5 ms·

Because capitalism has weaknesses and this is one of them. Markets will drift towards efficiency without considering externalities. Markets will not drift towar

by tyre 2y ago

Because capitalism has weaknesses and this is one of them. Markets will drift towards efficiency without considering externalities. Markets will not drift towards strategic manufacturing capacity at a higher cost per unit produced without government intervention (subsidies, tariffs.) So corporations and consumers outsourced because quantity at price beat quality and strategic concerns.

cjbgkagh 2y ago
What we have is more corporatism than capitalism - the markets are busy working with governments and setting up rackets to extract monopolistic rents. I don't have much experience with China but from my vantage point it does appear that there is quite a lot of competition between companies that does not seem to exist in the US to the same extent.
- cyberax 2y ago
  Uhm. Monopolism is the ultimate fate of unrestricted capitalism in established markets.
  - panick21_ 2y ago
    A claim made by socialist 200 years ago and yet it hasn't actually happened. And the minor amount of 'anti-monopoly' action taken by governments is hard to credit for that. The reality is that a monopoly is incredibly hard to sustain without government. And even in the cases where something close to it can be created, they can seldomly really push up the price as much as they think. Historically its governments creating the monopolies most of the time.
    - cyberax 2y ago
      > A claim made by socialist 200 years ago and yet it hasn't actually happened. It kinda did. Large stagnant industries tend to collapse into monopolies. However, this was masked either by new more nimble companies pushing out the incumbents by utilizing newer technologies, or by industries fading away entirely.
      - panick21_ 2y ago
        So it did but it actually didn't because of literally all the reasons people said it wouldn't. Sure if you remove new competition and technology then its more likely to happen. Defining monopoly is pretty hard in the first place. Only Will Smith can play Will Smith. Or is he in a market against all black actors? Or all actors? Or is it he also competing against the NBA/NFL? If a single company exist to provide some service in a small town, is that company a monopoly. If a company dominates a market for a decade+, is that a monopoly? There is a question of time. One can answers these question different ways. And even if they are monopoly, sometimes that is not a actually a problem. There are certainty some cases where some monopoly exist and are harmful. Mostly those are created by governments. However one can certainty have harmful situation in a relatively free market as well. But I think the argument that there was ever a case to be made that the Marxist idea of all companies merging in a single mega cooperation has never even been remotely true. And you have industries that are reasonably unregulated (in terms of market entry) and still have lots of competition. So the facts are 100% for sure much more complex then Marx and those that claim 'Capitalism always leads to centralization' believe. Or at least if it does it operates at timescales that makes it unclear that we should act on their recommendations. Often Standard Oil is the best example people can come up with and they are not even remotely close to taking over much outside of their specialty. Of course the whole discussion gets even more complex once multiple government (and cultures, and geographies, and climates and so on) are involved and we aren't taking about a single unified market.
- immibis 2y ago
  That's the result of capitalism, though. What else would the markets do? A corporation would be extremely stupid not to do these things. You can't have one without the other. And if the government was somehow incorruptible, as long as there was capitalism, corporations would still do their best to corrupt it.
  - cjbgkagh 2y ago
    Large governments increase the agency effect and incentive for corruption. Many smaller governments operating as a federation decrease both of these. It gets to a point where it isn’t worth the effort or risk to try to corrupt the government because you would have to bribe too many people and the payoff is too low.
- de_layer 2y ago
  [flagged]
eru 2y ago
> Markets will drift towards efficiency without considering externalities. Markets will not drift towards strategic manufacturing capacity at a higher cost per unit produced without government intervention (subsidies, tariffs.) Well, and why would we expect them to take that into account? Btw, there are good and (mostly) bad ways to do these interventions. Tariffs are especially bad. A lot of the discussion of these measures also treats all foreigners the same. Eg in practice a chip being produced in eg Canada is virtually as good for national security as one produced in the US. But acts like the 'CHIPS and Science Act' don't see it that way.
- schmidtleonard 2y ago
  Yes, tariffs are especially bad if you want to get paid big bucks for the genius business plan of overseeing labor and environmental arbitrage. The US industrialized itself with tariffs and deindustrialized itself by removing them.
  - eru 2y ago
    If restrictions to trade are so great, why do nations inevitably try to blockade each others ports in a war? Shouldn't that just help the other guy's economy prosper?
    - schmidtleonard 2y ago
      If a massage is so great, why not crush your torso in a hydraulic press? Shouldn't that just be a better massage?
      - eru 2y ago
        I interpret your quip as saying that you approve of carefully measured and dosed protectionism?
MaxPock 2y ago
"Markets will drift towards efficiency" Isn't this actually one of the benefits of capitalism ? Either you let capitalism allocate capital or you let the government -which makes you a communist.
- trashtensor 2y ago
  > Isn't this actually one of the benefits of capitalism ? Is it a benefit if that efficiency turns your industrialized economy into a financialized economy that can't manufacture enough bullets to fight a war that you start?
- DeathArrow 2y ago
  Capitalism and corporatism is not the same. Corporatism is a bit socialist in it's essence. In classical capitalism, there aren't two or three monopolistic players that dominate each industry, there are thousands of companies competing with each other. And that competition brings costs down, so no outsourcing is needed.
  - schmidtleonard 2y ago
    Nope. That's not at all what those terms mean. Capitalism is not "when competition," and socialism is not "when no competition." Capitalism = private ownership of means of production Socialism = collective ownership of means of production Capitalist monopolies are privately owned. A monopoly is no less privately owned than a minor company in a sector with healthy competition, and there is nothing remotely collective about a monopoly. A lack of competition does not in any way mean that "the people" own the organization. Not theoretically, and not actually. Collectively owned socialist enterprises are not necessarily free of competition. In fact, heated competition over quotas had a lot to do with many of socialism's worst blunders. Competition does not remotely guarantee that costs are low by international standards either.
  - dragonwriter 2y ago
    > Corporatism is a bit socialist in it's essence. They are orthogonal; it is possible to have socialist corporatism, but there is nothing inherently socialist about corporatism (or inherently corporatist about socialism.)

