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Your understanding of the practical and philosophical backing for capitalism is limited and reads more like an Econ 101 description of perfectly competitive mar

Your understanding of the practical and philosophical backing for capitalism is limited and reads more like an Econ 101 description of perfectly competitive markets than anything else. If you would like to learn more you could read Joseph Schumpeter’s Capitalism, Socialism and Democracy[1] or Deirdre McCloskey’s Bourgeois Virtues[2] [1] http://libgen.is/book/index.phpmd5=21EE8F203D5C3F9530D55985B805A4F9 http://libgen.is/book/index.phpmd5=21EE8F203D5C3F9530D55985B... [2] https://press.uchicago.edu/ucp/books/book/chicago/B/bo3750637.html https://press.uchicago.edu/ucp/books/book/chicago/B/bo375063...

danbruc 3y ago
Read a book is not a very helpful response in a discussion. Why do you not just state your position or point out a concrete flaw in mine or a disagreement with it? Until now you have not actually said anything substantial. Do you think the system is working well if 90 percent of your revenue is profit? Do you think competitive markets are not an important part of a capitalistic system? Do you want to say that zero profits only holds in equilibrium?
- barry-cotter 3y ago
  You have confused the equilibrium state of perfect competition and knowledge in frictionless markets with how dynamic markets work. In a properly working market in real life there will sometimes be large profit opportunities. Then someone will notice them and exploit them and eventually someone else will enter the same market niche and compete, eventually reducing economic profits to something approaching the rate of interest. This is very far from profits should be zero and everyone earns the same. In a market with no market imperfections, completely interchangeable goods and no market power from either buyers or sellers there will be no economic profits. Even in this toy market participants will earn more or less depending on how much capital they have. Zero economic profit holds only in equilibrium and there are no markets where equilibrium ever holds for long because the global and local economy is constantly in flux and entrepreneurs are constantly trying to find new ways to solve old problems cheaper or new markets or ways to solve a problem when one of the inputs suddenly dectupled in price. The system is working well if 90% of revenue is profit at pip squeak levels, yes. If Microsoft could manage 90% profit margins on billions of dollars of working capital that would be concerning. Individuals or small companies finding tiny market imperfections and becoming wildly rich exploiting them is the system working, incentivising people to produce value. Schumpeter: Entrepreneurs make new things and that’s great. Outside capitalism those people turn that energy into taking more of the pie, as warlords or tax farmers. Capitalism is better. McCloskey: Capitalism is good because it inculcates patience, diligence and tolerance in people.

danbruc 3y ago

Read a book is not a very helpful response in a discussion. Why do you not just state your position or point out a concrete flaw in mine or a disagreement with it? Until now you have not actually said anything substantial. Do you think the system is working well if 90 percent of your revenue is profit? Do you think competitive markets are not an important part of a capitalistic system? Do you want to say that zero profits only holds in equilibrium?

barry-cotter 3y ago
You have confused the equilibrium state of perfect competition and knowledge in frictionless markets with how dynamic markets work. In a properly working market in real life there will sometimes be large profit opportunities. Then someone will notice them and exploit them and eventually someone else will enter the same market niche and compete, eventually reducing economic profits to something approaching the rate of interest. This is very far from profits should be zero and everyone earns the same. In a market with no market imperfections, completely interchangeable goods and no market power from either buyers or sellers there will be no economic profits. Even in this toy market participants will earn more or less depending on how much capital they have. Zero economic profit holds only in equilibrium and there are no markets where equilibrium ever holds for long because the global and local economy is constantly in flux and entrepreneurs are constantly trying to find new ways to solve old problems cheaper or new markets or ways to solve a problem when one of the inputs suddenly dectupled in price. The system is working well if 90% of revenue is profit at pip squeak levels, yes. If Microsoft could manage 90% profit margins on billions of dollars of working capital that would be concerning. Individuals or small companies finding tiny market imperfections and becoming wildly rich exploiting them is the system working, incentivising people to produce value. Schumpeter: Entrepreneurs make new things and that’s great. Outside capitalism those people turn that energy into taking more of the pie, as warlords or tax farmers. Capitalism is better. McCloskey: Capitalism is good because it inculcates patience, diligence and tolerance in people.