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If someone wants to buy a company and liquidate it, that's up to them. If they make a profit then they're actually adding value. If they don't they will soon st

If someone wants to buy a company and liquidate it, that's up to them. If they make a profit then they're actually adding value. If they don't they will soon stop. Doing it via fees and loans is no different to just a straight liquidation as far as I can see. And since all the owners/investors are willingly taking part of they lose their money, that's on them. It's sad that people's jobs get eliminated. But we have accepted (for good reason) that jobs are never guaranteed. So that's life. Everything else here is basically just fear-mongering.

throwawayqqq11 3y ago
The main point of this article is the conflicting interests of greedy managers. > If they make a profit then they're actually adding value. Martin Skrelli. [0] Please tell me what and where his added value is. And please no fear mongering about the rich getting poorer. [0] https://en.m.wikipedia.org/wiki/Martin_Shkreli https://en.m.wikipedia.org/wiki/Martin_Shkreli
- LatteLazy 3y ago
  The value is in the resources of the company being liquidated. Right now, those resources are being used to produce $X per year in profit. But if we sold them all, and just put the cash in a bank we could get $Y in interest. Make sense? If Y>X then the best thing to do is liquidate the company. An example might help: imagine you have a steel mill, and it makes just $1000 a year. Someone from Canada comes to you and says "I'll give you 50m for the mill, I want to take all the equipment to Canada where there is a shortage of steel". He will fulfil more demand at a better price by doing that (hence he will offer 50m for a steel mill that only makes a pittance in the USA). And you can't ake the 50mil and build something people actually need (like a refinery since gas prices are really high etc). Does that make sense? It's about allocating resources. And stopping them being allocated to things people won't actually pay for (steel production when no one wants steel) so that they can be allocated to things people do want (more gas during a gas shortage). Resource allocation is actually really really critical both in general and in high efficiency, capital intensive economies like ours. Doing this well is basically why capitalism beats communism in terms of growth. Obviously profit is not everything. And we should help people made unemployed. But continuing to waste resources just makes everyone poorer. It's just quite an oblique way of doing what amounts to central planning but with no need for a single centre and doing it faster and smarter...
  - boppo1 3y ago
    Yeah, but this fell apart when the FOMC killed price discovery for 15 odd years. 'Profit' is not helpful to society, the goods and services it reflects is. When you tilt the pinball table so companies that make nothing and promise the future are valuable (theranos, wework, TSLA for a long time, anything Kathy Wood buys) while under-valuing companies that make and do stuff now, you wind up hollowing out the use of resources on real things people need and spending it on stuff like NFTs. How many billions has google spent on projects that never saw the light of day? How many hospitals and bridge repairs could we have had for that money? Benchmark rate intervention is hailed as saving the economy from crises, but all it did was prop up the paper-value of people's retirement funds while suffocating businesses that actually make and do useful stuff.
    - LatteLazy 3y ago
