this post was submitted on 29 Sep 2025
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So in the US, there are two kinds of corporations: Public (as in publicly traded on the stock market) and Privately owned (shareholders with stock unavailable to the public).
Publicly traded companies are required to be much more transparent to the public and their potential/active investors (to deter earnings fraud ala Enron), so therefore have plenty of data published for analysts to work with.
Privately held companies, by contrast, don't need to tell the public anything. By not being listed on the stock market, they can do almost anything they'd like with little danger of their business practices being scrutinized (It also doesn't help that the US is relatively weak when it comes to business regulation to begin with).
However, one advantage of this is that they aren't beholden to public investors demanding growth above all else - Publicly traded companies are legally bound to prioritize shareholder demands ahead of any other duties. Valve, for example, is able to perform a lot more pro-consumer moves with their services and software because they don't have Wall Street hounding them for quarterly returns.
Unfortunately, the reality is you can't have the best of both situations from the public's perspective. The US has more financial obscurity than is typically presented, and that often manifests as businesses dodging regulation, oversight, and accountability as much as possible. Mars, for instance, probably has skeletons in their closet on the supply chain front (abuse in the production of chocolate), that may give them incentives to remain as private as possible - no financial records, no transparency reports, no investor conferences.
(Also slightly away from the subject but consolidation is incredibly high in the US - many industries are effectively controlled by an oligopoly of companies)
This is actually a myth. They are expected to be responsible with their money, but they are not in any way required to maximize profit from a legal perspective. They repeat the lie because it is a good excuse to be evil. If a company doesn't do what it's shareholders like, they may vote out the board, or they might sue if the prospective was fraudulent (said they were working on something that they weren't for example... But remember also that American companies don't make forward statements like European ones do, so those cases are going to be things like "last year we spent 10 million on R&D" when they actually spent the money on plane trips to cocaine parties) but those are the recourses available to shareholders.
Wasn't that genuinely litigated in Dodge v. Ford? (https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.) I've seen that decision cited countless times.
It was argued, yes, but that is a state supreme court decision, not binding in any other state, and there is still no law that says this is true. Friedman wouldn't have bothered arguing about it in 1962 if it was unquestionably federal law or already settled by 1919. It is only convention.
But why can't you have the best of both situations from the publics perspective? You could require companies to disclose financial numbers if above a certain size, even if privately owned. That wouldn't force the owner(s) to be beholden to anyone, they just have to report the numbers. It's what we do here.
When you say "the reality is", do you mean that the existing players are just too powerful to allow it? Or is there something inherint to the system that wouldn't allow it?
Campaigns, campaign financing, and lobbying. US polotics is pay to play. Plus Americans are very individualistic. We would rather get screwed over by companies and the rich then have government tell us what to do. Does not always make sense.
The players are just too powerful to allow it. There's no limitations if a private corporation wanted to disclose information, but unless they are compelled, it will not happen. To our congressional representatives and current supreme court, applying any "burdensome restrictions" on corporations any more than the existing status quo is political poison for their careers.
I agree with you that it would be better if that were the case, but the reality is the regulators are complicit in the system being as broken as it is.