Does capitalism promote wasted human energy?

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stinkcat_14 said:
Probably better disclosure laws, because if the shareholders knew this kind of behavior was going on they can mount the pressure to discipline (or fire) the CEO who engages in it.
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As long as the shareholders investments continue to increase with the market, I’m sure they could care less what, short of something illegal, the CEO is doing.
 
Timothysis said:
As long as the shareholders investments continue to increase with the market, I’m sure they could care less what, short of something illegal, the CEO is doing.
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Those would be some pretty dumb shareholders wouldn’t they? After all, if I just wanted to keep up with the market, I would buy a spider instead of the individual stock. But that is besides the point. In our modern corporate world, top executives are not that different from government bureaucrats except they get paid more. They are not spending their own money, so they have less incentive to be concerned about what their boss really wants. Clearly if the executives spend more than is necessary, that is waste in our capitalist system. Minimizing that waste is better for everyone except the executives.
 
stinkcat_14 said:
Those would be some pretty dumb shareholders wouldn’t they? After all, if I just wanted to keep up with the market, I would buy a spider instead of the individual stock. But that is besides the point. In our modern corporate world, top executives are not that different from government bureaucrats except they get paid more. They are not spending their own money, so they have less incentive to be concerned about what their boss really wants. Clearly if the executives spend more than is necessary, that is waste in our capitalist system. Minimizing that waste is better for everyone except the executives.
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Did you take an argument pill today? I can tell you that as a shareholder in several companies that as long as the dividends come on a regular basis, profits meet projections and the value of the stock continues to rise, it doesn’t matter to me one whit if a CEO is buzzing about on a corporate jet. You don’t change CEOs like you change a tee shirt. If they deliver, then they are worth it.
 
Timothysis said:
Did you take an argument pill today? I can tell you that as a shareholder in several companies that as long as the dividends come on a regular basis, profits meet projections and the value of the stock continues to rise, it doesn’t matter to me one whit if a CEO is buzzing about on a corporate jet. You don’t change CEOs like you change a tee shirt. If they deliver, then they are worth it.
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It is a very bad idea to generalize from yourself. Just because you don’t care about something doesn’t mean that the issue is not important. And your opinion, or my opinion of the desirability of this is really irrelevant to the topic at hand. The topic at hand, is the waste that is in capitalism.

I think that we can agree that corporate executives, unless they are sole owners of the company, are not spending their own money. I think we can also agree that people are more wasteful of other people’s money than they are of their own money. So there is clearly the potential for waste in this arena. You may be fine with that waste, but it doesn’t change its nature, it is still waste.
 
stinkcat_14 said:
It is a very bad idea to generalize from yourself. Just because you don’t care about something doesn’t mean that the issue is not important. And your opinion, or my opinion of the desirability of this is really irrelevant to the topic at hand. The topic at hand, is the waste that is in capitalism.

I think that we can agree that corporate executives, unless they are sole owners of the company, are not spending their own money. I think we can also agree that people are more wasteful of other people’s money than they are of their own money. So there is clearly the potential for waste in this arena. You may be fine with that waste, but it doesn’t change its nature, it is still waste.
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And I think that we can all agree that this thread has descended into an abject mound of nothingness. :rolleyes:
 
I think I may regret jumping into this thread. I’m a software engineer and as such I probably take 10 “wrong turns” for every 1 right one. In other words, I may write and rewrite code until I get the desired functionality. Are all my attempts that didn’t make it into the final product wasted? Would someone looking at my work ask, “why didn’t you write the code perfectly the first time?” I would argue that I didn’t waste anything in that the wrong turns I took in my program’s implementation led me closer to the correct one.

And so it is with economics. People try things that they think will work. Sometimes it does and other times it does not. But I wouldn’t call people’s unsuccessful business attempts wasted since they learn and try to do better the next time and ultimately (and hopefully) do touch upon something that is successful and helpful to society.
 
PrayHarder said:
I think I may regret jumping into this thread. I’m a software engineer and as such I probably take 10 “wrong turns” for every 1 right one. In other words, I may write and rewrite code until I get the desired functionality. Are all my attempts that didn’t make it into the final product wasted? Would someone looking at my work ask, “why didn’t you write the code perfectly the first time?” I would argue that I didn’t waste anything in that the wrong turns I took in my program’s implementation led me closer to the correct one.

And so it is with economics. People try things that they think will work. Sometimes it does and other times it does not. But I wouldn’t call people’s unsuccessful business attempts wasted since they learn and try to do better the next time and ultimately (and hopefully) do touch upon something that is successful and helpful to society.
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The ten wrong moves you made certainly were wasteful, because it would obviously be desirable for your company if you could write it correctly the first time. Now, that is not likely possible, but if your company could find a way to write code with fewer iterations it would be more efficient.

