"The whole SHJ business model is an absolute drain on society- I have a theory that social utility and profitability (ROE) are in general inversely proportional. There's a wealth of evidence supporting such a position."
hmm. I strongly disagree with this for multiple reasons. Companies in Shine's line of work are a necessary counterbalance to a conflict of interest inherent to the insurance industry. Insurance is somewhat of a strange industry in that insurance companies are incentivized to not provide the service they are selling - or to minimize provision of that service. Thus consumers require representation to make sure that insurers hold up their end of the deal.
I suppose that the fact that insurers can't be trusted to play by the rules creates a drain on society because it creates the need for expensive legal proceedings to resolve, but that is hardly the fault of the lawyers. At worst they can be accused of profiting off this inefficiency not creating it, but really they are providing a necessary service.
In terms of your second statement this would depend on how you defined social utility but for this theory to be true then you would need to demonstrate that unprofitable companies deliver higher social utility. I don't think this is necessarily true. Also bear in mind that the profit of companies is distributed to shareholders, this includes superannuation/pension funds. These provide an extremely valuable service to society as they remove from the state the burden of providing for retirees. There is also the fact that profit motives provide incentive for investment in the economy, providing employment and so on and so forth. All of this is social utility delivered by profitability of companies.
How are unprofitable companies a social good? I don't think this makes sense unless you are suggesting that profitable companies underpay staff.
SHJ Price at posting:
86.0¢ Sentiment: Hold Disclosure: Held
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