by tyre 2y ago

cjbgkagh 2y ago

What we have is more corporatism than capitalism - the markets are busy working with governments and setting up rackets to extract monopolistic rents. I don't have much experience with China but from my vantage point it does appear that there is quite a lot of competition between companies that does not seem to exist in the US to the same extent.

cyberax 2y ago
Uhm. Monopolism is the ultimate fate of unrestricted capitalism in established markets.
- panick21_ 2y ago
  A claim made by socialist 200 years ago and yet it hasn't actually happened. And the minor amount of 'anti-monopoly' action taken by governments is hard to credit for that. The reality is that a monopoly is incredibly hard to sustain without government. And even in the cases where something close to it can be created, they can seldomly really push up the price as much as they think. Historically its governments creating the monopolies most of the time.
  - cyberax 2y ago
    > A claim made by socialist 200 years ago and yet it hasn't actually happened. It kinda did. Large stagnant industries tend to collapse into monopolies. However, this was masked either by new more nimble companies pushing out the incumbents by utilizing newer technologies, or by industries fading away entirely.
    - panick21_ 2y ago
      So it did but it actually didn't because of literally all the reasons people said it wouldn't. Sure if you remove new competition and technology then its more likely to happen. Defining monopoly is pretty hard in the first place. Only Will Smith can play Will Smith. Or is he in a market against all black actors? Or all actors? Or is it he also competing against the NBA/NFL? If a single company exist to provide some service in a small town, is that company a monopoly. If a company dominates a market for a decade+, is that a monopoly? There is a question of time. One can answers these question different ways. And even if they are monopoly, sometimes that is not a actually a problem. There are certainty some cases where some monopoly exist and are harmful. Mostly those are created by governments. However one can certainty have harmful situation in a relatively free market as well. But I think the argument that there was ever a case to be made that the Marxist idea of all companies merging in a single mega cooperation has never even been remotely true. And you have industries that are reasonably unregulated (in terms of market entry) and still have lots of competition. So the facts are 100% for sure much more complex then Marx and those that claim 'Capitalism always leads to centralization' believe. Or at least if it does it operates at timescales that makes it unclear that we should act on their recommendations. Often Standard Oil is the best example people can come up with and they are not even remotely close to taking over much outside of their specialty. Of course the whole discussion gets even more complex once multiple government (and cultures, and geographies, and climates and so on) are involved and we aren't taking about a single unified market.
immibis 2y ago
That's the result of capitalism, though. What else would the markets do? A corporation would be extremely stupid not to do these things. You can't have one without the other. And if the government was somehow incorruptible, as long as there was capitalism, corporations would still do their best to corrupt it.
- cjbgkagh 2y ago
  Large governments increase the agency effect and incentive for corruption. Many smaller governments operating as a federation decrease both of these. It gets to a point where it isn’t worth the effort or risk to try to corrupt the government because you would have to bribe too many people and the payoff is too low.
de_layer 2y ago
[flagged]

