4 ms·
Capitalism isn't inherently short-term oriented. This has more to do with the incentives in & the regulatory framework of the system (consider requirements for
by TDL 11y ago
Capitalism isn't inherently short-term oriented. This has more to do with the incentives in & the regulatory framework of the system (consider requirements for quarterly reporting & the whole expectations game that has risen from that requirement.)
- incongruity 11y agoCapitalism isn't inherently short-term oriented. No, but people do tend to be. We seem to be wired to value near-term gains much more strongly than long-term gains -- http://www.behavioraleconomics.com/mini-encyclopedia-of-be/time-temporal-discounting/ http://www.behavioraleconomics.com/mini-encyclopedia-of-be/t... This then drives us to create the systems that focus on near-term rewards – like the quarterly reporting and equities that can be traded at a moment's notice, etc. etc.
- eldavido 11y agoI see a lot of parallels with the political system. If you let the masses take charge, you're going to a get a more wild, dynamic, unpredictable outcome. In the stock market this new "democracy" manifests as extremely short hold times, in the political arena, as fringe candidates that party elites would never have let win the primaries, had they been in charge. I, for one, hold stocks for a long time, and hope companies do optimize for the long term, but I realize I may be in the minority.