Capitalism relies on survival of the fittest for businesses

Page 3 of 4 [ 49 posts ]  Go to page Previous  1, 2, 3, 4  Next

magz
Forum Moderator
Forum Moderator

User avatar

Joined: 1 Jun 2017
Age: 35
Gender: Female
Posts: 8,538
Location: Poland

14 Oct 2020, 4:37 am

In any system, reasonable people act reasonably. The cases you mentioned were more or less balanced. However, the bushes case shows that without particular regulations, common good tends to lose over particular interests.

My main point: is there an imbalance in the system between someone who can afford paying a legion of lawyers for ultimately lost cases and someone who would end up in a crippling debt unless the best case scenario for them? What happens when sides are like that and the result is uncertain?

Does this system really protect individuals?
Are they really equal before the law?
It works as intended to some extent but what happens outside this extent?


_________________
Let's not confuse being normal with being mentally healthy.
***** ***


XFilesGeek
Forum Moderator
Forum Moderator

User avatar

Joined: 24 Jul 2010
Age: 37
Gender: Female
Posts: 5,677
Location: The Oort Cloud

14 Oct 2020, 3:59 pm

GGPViper wrote:
AngelRho wrote:
magz wrote:
But how would you remove the whole sueing system in the US and how would you replace it?
I mean, you don't need to sue one on economic basis, it can be about your wife's dog, all you need is affording a lot more lawyer time than your competitor.

It’s really simple. You just get rid of legislation that regulated business. On the business side, there’s nothing to get sued over. You can do whatever you want. You can dump excess diesel oil in a river and nobody cares.

Laws simply exist to protect the rights of individuals. Dumping diesel into a river isn’t an immediate concern if it’s just the environment. That river doesn’t affect me, so what? But it does affect the farmer downstream who relies on the river for irrigation or for his cattle. The individual farmer can sue the big business for damages because the actions of a factory resulted in harm to his farming operations. The business responsible for causing damage will have to pay restitution to the farmer because it was negligent.

And that’s because there are already laws in place that protect the rights of individuals. There is no need for laws that say “don’t dump diesel into rivers” There’s no need for government agencies to barge in for random inspections. There’s no need for laws that say you have to change your behavior, and this is how you do it. Everyone who does business abides by the simple precept of “do no harm” or they face consequences if they do cause harm. And if you hurt enough people enough times, you lose your right to do business. There’s no need for regulation as long as laws respecting individual freedom are enforced—in short, you can do as you please as long as you don’t hurt someone else or impose on their own individual freedoms.

Such a system simply does not work in practice due to transaction costs.

It also becomes completely untenable once the environmental impact reaches a certain scale - when the issue is air pollution, for instance.

Which of the 153 companies in the area emitting carcinogenic particles into the air should the cancer-stricken subsistence farmer drag in court for 5-10 years while paying out of his own pocket, and how?


In my experience, Libertarians tend to think they've stumbled onto profound truths that the rest of us are just too dense to see. The reality is we've already tried the majority of what Libertarians propose, found it doesn't work in practice, and have responded with government regulations where necessary.

Additionally, it's fine to say we should set-up a situation where everyone is on the "honors system," but when you don't actually have a plan for dealing with those who don't comply, it becomes a situation where the rest of us aren't willing to risk our freedom and health for political theories.


_________________
"If we fail to anticipate the unforeseen or expect the unexpected in a universe of infinite possibilities, we may find ourselves at the mercy of anyone or anything that cannot be programmed, categorized or easily referenced."

-XFG (no longer a moderator)


AngelRho
Veteran
Veteran

User avatar

Joined: 4 Jan 2008
Age: 42
Gender: Male
Posts: 8,102
Location: The Landmass between N.O. and Mobile

14 Oct 2020, 5:10 pm

Once again, the problem is government. It's government policies that create what is essentially two justice systems.

