8 ms·
In reality markets are not as competitive or as simple as the model. If you want to set up another Walmart say, it is not that easy to get it funded or make it
by justincormack 11y ago
In reality markets are not as competitive or as simple as the model. If you want to set up another Walmart say, it is not that easy to get it funded or make it a success, not as simple as just hiring a bunch of people and putting them to work to make money, as any entrepreneur knows.
- WalterBright 11y agoThen is it really the workers creating that value, or the people, capital, and infrastructure creating that value? For example, suppose I have a machine that, when a lever is pulled, it manufactures a gold nugget. A worker is needed to pull that lever - but is the bulk of the value being created by the worker or the machine? It gets down to how one does the accounting for productivity. Get it too far wrong and one is likely to go out of business.
- tamana 11y agoSuppose the workers unionized and negotiated for higher wages. Did unionization increase their wealth creation?
- WalterBright 11y agoIf workers negotiate for higher wages, then business is forced to put them on more productive tasks. Less productive tasks tend to simply not get done, or get replaced by automation. Unions have sometimes priced themselves out of the market, meaning the business closed. Didn't that happen with Hostess?
- spdionis 11y agoAnd that's exactly the point. Entrepreneurs actually bring value to the table.