Comment by stego-tech
5 hours ago
I mean, that's one way to look at it I suppose, and it's why you see Healthcare Insurers and Private Equity diversify into elder care for a captive audience.
In reality though, I was not-so-subtly trying to suggest that if something is necessary for the public good (curing diseases) but a bad business model, then perhaps Capitalism itself is the wrong vehicle for that segment of industry and a different option - be it an incentive structure, government-owned pharmaceutical research, or managed economy - is needed.
Society fundamentally needs things that are simply bad business - sheltering everyone (lowers long-term housing revenue), feeding everyone (lowers long-term food revenue), healing everyone (lowers long-term healthcare revenue), educating everyone (lowers the value of degrees/credentials). If our economic model prohibits or discourages achieving optimal resource usage and human outcomes, then it's our obligation to explore and identify alternatives that may improve those outcomes respectively.
> In reality though, I was not-so-subtly trying to suggest that if something is necessary for the public good (curing diseases) but a bad business model, then perhaps Capitalism itself is the wrong vehicle for that segment of industry and a different option - be it an incentive structure, government-owned pharmaceutical research, or managed economy - is needed.
I believe the great innovation of capitalism is markets, and the next era of economic and social progress will be driven by mixed capital/social good markets.
For example, what if you tied the tax rate for an industry to a combination of broad social goods (say, homelessness) and industry-specific goods (say the incidence rate of cancer for cancer drug companies), such that if we’re in a the middle of a homelessness crisis and many people have cancer, the tax rate might be 50%, vs if there is virtually no homelessness and we’ve cured cancer, maybe it’s 10%. Obviously there are other market approaches but eventually they would be converted to capital markets, so something like the above makes sense to me as a start.
isn't this just a way of saying that markets aren't representing externalities correctly?
a company doesn't have to pay for bad things they produce as a byproduct (e.g., pollution) and they dont get to benefit from good things they produce as a byproduct (e.g., curing a disease).
I think we've discovered that markets are great for some things, and disastrous for others. e.g. fire services, and health.