      I don't necessarily disagree with a lot of what you say. I think it just fails to see the wider system. For instance when you said "profit is not helpful to society" you were correct. But profit is the reward people get for doing things useful to society. It's the signal that the things they are doing ARE useful. And profit pays to continue and expand those actions. A more general theme is your distinction between "real" things and the alternative. You're not wrong an NFT is a total waste of time in my opinion. But if people actually want NFTs more than steel, that is ok. Give them NFTs. And many many people DO want those things. (There is something ironic that we have ended up here as the ussr concentrated on metrics like steel production while people grew more and more discontented because they wanted vacuous things like jeans and washing machines, not steel...). That is not the fault of the profit motive or the market or capitalism. That's people wanting the "wrong" things. That won't change under any other system...
      - boppo1 3y ago
        >That's people wanting the "wrong" things. That won't change under any other system... Do you know what the FOMC is/does?
  - ceejayoz 3y ago
- multicast 3y ago
  > Please tell me what and where his added value is. And please no fear mongering about the rich getting poorer. Daraprim is a very old drug used by about 2k people in the US! So the narratives by the media that gives one the feeling he kills millions is wrong. 97% in the US have health insurance + you get depending on the state your living in an extra charge by the IRS if you don't have one. Martin Shkreli gave the drug away for free if a person could proof that they could not afford it. People are still dying because of daraprim every few years. But as I said it is a very old drug and has not improved since its inception in the 50s. The price hike had not the goal that he and his investors could get rich quick (which would be there right as free human beings). The research of a drug and especially the clinical trails can cost several hundred millions of dollars, thus a price hike was necessary to discover a new and better form of daraprim. There is a reason that rare disease drug sometimes cost a few 100k when only a handful of people need it. Pharma is a long term game. He can sell daraprim for much more in the future than the $750 of the current version. In the long run he and his investors profit enormously but also the patients that need it since it is more safe. When you develop a live saving drug, that only 2k people use, you have the right to charge whatever price you desire. People need to see that pharma is a business like any else and is not excluded from free-market and capitalistic principles. Ìn addition, once you had your daraprim course you are fully healed - you "loose" the customer. Therefore a high price is needed even more to offset the cost and to profit. Pharma companies put private resources into effort (capital, infrastructure, expertise etc.) for developing a rare disease drugs. Nobody has the right to demand anything from them nor condemn them.
game_the0ry 3y ago
You fail to see how parasitic modern US capitalism has become. US capitalism has been extremely productive but the gains in productivity have disproportionally distributed to shareholders, and employees got the short end of the stick. [1] And this isn't capitalism problem btw. This is a corporate culture problem. [1] https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/
- LatteLazy 3y ago
  I don't fail to see that, I just think it's an entirely different problem, with a solution unrelated to this issue. I agree about the current corpocracy. If people want a nonparasitic system, they need to implement a tax system that supports that. Permitting or banning or any other restriction on private equity won't solve inequality. Redistribution of capital, education and healthcare, proper infrastructure and more opportunity in general will.
bigbillheck 3y ago
> If someone wants to buy a company and liquidate it, that's up to them. Maybe it shouldn't be.
- georgeecollins 3y ago
  The issue is that if the legal and tax incentives are skewed to liquidate the company rather than save it then people will naturally have that preference. I worry that is not great for the working class in this country.

