4 ms·

That's the part I don't understand capitalism: on one hand, big corps try to save every dime by downsizing and outsourcing, and on the other hand, they pour mon

That's the part I don't understand capitalism: on one hand, big corps try to save every dime by downsizing and outsourcing, and on the other hand, they pour money like this.

mike_herrera 14y ago
It's a control issue under the guise of a cost-saving effort. Contractors and vendors are easier to hire and fire compared to employees. Generous advances in worker productivity mean that the same permanent internal workforce is no longer required.
obviouslygreen 14y ago
That's not capitalism, it's poor valuation, managerial inefficiency/stupidity, and fad/reaction behavior (among other things, I'm sure). It's counterintuitive, counterproductive, a massive waste, contrary to the penny-pinching you mention, and obtuse. It's also just kind of how people are. You can't reasonably expect a large corporation -- which is just a big group of people who are all trying to make decisions and getting in each other's way -- to be able to make logical choices when they're subject to every large stakeholder's whim and every bit of incompetence that happens everywhere along the line. Is it happening in a capitalist setting here? Yes. But it happens in all settings all over the world, so to suggest it's unique to this system ignores the actual nature of the issue (which is the Human Condition).
- Florin_Andrei 14y ago
  Just be careful to not fall into the "if it's good, it's Capitalism, if it's bad, it's human nature" fallacy.
roc 14y ago
It's all just incentives. The downsizing and outsourcing is driven by incentives to remove cost from the balance sheet. If there's no incentive to do so wisely, if there's no disincentive against doing so poorly, people will inevitably make bad 'outsourcing' deals, just to have made them. Quality might take a hit, direct billings might skyrocket, products might have to be scrapped, etc. But if you don't fix the incentives, it will happen over and over. Similarly, if you incentivize a person to make deals, if they have a stronger incentive to make deals than to make good deals (e.g. if they have no effective disincentive against making bad deals) bad deals will get made.

That's the part I don't understand capitalism: on one hand, big corps try to save every dime by downsizing and outsourcing, and on the other hand, they pour money like this.

mike_herrera 14y ago

It's a control issue under the guise of a cost-saving effort. Contractors and vendors are easier to hire and fire compared to employees. Generous advances in worker productivity mean that the same permanent internal workforce is no longer required.

obviouslygreen 14y ago

That's not capitalism, it's poor valuation, managerial inefficiency/stupidity, and fad/reaction behavior (among other things, I'm sure). It's counterintuitive, counterproductive, a massive waste, contrary to the penny-pinching you mention, and obtuse. It's also just kind of how people are. You can't reasonably expect a large corporation -- which is just a big group of people who are all trying to make decisions and getting in each other's way -- to be able to make logical choices when they're subject to every large stakeholder's whim and every bit of incompetence that happens everywhere along the line. Is it happening in a capitalist setting here? Yes. But it happens in all settings all over the world, so to suggest it's unique to this system ignores the actual nature of the issue (which is the Human Condition).

Florin_Andrei 14y ago
Just be careful to not fall into the "if it's good, it's Capitalism, if it's bad, it's human nature" fallacy.

roc 14y ago

It's all just incentives. The downsizing and outsourcing is driven by incentives to remove cost from the balance sheet. If there's no incentive to do so wisely, if there's no disincentive against doing so poorly, people will inevitably make bad 'outsourcing' deals, just to have made them. Quality might take a hit, direct billings might skyrocket, products might have to be scrapped, etc. But if you don't fix the incentives, it will happen over and over. Similarly, if you incentivize a person to make deals, if they have a stronger incentive to make deals than to make good deals (e.g. if they have no effective disincentive against making bad deals) bad deals will get made.