5 ms·

Adaptability needs to be the rediscovered strength of market economies

18 points by prostoalex 4y ago

zeroth32 4y ago
It is forbidden to build new oil refineries and pipelines. Banks will not provide loans, insurance companies will refuse to insure it, govs will not issue permits and so on. Oil is obsolete industry with limited supply, and it makes sense price increases like with housing. If you do not like it, buy a Tesla or donkey, it is market economy!
- sharemywin 4y ago
  That's because everyone of those entity's also absorb the down stream costs so when they need to pay the full cost for "cheap" oil it ain't worth it
checkyoursudo 4y ago
I have occasionally thought about so-called "economic uncertainty" over the last couple of years. When I was in undergrad a long time ago, I had a course that touched on cultural differences. One of the claims was that a significant difference between, for example, American culture and several Asian cultures was that Americans tended to be okay with high uncertainty, while Asians preferred low uncertainty. (Let me say for the record that I have no idea if this is true or not; just something I came across in university.) While the thesis was that this difference held true across many aspects of life, one possible implication was that Americans tended to be more innovative and risk-taking, while Asians tended to be more risk-averse (and conservative in approach) and less likely to fail when finally making an attempt. Maybe this was like "easier to ask forgiveness than permission" versus "look before you leap" mentalities. Then suddenly in the past 5 or 10 years, I have heard and read so many American business leaders and pundits whining and warning about uncertainty in the business climate. Taxes, regulations, supply chains, demand risks, or whatever else, I don't even know. I mean, I understand that uncertainty is a massive risk for entrenched incumbents and stodgey old behemoths, but I have occasionally wondered where the spirit of innovation, risk-taking, and, as TFA discusses, adaptability has gone. (It's all gone to start-ups, of course; maybe?)
- fxtentacle 4y ago
  I believe you're on to something here. I also heard that research and small startups in the US (and west in general) tend to take on more risk for potentially higher rewards. But companies for years have outsourced everything from production to research to product development. And those contract developers both are culturally risk-averse and they also have strong financial incentives to take on only the minimum of risk necessary to get paid for their research contract. And that's why the innovation speed of large US companies is limited by risk-reduction in Asia.
- ZeroGravitas 4y ago
  You can turn most high-uncertainty situations into low-uncertainty situations via simple mechanisms like insurance. But, some people don't like that, they feel that admitting their successes, and others failures, were partly just random chance, takes away from their feeling of control over their lives and so strongly need to believe they succeeded due to their own efforts (which in their mind helps to guarantee their future luck/success). So the argument was probably really about how much you should remove the uncertainty post-facto, and highly reward the winners and punish the losers, and the high-uncertainty angle was likely pushed by people who had already got lucky, and/or people who thought they would and so wouldn't suffer the consequences. The next generation has to run that experiment again, and learn the lesson anew.
- andrekandre 4y ago
  > while Asians tended to be more risk-averse that teacher should visit china someday; people aren't afraid to take risks when it comes to entrepreneurship... and japan in the bubble days was quite wild with all kinds of risk taking as well...
qikInNdOutReply 4y ago
We cant have market economics anymore. We transfered tasks of the state (provide social security|pensions) to large private entitys. Making them by virtue of job fiscal conservative and oligopoly entrenched. Meaning, the state has no interest to disturb there rule over whole sectors of industry. These are basically comand economics in disguise and they will adapt to new things only if they replace there milking cows and they have to buy them. Turns out you can infect the free market with the state, by overreaching and kill it.
- sharemywin 4y ago
  Is there really such things as a free market?
scotty79 4y ago
I always found it annoying that people are afraid to as much as fart if it might harm the economy. The main advantage of free(ish) market economy is that it has ability to adapt to changing conditions. The main superpower of companies is that they can die and their people and assets can be used by other better adapted companies.
- andrekandre 4y ago
  > I always found it annoying that people are afraid to as much as fart if it might harm the economy. its because its inherently political: if things go bad, regardless if its "the biz cycle" or rampant speculation and bubbles, the president (and/or political party) usually gets blamed for it... also most peoples retirements are tied up in the private markets now, so there is immense pressure to keep the returns flowing
leroman 4y ago
Electric cars are coming. The power dynamics in the oil and energy world is changing.. Maybe adaptability needs to mean also a contracting economy? Who said overall profits in a world with more reliable components and less waste, is overall larger? (Say after the electrification transition is mostly said and done) Anyway, economy as it is structured now cant handle automation, slowing / declining population, more responsible usage of natural resources etc.. Or otherwise how can it rely on keeping borrowing from the future and leveraging future gains, as the economy is structured right now?

