5 ms·

I generally agree with your post. However, > if something isn't immediately profitable, it won't be done, period, no matter the long-term benefits. This is n

by nickik 12y ago

I generally agree with your post. However, > if something isn't immediately profitable, it won't be done, period, no matter the long-term benefits. This is not true. Many companys make huge amount of long term investments that will not be profitable for a while. Companys that fail to to do these kind of things will have long term problems when the market changes and they have nothing new to offer. > People like Elon Musk do space in spite of free market, not thanks to it - he had a dream and enough money to push cheap rockets down the market's throat whether it wanted them or not. This is also a strange phrasing. Musk could not do what he does without market demand for his product, he has lots of money but not enougth to fully devlop everything he wants without profit. He might not have started the project to make space flight cheaper, but thats the effect the market cares about and thats why its a substainable project. Space flight is also very special because regulation are way beyond what you normally face. Goverments around the world are not to friendly to people building these kinds of rockets. SpaceX for example only has americans working there because of these regulations.

TeMPOraL 12y ago
> This is not true. Many companys make huge amount of long term investments that will not be profitable for a while. I guess it depends both on how long is the long term, and on the quantifiability of the returns of investment. There was a nice thread about it yesterday, with a wonderful quote: "My former boss (CTO of Panasonic) once told me that the only way to do real R&D is to have a monopoly that allows you to hide the margins in cutting edge R&D. Everyone else was doing just product development." https://news.ycombinator.com/item?id=8357318 https://news.ycombinator.com/item?id=8357318 Entrepreneurs avoid doing "blue-sky" research because the return is unpredictable. It might be zero, it might be a little bit, it might be an entire new industry - but you can't predict your profit. That's why we have governments that fund basic research with no expectation of getting anything from it immediately. > This is also a strange phrasing. Musk could not do what he does without market demand for his product, he has lots of money but not enougth to fully devlop everything he wants without profit. True. What I meant is that both here and with Tesla, he used his money to force this demand. They had to do a lot of work to get electric cars to the point people actually started to want them. Ditto for rockets; he needs them for his goals, so he made them profitable where previously they were not. But toilet-paper businesses [0] (which are the majority of the market) went elsewhere, there are plenty of lower-hanging fruits that you can monetize if you don't care what you're selling. [0] - https://news.ycombinator.com/item?id=8319102 https://news.ycombinator.com/item?id=8319102
- innguest 12y ago
  Not having to compete with anyone does not make a product cheaper, it makes it more expensive. Competition drives prices down. So the government having a monopoly over a service makes that service more expensive. Advertising is not a waste of resources, it is investment of resources - literally, money spent buying leads in order to try and convert them into customers. > Look, capitalistic economy is a greedy optimization algorithm [...] if something isn't immediately profitable, it won't be done, period Your "Look" and "period" intimidation tactics aside, what you are saying contradicts the way capitalism works. An enterprise only comes to be through savings, that are then invested. This in itself is inherently a long-term process that aims towards what will be profitable in the future. Capitalism only works through sacrificing short-term gains for long-term bigger gains. I have no idea where you got the skewed view that capitalism is myopic as you put it. Apple invests R&D on new products all the time and it funds it with its own money. If it had to pay taxes in the US it might not have been able to fund its own research, and then you'd see companies lobbying for R&D tax cuts, which then generate more waste through increased red tape. > Tesla, he used his money to force this demand. You're playing words games. Tesla bought rockets, that's it. He didn't "force the demand" for rockets, he increased it by 1 through wanting them. The essential difference is that Musk did not steal money from anyone in order to buy rockets. The government, on the other hand, steals from its constituents so that someone that did not earn the right to build a rocket can now build one. And obviously Tesla's rockets or whatever he's doing (I don't really care) will be better because he has an incentive to optimize his resources' allocation as it is his money on the line. A governmental agency has no such incentive to be wise with its funds since it never earned it and it can always request more.
  - TeMPOraL 12y ago
    In general, I think you might consider [0] a beneficial read; it pretty much answers all your questions and debunks your points. For me, your comments sound a lot like libertarianism turned into religion. A lot of dogmas that sound nice, but are trivially easy to be shown false. To respond to a particular point, > Not having to compete with anyone does not make a product cheaper, it makes it more expensive. Competition drives prices down. So the government having a monopoly over a service makes that service more expensive. True in many cases, especially if you only care about end-buyer price, but false in others. Some things fail spectacularly when you make them competitive. Things like basic research, things like exploiting a limited pool of shared resources, things like schools and prisons - they all go to hell when you try to run them on free-market rules. Some would say medicare is another similar thing. The market price is not the only important metric; some others are: quality, accessibility, efficiency, externalities. > Advertising is not a waste of resources, it is investment of resources - literally, money spent buying leads in order to try and convert them into customers. Who, were you not to convert them, would go to the competitor. It's a total waste of resources - you spend money (and more importantly, fuel and man-hours) trying to one-up your competitor, he does the same; on average, you still get the same amount of clients, only both of you wasted resources on a stupid zero-sum game. You'd both be better off if you agreed to not run any more ads that it take for people to discover you exist; yet since you can't agree on that, you're stuck in a zero-sum game. [0] - http://www.raikoth.net/libertarian.html http://www.raikoth.net/libertarian.html

