We've Been Doing Business Wrong

Last Updated: 2026-02-18 00:00:00 -0600

For some reason, after spending the best part of a decade in the tech industry, I’ve begun to feel a certain kind of way about the state of enterprise in the highly industrialized parts of the world. I can’t begin to imagine why. “Growth for the sake of growth is the ideology of the cancer cell”, the kids say. (I’ve looked. The quote’s hard to source, but it appears in a 1969 article by Edward Abbey, though he was chiefly concerned with urban sprawl.) Like most ideas a person can hold, the way I’ve viewed enterprise and corporation over the last thirty years or so of my life has gone through some changes. Now, with nothing better to do on a Wednesday afternoon but finally put some of those thoughts to pen, I am going to inflict them upon you.

Scarcity is a Dead God, and We Have Killed Him.

There’s this concept in science fiction, that at least makes a nod toward economics as a science, of ‘post-scarcity’. It’s most strongly featured in Star Trek, and the progenitor-idea behind the leftist’s favourite meme of “Fully Automated Luxury Gay Space Communism”. The short version, again without reference to actual economics (at best a minor in my management-oriented post-secondary education) is that it’s possible for a society to hit a level of industrialization and economic productivity where resources are effectively unlimited - e.g. the Star Trek “replicator” or the fact that humanity collectively grows more food than it can consume, logistically.

There’s sort of two problems with post-scarcity thinking:

It creates a general idea that anything post-scarcity is effectively worthless because there’s effectively infinitely many of it;
As a result of one, which is caused by the supply/demand idea in your first-pass macro-econ course, the presumption that Infinitely Many of something is “worthless” incentivizes the manufacturing of scarcity.

Basically, if you make Software TM, you want to be able to generate the greatest profit making that software possible. This means being able to somehow drive up the price you can extract (amazingly, this is possible even though software is an effectively post-scarcity resource right from the outset!) while driving down your cost to manufacture. Most recently we see this in terms of replacing human employees with unfit-for-purpose toolboxes instead in the form of LLM slopcode-agents, but it’s a problem as old as double-entry accounting.

“Software” here can be considered a meta-syntactic variable: my complaints apply to basically any product you can think of.

And here’s the thing. Let’s suppose you’re me: writing blogposts, creating small gizmos and bits of software, writing books, and throwing livestreams onto the internet every few days. If you want to earn a living doing that, meaning you want to financially justify this use of your time by ensuring that, as a result of these activities you are able to cover the costs of your necessities of daily life and bonus luxuries as are afforded to you, you too need to have a corporation’s eye for the profit margin - that difference between what you can get other people to pay you for your activity and what it costs you to pursue that activity and deliver those things to the people who are paying you. For the vast majority of people in “developed” countries, this problem is most easily solved by agreeing to work for a corporate entity or some other enterprise in exchange for a wage or a salary.

There is nothing wrong with earning a wage, or a salary, or using your skills for profit in any other way. The problem is when concern for profit becomes an all-consuming need to grow the profits. The problem, in short, is Fiduciary Responsibility, not merely a profit-motive.

Fiduciary Responsibility is the Worst Period Idea Period Ever Period

Fiduciary Responsibility is, in essence, the idea that if you are an agent of an enterprise, you owe a responsibility to everyone with a stake in that enterprise to make the enterprise as profitable as possible. Where this differs from a profit motive on its own is that key phrase, stakeholders.

If I wanted to make Arcana Labs and all it’s various strange activities, or my fiction writing, or my twitch streaming a full-time career, we could think of that in a way as a form of sole proprietorship. I am effectively an enterprise of one, and everyone in the enterprise is a stakeholder, obviously.

If you had a partnership structure, all the partners would be stakeholders, which is also appropriate.

A major problem with the current mainstream model of incorporation, where ownership of the corporation is staked to effectively tradable tokens-of-ownership (shares, whether or not the company is publicly traded), a problematic situation can develop where most of the stake held is by a comparatively small number of people within the enterprise, or, worse, a significant portion of stake is held outside the enterprise entirely. When this happens, the Fiduciary Responsibility principle makes your decision-making beholden to either a minority of your fellow members of the enterprise or to individuals outside the enterprise entirely. The concern is now “what will make the shareholders the most money?”, and this increasingly reduces the amount of concern that goes into the enterprise itself. If it’s most profitable when the time to compute profit comes around to reduce headcount, you’ll shed hundreds of employees to meet those growth targets the stakeholders expect.

You’re holding my Bag.

