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If that's the policy goal would it not be much easier to just build programs to support startups and entrepreneurs?

by foota 7y ago

sokoloff 7y ago
Take the converse construction. "Let's raise taxes on companies and wealthy individuals so the government can get into the winner-picking business of investing in startups and entrepreneurs." I would personally object to that policy.
- foota 7y ago
  It doesn't have to be "winner picking" you could have some policy like subsidizing private sector business loans for small business, coupled with additional small business tax breaks (maybe payroll tax breaks as well?). This would accomplish the goal of encouraging small businessess without the government having to evaluate small businesses on their merits.
jaredklewis 7y ago
Well I guess that depends on how successful you imagine the government would be at running such a program. If it is in the US, my intuition is that it wouldn't be very good.
imtringued 7y ago
That's basically a planned market and those do not work without a perfect government that has total access over all information in the economy. Such a government will probably never exist. Remember you are talking about denying a CEO the ability to decide whether to invest or not invest in additional production capacity and instead assigning this task to the government. The CEO has more information about his own company than the government, which means that the government is not capable of making this decision. The government is also insulated from the consequences of making the wrong decision, if a company loses revenue or even shuts down the government is not directly affected.
- WalterBright 7y ago
  The government will also intrinsically allocate money based on political considerations, which are not necessarily congruent with practical ones.
- foota 7y ago
  What? How does what I commented at all resemble a planned market? I elaborated a little on an alternative proposal for increasing investment at https://news.ycombinator.com/item?id=20665196 https://news.ycombinator.com/item?id=20665196 I think the only thing similar to planned economy here is that you're shifting tax burden and resources invested from larger companies to smaller companies. The idea being that small companies are a beneficial resource because they contribute more directly and locally to their economies. You could argue that this is a distortion but I think it's a long way from a planned economy.

If that's the policy goal would it not be much easier to just build programs to support startups and entrepreneurs?

by foota 7y ago

If that's the policy goal would it not be much easier to just build programs to support startups and entrepreneurs?

Take the converse construction. "Let's raise taxes on companies and wealthy individuals so the government can get into the winner-picking business of investing in startups and entrepreneurs." I would personally object to that policy.

foota 7y ago
It doesn't have to be "winner picking" you could have some policy like subsidizing private sector business loans for small business, coupled with additional small business tax breaks (maybe payroll tax breaks as well?). This would accomplish the goal of encouraging small businessess without the government having to evaluate small businesses on their merits.

jaredklewis 7y ago

Well I guess that depends on how successful you imagine the government would be at running such a program. If it is in the US, my intuition is that it wouldn't be very good.

imtringued 7y ago

That's basically a planned market and those do not work without a perfect government that has total access over all information in the economy. Such a government will probably never exist. Remember you are talking about denying a CEO the ability to decide whether to invest or not invest in additional production capacity and instead assigning this task to the government. The CEO has more information about his own company than the government, which means that the government is not capable of making this decision. The government is also insulated from the consequences of making the wrong decision, if a company loses revenue or even shuts down the government is not directly affected.

WalterBright 7y ago
The government will also intrinsically allocate money based on political considerations, which are not necessarily congruent with practical ones.
foota 7y ago
What? How does what I commented at all resemble a planned market? I elaborated a little on an alternative proposal for increasing investment at https://news.ycombinator.com/item?id=20665196 https://news.ycombinator.com/item?id=20665196 I think the only thing similar to planned economy here is that you're shifting tax burden and resources invested from larger companies to smaller companies. The idea being that small companies are a beneficial resource because they contribute more directly and locally to their economies. You could argue that this is a distortion but I think it's a long way from a planned economy.