The only quasi-problem is that a straight-down-the-middle justice system is going to favor the wealthy in terms of who goes to jail over things. Rich people can afford fines and large settlements. Poor people cannot. A poor person alone cannot nor should not be expected to empty his bank accounts to sue a rich person or large business. But a poor person can still call witnesses and present evidence. If the negligent company has committed a serious offense, then it is subject to the same laws that protect people from crimes, anyway. It is not up to the individual, but rather "the People," i.e. prosecutors, who hold trials on behalf of victims and survivors. It would be no different than a single person who commits murder. It's impossible to favor the wealthy or businesses in criminal actions. Regardless of how theatrical a rich man's defense lawyer might be, at the end of the day there's only guilt or innocence. The state can either prove their case or not. Such was the case with OJ Simpson, and that sparked a legal movement that, in my opinion, went too far the other way, such as with cases that are almost entirely circumstantial--like Scott Peterson. If you look at circumstantial evidence hard enough, I'm sure you can prove a case against pretty much anyone, which makes going about your daily life pretty frightening considering you can get arrested for pretty much anything and there's nothing you can really do about it. Basically...just treat everyone the same, all laws apply to all people all the time, and as long as we all act like good boys and girls, we can expect there won't be any problems. Part of the problem is not just the laws themselves, the intense regulation, but new strands within the justice system itself. American courts do need a little work.

What you're basically referring to are torts in civil trials rather than criminal trials. Companies can afford settlements without ever having to go to trial. However, tort cases are frequently frivolous and are abused by "needy" people partnered with greedy lawyers. I have no problem with tort cases, but I do have doubts as to how necessary they really are. In recent years states have passed tort reform legislation to cut back on abuses. That's important where I live because Mississippi is known to be particularly litigious.



AngelRho
Veteran
Veteran

User avatar

Joined: 4 Jan 2008
Age: 42
Gender: Male
Posts: 8,102
Location: The Landmass between N.O. and Mobile

14 Oct 2020, 5:28 pm

XFilesGeek wrote:
GGPViper wrote:
AngelRho wrote:
magz wrote:
But how would you remove the whole sueing system in the US and how would you replace it?
I mean, you don't need to sue one on economic basis, it can be about your wife's dog, all you need is affording a lot more lawyer time than your competitor.

It’s really simple. You just get rid of legislation that regulated business. On the business side, there’s nothing to get sued over. You can do whatever you want. You can dump excess diesel oil in a river and nobody cares.

Laws simply exist to protect the rights of individuals. Dumping diesel into a river isn’t an immediate concern if it’s just the environment. That river doesn’t affect me, so what? But it does affect the farmer downstream who relies on the river for irrigation or for his cattle. The individual farmer can sue the big business for damages because the actions of a factory resulted in harm to his farming operations. The business responsible for causing damage will have to pay restitution to the farmer because it was negligent.

And that’s because there are already laws in place that protect the rights of individuals. There is no need for laws that say “don’t dump diesel into rivers” There’s no need for government agencies to barge in for random inspections. There’s no need for laws that say you have to change your behavior, and this is how you do it. Everyone who does business abides by the simple precept of “do no harm” or they face consequences if they do cause harm. And if you hurt enough people enough times, you lose your right to do business. There’s no need for regulation as long as laws respecting individual freedom are enforced—in short, you can do as you please as long as you don’t hurt someone else or impose on their own individual freedoms.

Such a system simply does not work in practice due to transaction costs.

It also becomes completely untenable once the environmental impact reaches a certain scale - when the issue is air pollution, for instance.

Which of the 153 companies in the area emitting carcinogenic particles into the air should the cancer-stricken subsistence farmer drag in court for 5-10 years while paying out of his own pocket, and how?


In my experience, Libertarians tend to think they've stumbled onto profound truths that the rest of us are just too dense to see. The reality is we've already tried the majority of what Libertarians propose, found it doesn't work in practice, and have responded with government regulations where necessary.

Additionally, it's fine to say we should set-up a situation where everyone is on the "honors system," but when you don't actually have a plan for dealing with those who don't comply, it becomes a situation where the rest of us aren't willing to risk our freedom and health for political theories.

The way I see it, it's a matter of government regulation patching up a problem that is already covered in existing legislation, and when that doesn't work, we patch the patch. Government regulation wouldn't be such a bad thing (actually, it would...) if laws and regulatory agencies didn't favor the politics of those who put them in power. It amounts to one group getting special favors by denying the other group the freedom to conduct business in the safest and most cost-efficient way. Monopolies, for instance, were the direct result of government charters establishing them. Once it was apparent that monopolies are a problem (surprise, surprise), now it becomes the role of government to save us all from the monopolies that IT CREATED. So we begin trust-busting while corporations look for loopholes that allow them to continue monopolistic behavior.