We accept this behaviour because we accept a collection of social constructs that have become truths of the world, but they’re less true in the “water is wet” sense than they are in the broader sense of “vanilla smells pleasant”. Of course the profit should go to the stakeholders. They’re stakeholders. They have the risk and should get the reward.

These truths are numerous: money has a value, rent-seeking is acceptable behaviour, investors hold all the risk. They are, however, Lies to Children. Useful fictions. Money services as a medium of exchange only because we’ve all agreed that it should. We allow for landlordism and other rent-seeking behaviours because we’ve got a situation where housing and other needful goods are not in surplus and also unevenly-distributed. “Landlords give access to housing” is a true statement that is also true in the sense that “cars are a more free method of transport than busses”.

But that’s a discussion for another time. For the present, our real bone to pick is this idea that stake-holders, especially shareholders, are “holding the bag” of risk and reward. That statement is arguably still sometimes true, to be fair; when an enterprise is in its infancy, not yet stabilized and established. It becomes less true as business models solidify, and I would argue, absolutely fallacious by the time a business is stable enough to consider “going public”. The risk assumed by the NASDAQ or NYSE investor can be better compared to the risk assumed by the gambler than the baker, though the stock game is arguably safer to the initiated than buying a lottery ticket is. (“Lotteries are a tax on the poor” is another idea that might bear some examination at another time.)

Indeed, any time a situation has emerged where a legal move for a business is to shed employees - contributors to the enterprise - in order to maximize the profit opportunities for the “legal” stakeholders, the real risk is on the shoulders of these ‘unstaked’ employees.

In fact, I’m comfortable to say that this situation is a form of legalized theft. If the worker performs their job poorly, they realize the risk of the failures of the enterprise. If they perform their job well, but Infinite Growth isn’t on the cards for the company they work for, they still bear the risk of the insufficient success of the enterprise.

The Game is not Zero-Sum, Even When It Is

Let’s digress for a moment to discuss the infinite growth meme, because I think it’s important for people to understand what I see as the true punchline of a “number go up” mentality: absolutely nothing works that way in reality. All products, scarce or post-scarce or never-scarce-in-the-first-place, have a saturation point where everyone who could possibly be convinced to purchase that product or patronize that service have done so. It’s not a question of expanding your offering or getting into new markets: if there’s only eight billion or so living and financially liquid souls on the planet, it is improbable you are going to sell many more than eight billion licenses for Software TM.

That doesn’t mean everything, or even anything, will only ever be purchased by one person one time, of course. As we figured out with the frankly rather infuriating move from perpetual licensing to personal-use subscription SaaS, almost anything can be turned into a forever revenue stream. At that point, your concern turns a little bit toward client retention, sure, but there’s still a greatest possible extent to which you’re ever going to spread your market cap.

And that is absolutely okay. If the business is profitable, if the enterprise is able to sustain the livelihoods of all engaged in the enterprise, it is doing its job even if it’s not setting new records every year.

The Guilds and the Trade Unions had a Point

The thing is, I just don’t think that limited liability corporations with transferrable shares are a responsible or ethical way to organize an enterprise, for much the same reason I don’t think it’s a good idea to let someone else own all my data storage or to let a child have unrestricted access to a firearm. That doesn’t mean I don’t believe in stakeholders. I’m not an idiot; there is risk in enterprise. My education was to support a career in an industry where the average life expectancy of a fresh enterprise was 3 years and you shouldn’t expect to turn a profit on the original investment in the first five years. Obviously that’s not the kind of thing that just anyone should do or the kind of risk that just anyone should take.

There’s a reason the majority of people are employees of an enterprise with an agreed wage or salary rather than taking the full risks of ownership of an enterprise, after all.

I was asked a few months ago what my ideal enterprise looks like, and I can articulate it in the silliest way possible: it looks a lot like what a pirate crew on the web game Yohoho! Puzzle Pirates looks like: everyone staked to varying degrees to the success of the enterprise. You had tiers that were something like “double share”, “full share”, and “half share”, and at the end of a session once the booty were liquidated into currency, that pool of currency was split according to those shares (2, 1, and 0.5). As long as everyone knew what they’d signed up for, things were fine.

(Occasionally, someone would misunderstand, and war were declared)

Now, it’s a risky proposition for the average person stuck on a salary - I know I’m having a hard time wrapping my head around deciding to give up a salaried position where I know that on certain days every month I have a certain amount of money coming to me and can budget accordingly. I don’t think “fixed rate” employment is ever going away completely.