by nickik 12y ago

TeMPOraL 12y ago

> This is not true. Many companys make huge amount of long term investments that will not be profitable for a while. I guess it depends both on how long is the long term, and on the quantifiability of the returns of investment. There was a nice thread about it yesterday, with a wonderful quote: "My former boss (CTO of Panasonic) once told me that the only way to do real R&D is to have a monopoly that allows you to hide the margins in cutting edge R&D. Everyone else was doing just product development." https://news.ycombinator.com/item?id=8357318 https://news.ycombinator.com/item?id=8357318 Entrepreneurs avoid doing "blue-sky" research because the return is unpredictable. It might be zero, it might be a little bit, it might be an entire new industry - but you can't predict your profit. That's why we have governments that fund basic research with no expectation of getting anything from it immediately. > This is also a strange phrasing. Musk could not do what he does without market demand for his product, he has lots of money but not enougth to fully devlop everything he wants without profit. True. What I meant is that both here and with Tesla, he used his money to force this demand. They had to do a lot of work to get electric cars to the point people actually started to want them. Ditto for rockets; he needs them for his goals, so he made them profitable where previously they were not. But toilet-paper businesses [0] (which are the majority of the market) went elsewhere, there are plenty of lower-hanging fruits that you can monetize if you don't care what you're selling. [0] - https://news.ycombinator.com/item?id=8319102 https://news.ycombinator.com/item?id=8319102

innguest 12y ago
Not having to compete with anyone does not make a product cheaper, it makes it more expensive. Competition drives prices down. So the government having a monopoly over a service makes that service more expensive. Advertising is not a waste of resources, it is investment of resources - literally, money spent buying leads in order to try and convert them into customers. > Look, capitalistic economy is a greedy optimization algorithm [...] if something isn't immediately profitable, it won't be done, period Your "Look" and "period" intimidation tactics aside, what you are saying contradicts the way capitalism works. An enterprise only comes to be through savings, that are then invested. This in itself is inherently a long-term process that aims towards what will be profitable in the future. Capitalism only works through sacrificing short-term gains for long-term bigger gains. I have no idea where you got the skewed view that capitalism is myopic as you put it. Apple invests R&D on new products all the time and it funds it with its own money. If it had to pay taxes in the US it might not have been able to fund its own research, and then you'd see companies lobbying for R&D tax cuts, which then generate more waste through increased red tape. > Tesla, he used his money to force this demand. You're playing words games. Tesla bought rockets, that's it. He didn't "force the demand" for rockets, he increased it by 1 through wanting them. The essential difference is that Musk did not steal money from anyone in order to buy rockets. The government, on the other hand, steals from its constituents so that someone that did not earn the right to build a rocket can now build one. And obviously Tesla's rockets or whatever he's doing (I don't really care) will be better because he has an incentive to optimize his resources' allocation as it is his money on the line. A governmental agency has no such incentive to be wise with its funds since it never earned it and it can always request more.
- TeMPOraL 12y ago
  In general, I think you might consider [0] a beneficial read; it pretty much answers all your questions and debunks your points. For me, your comments sound a lot like libertarianism turned into religion. A lot of dogmas that sound nice, but are trivially easy to be shown false. To respond to a particular point, > Not having to compete with anyone does not make a product cheaper, it makes it more expensive. Competition drives prices down. So the government having a monopoly over a service makes that service more expensive. True in many cases, especially if you only care about end-buyer price, but false in others. Some things fail spectacularly when you make them competitive. Things like basic research, things like exploiting a limited pool of shared resources, things like schools and prisons - they all go to hell when you try to run them on free-market rules. Some would say medicare is another similar thing. The market price is not the only important metric; some others are: quality, accessibility, efficiency, externalities. > Advertising is not a waste of resources, it is investment of resources - literally, money spent buying leads in order to try and convert them into customers. Who, were you not to convert them, would go to the competitor. It's a total waste of resources - you spend money (and more importantly, fuel and man-hours) trying to one-up your competitor, he does the same; on average, you still get the same amount of clients, only both of you wasted resources on a stupid zero-sum game. You'd both be better off if you agreed to not run any more ads that it take for people to discover you exist; yet since you can't agree on that, you're stuck in a zero-sum game. [0] - http://www.raikoth.net/libertarian.html http://www.raikoth.net/libertarian.html