SoylentNews is people
SoylentNews
Capitalism is in trouble – at least judging by recent polls.
A majority of American millennials reject the economic system, while 55% of women age 18 to 54 say they prefer socialism. More Democrats now have a positive view of socialism than capitalism. And globally, 56% of respondents to a new survey agree "capitalism as it exists today does more harm than good in the world."
One problem interpreting numbers like these is that there are many definitions of capitalism and socialism. More to the point, people seem to be thinking of a specific form of capitalism that deems the sole purpose of companies is to increase stock prices and enrich investors. Known as shareholder capitalism, it's been the guiding light of American business for more than four decades. That's what the survey meant by "as it exists today."
As a scholar of socially responsible companies, however, I cannot help but notice a shift in corporate behavior in recent years. A new kind of capitalism seems to be emerging, one in which companies value communities, the environment and workers just as much as profits.
The latest evidence: Companies as diverse as alcohol maker AB InBev, airline JetBlue and money manager BlackRock have all in recent weeks made new commitments to pursue more sustainable business practices.
[...] A 2017 study showed that many companies with climate change goals actually scaled back their ambitions over time as the reality clashed with their lofty goals.
But businesses can't afford to ignore their customers' wishes. Nor can they ignore their workers in a tight labor market. And if they disregard socially responsible investors, they risk both losing out on important investments and facing shareholder resolutions that force change.
The shareholder value doctrine is not dead, but we are beginning to see major cracks in its armor. And as long as investors, customers and employees continue to push for more responsible behavior, you should expect to see those cracks grow.
(Score: 0) by Anonymous Coward on Friday January 24 2020, @08:41PM (11 children)
But that isn't what profit is at all. Profit is the money that's left after the costs are subtracted, and it applies to both workers and investors. If profit was the difference between what a worker was paid and what their work is worth, then a business increasing profits by, for example, negotiating cheaper rent on their office space, actually would have increased the value of their employees work, when it should be obvious that the work hasn't changed at all.
But more to the point, workers earn profits too. It's the difference between what they are paid and the cost of working plus the value of their time. Under capitalism, a worker is free to market their skills to any potential employer, and to choose the best offer. They're free to reinvest some of their money in better education to give themselves or their children better opportunities. Under communism, a worker is assigned a job, often before they're even old enough to understand what they're being set up for, and if they don't show up, they get sent to the gulag.
And yet, on the left, people decry doing exactly that. Every week there's a left-leaning piece in some magazine about how awful the "gig economy" is, when all it really is, is people working for themselves*. California is even trying to find ways to make it illegal.
* in case you are going to bring up Uber, etc. and how they make money but the drivers don't, it's simply economics. Driving for Uber is approximately perfect competition. Lots of people have cars, driving is a very common skill, and there's almost no difference from one to another. But very few people have the matchmaking service. That's where the value is. The more competitors in the space, the less profit there is. Do something where you provide real value - and you get to make more money and people start to call you a "freelancer" or a "sole proprietor."
(Score: 4, Informative) by ikanreed on Friday January 24 2020, @08:52PM
Uber sets the prices of uber rides, not "the market".
It's a fiction to assuage regulators who think like you do.
(Score: 2) by sjames on Saturday January 25 2020, @09:10PM (9 children)
The problem is that most of our markets seem to be dysfunctional. Smith clearly laid out how with functional markets, the selling price would quickly move to approximate the marginal cost of production. That's not happening a lot in the U.S. today.
Part of the problem is that everything Smith wrote assumed that the pool of economic actors was all within a couple orders of magnitude of the same economic power. Today, it's mostly individuals dealing with multi-nationals that have at least 6 orders of magnitude more economic power. That would be at least part of the reason Smith advised that corporate charters be handed out very sparingly and that such chartered corporations should be kept on a short leash. He also called for markets to be closely regulated.
Failure to heed any of that advice is probably at the root of the many dysfunctional markets.
Note to the hard core Capitalist: Your favorite ism is starting to lose in the market of ideas. Adapt or die! Give us more of the same and you'll easily live to see a different ism reign supreme.
As a second note, putting the fox in charge of the henhouse is not likely a winning strategy.
(Score: 2) by The Mighty Buzzard on Sunday January 26 2020, @03:50PM (7 children)
Note: Approximate not equal. Profit is necessary or you get zero potential for expansion, no rainy day fund, zero for a research budget, etc...
My rights don't end where your fear begins.
(Score: 2) by sjames on Sunday January 26 2020, @09:24PM (6 children)
That's why I chose the word approximate rather than equal. These days, many products and services reveal no relationship at all between price and the marginal cost of production. The worst examples are found in the area of healthcare.
Consumer electronics and appliances are another example. Often the lower priced models in a range are exactly the same as the high end model internally, they just vandalize it by cutting a few traces to make it lower end. That is, it actually costs a little more to manufacture than the high end one did. In other cases, the hardware is identical and the vandalism is in the firmware. Manufacturers actively hunt and threaten sites that tell you which cut traces to bridge together and how to flash the higher end firmware on the device.
If we had an actual competitive market, they'd be forced to leave the features turned on and sell at the lower price to match the competition's offering. Of course, many such products are actually identical no-name products with different higher end emblems stuck on it at a substantial mark-up.