eru 2y ago

> Markets will drift towards efficiency without considering externalities. Markets will not drift towards strategic manufacturing capacity at a higher cost per unit produced without government intervention (subsidies, tariffs.) Well, and why would we expect them to take that into account? Btw, there are good and (mostly) bad ways to do these interventions. Tariffs are especially bad. A lot of the discussion of these measures also treats all foreigners the same. Eg in practice a chip being produced in eg Canada is virtually as good for national security as one produced in the US. But acts like the 'CHIPS and Science Act' don't see it that way.

schmidtleonard 2y ago
Yes, tariffs are especially bad if you want to get paid big bucks for the genius business plan of overseeing labor and environmental arbitrage. The US industrialized itself with tariffs and deindustrialized itself by removing them.
- eru 2y ago
  If restrictions to trade are so great, why do nations inevitably try to blockade each others ports in a war? Shouldn't that just help the other guy's economy prosper?
  - schmidtleonard 2y ago
    If a massage is so great, why not crush your torso in a hydraulic press? Shouldn't that just be a better massage?
    - eru 2y ago
      I interpret your quip as saying that you approve of carefully measured and dosed protectionism?

MaxPock 2y ago

"Markets will drift towards efficiency" Isn't this actually one of the benefits of capitalism ? Either you let capitalism allocate capital or you let the government -which makes you a communist.

trashtensor 2y ago
> Isn't this actually one of the benefits of capitalism ? Is it a benefit if that efficiency turns your industrialized economy into a financialized economy that can't manufacture enough bullets to fight a war that you start?
DeathArrow 2y ago
Capitalism and corporatism is not the same. Corporatism is a bit socialist in it's essence. In classical capitalism, there aren't two or three monopolistic players that dominate each industry, there are thousands of companies competing with each other. And that competition brings costs down, so no outsourcing is needed.
- schmidtleonard 2y ago
  Nope. That's not at all what those terms mean. Capitalism is not "when competition," and socialism is not "when no competition." Capitalism = private ownership of means of production Socialism = collective ownership of means of production Capitalist monopolies are privately owned. A monopoly is no less privately owned than a minor company in a sector with healthy competition, and there is nothing remotely collective about a monopoly. A lack of competition does not in any way mean that "the people" own the organization. Not theoretically, and not actually. Collectively owned socialist enterprises are not necessarily free of competition. In fact, heated competition over quotas had a lot to do with many of socialism's worst blunders. Competition does not remotely guarantee that costs are low by international standards either.
- dragonwriter 2y ago
  > Corporatism is a bit socialist in it's essence. They are orthogonal; it is possible to have socialist corporatism, but there is nothing inherently socialist about corporatism (or inherently corporatist about socialism.)