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In economic theory, every trade is beneficial for both parties. You have too many cows, but need money and I have money and am hungry - you sell me a cow and we
by mathattack 8y ago
In economic theory, every trade is beneficial for both parties. You have too many cows, but need money and I have money and am hungry - you sell me a cow and we are both better off.
Reality is a little tougher. You and I both run hedge funds. One of us thinks Amazon will go up. The other down. One sells to the other. In a month, only one of us has made money. Exactly what the other missed out on making.
Conversely, I sell shoes. You sell supply chain software. You sell me the software for a million dollars. I save 20 million in costs. I want you to improve the software, so I tell the world about my savings. You sell to ten other customers, and I save another 20 million with improved software. Your investors make money, as do your employees. We grew the pie and we all win.
I don’t know what the world is truly like, but I prefer pretending it’s the latter.
- zeusk 8y agoand what about the people/services that were part of the 20 million dollar cost you reduced using that software?
- platz 8y ago"rip them"
- horsecaptin 8y agoThats the whole point of the a capitalist environment! Hopefully those people were paid well for their hard work and saved up enough money to retire or move onto bigger things.
- mathattack 8y agoIn a grow the pie worldview, let’s say the 20mm in supply chain costs means less WIP inventory and less shipping. The WIP inventory reduction might come as a decrease in raw materials. Let whoever sold it to me sell to someone else. The people transporting goods can transport for others. (Or they were overcharging)
- api 8y agoIf there is sufficient growth and economic diversity they can find different and hopefully better jobs. Would you want a job as a copy clerk? These were people who copied documents by hand before copy machines were invented.
- Stratoscope 8y agoOr a job as a computer: https://en.wikipedia.org/wiki/Human_computer https://en.wikipedia.org/wiki/Human_computer
- deleted 8y ago[deleted]
- krotton 8y agoWell, the cow is a tad worse off than before...
- api 8y agoThat's a pretty good contrast between productive capitalism and financial capitalism. Productive capitalism is win-win. Financial capitalism is win-lose.