Comment by shimman
20 hours ago
Why should society care about people making profits? Society would greatly benefit from cheap abundant ram than FAANG shares going up. I'm kinda sick about only caring that some billionaire makes more money and would rather you know... actually improve conditions to better society.
This is why China is eating the West. Quite easy to start an electronics company when you have such an abundance of suppliers, compare this to America where there is maybe one or two players in the entire nation.
Quite pathetic, but we live in a pathetic world so it tracks.
You think Chinese businesses aren’t in it for the profits?
While these private companies exist and are in it for the profits, they don't control the government, meaning any potential price gouging is strictly regulated. The Chinese government actively prevents private companies from becoming too powerful or dominating an industry in the public eye. Instead, they foster competition by promoting and building up alternative companies.
A great example of this is how they handled digital payments. While Visa and Mastercard maintain a monopoly in the West, China faced a similar situation when private mobile payment systems began dominating the market. In response, the government stepped in and forced the ecosystem to open up to competitors.
I wouldn't characterize it as forcing to "open up". It's true they put an end to some of the most egregious anti-competitive practices, but the Chinese tech ecosyatem, including payments, is still notoriously non-interoperable. For example, there's no way to transfer money between WeChat Pay and Alipay.
The relationship between Tencent/Bytedance/Alibaba is what happens when there are no monopoly laws or they are ineffective: every company fighting tooth and nail to corner every market with a single "super-app". No specialization at all and many races to the bottom, like the recent war between Alibaba, JD and Meituan over instant delivery that made every company involved lose a lot of money.
I don’t get the example, any payment in China is basically a duopoly between WeChat and Alipay, meanwhile in US there are visa, mastercard, American Express and discover counting credit card payment only.
But not open up to competitors like Visa.
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In China the desire for profits serves the society. In the US the society serves the desire for profits.
They are but the difference is that China doesn't want to encourage monopolies and have zero qualms in jailing or executing bad business leaders.
There absolutely are monopolies. There are, in fact, many state run enterprises. Where do you get these ideas?
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> This is why China is eating the West.
Nothing to do with cheap labour.
No, nothing to do with that. Even Steve Jobs said so back 20+ years ago, about why Apple can't just get out of China manufacturing.
He said the labour cost is neghigible and not qualitatively different to the US. It's the availability of every part and tech you need in nearby supply centers and factories, the huge supply of appropriate resources, including the ability to have tens of thousands of expert workers on command for a fast new production run.
Of course you do not talk about cheap labor when you are exploiting it, from which all the speed, all the availability-at-any-time come from. The closest quote I can find is
The story is told of when Apple did a last minute design change on the Iphone. As soon as the parts came in, 8000 Chinese workers were immediately called in at midnight to start a 12 hour shift. An Apple executive is quoted as saying that the “speed and flexibility are breathtaking.”
Currently the reality on Chinese assembly lines is those expert workers are working 12 hour shifts for 1 day off every 14 days, and earns about $800-$1,000 a month.
It's a huge problem in China actually, those 996-esque working schedule is everywhere now, normal 955 or even 965 schedule is almost non-existent among domestic private employers. The sad thing is that sometimes some Act (like EU supply chain law) forces factories to 955 schedule but those line workers are not happy, because that means they don't get overtime and are making minimum wages like $300 a month, not even enough to live a life. Chinese got five day work week because of WTO, yet now many have lost it.
I'd buy that if you're talking about developing new products/new production lines, it's cheaper to have suppliers and know how hand - and it's great for margin optimization, because they have other production lines.
But that margin isn't funneled to pay wages and improve living standards.
To say wages don't play a role it's more of a corporate narrative to wash those decisions.
If wages aren't a factor, why don't they raise wages and living standards for those workers?
We're also eagerly taking advantage of their cheap labour and we're taking advantage of plenty of people here at home, sometimes to the point of literal slavery (it's okay when they're prisoners or immigrants)
Labor has very little to do with it and more about a political class that has to increase the material needs of a nation if they still want to stay in power.
What has the US government done for American's lately outside of forcing people to buy healthcare and providing monetary support for families for a small window during covid? All we have is a political class that wants to fuck Americans raw until they pump every cent out of us.
Also the US has one of the most weakened labor classes in the world, come the fuck on. Corporations convinced our governments to sell out labor at every opportunity. You're acting as if it was the 1930s where there was a national strike every month until the Wagner Act.
Why are you stating China competitiveness isn't related to labor, and then pivot to US labor?
Before you go there, you should answer: what has the Chinese government done for the Chinese lately? Is everything well in their society, labor and economy wise?