throwawayqqq11 3y ago

The main point of this article is the conflicting interests of greedy managers. > If they make a profit then they're actually adding value. Martin Skrelli. [0] Please tell me what and where his added value is. And please no fear mongering about the rich getting poorer. [0] https://en.m.wikipedia.org/wiki/Martin_Shkreli https://en.m.wikipedia.org/wiki/Martin_Shkreli

LatteLazy 3y ago
The value is in the resources of the company being liquidated. Right now, those resources are being used to produce $X per year in profit. But if we sold them all, and just put the cash in a bank we could get $Y in interest. Make sense? If Y>X then the best thing to do is liquidate the company. An example might help: imagine you have a steel mill, and it makes just $1000 a year. Someone from Canada comes to you and says "I'll give you 50m for the mill, I want to take all the equipment to Canada where there is a shortage of steel". He will fulfil more demand at a better price by doing that (hence he will offer 50m for a steel mill that only makes a pittance in the USA). And you can't ake the 50mil and build something people actually need (like a refinery since gas prices are really high etc). Does that make sense? It's about allocating resources. And stopping them being allocated to things people won't actually pay for (steel production when no one wants steel) so that they can be allocated to things people do want (more gas during a gas shortage). Resource allocation is actually really really critical both in general and in high efficiency, capital intensive economies like ours. Doing this well is basically why capitalism beats communism in terms of growth. Obviously profit is not everything. And we should help people made unemployed. But continuing to waste resources just makes everyone poorer. It's just quite an oblique way of doing what amounts to central planning but with no need for a single centre and doing it faster and smarter...
- boppo1 3y ago
  Yeah, but this fell apart when the FOMC killed price discovery for 15 odd years. 'Profit' is not helpful to society, the goods and services it reflects is. When you tilt the pinball table so companies that make nothing and promise the future are valuable (theranos, wework, TSLA for a long time, anything Kathy Wood buys) while under-valuing companies that make and do stuff now, you wind up hollowing out the use of resources on real things people need and spending it on stuff like NFTs. How many billions has google spent on projects that never saw the light of day? How many hospitals and bridge repairs could we have had for that money? Benchmark rate intervention is hailed as saving the economy from crises, but all it did was prop up the paper-value of people's retirement funds while suffocating businesses that actually make and do useful stuff.
  - LatteLazy 3y ago
    I don't necessarily disagree with a lot of what you say. I think it just fails to see the wider system. For instance when you said "profit is not helpful to society" you were correct. But profit is the reward people get for doing things useful to society. It's the signal that the things they are doing ARE useful. And profit pays to continue and expand those actions. A more general theme is your distinction between "real" things and the alternative. You're not wrong an NFT is a total waste of time in my opinion. But if people actually want NFTs more than steel, that is ok. Give them NFTs. And many many people DO want those things. (There is something ironic that we have ended up here as the ussr concentrated on metrics like steel production while people grew more and more discontented because they wanted vacuous things like jeans and washing machines, not steel...). That is not the fault of the profit motive or the market or capitalism. That's people wanting the "wrong" things. That won't change under any other system...
    - boppo1 3y ago
      >That's people wanting the "wrong" things. That won't change under any other system... Do you know what the FOMC is/does?
- ceejayoz 3y ago
multicast 3y ago
> Please tell me what and where his added value is. And please no fear mongering about the rich getting poorer. Daraprim is a very old drug used by about 2k people in the US! So the narratives by the media that gives one the feeling he kills millions is wrong. 97% in the US have health insurance + you get depending on the state your living in an extra charge by the IRS if you don't have one. Martin Shkreli gave the drug away for free if a person could proof that they could not afford it. People are still dying because of daraprim every few years. But as I said it is a very old drug and has not improved since its inception in the 50s. The price hike had not the goal that he and his investors could get rich quick (which would be there right as free human beings). The research of a drug and especially the clinical trails can cost several hundred millions of dollars, thus a price hike was necessary to discover a new and better form of daraprim. There is a reason that rare disease drug sometimes cost a few 100k when only a handful of people need it. Pharma is a long term game. He can sell daraprim for much more in the future than the $750 of the current version. In the long run he and his investors profit enormously but also the patients that need it since it is more safe. When you develop a live saving drug, that only 2k people use, you have the right to charge whatever price you desire. People need to see that pharma is a business like any else and is not excluded from free-market and capitalistic principles. Ìn addition, once you had your daraprim course you are fully healed - you "loose" the customer. Therefore a high price is needed even more to offset the cost and to profit. Pharma companies put private resources into effort (capital, infrastructure, expertise etc.) for developing a rare disease drugs. Nobody has the right to demand anything from them nor condemn them.

game_the0ry 3y ago

You fail to see how parasitic modern US capitalism has become. US capitalism has been extremely productive but the gains in productivity have disproportionally distributed to shareholders, and employees got the short end of the stick. [1] And this isn't capitalism problem btw. This is a corporate culture problem. [1] https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/

LatteLazy 3y ago
I don't fail to see that, I just think it's an entirely different problem, with a solution unrelated to this issue. I agree about the current corpocracy. If people want a nonparasitic system, they need to implement a tax system that supports that. Permitting or banning or any other restriction on private equity won't solve inequality. Redistribution of capital, education and healthcare, proper infrastructure and more opportunity in general will.

bigbillheck 3y ago

> If someone wants to buy a company and liquidate it, that's up to them. Maybe it shouldn't be.

georgeecollins 3y ago
The issue is that if the legal and tax incentives are skewed to liquidate the company rather than save it then people will naturally have that preference. I worry that is not great for the working class in this country.