesignated Funding Destinationâ, or âDFDâ as I define it in the longer paper) would provide some advantage. But the strength of that advantage would depend on that context, some of which would be imply greater advantages that would imply greater profit opportunity.
âStructurally, there is no reason that a Guiding Producer would produce goods and services at a higher cost.â
This statement is true, albeit more modest than you appear to be suggesting. You correctly note that actors in our economies have different competitive advantages based on the factors such as vendor relationships, payment history, location, distribution mechanisms, and many more. Consequently, the results of competition between the actors that compose firms, including investors, depends on a wide variety of factors. What I mean when I say there is no reason a Guiding Producer would produce goods and services at a higher cost, I simply mean that having a popular charity as recipient of producer surplus instead of wealthy shareholders confers an advantage. This advantage is not balanced by any other structural disadvantage. A firm with a popular profit destination is strictly superior, competitively speaking, to the same firm with a neutral or unpopular profit destination. Of course, a Guiding Producer does not get to compete with its pre-acquisition self, and it may not outcompete the other competitors with a less popular DFD. So, status as a Guiding Producer is not a magical aura that will automatically optimize for all the factors, and thus success is not guaranteed, but it does create an unalloyed competitive advantage along one dimension that is broadly applicable across market sectors.
I believe that a metaphor may be helpful in conveying the power of charitable profit destination. Consider the economy of metal goods in the fictional medieval world of Profitos, where, on the island of Popularis, the metal Charitium is discovered. Charitium is as strong, durable, and otherwise useful as the other available metal, iron, but is significantly lighter, making it more useful as a component in the vast majority of applications. Now perhaps, in some contexts, this advantage is hardly important, such as regarding horseshoes. So, incumbent talented blacksmiths can produce better iron horseshoes because their superior skill and/âor other available resources can make for the best offerings, even though, theoretically a Charitium horseshoe would be better. However, in the context of a sword, the significant weight difference implies a battle advantage that allows the swordsmiths with access to Charitium to monopolize the sector such that iron swordsmiths can only produce swords that are useful for resistance-training.
Very high amounts of Charitable Equity in firms in our world will be like Charitium in Profitos. Although in many sectors the advantage conferred will not necessarily imply dominance given other firmsâ short-term advantages which proceed from their incumbencies and economies of scale. However, in some contexts, Charitable Equity in firms would allow for decisive advantages. For instance, maybe you could fund the salary of realtors or life insurance salespeople in exchange for their commissions with resultant Guiding Producers that are no less competitive (I know there are a variety of adverse selection or other arguments here, which I could address at another time- my point simply is that in some contexts Charitable Equity could be more potent or lack issues that may affect other economic contexts). As the public becomes more aware of Guided Consumption, the advantage of Charitable Equity will become more potent, and I anticipate that Guiding Producers will proliferate even to sectors where its advantage is not as important. One of the functions of the Consumer Power Initiative will be researching and reasoning so that we can identify the contexts in which Guiding Producers can thrive in the early stages of Guided Consumption so that an even more fulsome presence in the economy can soon be achieved.
So, to summarize on that quote, I think you took my statement as being stronger than it actually was, and Charitable Equity does not magically eliminate all other competitive factors. It does, however, add a dimension on which a firm can be almost alwaysâstrictly superiorâ, which I believe will allow for general economic proliferation.
âIn low-differentiation sectors, it may be easier to construct a âno-brainerâ where a consumer is genuinely ambivalent as to two products.â
This issue is one that I address more fully in my longer post, particularly in Section III. So, you are correct that it is unlikely that we can create the perfect no-brainer situation, however, this does not mean that we canât get close enough to obtain large market-share capture or even monopolies in some contexts. This is even more evident when one considers the advantages from positive discrimination from other economic participants (see BOASâs free consultants, lower advertising fees, higher commission from suppliers) and essentially tons of free advertising from a social movement for companies that serve charities. I believe what this critique fails to appreciate is that Guiding Companies will have the benefit of professionals managing and directing their affairs just as normal companies would. Why would not these structurally advantaged entities not tend to outcompete normal firms?
âPeople all over the world choose the âlesser of two evilsâ in the political contexts routinelyâ
I think that your formulation of my thesis is a strawman consisting of a stronger thesis than I am making (no attribution of bad faith or any ill will here, I most appreciate your comment!). Like you say, Charitable Equity is only one factor in the competition among firms. Thus, it is not, by itself, a guarantee of success, but rather a broadly applicable structural advantage. However, this broadly applicable structural advantage, in conjunction with tactical and strategic participation in the economy by charitable investors working in conjunction with the Consumer Power Initiative, can still be transformative and revolutionary.
Is a given sector, such as the cost-competitive production of chicken products, fraught with moral obscenity? Then enter the vegan and cultivated meat space, using profits to promote systemic changes that can create a more just relationship between humans and animals. There is one question as to whether significant moral impurity would be ruinous for Guiding Producersâ competitive advantages (I am inclined to think that they are not), but this question is besides the point. Charitable investors can choose the sectors in which Guiding Producers/âCompanies operate!
The positive or negative competitive advantage of acting badly is also contextual. In some, such as factory farming, evil is profitable. But in other contexts, consumers pay premiums for companies that behave scrupulously. This phenomenon is known as conscious consumerism. More generally, the tendency of economic actors to do good or ill is largely a function of the features of the systems in which they operate. The utilization of charitable equity to create structural competitive advantages to do good is a way to construct sustainably virtuous systems.
As for why Newmanâs Own and Bosch are the exceptions that prove the rule? I just think thereâs something very counterintuitive about the notion that the best way to solve global poverty would be to buy out a ketchup company for rich countries. There have been long-running mores requiring modesty and forbidding flaunting etc. regarding charitable activity. The merging of the philanthropic and business, so flagrantly using charities for marketing merges clashing worlds in a way that is almost forbidden magic. There have been isolated cases of Guiding Producers, but not a concerted effort to weaponize identity in the manner I propose.
Thank you for your time as well.
-Brad