No, we’re past the cheap labor. They’ve already taken the lead on 3-D printing, drones, robotics, are very close to making their own CPUs and GPUs, their lead on EV cars is pretty much unassailable, they’re in the process of building an electrostate with 100% redundancy and dirt cheap electricity, their bullet trains are on par with Japan’s, they are supplying the entire world with everything solar. I could go on and on. China has arrived and all our geriatric government cares about is creating a white ethnostate and propping up oil and gas companies.
Chinese labour isn't very cheap anymore.
I own FAANG stock because I own the S&P 500 in my retirement accounts, and so do managed pension funds. There's a lot more than billionaires who benefit from FAANG shares going up in value.
It's true that the current pension provision depends on this. But if pensions are mainly funded by companies which extract monopoly rent, then it would actually be more efficient and be less distortionary to the competitive market to fund them directly out of taxation - one big, simple rent instead of 100,000 different ones clogging everything up.
Are US retirement accounts largely growing on the back of “companies which extract monopoly rent”?
That seems outlandish. My iPhone isn’t “rent”, neither is an Nvidia GPU, or an Instagram ad.
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Aren't you worried about the circle-funding these companies indulge in when your pnsion depends on it? For example Nvidias's dubious deals with Huangs charity? If something goes sideways there, $5T are at stake: https://www.youtube.com/watch?v=xUbJDrL6ZfM
I agree, the sentiment that billionaires are the only beneficiaries of share value increases is misinformed, but the mentality of profit chasing is a long term security risk not just to the nation, but to the continued rise in value of said shares. Once China has enough of a grip on their domestic attempts at semiconductor fabrication, these company's supply chains will be completely compromised, allowing China to practically swap out any of these FAANG companies for Chinese counterparts over time. As long as the US, UK, EU and FAANG continue to do next to nothing to develop domestic chip fabs and supply chains, it is only a matter of time.
This is a general argument in favor of protectionist tariffs and against free trade.
You don't understand the point of capitalism. It's not about making rich people richer. Capitalism is about producing stuff. To create a large variety of (useful) products for society.
You need capital to make pretty much anything. Somebody has to come up with a large amount of resources (money) put upfront into the venture. Capitalism creates the incentive for that - if the gamble pays off, then the investors get more value back. If it doesn't work out, then investors lose money. Most businesses fail early and do not provide a return for the investment.
The point of capitalism is to keep this system running. As a result of it we have made an ungodly amount of technological and quality of life improvements. Some people have become filthy rich from this, but typically they also provided the world with goods or services that people like and use. Tesla made Elon filthy rich, but it also made electric vehicles popular.
> You don't understand the point of capitalism. It's not about making rich people richer.
Making the rich richer isn't necessarily the point, but it is an unavoidable consequence.
> Capitalism is about producing stuff.
Humans have been producing stuff well before the concept of ownership was invented, and certainly well before the massive wealth accumulation that is the hallmark of capitalism.
And almost for the entirety of that period, humans lived in abject poverty. The rise of capitalism perfectly correlates with the most spectacular increase in human flourishing and prosperity in the history of our species. Even in the last fifty years, liberalizing economies, private ownership, and contract law have lifted tens of millions out of poverty, mostly in SE Asia.
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Society should care about people making profits because otherwise those people do something else instead of providing goods and services. What happened in Communism is instructive on this point. Now if you want to argue that the pursuit of maximum profit as an end is a problem, there's a case to be made. The US had something like a marginal tax rate of 90% around the 1940s/1950s, if I recall correctly, and it obviously didn't hurt innovation, but people got paid in perks and corner offices and status instead of just money.
I think people are misled by Marx and derivatives, and misdiagnose the problem. I don't think people are upset by the CEO making lots of money as much as they are by the HBS management style of using people as a tool, or even as interchangeable "resources". However, the philosophical materialism of Marx & Co. pretty much makes this inevitable. (The secular view is also materialism, so you get it on both sides.)
> I don't think people are upset by the CEO making lots of money as much as they are by the HBS management style of using people as a tool, or even as interchangeable "resources".
How about both? Both are pretty terrible for society IMHO. Some shithead's making 6000x of what average worker at their company because they're on top and they're treating everyone under them as interchangable tools with zero compassion. If they were limited to only making like 3x then they'd be on a much more equitable place with their underlings and might even be more likely to see them as fellow humans instead of disposable work units.
Perhaps it’s not capitalism that’s the problem but the unboundedness of the greed of a few, with respect to the other needs of humanity.
Also Adam Smith implied that unbounded avarice is irrational and disruptive to society.
The assumption is that morality survives grotesque wealth accumulation, we see many examples proving otherwise
"Capitalism is the problem" by itself is like saying "unix operating systems are a problem". There are so many flavours, so many parameters (laws, tax, etc.) that I do not see value in generalizations.
I think morality is quite hard to define and any system should take into account unboundedness of some human attributes (being greed, stupidy or other) in some humans.