So why not just do away with laws establishing or regulating or breaking monopolies altogether? If a company corners a market and drives up prices, people will stop buying their products/services because the cost is too prohibitive. A small business startup can fill the void by offering superior, cheaper goods/services that local consumers can afford and deny the monopoly any profits. The monopoly could attempt to buy out the startup, of course, but where are they going to get the money if their goods/services aren't making any money? They'd be forced to either lower costs in order to compete with the startup or develop a new product to make the startup's products obsolete and put them out of business. Who wins? The consumer. And if the startup wants to stay competitive, they'll have to adapt and keep cranking out new, innovative products. By getting government intrusion out of the way, companies and individuals are able to make the best decisions for themselves.

I don't consider myself a Libertarian, nor do I think these are particularly profound ideas. But I do not agree that these ideas have been honestly realized. I think there have been too many people connected with the government that have too much to gain through regulation. Crony capitalism is not capitalism.



Antrax
Veteran
Veteran

User avatar

Joined: 23 Feb 2019
Gender: Male
Posts: 1,639
Location: west coast

16 Oct 2020, 1:08 am

magz wrote:
TheRobotLives wrote:
That's why we need less regulation, reduced labor laws, less taxes so small business can compete.
But how would you make sure it wouldn't empower the big fish even more than the small, making the situation even less balanced?

The problems start when the big businesses become the ones who practically regulate the market, preventing others from gaining power or even surviving - like "let's just sue the competitor until they bankrupts on lawyers, we're big enough to afford it". State deregulation does not help when non-state entities are the ones preventing market mechanisms from working.


Regulation hurts small business more than big business. Reducing regulation is never going to make it easier for big business to crowd out small business. Now there are good arguments for regulation, but touting it for constraining big business is not one of them.

In general I think people overestimate the ability of large corporations to crush smaller competitors. Amazon and Walmart aren't giants just because they're big. They're both brutally effective at what they do. Companies like Sears-Roebuck, A&P grocery, and Blockbuster used to dominate their respective markets. Now they're all bankrupt. It wasn't that long ago that Amazon was a small upstart competitor to Borders bookstore.


_________________
"Ignorance may be bliss, but knowledge is power."


magz
Forum Moderator
Forum Moderator

User avatar

Joined: 1 Jun 2017
Age: 35
Gender: Female
Posts: 8,538
Location: Poland

16 Oct 2020, 2:54 am

Antrax wrote:
Regulation hurts small business more than big business.
Where did you get the claim from?

I live in EU, which tends to be overregulated even for my taste. When, because of covid, people en masse switched to online shopping, I was very surprised that in US everyone relied on Amazon - here, myriads of small and medium-seized companies offer virtually anything online, often straight from the manufacturer (e.g. clothing).
So, we didn't have one company overload but a very elastic, quickly-adapting, diverse market.

However, there can be a situation where regulation indeed hurts the small: when the regulation is done under strong influence of lobbying big companies, with an intention to prevent competition from gaining power.


_________________
Let's not confuse being normal with being mentally healthy.
***** ***


TheRobotLives
Veteran
Veteran

Joined: 7 Dec 2019
Gender: Female
Posts: 1,430
Location: Quiet, Dark, Comfy Spot

16 Oct 2020, 3:52 am

magz wrote:
Antrax wrote:
Regulation hurts small business more than big business.
Where did you get the claim from?

I live in EU, which tends to be overregulated even for my taste. When, because of covid, people en masse switched to online shopping, I was very surprised that in US everyone relied on Amazon - here, myriads of small and medium-seized companies offer virtually anything online, often straight from the manufacturer (e.g. clothing).
So, we didn't have one company overload but a very elastic, quickly-adapting, diverse market.

However, there can be a situation where regulation indeed hurts the small: when the regulation is done under strong influence of lobbying big companies, with an intention to prevent competition from gaining power.

Tracking , auditing, reporting , inspections, compliance to a government entity is expensive.

The cost impacts small business more.

The large company has a team of professionals of lawyers, accountants, IT workers, compliance specialists and expensive software.


_________________
Then a hero comes along, with the strength to carry on, and you cast your fears aside, and you know you can survive.

