"The Riff" with Byrne Hobart and Erik Torenberg cover image

E24: Why Acquisitions Fail, How to Write a Great Memo, and The Fate of ChatGPT Wrappers

"The Riff" with Byrne Hobart and Erik Torenberg

NOTE

Wealth Transfer: Past Sacrifices for Future Gains

Unions play a complex role in wealth creation, primarily transferring wealth from employers to employees. However, unlike corporate investments, unions face challenges when making decisions that incur immediate costs for long-term benefits, as these sacrifices often benefit future workers who may not be represented by the current union. This creates a lesser appeal and lack of capitalization on future outcomes. Consequently, unions maintain a higher discount rate, focusing on present worker interests rather than future gains, unlike shareholders who are invested in maximizing future company value.

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