18 points by prostoalex 4y ago

It is forbidden to build new oil refineries and pipelines. Banks will not provide loans, insurance companies will refuse to insure it, govs will not issue permits and so on. Oil is obsolete industry with limited supply, and it makes sense price increases like with housing. If you do not like it, buy a Tesla or donkey, it is market economy!

sharemywin 4y ago
That's because everyone of those entity's also absorb the down stream costs so when they need to pay the full cost for "cheap" oil it ain't worth it

checkyoursudo 4y ago

I have occasionally thought about so-called "economic uncertainty" over the last couple of years. When I was in undergrad a long time ago, I had a course that touched on cultural differences. One of the claims was that a significant difference between, for example, American culture and several Asian cultures was that Americans tended to be okay with high uncertainty, while Asians preferred low uncertainty. (Let me say for the record that I have no idea if this is true or not; just something I came across in university.) While the thesis was that this difference held true across many aspects of life, one possible implication was that Americans tended to be more innovative and risk-taking, while Asians tended to be more risk-averse (and conservative in approach) and less likely to fail when finally making an attempt. Maybe this was like "easier to ask forgiveness than permission" versus "look before you leap" mentalities. Then suddenly in the past 5 or 10 years, I have heard and read so many American business leaders and pundits whining and warning about uncertainty in the business climate. Taxes, regulations, supply chains, demand risks, or whatever else, I don't even know. I mean, I understand that uncertainty is a massive risk for entrenched incumbents and stodgey old behemoths, but I have occasionally wondered where the spirit of innovation, risk-taking, and, as TFA discusses, adaptability has gone. (It's all gone to start-ups, of course; maybe?)

fxtentacle 4y ago
I believe you're on to something here. I also heard that research and small startups in the US (and west in general) tend to take on more risk for potentially higher rewards. But companies for years have outsourced everything from production to research to product development. And those contract developers both are culturally risk-averse and they also have strong financial incentives to take on only the minimum of risk necessary to get paid for their research contract. And that's why the innovation speed of large US companies is limited by risk-reduction in Asia.
ZeroGravitas 4y ago
You can turn most high-uncertainty situations into low-uncertainty situations via simple mechanisms like insurance. But, some people don't like that, they feel that admitting their successes, and others failures, were partly just random chance, takes away from their feeling of control over their lives and so strongly need to believe they succeeded due to their own efforts (which in their mind helps to guarantee their future luck/success). So the argument was probably really about how much you should remove the uncertainty post-facto, and highly reward the winners and punish the losers, and the high-uncertainty angle was likely pushed by people who had already got lucky, and/or people who thought they would and so wouldn't suffer the consequences. The next generation has to run that experiment again, and learn the lesson anew.
andrekandre 4y ago
> while Asians tended to be more risk-averse that teacher should visit china someday; people aren't afraid to take risks when it comes to entrepreneurship... and japan in the bubble days was quite wild with all kinds of risk taking as well...

qikInNdOutReply 4y ago

We cant have market economics anymore. We transfered tasks of the state (provide social security|pensions) to large private entitys. Making them by virtue of job fiscal conservative and oligopoly entrenched. Meaning, the state has no interest to disturb there rule over whole sectors of industry. These are basically comand economics in disguise and they will adapt to new things only if they replace there milking cows and they have to buy them. Turns out you can infect the free market with the state, by overreaching and kill it.

sharemywin 4y ago
Is there really such things as a free market?

scotty79 4y ago

I always found it annoying that people are afraid to as much as fart if it might harm the economy. The main advantage of free(ish) market economy is that it has ability to adapt to changing conditions. The main superpower of companies is that they can die and their people and assets can be used by other better adapted companies.

andrekandre 4y ago
> I always found it annoying that people are afraid to as much as fart if it might harm the economy. its because its inherently political: if things go bad, regardless if its "the biz cycle" or rampant speculation and bubbles, the president (and/or political party) usually gets blamed for it... also most peoples retirements are tied up in the private markets now, so there is immense pressure to keep the returns flowing

leroman 4y ago

Electric cars are coming. The power dynamics in the oil and energy world is changing.. Maybe adaptability needs to mean also a contracting economy? Who said overall profits in a world with more reliable components and less waste, is overall larger? (Say after the electrification transition is mostly said and done) Anyway, economy as it is structured now cant handle automation, slowing / declining population, more responsible usage of natural resources etc.. Or otherwise how can it rely on keeping borrowing from the future and leveraging future gains, as the economy is structured right now?