"unboundedness of the greed of a few"
Lots of people claim "greed", but the stereotypical Tech billionaire doesn't simply roll around in gold like Scrooge McDuck, doing nothing and demanding more. They invest and reinvest it into new enterprises.
Of all the ways of dealing with massive wealth, this is probably the second least disruptive one. (The first one would be just giving it to honorable causes.)
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Capitalism is the only known system that aligns natural, normal individual greed with the benefit and advancement of the society.
Call me crazy but society should care about giving people meaning, providing healthcare, and an education. You know the three things that lead to productive humans.
Notice in my comment I mention nothing about taxes? Maybe people are mislead about neoliberalism? All it has done was sell out American jobs, get civilians addicted to drugs, and manufactured a political class that cares about donations over material needs.
This is an economic system that isn't even 50 years old and you're already going with the Marx scare quotes as if US branded capitalism hasn't already killed 10s of millions of Americans in the pursuit of profit.
Let's not even peel back the founding of this nation, a colonial white slaver state with minority protections baked into the constitution to impede people's chances of progress with every life.
>Call me crazy but society should care about giving people meaning, providing healthcare, and an education. You know the three things that lead to productive humans.
Things that are paid for by economic surpluses. No profits, no investment, no taxes.
It's very much a matter of balance, you're not wrong that those services you mention are vital as are many others generally provided by governments. However it's all funded by a dynamic efficient economy.
The question of private wealth is the hardest, but private wealth by itself isn't a problem. The question there is, who should own and run productive economic activity. If it's not the state, it's private individuals. The wealth of billionaire industrialists doesn't consist of one big pile of money they wallow in, like Scrooge McDuck. It consists of their ownership and control of companies that do things in the economy.
Taking away that wealth means taking away those companies, and doing what with them? if you sell them to other private individuals, now they own and run those companies. If you can just take companies away from people like that, why would anyone build or buy them? If you take the companies into public ownership, now they're run by civil servants and politicians, but you'd have to pay for the companies, right? If you just seize assets, nobody is going to invest in anything that can be seized.
I do think inequality is a growing problem, but there are no easy answers.
Society shouldn't. But it's not society making that decision, it's the corporations and people with lots of wealth that want to get even more wealth.
> Why should society care about people making profits?
The people making profits are the ones providing food, shelter, and phones to you.
> The people making profits are the ones providing food, shelter, and phones to you.
I'm not worried about the guy making my sandwich at the corner deli. He's entitled to my money because he provides a valuable service.
I am worried about the owner of FoodCo, who plays golf all day while his employees run the company. He provides literally no service to anyone at all, but makes more money than any employee. He then uses his profits to buy homes in the area, so his employees can pay back half of their paycheck to him in the form of rent.
Why doesn't a small village have a supermarket? If it's small enough then it won't have any store at all. Why? Because the business doesn't make enough money to justify it and the consequence of this is that none of the inhabitants of that village can "just go to the store to buy some milk". They either need to plan weeks or months worth of shopping in advance or have access to transport that can take them to a town that has a store.
The owner of FoodCo put in a lot of their money upfront to make the company happen in the first place. Your deli guy wouldn't have a job if the FoodCo guy hadn't done what he did.
I know that it's hard for people from rich (and high population) countries to understand, but the high variety of goods and services that exist are a consequence of people investing into businesses. Without them many of these businesses wouldn't exist, because most people are not rich enough to be able to fund a business on their own.
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Name one CEO of a large company who fits your profile.
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No, the real people providing the food, shelter and electronics are the generally the lowest paid in society.
But they are making a profit. Otherwise they'd have to stop providing stuff, because they'd be broke.
Nope. They're the ones making those more expensive, via collusion, rent-seeking, monopoly capture, and lots of other ways.
Well I am still waiting for my google home and my meta steaks.
Reality is, those companies don't give anything back, just siphone all profits into tax havens so owners can take as much cash out of it as possible, in one form or another.
Their goal is to provide nothing back as much as they could. Look at their actions, not some empty PR statements.
> Reality is, those companies don't give anything back
California, Washington, and New York are about to find out what happens when they drive the wealthy businesses out of the state.
Massachusetts found out a few years ago. They decided they were going to heavily tax yachts that were built by the yacht industry in the state. What happened is the wealthy bought their yachts elsewhere, and the local yacht industry collapsed, and many thousands of skilled craftsmen lost their jobs.
The tax was rescinded.
It's a cycle. The zeitgeist moves from communism to capitalism and vice-versa every 30 years or so.
The zeitgeist yes, but in terms of actual politics socialism nowadays is really a vague aspiration rather than any actual policies. Certainly here in the UK our Labour governments since the 90s have confined themselves to just tweaking the settings on the economy Maggie built in the 80s. I'm just about old enough to remember what actual socialist economic policies looked like.