8 ms·

Many people seem to hold an intuition or belief that it is wrong to profit, or profit "excessively" when providing certain types of services, particularly relat

• lentil_soup 11y ago
  until because of the profit you are tempted to support the continuation of the problem
• berntb 11y ago
  You are totally correct -- as long as competition isn't short circuited. Think regulatory capture and ol' boys networks. Also, there is a ridiculous level of general incompetence among Swedish politicians today; they often do nothing but politics inside the party system from their youth.
• digi_owl 11y ago
  Its not a question of profits or not, but about the risk of rent-seeking.
• clarkmoody 11y ago
  > 2. The more profit, the stronger the incentive for entrepreneurs to enter the market and/or innovate. 3. The more entrepreneurs in the market, the tighter the margins will become, due to competition. The price for the service will fall as a result, and the companies will become more efficient.
  • TeMPOraL 11y ago
    But also remember that: 4. The more low-hanging fruits in terms of efficiency have been picked, the more entrepreneurs will be pressured into saving money on quality of their product - which in this case means quality of care. This is the stage when serious abuse starts. The maximum benefit of a market solution is reached when you can stop companies from progressing from 3 to 4.
    • jazzyk 11y ago
      Only if the barriers to entry into that market or product/service stickiness are high. Otherwise, customers, unhappy with the quality, will flee to the competition.
      • TeMPOraL 11y ago
        To clarify my point - 4 is when all competitors are pressured into saving on the product itself. It's not just about barriers to entry or stickiness - it can be simply because margins are very low. There will always be someone who will sacrifice yet another value in order to be more profitable, and thus will force his competitors to either give up on that value too, or to get outcompeted.
        • caskance 11y ago
          If that is the decision they face, that means customers did not want the thing that was sacrificed, and leaving it out is an improvement. The danger most people worry about is when the customers are getting a better experience at the expense of individuals who don't have any choice in the matter, like in the prison scenario. But negative externalities are hardly specific to this situation.
          • TeMPOraL 11y ago
            I think you may be underestimating just how much crap customers can deal with before they say "enough" (and just how hard is it to coordinate them to say it together). I don't think anyone is happy that they have to replace light bulbs and electric kettles every other year, but we have no choice - the durable options are not on the market. They have disappeared years ago. And in case of housing, I think the conditions could reach a pretty horrible level before people would be forced to seek something else. My point is that market is too good at making things efficient. Its goal is to make things profitable. Which is a decent proxy for the peoples' goal of making a product or service "good", but those two ideas start to diverge at some point.
• pbhjpbhj 11y ago
  Profit is from the remaining monies after wages have been paid. Profit is the excess the market will bear above the cost of delivering the services. It is largely unrelated to sustainability; if it weren't that way then giving shareholders/owners the profit would break the company.