Be the hero of your life.


magz
Forum Moderator
Forum Moderator

User avatar

Joined: 1 Jun 2017
Age: 35
Gender: Female
Posts: 8,538
Location: Poland

16 Oct 2020, 3:56 am

TheRobotLives wrote:
Tracking , auditing, reporting , inspections, compliance to a government entity is expensive.

The cost impacts small business more.

And somehow, in practice, the overregulated EU is evaluated as a market cheaper for a startup... https://www.startupgrind.com/blog/the-3 ... -startups/
Quote:
Europe vs. US:

Less vs. more funding required
Revenue first vs. growth first
Fast proof of concept required vs. user base is everything that counts
Strong local component vs. geographically independent product
Entering new markets quickly vs. conquering one massive market gradually


_________________
Let's not confuse being normal with being mentally healthy.
***** ***


AngelRho
Veteran
Veteran

User avatar

Joined: 4 Jan 2008
Age: 42
Gender: Male
Posts: 8,102
Location: The Landmass between N.O. and Mobile

16 Oct 2020, 4:18 am

TheRobotLives wrote:
magz wrote:
Antrax wrote:
Regulation hurts small business more than big business.
Where did you get the claim from?

I live in EU, which tends to be overregulated even for my taste. When, because of covid, people en masse switched to online shopping, I was very surprised that in US everyone relied on Amazon - here, myriads of small and medium-seized companies offer virtually anything online, often straight from the manufacturer (e.g. clothing).
So, we didn't have one company overload but a very elastic, quickly-adapting, diverse market.

However, there can be a situation where regulation indeed hurts the small: when the regulation is done under strong influence of lobbying big companies, with an intention to prevent competition from gaining power.

Tracking , auditing, reporting , inspections, compliance to a government entity is expensive.

The cost impacts small business more.

The large company has a team of professionals of lawyers, accountants, IT workers, compliance specialists and expensive software.

I won’t be satisfied until there’s no regulation. Small businesses will always struggle to compete against big business, but there are advantages to being small that means you are able to do things big business can’t do. But I think a good goal for every small business to have is to become a big business. Big businesses have adapted so they can survive regulation, yes, but imagine a small business showing significant growth. They may not be prepared for what happens when they go big.

The central issue for regulating big business versus small business is the government punishing small businesses for being successful. It also unfairly favors big businesses who manage to jump through the hoops, meaning they leverage government policy to protect themselves from competition. The consumer loses out because innovation and improved or new products are born out of some combination of competition and cooperation when businesses decide to work collaboratively. Stopping regulation means a better chance for everyone—big business can’t hide behind policy to deny small businesses entry into a market, small businesses don’t get rewarded for staying small/punished for growing. Crony capitalism is not capitalism.



magz
Forum Moderator
Forum Moderator

User avatar

Joined: 1 Jun 2017
Age: 35
Gender: Female
Posts: 8,538
Location: Poland

16 Oct 2020, 4:42 am

AngelRho wrote:
I won’t be satisfied until there’s no regulation.
One of the advantages of multiple countries in the world is a possibility to simultanously test a multitude of approaches to various problems and see outcomes. I really prefer real world observations over any ideology.
AngelRho wrote:
Small businesses will always struggle to compete against big business, but there are advantages to being small that means you are able to do things big business can’t do. But I think a good goal for every small business to have is to become a big business.
But the market can support only a few big businesses, so if everyone sets their goal as becoming one, inevitably most of them will fail.
Additionally, a maket dominated by just a few big businesses is less resilient and more prone to crises - collapse of one of the players shakes the whole system violently, likely making others follow.


_________________
Let's not confuse being normal with being mentally healthy.
***** ***


Antrax
Veteran
Veteran

User avatar

Joined: 23 Feb 2019
Gender: Male
Posts: 1,639
Location: west coast

16 Oct 2020, 4:56 am

magz wrote:
Antrax wrote:
Regulation hurts small business more than big business.
Where did you get the claim from?

I live in EU, which tends to be overregulated even for my taste. When, because of covid, people en masse switched to online shopping, I was very surprised that in US everyone relied on Amazon - here, myriads of small and medium-seized companies offer virtually anything online, often straight from the manufacturer (e.g. clothing).
So, we didn't have one company overload but a very elastic, quickly-adapting, diverse market.

However, there can be a situation where regulation indeed hurts the small: when the regulation is done under strong influence of lobbying big companies, with an intention to prevent competition from gaining power.


