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This ignores the opportunity cost of a more productive business throughout the time period of the low efficiency business: one that may hire more workers and pr

This ignores the opportunity cost of a more productive business throughout the time period of the low efficiency business: one that may hire more workers and provide more value to potential customers in the locality it serves. Under this comparison, the foolishness of an investor has resulted in a comparative net loss for themselves and the community.

para_parolu 3y ago
Who defines more productive business? Maybe car wash is a good business for people to work for in some period of live. USSR tries to optimize business from top but selecting what would be produced and how much. Didn’t work well for community or customers.
- pixl97 3y ago
  And late stage capitalism with boom/bust cycles is good for the community and customers too? At least for the 1% it's doing great. The point is that a "Local" government deciding on how many of one kind of business shows up in one spot isn't optimizing from the top (you could consider that the state or federal government). Instead you could consider it optimizing it from the middle. The local people are electing officials and having them implement their will. Trying to call that communism would be... odd.
  - I-M-S 3y ago
    The way most municipal councillors in English-speaking countries optimize everything to retain homeowner's real estate value while keeping property taxes low doesn't exactly imbue confidence.
  - gameman144 3y ago
    Are boom/bust cycles unique to capitalism? China is going through a pretty big bust and is hardly a capitalist role model.
    - paulryanrogers 3y ago
      Is China not a capitalist country? It does not appear to be a heavily planned economy, at least not in the past few decades.
      - oreally 3y ago
        Yes it is ever since it opened up, granting some exceptions to inwardness, recent bits of geopolitics and socialist moves.
  - int_19h 3y ago
    Having lived in the USSR, I certainly prefer late stage capitalism.
throwaway22032 3y ago
Yes, and the entire point of capitalism and why it succeeds so well is that the individual profit motive is enough for investors to, in aggregate, not invest in low efficiency businesses. As opposed to a central planning model in which a foolish planner can cock up the entire thing because they are usually far less accountable for failure and recieve little reward for success other than continued survival.
henriquez 3y ago
So you’re advocating a Chinese Communist Party model or what? A central authority determines what the market should be vs. what the market _is?_
- BriggyDwiggs42 3y ago
  I wish people wouldn’t say that any market interference is communism as though the US isnt Keynesian while simultaneously pretending china is even close to communist.
- pixl97 3y ago
  It's kind of funny listening to the silly things free market maximalists tend to say.... "Local people electing a local government choosing what gets built locally is communism"
  - henriquez 3y ago
    I’m not a free market maximalist. I just don’t see how some random local politician is more qualified to determine how many car washes are permissible than local business owners who have bought and permitted car wash businesses. And for whatever it’s worth there aren’t nearly enough car washes where I live.
    - muti 3y ago
      A politician may be more or less qualified than the business owner, but they don't have the obvious conflict of interest and are more likely to act in the interest of the locality as a whole
  - Newlaptop 3y ago
    You should live in a country without a culture and legal framework for competitive markets, or try to talk to someone first hand who has such experience. I suspect you're a good person who just misunderstands how markets and individual rights interconnect. If the local government can simply declare "there are enough X, no more are allowed" then the rich, powerful and well-connected elite can solidify their privileged positions forever. Raise prices, lower wages, provide poor service - it doesn't matter, their buddies on the city council will guarantee no one is allowed to open a competing business. If you want to protect the lower class and middle class, you don't want to hand the elite a tool to turn their business into a local monopoly for the price of a campaign contribution.
bluGill 3y ago
Nothing else solves that problem either. Sure you can pass the buck from investors to someone else, but they also don't know what is correct. Everyone is guessing - they often have various evidence but it is never complete enough to be 100% confident in your decisions and so there is always someone guessing. The difference is here the people making the guess are also taking on the risk of what if they are wrong. When someone else makes the decision they don't have the risk and thus less incentive to get it right. Also that "someone" making the decision tends to be making a lot of decisions and so are unlikely to spend enough time researching it, or alternatively since they don't feel any pain they will spend far too much time on research. (there is no objective way to say what is enough time in research)

para_parolu 3y ago

Who defines more productive business? Maybe car wash is a good business for people to work for in some period of live. USSR tries to optimize business from top but selecting what would be produced and how much. Didn’t work well for community or customers.

pixl97 3y ago
And late stage capitalism with boom/bust cycles is good for the community and customers too? At least for the 1% it's doing great. The point is that a "Local" government deciding on how many of one kind of business shows up in one spot isn't optimizing from the top (you could consider that the state or federal government). Instead you could consider it optimizing it from the middle. The local people are electing officials and having them implement their will. Trying to call that communism would be... odd.
- I-M-S 3y ago
  The way most municipal councillors in English-speaking countries optimize everything to retain homeowner's real estate value while keeping property taxes low doesn't exactly imbue confidence.
- gameman144 3y ago
  Are boom/bust cycles unique to capitalism? China is going through a pretty big bust and is hardly a capitalist role model.
  - paulryanrogers 3y ago
    Is China not a capitalist country? It does not appear to be a heavily planned economy, at least not in the past few decades.
    - oreally 3y ago
      Yes it is ever since it opened up, granting some exceptions to inwardness, recent bits of geopolitics and socialist moves.
- int_19h 3y ago
  Having lived in the USSR, I certainly prefer late stage capitalism.

throwaway22032 3y ago

Yes, and the entire point of capitalism and why it succeeds so well is that the individual profit motive is enough for investors to, in aggregate, not invest in low efficiency businesses. As opposed to a central planning model in which a foolish planner can cock up the entire thing because they are usually far less accountable for failure and recieve little reward for success other than continued survival.

henriquez 3y ago

So you’re advocating a Chinese Communist Party model or what? A central authority determines what the market should be vs. what the market _is?_

BriggyDwiggs42 3y ago
I wish people wouldn’t say that any market interference is communism as though the US isnt Keynesian while simultaneously pretending china is even close to communist.
pixl97 3y ago
It's kind of funny listening to the silly things free market maximalists tend to say.... "Local people electing a local government choosing what gets built locally is communism"
- henriquez 3y ago
  I’m not a free market maximalist. I just don’t see how some random local politician is more qualified to determine how many car washes are permissible than local business owners who have bought and permitted car wash businesses. And for whatever it’s worth there aren’t nearly enough car washes where I live.
  - muti 3y ago
    A politician may be more or less qualified than the business owner, but they don't have the obvious conflict of interest and are more likely to act in the interest of the locality as a whole
- Newlaptop 3y ago
  You should live in a country without a culture and legal framework for competitive markets, or try to talk to someone first hand who has such experience. I suspect you're a good person who just misunderstands how markets and individual rights interconnect. If the local government can simply declare "there are enough X, no more are allowed" then the rich, powerful and well-connected elite can solidify their privileged positions forever. Raise prices, lower wages, provide poor service - it doesn't matter, their buddies on the city council will guarantee no one is allowed to open a competing business. If you want to protect the lower class and middle class, you don't want to hand the elite a tool to turn their business into a local monopoly for the price of a campaign contribution.

bluGill 3y ago

Nothing else solves that problem either. Sure you can pass the buck from investors to someone else, but they also don't know what is correct. Everyone is guessing - they often have various evidence but it is never complete enough to be 100% confident in your decisions and so there is always someone guessing. The difference is here the people making the guess are also taking on the risk of what if they are wrong. When someone else makes the decision they don't have the risk and thus less incentive to get it right. Also that "someone" making the decision tends to be making a lot of decisions and so are unlikely to spend enough time researching it, or alternatively since they don't feel any pain they will spend far too much time on research. (there is no objective way to say what is enough time in research)