Exxon The Great

What makes a company great? “Great” clearly doesn’t mean “perfect.” (See also what’s known as “Great Man Theory,” which has to do with the historical significance of influential — not always morally upstanding — individuals). A company, just like a political leader, might be considered great, even if flawed, perhaps even tragically flawed. Surely we can at least imagine calling a company “great,” even if we weren’t entirely approving of its behaviour. Then again, at some point, grand accomplishments won’t always outweigh questionable methods. So, what makes a company great?

Earlier this month, investment advice site, the Motley Fool, had this to say:
The Greatest Company in the History of the World

“It’s the world’s greatest company, period.” — Arjun Murti, Goldman Sachs

I’m what a lot of folks would call “obsessed” with finding great stocks. So when I heard Goldman Sachs oil oracle Arjun Murti boldly label a company as the world’s greatest company, you’d best believe I paid attention.

That’s pretty high praise, but the facts speak for themselves. In fact, my research led me to take Murti’s claim one step further: This is the greatest company in the history of the world.

The corporate titan in question produced modern-day history’s greatest fortune and earned double the combined 2008 profits of Google (Nasdaq: GOOG) and Microsoft (Nasdaq: MSFT). If you’d invested $1,000 in this company in 1950, your shares would now be worth about $2,400,000. And, incredibly, this giant still has decades of slick profits ahead of it.

Meet the world’s greatest company: ExxonMobil….

I can hear the question echoing across the world: “Exxon? ‘Scuse me? The greatest…??”

Of course, the key to the claim is that it’s rooted in profits. Exxon is undeniably a great profit-earner. Then again, Al Capone made lots of profits, too. But he murdered a lot of people along the way. So profits aren’t all that matters. But nor is profit utterly irrelevant, morally speaking. If profits are earned without force or fraud, then profits signal that a company has provided people with something they wanted. Profits are never one-sided: they’re always one half of a win-win scenario, given the basic economic idea that all voluntary economic transactions are mutually beneficial. None of this is to say that big, profitable companies are morally in the clear. Far from it. Exxon has done plenty wrong. But it’s worth at least contemplating the notion that the most profitable companies are, other things being equal, the ones that have provided the most people with stuff they wanted.

On the other hand, it would be good if we all wanted less of what Exxon sells. The environment we hand down to our children and grandchildren depends on that. But it’s not clear that those sorts of aggregate effects can easily be laid at the feet of a particular company, supplying a useful (indeed, necessary) product to each of us on a sale-by-sale basis.

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