Similarly, when people start businesses and they fail, that is a waste as well. If we knew that ahead of time we would have never started the business. So failures are wasteful. The only caveat is that usually the payoff makes enduring the failure worthwhile, but we would be better off if we never endured the failure in the first place.
 
stinkcat_14 said:
Similarly, when people start businesses and they fail, that is a waste as well. If we knew that ahead of time we would have never started the business. So failures are wasteful.
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I think I’ll call my investment advisor and tell her that I only want positive growth from now on because negative growth is wasteful and interferes with my retirement plans. Why, oh why didn’t I know this when I started my portfolio??? :eek:
 
stinkcat_14 said:
If there truly is no difference, and Bayer has convinced people that there is, then I would call it a waste. Bayer certainly has no incentive to tell people that the generic equivalent is exactly the same.
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How do we know that Bayer is exactly the same as generic. Bayer may have higher quality standards than the generic, especially if the latter is not under the control of Bayer.
 
Timothysis said:
I think I’ll call my investment advisor and tell her that I only want positive growth from now on because negative growth is wasteful and interferes with my retirement plans. Why, oh why didn’t I know this when I started my portfolio??? :eek:
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If you had a choice between an advisor who does have failures in the portfolio and one who has failures, which is more preferable?

If I sink $100k into a business and the business fails, that money is wasted. The same goes for a stock. It may be that even with the failures the portfolio has a positive expected rate of return. But the portfolio would be even better off it it didn’t have the failures.
 
stinkcat_14 said:
If you had a choice between an advisor who does have failures in the portfolio and one who has failures, which is more preferable?

If I sink $100k into a business and the business fails, that money is wasted. The same goes for a stock. It may be that even with the failures the portfolio has a positive expected rate of return. But the portfolio would be even better off it it didn’t have the failures.
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You remind me of my brother; he has a wonderful knack for stating the obvious. My motto for him is “water is wet.”
 
nmgauss said:
How do we know that Bayer is exactly the same as generic. Bayer may have higher quality standards than the generic, especially if the latter is not under the control of Bayer.
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It seems to me that I have already argued that some may prefer Bayer based on their reputation over a no name brand but stink cat dismissed that suggestion at once. 😦
 
stinkcat_14 said:
If you had a choice between an advisor who does have failures in the portfolio and one who has failures, which is more preferable?

If I sink $100k into a business and the business fails, that money is wasted. The same goes for a stock. It may be that even with the failures the portfolio has a positive expected rate of return. But the portfolio would be even better off it it didn’t have the failures.
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The money is not wasted. The capital purchases required to start the business still have value. If a businessman decides to close shop before he goes bankrupt, he can recoup some of his original investment by selling to liquidators.

There is no such thing as a failed portfolio unless you count those stupid ones that have few securities and are poorly diversified. One may lose money without being a failure. If the securities are sold at a loss there is at least some money left. Some people hold onto their portfolio through hard times and eventually reach their original purchase price. If they continue to hold onto the securities through boom times and then they sell, then the portfolio is successful. Thus a portfolio may be poor at one time and excellent at another time.

Few portfolios have star performers 100% of the time. There are so many unknowns in the price of a share of stock, that it is impossible to guarantee against losing money.
 
How many different auto manufacturers do we need? Do they need to change their designs every year? I, for one, would prefer a cheaper, well built car than have such a wide selection of ever-changing models.

Also, it’s well known that Los Angeles used to have one of the best mass transit systems in the world… until Ford Motor Company bought it all up and dismantled them. And Ford was perfectly within the law, due to our capitalistic society.

LOVE! ❤️
 
nmgauss said:
How do we know that Bayer is exactly the same as generic. Bayer may have higher quality standards than the generic, especially if the latter is not under the control of Bayer.
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How do Bayer’s quality standards differ?
 
Timothysis said:
You remind me of my brother; he has a wonderful knack for stating the obvious. My motto for him is “water is wet.”
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Sometimes one has to state the obvious when you have people claim that making investments that lose value is not a waste Let me ask you a simple question: How many pink sheets stocks does your advisor recommend for your portfolio? Probably few or none, since most of them lose money, so putting them in would generate waste for your portfolio. Obviously an investment advisor would like to minimize the amount of waste, holding everything else equal.
 
stinkcat_14 said:
Sometimes one has to state the obvious when you have people claim that making investments that lose value is not a waste Let me ask you a simple question: How many pink sheets stocks does your advisor recommend for your portfolio? Probably few or none, since most of them lose money, so putting them in would generate waste for your portfolio. Obviously an investment advisor would like to minimize the amount of waste, holding everything else equal.
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If you sell an investment at a lower price than you bought it, there is some loss, but usually not a catastrophic one. If you hold onto a losing investment for better times, and sell at a profit, then you are a success. Look what happened to Apple, Inc. Twenty years ago it was a loser. Now it is a fantastic success.

How does one detect “pink sheets stocks”? Every prospectus of a mutual fund says, “Past performance does not guarantee future results”. So how is one to avoid “pink sheets stocks?”

There is a great popularity of inflation-sensitive money market funds. They have returned such a low rate of return, that with inflation, they are losing money. Should we throw them out?
 
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