But I do think it’s a good model. I think it actually creates a sense of being a stakeholder in an enterprise, of having a vested interest in doing whatever you can to ensure the success of that enterprise, in order to maximize the pie for everyone else aboard (beg pardon) and make sure those two slices, that slice, or half-slice you’re taking home was worth your time and effort. And here’s the thing: nowhere in there did I suggest you should be able to buy your way to a slice of the pie, let alone a bigger one. If you have too much money lying around, and you wanted to use it to speculate on the success or failure of an enterprise, we have a tool for that already - it’s called usury.

I don’t think that you should really be taking the stake with you when you leave, either. You should obviously get the share that’s coming to you on the way out the door, but if you’re gone you’re gone.

So how do you move up this ladder of stakes? The hopeless optimist in me thinks merit might suffice, but that’s an awfully broad term. The part of me that tends to view all labour as a trade wonders if it shouldn’t be something a bit like seniority. When you’re junior and fresh in your role, maybe you are a rate employee, and become a half-share when you’ve got the basic ropes. Then, as you move up that ladder of instrumentality, demonstrate a greater mastery of your profession and eventually even start mentoring others, you’re granted more share as you go up. I know. Imagine working hard and improving your skills being a rewarded behaviour.

That was really the other half of my ideal model: the enterprise, as a by product, should be creating masters of the trade the enterprise plies. Anything worth doing is worth doing well. None of this “let’s automate away all the work we normally give junior engineers” as if you have no idea where senior engineers come from. (If you really don’t, ask your father.)

Bus Factors of 100% are Perfectly Reasonable

Anticipating reactions, the next objection is probably “well, that’s all well and good for an enterprise where one accident wipes out all thirty employees, but what happens when you want to scale”, at which point I politely remind you that “scale” is a four-letter word in this laboratory and shake the swear jar under your nose like the mother of an unruly teen.

I don’t know that I believe a business should scale infinitely. In software it’s certainly easy to grow, but I’ve worked in plenty of other industries where it wouldn’t make sense. What would a restaurant even do with 500 employees?

It’s like the old joke about the more popular furry conventions: the wrong plane crash on the way to or leaving Midwest Fur Fest is going to kill the entire staff-engineer-and-higher generation of the US IT industry. Obviously that sort of thing would be a disaster, but I sort of think that all of your employees probably should be able to fit on the same airplane (even if it’s a really big one). It keeps the heirarchy reasonably flat and facilitates an environment where a share of ownership is actually worth something.

Remember, you want a flat heriarchy because why be a half share when there’s a 100-share member of the c-suite (which would actually be less skewed than the minimum/maximum compensation disparities at most tech firms), and you don’t always want a situation where the total number of shares in the entire enterprise is so high where your share can’t support your livelihood anymore!

XKCD 2347 is an Ideal, Actually

Obviously, there comes an objection to this: in order to grow the enterprise, more people are needed. The counter-argument to this, is, of course, to point at recent layoff figures, but let’s address the problem more specifically:

I don’t think that anybody needs to be the “world’s standard producer of X, Y, or Z” anyway.

This might be the FOSS/OSHW brainworms, or my recent increasing radicalization toward being a proponent of federated technologies and platforms, but you can just be curl. There’s no reason we need to be creating these huge software monocultures to let one womable vulnerability rip through everything. There’s no need to be the global leader in social media platforms for pictures of cats messing up calligraphy projects.

From an economic perspective, there’s an important difference between a company selling paperclips in 450 countries and a company selling paperclips in one logistical region of one administrative division of every country: a whole lot more job opportunities for would-be sellers of paperclips, makers of paperclips, and designers of new and exotic paperclip technologies.

XKCD 927 doesn’t Matter

From here, the obvious objection becomes that sounds like an interoperability nightmare, but it’s really only as big of a problem as market forces would allow.

It’s a comparison that annoys a lot of people, but of the things Discord replaced, one of the core examples is IRC. But IRC wasn’t one piece of software the way that Discord is. It was a standard, a protocol for a way to use the internet to reliably move text messages between individuals on different computers. It had as many clients - produced by as many different enterprises - as there are fish in the sea. People are still producing new software that uses the standard.

A standards-based approach to manufacturing is literally all it takes to have global interoperability of “stuff”, and we had that (or were on the way to that) for the better part of a century. It wasn’t even “the internet” or “big tech” that ruined that for us per se, it was the late-internet-2.0 “FAAANG” era of “one stop shop” apps where something that used to be a distributed standard and the people who used it were increasingly replaced with one product owned and maintained by one company whose profit motives (and fiduciary responsibility) might not best align with the interests or tastes of their users.

