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Eh, that's true for most every company until you get into areas of natural monopolies. Then the benefits of market forces don't exist and you're stuck with shitty service but not real alternative. At least you can vote the bums out. Which is why regulation of those guys is so complicated.
It'd be interesting to see what nationalizing the infrastructure platforms which create a natural monopoly, but leaving the companies who provide the services in the marketplace would lead. Gummin't owns all the fiber and cell towers and such, but you buy your access to it via local ISP's and cell phone companies that compete with each other. Rather than only choosing between AT&T, Verizon, or Comcast.
This to me is one of the key points of nationalising something. If its proper functioning is critical to our nation, profit and expense should be secondary factors. For the public sector, it sort of is, but in for-profit business you can make poor long term decisions in pursuit of short term goals and in many cases are encouraged to do this. A failing bank is one thing, a katrina or our healthcare crisis is something else.
It's kind of sad, but for-profit and for-people seem to be mutually exclusive in business.
Not necessarily. The problem occurs only if the business is a monopoly, and/or is a terribly managed clusterfuck (see: our healthcare system).
Otherwise, capitalistic competition, i.e. the profit motive, minimizes inefficiency and lowers prices for the consumer.
Not superior in all cases, profit is a very strong motivator.
As ege mentions a lot of capitalism is "minimizes inefficiency and lowers prices". Take FEMA - by lowering stocks of supplies and reducing headcount you meet those two goals. Which is ok until something like katrina when that 'inefficiency' turns into robustness.
Right, which is why nobody intends to privatize the fire department, police department, or FEMA (unless you're a Paultard, but that's a different story entirely).
When it comes to, say, grocery stores, the competition by several businesses allows for lower prices than if, say, the government was in charge.
http://www.youtube.com/watch?v=GlUsiKfeDfo&eurl=http://areasofmyexpertise.blogspot.com/
http://www.ugo.com/movies/babylon-ad-video-gallery/?cur=vin-diesel-dungeons-and-dragons&morepics=1
I looked into it, and this bailout for the borrowers is quite two-faced. It's a great plan to help out specifically someone who bought more they could afford. They get a free, low-interest, guaranteed refi and can write off a good bit of depreciation. However, the downside is that the FHA gets a permanent lein on any future appreciation. If you get an FHA loan and the market improves and you sell, the government gets 100% of any value appreciation. This 100% declines over the years to 50%, where it remains in perpetuity. That means that anyone who takes this deal will owe the government at least half the profits of the biggest investment they'll make in their lives. I haven't even thought enough about that to know how I feel about it. It stablizes the market for now, but in the long term I see a ton of money going to the government that is normally used to fund college and retirement.
People like me who are looking at buying a house get a loan (actually a tax credit we have to pay back) of $7,500 that's repayable over 15 years at 0%.
So that's cool.
This is a claim I hear a lot referring to capitalism, but to me its combining two things.
It is beneficial in a capitalist system to make your own operation more efficient and to lower the prices you must pay. This increases your profit.
It is not beneficial (at least not intrinsically) to increase the general efficiency of the system or to lower your own prices to below what you must.
Profit can be defined as the differences in efficiency between what you can provide and what is 'needed' by others. Say I can do something for X units/product. A customer would require Z units to produce or otherwise obtain a product. You offer to exchange for Y units as long as Y>X and the customer accepts as long as Y<Z.
So why would you want to increase the efficiency of the system in general if that resulted in Z coming down, or in the number of products needed came down?
That doesn't mean capitalism isn't the best foundation for an economic system, but it also gives the invisible hand far more credit than Adam Smith did.
QEDMF xbl: PantsB G+
I think the efficiency of the "system", as you put it, is merely the summation of those individual responses. And also the natural response of each individual to their 'competitors'. I think your explanation explains why an individual deal might be made. But to add another two variables, the customer C and you (the producer) B. C would only go to B if B > P (P = all producers). the competition between individual B's results in Y decreasing as each individual X either decreases or stops being part of the market.
I think that can be summed up in the market for "technology" and is macroeconomically measured with the term "productivity", which almost always increases as economies develop.
QEDMF xbl: PantsB G+
I can agree with that to a large extent, but I thought you were referencing the general case. The government's role should be to keep the playing field level, though I admit it doesn't always succeed. In general I think it gets better over the long term. Natural monopolies are an intersesting scenario, and I think a strong argument can be made for the government taking over those industries.