Note, this is distinct from the common case in server motherboards where you may see solder pads where they didn't place a controller. In that case, the lower end board was at least the cost of that chip cheaper to manufacture. Fair enough, but there are plenty more cheats there, like offering a "hardware" feature that is actually emulated (poorly) using SMM (or now, the Management Engine) to intercept access.Commonly, cheaper "RAID controllers" and just a regular SATA controller with the ID bumped one and a Windows driver that implements soft RAID.
As a rule of thumb, if you hear the term "value pricing", the speaker has thrown Smith out the window and is practicing Mercantilism.
(Score: 2) by The Mighty Buzzard on Sunday January 26 2020, @10:05PM (5 children)
Which is all fine and good, really. So long as there is a competitive market rather than one that's had the throat of competition artificially stomped on by the government anyway. Or where the government has refused to smack down anti-competitive business practices by those with monopolistic powers. We currently have neither but I'd prefer we fix the root cause to address the problem rather than breeding an entirely new species of problem through idiotic bandaid regulations.
My rights don't end where your fear begins.
(Score: 3, Insightful) by sjames on Monday January 27 2020, @05:22AM
I suspect no matter the ideology, anyone suggesting anything that might get to the root of the problem will be branded a socialist by the current crop of fanatics, even if it's a quote right out of "The Wealth of Nations".
Getting at the root of it will likely involve nullifying a lot of corporate charters. Somehow, the current "Capitalists" don't see government granted charters as government interference, but what else could it be called?
I am not convinced that corporate charters are compatible with a functioning market. The market simply doesn't work that well when there is such a disparity of economic power between buyer and seller. The problem is that some things these days can really only be accomplished at scale. There's no such thing as a desktop chip fab, nor is there a briefcase MRI.
(Score: 2) by sjames on Monday January 27 2020, @05:29AM (3 children)
Please forgive the double reply.
The other aspect is that we have several generations growing up with the current state of affairs being claimed to be some sort of paragon of Capitalism. Given that the results of what they have been taught is Capitalism are so dismal for so many, is it any wonder they start thinking they'd like to try something else? If the champions of Capitalism don't do less cheerleading and more fixing, it will get tossed out.
Simply stripping away the current band-aids will not get to the root of the problem. It will make it even worse for even more people and it will hasten the exit of Capitalism. First fix the roots, then remove the band-aids once the obvoius wounds have actually healed.
(Score: 2) by The Mighty Buzzard on Monday January 27 2020, @04:06PM (2 children)
No worries. Everyone hits Submit right before they think of something really relevant they forgot to say once in a while.
Nah, you can do it all at once. You just have to plan it out carefully before you do. And it's not corporations' existence or even their size that's the problem, it's the size of the market share they're allowed to attain without the government saying "Oh hell no!". Well, that and government granted monopolies like patents and copyright being all kinds of in need of a good enema.
Lots of folks here think they'd be miserable and destitute under an economic system run by my ideals but they don't get how truly and vehemently I hold my anti-trust views. I'd make life pretty fucking miserable for anyone with over a 20% market share; globally, nationally, regionally, or locally. And mergers when there are less than half a dozen competitors in a sector would be right the fuck out. A hell of a lot of things they used to call "synergy" would be gone as well, like Disney owning the means of production, the product, and the means of distribution.
Capitalism really does work better than anything but you can't play favorites and you can't allow abuse of monopoly powers. If the government isn't doing everything necessary to foster competition, it's not capitalism that they're after.
My rights don't end where your fear begins.
(Score: 2) by sjames on Tuesday January 28 2020, @08:01PM (1 child)
I really doubt it can be done all at once. You would have enough enforcement actions stacked up that it would take years to iron out. The laws would need several amendments to work around the work-arounds bad actors would implement before enforcement could catch up. Meanwhile that misery and destitution would run rampant with the band-aids ripped off before the wounds are healed. I would be amazed if no corporation chose to press forward full steam under their temporary freedom from restraint with plans to spirit away the profits before the music stops.
Meanwhile, I believe you would find 20% to be an unreliable threshold. That would yield 5 competitors each vastly more powerful than their customers. Each big enough to disconnect directive from action, which is the formula for creating a virtual psychopath. More to the point, few enough to manage a tacit agreement among them.
You would definitely have to address the incestuous relationships between various boards of directors and executive suites. It tends to create a lot of unofficial back channels for that tacit agreement.
But keep in mind, Smith didn't likely warn against the granting of charters for his own amusement. He saw it as playing with fire, a sort of Faustian bargain, The history of economies that ignored his advice seem to bear that out. Be sure you're noty missing the root of the problem.
(Score: 2) by The Mighty Buzzard on Wednesday January 29 2020, @12:40AM
Not all currently warranted enforcement actions would need to even be taken. A few good high-profile ones get their nuts thoroughly stomped on in public and enforcement necessity will decline drastically.
This is why coders should write laws instead of lobbyists for the groups that the laws are supposed to regulate. Specifically, paranoid coders who have a hardon for security. Bonus points if you run each past a team of Bytrams several times for QA before finalizing them.
That ain't no shit. Not even a little bit.
By the way, 20% was an off the cuff number. I'd ask for further discussion to see what sounds best but I don't see anyone voting me Emperor of North America any time soon. Which is probably just as well. I'd be pissed off all the time and it would cut into my fishing.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday January 26 2020, @10:29PM
Correct [theatlantic.com]