And every time you try to suggest that sort of approach again, people bring up XKCD 927, as if somehow the integer count of standards available is actually a problem. Even if you have fifteen competing standards for (e.g.) smartphone OS image baselines, it doesn’t really cause a problem as long as products that have to interact with that list what standards they conform to and are compatible with.

You know, like how we have a dozen competing net-friendly (and sometimes not net-friendly) formats for storing digital images.

The Arcana Corollary to Vimes’ Law

I mentioned early the idea that an enterprise can reach a sort of break-even where they’ve reached everyone they can, and at a certain point, their only hope is essentially repeat business. This phenomenon is responsible for most of the stuff you don’t currently like about any industry you could probably mention, and to rattle them off is a risk of projecting that “old man yells at cloud” image. Nothing has a decent amount of on-board storage anymore. Cars aren’t built to last anymore. “Device Hording”. Fast Fashion.

In one of his Discworld novels, Terry Pratchett expounded an idea that has since become known as Vimes Law or “The Boot Rule”. To not crib him directly, the idea was that an expensive boot probably lasts a good long time, but a cheap boot almost certainly won’t. By the time you’ve worn out the expensive boot, you’d almost certainly have spent more money replacing the cheap boots. He likens the idea to a tax on poverty (if you’re too broke to afford the expensive boots once, you have no choice but to repeatedly by the cheap ones), and I in no way disagree.

This is a problem for me personally. I have strange cares. I am not interested in participating in a system where you’re deliberately making an inferior thing so that you can sell more of the thing. This phenomenon is in no way limited to physical goods.

There was a time, in my lifetime, when software was actually really expensive. (Quiet down, FOSS). If you wanted that year’s edition of Microsoft Office, or one of the Adobe suite programs, or something from Autodesk like AutoCAD or Maya (I think they made Maya, anyway), you needed some appreciable spare dosh. This was a real problem for people just starting out, like students in a field that used the specialized software. FOSS really didn’t have the broad format compliance it has now, and even if it did, a bunch of students in a classroom are going to be much harder to teach if they’re using half a dozen different programs in the same general category, by comparison to teaching all of them Excel specifically. But, there was a beautiful compensation: most of the time these licenses were perpetual. If you bought, say, Microsoft Office 2006, you had it until the wheels fell off.

This was true of operating systems, software suites, etc. You actually owned things.

Now, of course, with the subscription model, that barrier to entry is lower. A self-employed artist can almost justify the expense of Adobe (but obviously, profit motive being what it is, should be exploring other alternatives!) on a month to month basis but over the run of years pay enormous sums of their profits. Perpetual licenses for a lot of software isn’t even always available. (For a while, gaming was a sacred island in a sea of this nonsense, but the proliferation of mobile games and MMOs has made that significantly murkier over the years.)

There’s a million justifications. Oh, you get updates more often, and that can be important for security. Oh, we’re constantly adding new features.

But you don’t own anything. If you stop paying, you don’t even retain access to the software in the state it was in when you stopped paying for these new updates and features.

And if you’re not careful about that, especially with the increasing reliance on paid cloud storage - you can lose your livelihood this way.

It’s a tax on individual enterprise, it’s the Vimes Law tax on being too poor to afford licenses that they won’t even sell you in the first place, and it’s just wrong. It’s not how an ethical enterprise should operate.

But how do we get around market saturation if we can’t double dip? The same way we did before: the upgrades need to be genuine upgrades. The next widget in the product line needs to be an actual improvement. You sell service and repairs. It’s not rocket appliances, it’s just slightly more effort than rent-seeking. But the choice between the two is straightforward, if you have a conscience.

The Ethics of Vast Wealth

I’ve had to tack this bit down at the end, as a sort of final thought, because there’s no straight flow into it from any one other topic we touched on: while a reasonable appreciation of profit motive is a necessity in a monetary economy, and the fiduciary responsibility is reasonable when it’s not being abused (it is still, after all, present in a system where the stakeholders are the main agents of the enterprise rather than external actors), I’m still not wholly convinced there is an ethical version of being a billionaire, or millionaire.

Not in the sense of those specific numbers - inflation is hitting a point where you almost have to be a millionaire to be comfortably middle-class, in some senses - but this idea that somehow anyone’s contributions to society as a whole or the enterprises they’re active in to the extent that they’re worth hundreds of their comrades.

I believe this is where the kids would say “Eat the Rich”. Horded money serves no ends. Get it out there, get it flowing, get it doing stuff. It’s good for you, good for enterprise, and good for your community.

The ironclad way to not get torches-and-pitchforksed by the peasantry is not to be the lord in the first place. Or, to put it another way: Corona onus grave est; noli eam gerere.

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