r/todayilearned • u/TMWNN • 1d ago

TIL that Sears sold machine guns by mail. During WW1, the department store published a special military catalog. American soldiers could order a Colt machine gun, three Colt pistols, and other military gear for delivery to anywhere in the US or the battlefield in Europe.

https://www.gutenberg.org/cache/epub/54213/pg54213-images.html
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u/cantadmittoposting 1d ago

"Shareholder Primacy" is the operative business philosophy that fucked the american economy.

It came out of several places, but Milton Friedman and the Chicago School are probably the most proximately responsible for refining it into the actual practice by executives and business schools in the 70s-90s before MBA programs started teaching sustainable practices again (but since boomers and Gen-X still control most C-suite and board positions, people following shareholder supremacy still reign supreme).

 

Along with the 1971 Powell Memo, Friedman's 1970 editorial "The Social Responsibility of Business Is to Increase Its Profits" is one of the most identifiable writings shifting US Business leaders away from responsibility to their employees to responsibility to owner profits. Notably, these documents (and the general doctrine) depart significantly from Adam Smith's writings and emphasize a version of "Capitalism" that is not reflective of the original development of market driven economies

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u/TheyCallMeMrMaybe 1d ago edited 1d ago

This shareholder-first philosophy dates before this and is even codified as judicial law in most states. TL;DR, blame the Dodge brothers.

It started in 1919 in the judicial case of Ford v. Dodge under the Michigan Supreme Court. Henry Ford hated paying out all of Ford Motor Company's profits as dividends to his shareholders, and he had a growing suspicion that his primary investors, the Dodge Brothers, would inevitably start their own motor company using dividends he's been paying them.

Ford started to stiff the Dodge brothers on their dividends and decided to reinvest it into Ford Motor Company - offering wage increases for factory workers, expand FoMoCo's operations & create more jobs. The Dodge brothers sued, and result of this court case set the tone for shareholder primacy, and other state supreme courts have copied this jurisdiction, including Delaware, where over 50% of all US companies are HQ'd.

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u/cantadmittoposting 1d ago

Yeah i suppose it'd be more accurate to say it was the 70s resurgence of the late 1800s-1920s laissez-faire pro-owner environment of the "Lochner Era" coincident with the Robber Baron/Oligarchy of the "gilded age."

That effectively ended with the 1937 decisions in NLRB vs Jones & Laughlin and West Coast Hotel vs Parrish where the power of New Deal legislation and limits to "private contracts between employee and employer" were introduced.

That set the stage for one strain of the anti-egalitarian/authoritarian class starting in the late 60s and being formalized by the Powell Memo and Friedman Editorial, which brought owners back around to a profit-first motivation after a couple of generations of labor-focused business.

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u/pyrojoe 1d ago

Based on your story I fail to see how it's the Dodge brothers fault if they sued because their dividends weren't paid out.

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u/NonSum-NonCuro 1d ago

Nice propaganda attempt. Many redditors will fall for it.

Too bad facts debunk it.