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  •  and probably a better investment financially. (7+ / 0-)

    B-corps have something that will prove to be absolutely critical that conventional corporations do not: built-in negative (limiting) feedback mechanisms.

    Unrestrained positive (reinforcing) feedback ultimately destroys the system in which it operates.  By analogy think of a "thermostat" that is programmed "when an increase in temperature is detected, add more heat."  Eventually it will cause the building to burn down.  (I call that a "thermo-max" as in "maximizing heat", as compared to a "thermostat" that seeks a static level of heat based on the comfort of the building's occupants.)

    Negative feedback keeps systems stable.  That's how a thermostat works: when the temperature rises to a set-point, the thermostat turns off the heat.  This keeps you comfortable and doesn't let the building burn down.  

    Corporations with unrestrained positive feedbacks are inherently unstable and prone to self-destruct.  

    When you add negative feedbacks, you set limits, which provide stability.  

    The corporation that is subject to limits such as the values of benefit corporations, co-ops, and suchlike, is inherently more stable.  It is less susceptible to rash decisions that maximize for the short term at the inevitable expense of the long term.  

    And we will soon discover, that these types of corporations are better investments in the conventional sense of the term:  they are safer investments, they perform in a more predictable manner, they can be counted on for things such as retirement-related investments.  

    This will create a strong incentive for investors who are seeking more secure investments.  This is inevitable.  

    "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

    by G2geek on Wed Jan 11, 2012 at 07:22:39 PM PST

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    •  Although, nothing makes money like (4+ / 0-)
      Recommended by:
      KenBee, ozsea1, citisven, Glen The Plumber

      an entity that can externalize its costs.

      Humane corporations may generate stable returns, but they'll be lower than the pillage-and-burn corporations' peaks. That's a good thing.

      Government and laws are the agreement we all make to secure everyone's freedom.

      by Simplify on Wed Jan 11, 2012 at 08:16:49 PM PST

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      •  the difference between coffee and meth. (11+ / 0-)

        You can drink coffee for sixty years without ill effects.

        Snort meth?  About two weeks before paranoid schizophrenia sets in.  

        Agreed, externalizing costs boosts profits.  But I managed to convince some hardcore libertarians of the necessity for ecological laws, on the basis that:

        Libertarianism supports the principle of voluntary transactions between consenting adults, and the use of criminal law for cases of "force or fraud."

        Externalized costs bring non-consenting parties into transactions against their will.

        Therefore externalized costs violate the principle of voluntary transactions between consenting adults.

        Externalizing of costs is a form of fraud because, it leads the voluntary participants in the transaction to believe that the price paid for the transaction is a legitimate price, when in fact it is not, since it is based upon enforcing additional costs on others against their will.  

        Slam dunk!

        "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

        by G2geek on Wed Jan 11, 2012 at 08:36:13 PM PST

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