5 ms·

It's precisely where the idea of a corporation comes in. How can a group of people risk so much? The only way is if it fails they don't go to prison or suffer f

It's precisely where the idea of a corporation comes in. How can a group of people risk so much? The only way is if it fails they don't go to prison or suffer for the rest of their lives because of that failure. Otherwise it would be very hard to convince people to take such enormous risks. The main "problem" with capitalistic business is in expectations. People need to realize that every day comes with risk. And only through that risk do we see reward. But the little guy working the line, he just wants a paycheck with no risk. Unfortunately there would be very little reward if that were so.

dictum 13y ago
> But the little guy working the line, he just wants a paycheck with no risk. Unfortunately there would be very little reward if that were so. The little guys working the lines usually don't have safety nets and credentials—inherited money, money from previously founded business, mentors, a reputation, or even supportive relatives—so their fear of failure is somewhat justified.
- ianstallings 13y ago
  True, but without the risk there would be no job for them to fear losing in the first place. People need to be responsible to themselves first, and a safety net is part of that. I say that knowing I just blew through $20k+ of my own safety net after going jobless for months. It's just business after all. But then again, this is why I have no qualms giving them my upsized salary demands. Because after all, it's just business. It's harsh, reality. The days of retiring with a gold watch and pension were gone long before I ever hit the market decades ago unfortunately.
  - selmnoo 13y ago
    > True, but without the risk there would be no job for them to fear losing in the first place. People need to be responsible to themselves first, and a safety net is part of that. It bugs me that it's often the poor that want free markets and cheer most for it, and shun co-op stores. The system is betraying them, they should just get away from it and focus on positive systems like co-op self-sustaining communities.
rayiner 13y ago
> And only through that risk do we see reward. But the little guy working the line, he just wants a paycheck with no risk. This is a bit of pseudo-economics that's popular in the business community nowadays. Risk can be priced, in that it costs money to shift risk to someone else and you can charge a premium for taking on risk yourself. But statements like "only through that risk do we see reward" are just mumbo-jumbo.
- ianstallings 13y ago
  Well if you can show one example where rewards come without risk I'll gladly cede my position. I just haven't experienced it myself in my life. I guess someone giving me a gift is risk free. But I wouldn't call that a reward.
  - tikhonj 13y ago
    Reward without risk is the usual definition of arbitrage. Some people make good money that way. Of course, you can construe any activity to have some risk. After all, there's always the possibility that your currency collapses, or something. However, ignoring that sort of possibility, risk is not necessary to make money in a capitalist system.
    - ianstallings 13y ago
      Hrm, a valid point and I would add that the risk in arbitrage is so very low because they basically only face systemic risk. Risk of financial crisis, etc. I never really thought about that until now.
  - rayiner 13y ago
    Sure. Say you're a bright young Harvard business school graduate. You might choose to either found a start-up, or go to a VC firm and help fund start-ups. The latter path is much lower risk (because you're not risking your own money, but rather that of the limited partners), but statistically you'll also probably come out ahead, financially, going that route. Or to pose another example, starting a restaurant is probably riskier than starting a B2B software company, but also probably much less financially rewarding.

dictum 13y ago

> But the little guy working the line, he just wants a paycheck with no risk. Unfortunately there would be very little reward if that were so. The little guys working the lines usually don't have safety nets and credentials—inherited money, money from previously founded business, mentors, a reputation, or even supportive relatives—so their fear of failure is somewhat justified.

ianstallings 13y ago
True, but without the risk there would be no job for them to fear losing in the first place. People need to be responsible to themselves first, and a safety net is part of that. I say that knowing I just blew through $20k+ of my own safety net after going jobless for months. It's just business after all. But then again, this is why I have no qualms giving them my upsized salary demands. Because after all, it's just business. It's harsh, reality. The days of retiring with a gold watch and pension were gone long before I ever hit the market decades ago unfortunately.
- selmnoo 13y ago
  > True, but without the risk there would be no job for them to fear losing in the first place. People need to be responsible to themselves first, and a safety net is part of that. It bugs me that it's often the poor that want free markets and cheer most for it, and shun co-op stores. The system is betraying them, they should just get away from it and focus on positive systems like co-op self-sustaining communities.

rayiner 13y ago

> And only through that risk do we see reward. But the little guy working the line, he just wants a paycheck with no risk. This is a bit of pseudo-economics that's popular in the business community nowadays. Risk can be priced, in that it costs money to shift risk to someone else and you can charge a premium for taking on risk yourself. But statements like "only through that risk do we see reward" are just mumbo-jumbo.

ianstallings 13y ago
Well if you can show one example where rewards come without risk I'll gladly cede my position. I just haven't experienced it myself in my life. I guess someone giving me a gift is risk free. But I wouldn't call that a reward.
- tikhonj 13y ago
  Reward without risk is the usual definition of arbitrage. Some people make good money that way. Of course, you can construe any activity to have some risk. After all, there's always the possibility that your currency collapses, or something. However, ignoring that sort of possibility, risk is not necessary to make money in a capitalist system.
  - ianstallings 13y ago
    Hrm, a valid point and I would add that the risk in arbitrage is so very low because they basically only face systemic risk. Risk of financial crisis, etc. I never really thought about that until now.
- rayiner 13y ago
  Sure. Say you're a bright young Harvard business school graduate. You might choose to either found a start-up, or go to a VC firm and help fund start-ups. The latter path is much lower risk (because you're not risking your own money, but rather that of the limited partners), but statistically you'll also probably come out ahead, financially, going that route. Or to pose another example, starting a restaurant is probably riskier than starting a B2B software company, but also probably much less financially rewarding.