You said the govenment ahould decide how capital is allocated, and not capitalists. What is it if not central planning?
You are talking about wealthy individuals, how they are not special and can get ripped off, do not know more than other people, etc. But this is not the point. The competency of the individual matters, but less than the incentive structures that exist around them.
Competition and profit motive create incentives to decrease production costs, increase production, look for new markets and lower the price(not always, do not tell me about when this is not the case, I know).
And both capitalists and upper management exist in a very pressured environment. Capitalists have to allocate resources correctly, because they own them. For that reason, they are careful when investing, and only do economically sensible things(if they themselves are sensible, and if they are not they will see their capital diminish). The organisations that manage finances and corporations are held accountable by that: they have to make sure they are making correct decisions to attract capital.
Corporate structure in America is characterised by a prominence of markets in management. High publicity of company actions and results, coupled with a structure that holds management accountable to the shareholders creates a system where both good and bad decisions are reflected in the capitalisation and management is, as I said, under great pressure to perform because the will have to pack their bags and leave otherwise.
This is the system that made America the largest economy in the world.
The same can not be said about government owned firms. I said nearly unlimited, and this is more or less the case. Governments throw money at the problem until it is solved, since there is no profit motive, no pressure to perform, costs are higher, performance is worse, etc. Of course, they try to optimise, but history shows that they are almost always less efficient than private firms.
They should still be employed in certain parts of the economy, like social services, infrastructure, etc. But probably only when there are good reasons for that.
You said the govenment ahould decide how capital is allocated, and not capitalists. What is it if not central planning?
I assume it’s implied we’re talking about investment capital considering you said taxing the rich would reduce their ability to invest and I talked exclusively about investing.
Competition and profit motive create incentives to decrease production costs, increase production, look for new markets and lower the price(not always, do not tell me about when this is not the case, I know).
None of those things have anything to do with the existence of wealthy people.
And both capitalists and upper management exist in a very pressured environment. Capitalists have to allocate resources correctly, because they own them. For that reason, they are careful when investing, and only do economically sensible things(if they themselves are sensible, and if they are not they will see their capital diminish)
Maybe 50-100 years ago. Do you really think Google, Amazon, Meta and anything Elon Musk touches exists in a pressured environment? Google has so much money they can create new tech for a new product and then 2-3 years later throw the tech with the product into the dumpster. Amazon has deliberately attritioned out an entire market (by undercutting everyone) to create a monopolistic empire. Meta “expansions” into other markets have been exclusively through buying out a potential competitor, because they just have that much money. And Musk blew away 42 billion to run one of the biggest social media sites into the ground. They don’t feel pressure. They don’t need to allocate resources correctly. Mega corporations have so much capital they don’t even know what to do with it. They probably could torch half their market value and their closest competitor still wouldn’t be competition to them.
Or did you mean the time wall street literally crashed the economy so hard the government had to bail them out? When it comes to the wealthy there are no risks.
This is the system that made America the largest economy in the world.
And for what purpose? Who benefits from having the largest economy in the world? It’s clearly not the American people.
The same can not be said about government owned firms. I said nearly unlimited, and this is more or less the case. Governments throw money at the problem until it is solved, since there is no profit motive, no pressure to perform, costs are higher, performance is worse, etc. Of course, they try to optimise, but history shows that they are almost always less efficient than private firms.
You’re trying to say China isn’t on the verge of beating the US in the economic game? It has nothing to do with who controls the company, it’s about how much you make your employees slave away. The more they slave the more profitable you’ll be. Government entities tend to be “less efficient” because there’s higher scrutiny towards slaving away (they can still end up slaving away because they’re usually underfunded so one person has to fulfill multiple roles, but that’s because there’s not enough taxation coming in due to us not properly taxing the rich).
So you think there is a distinction between investment capital and some other capital I do not know about?
Yes it does. If there is not an expectation of profit, private property, etc this does not work at all. If there are, it will lead to capital accumulation.
Yes they do. Creating a monopoly is not an example of unreasonable decitions. What? Google has a lot of money, and experimenting with possible products is not what I would call an example of stupid decisions. The point is, they have those resources, their market cap crows by the day(well, until recently), they are effective. Bying a competitor is a terrific idea. Why do you say this is an example of unreasonable behaviour if it benefits the owners of these companies?
The wall street did not crash because of individual mistake of investors, but because of market tendencies. This is completely unrelated.
“The more they slave the more profitable they will be” is, of course, true in a sense that paying less can increase profit margins amd you can force the workers to work more, but this is not always possible as there are usually regulations that protect workers, unions, and some positions are highly competitive. I do not know what is the case in America, but here government jobs pay less than private sector. Often a lot less. Goverment workers are as likely to overwork because they are understaffed. They are still less efficient. There is no research that reflects what you are saying. This is just your opinion.
So you think there is a distinction between investment capital and some other capital I do not know about?
Ookay… So what’s the issue with taxing them? It’s not like the office chair they own suddenly becomes useless if they get taxed. Their capital in the most general sense will stay the same.
Yes it does. If there is not an expectation of profit, private property, etc this does not work at all. If there are, it will lead to capital accumulation.
Ah yes, we were all hunter gatherers until capitalism was invented. We didn’t improve our production methods, we didn’t improve our tools, we didn’t educate ourselves. No offense but that’s an absolutely moronic argument.
Creating a monopoly is not an example of unreasonable decitions. What?
So we don’t need a market economy? Because a monopoly destroys the market.
Google has a lot of money, and experimenting with possible products is not what I would call an example of stupid decisions.
I never said it was a stupid decision. You said they need to allocate resources correctly, they don’t because because they’re probably making more money they can spend. They don’t feel any pressure to make correct decisions.
Bying a competitor is a terrific idea.
I’m sorry, I thought competition in the market is the reason companies make great decisions. So it’s a terrific idea to get rid of the very thing that forces you to make great decisions?
Well, you’re not wrong. Capitalism loves when it can just buy itself into a monopoly and churn out shitty products because people have no other option.
The wall street did not crash because of individual mistake of investors, but because of market tendencies. This is completely unrelated.
Those market tendencies were all reckless financial actions from orders that came top to bottom. The capital owners were squeezing everything they could out of the people, until it all came crashing down. And then they got bailed out by the government.
“The more they slave the more profitable they will be” is, of course, true in a sense that paying less can increase profit margins amd you can force the workers to work more, but this is not always possible as there are usually regulations that protect workers, unions, and some positions are highly competitive.
So capitalism is okay because the non-capitalist things are supposed to keep it in check?
I do not know what is the case in America, but here government jobs pay less than private sector. Often a lot less. Goverment workers are as likely to overwork because they are understaffed. They are still less efficient. There is no research that reflects what you are saying. This is just your opinion.
Okay, so provide sources proving otherwise you saying the government is less efficient is also JUST YOUR OPINION.
