How a business actually works
Money flow, CEOs, monopolies, boycotts
Every company is a balance sheet, an income statement, a cap table, and a power structure. Move the controls below to see how revenue flows through to the various claimants — and where the levers of power actually sit.
How CEOs actually have power
The technical answer: shareholders own the company, the board represents shareholders, the board hires/fires the CEO and approves major decisions. The board sets the CEO's compensation.
The real-world answer: the CEO usually controls the board. They influenced which directors got nominated. They set the agenda for board meetings. They control what information directors receive. The compensation committee uses a "peer group" of similar companies — but those peers are also CEO-influenced. The result: CEO pay rises in lockstep across companies, even when individual performance is mediocre, because everyone is comparing to everyone else.
From 1965 to 2023, CEO-to-worker pay ratio went from about 21:1 to 344:1. Median worker pay during that period barely beat inflation. CEO pay rose ~1,200% in real terms. This isn't because CEOs got 50× more skilled. It's because the system that sets CEO pay is captured by CEOs.
Monopolies, oligopolies, and silent collusion
You don't need a formal cartel to coordinate prices. Three structural features can produce coordinated pricing without any explicit communication: concentration (when 4 firms produce 80% of output, each watches the others closely and matches price moves without explicit agreement — "tacit collusion," mostly legal); public prices (when prices are visible, competitors adjust without communicating); and long-term relationships ("live and let live" patterns develop because aggressive cutting today invites retaliation tomorrow).
US sectors with high concentration: airlines (4 majors control 65%), wireless (3 carriers), eyeglasses (Luxottica owns most major brands), beer (2 companies control 65%), seeds (4 companies control 60%), funeral services, hospital systems, broadband (most counties have 1-2 providers).
Why boycotts mostly fail (and when they work)
The honest data: most modern boycotts have minimal financial impact on target companies. Bud Light lost 25% of US beer market share in 2023 — one of the most successful recent boycotts — but Anheuser-Busch's parent stock dropped only ~20% and recovered within 18 months. Goya, Disney, Target, Starbucks — most "cancelled" companies recover.
Boycotts work when: the target has narrow margins (a 5% sales drop wipes out profitability), the target has substitutes (easy switching), the boycott has institutional weight (corporate or government divestment, not just individuals — anti-apartheid divestment from South Africa worked because pension funds and universities pulled out, not because of individual consumers), or the target depends on a specific demographic that can be mobilized.
Famous successful: Montgomery bus boycott (1955-56). UFW grape boycott (1965-70). South Africa divestment (1970s-90s). Famous near-zero impact: most social-media-driven boycotts of major corporations.
What you just learned
Companies aren't conscious actors. They're aggregations of incentive structures. The way to change corporate behavior is to change the incentives — antitrust enforcement, executive accountability, regulatory rules, labor power, shareholder activism. Boycotts are downstream of all these. Treating "boycott" as the primary tool is treating the smallest lever as the biggest.