Simple economies of scale is all. Regulation increases cost. At scale costs can be centralized and relatively decreased.

Say you're a food manufacturer and need to get your food tested chemically to comply with government safety regulations. Let's say you hire an outside company to test your food. If you're small you pay them whatever their rates are, whereas if you're big and offering big business you can get a bulk discount.

Off the top of my head that EU-US disparity might be cultural. People in the US tend to love their big brand names, IDK if its the same in Europe.


_________________
"Ignorance may be bliss, but knowledge is power."


magz
Forum Moderator
Forum Moderator

User avatar

Joined: 1 Jun 2017
Age: 35
Gender: Female
Posts: 8,538
Location: Poland

16 Oct 2020, 5:10 am

In EU, government agencies (Sanepid in Poland) perform all the required testing, the only price the company pays is inconvenience of being checked - otherwise, how could they control that the testing companies don't fabricate their results? If testing companies were subjected only to market mechanisms and no outside regulation and control, what would prevent them from stretching their results in a way suiting their client?

And indeed, Europeans - at least Central Europeans - tend to value local manufacturers over global brands.


_________________
Let's not confuse being normal with being mentally healthy.
***** ***


GGPViper
Veteran
Veteran

User avatar

Joined: 23 Sep 2009
Gender: Male
Posts: 5,577

16 Oct 2020, 5:16 am

I don't think it makes sense to speak broadly of "regulation" of businesses as a single category.

From a microeconomic (market economy) perspective, business regulation can be divided into (at least) 2 categories:

1. Regulation that corrects market failures (externalities, transaction costs, information asymmetry etc.)
2. Regulation that achieves non-market objectives (redistribution, public decency, national security etc.)

The former - ceteris paribus - increases market efficiency, while the latter - ceteris paribus - reduces market efficiency.

And many types of market-correcting regulation (1) makes it easier for companies - especially small companies - to do business, not harder. A good example is online business, which requires a substantial regulatory framework in order to ensure reliable payment and delivery.

And it is entirely possible for business to be both under- *and* overregulated at the same time, if there is too much of (2) and too little of (1). The US health care system, for instance, is widely considered by economists to "under"-regulated, which is likely the main reason for the exorbitant level of US health care expenditure.


_________________
Omit needless words.


Fnord
Veteran
Veteran

User avatar

Joined: 6 May 2008
Gender: Male
Posts: 45,430
Location: Stendec

16 Oct 2020, 8:54 am

During the middle of the day, Anaheim* within a half-mile of Harbor and Katella now looks like a ghost town. All of the entertainment, hospitality, retail, and tourist-based businesses are either closed or have limited their hours.  A year ago, it took more than 30 minutes to drive through that area because of all the people milling around and jaywalking.  Now it takes a little under 10 minutes to go the same distance if I hit all the green lights (which is not at all hard to do these days).

People I barely know have been begging me for job leads -- mostly club, hotel, restaurant, and retail workers.  I have to tell them that the only job openings I know of are in the engineering, medical, technical, and transportation fields.  The people looking for work are those who relied mostly on their social skills to land a job, while those whose skills require a professional degree seem to have little difficulty in getting or retaining employment.

It seems to be the same story everywhere; entertainment, hospitality, retail, and tourist-based businesses have been hit hard by the need for social isolation and the fear of contagion.  Those which already had an on-line presence are doing better than those which did not.  Those which kept up with the times are doing better then those which did not.  As old businesses have died, new ones have sprung up in their places offering on-line ordering and safe delivery.

"Ghost Kitchens" have become popular -- these are basically no-name, delivery-only restaurants that can put a professional-quality meal for 4 on your table in an hour or less.  We used to call such places "Caterers"; but since the average local caterer would only accept orders for 7-course meals for 100 to 300 people, the idea of ordering a main dish, 3 sides, and a desert for each member of your family seems like a novel idea.  Many Ghost Kitchens have "risen from the ashes" of popular mom-and-pop restaurants that went under soon after the coronavirus hit -- their owners adapted to the new business environment and they are thriving.

So yes, I can see some kind of economic Darwinism going on -- It's "Survival of the Fittest" and "Adapt or Die".  Those businesses which are already robust enough and those which can adapt will survive, while those which are stuck in their 20th-century business models are likely to die out.

That's just how it is.

:D *The Anaheim location mentioned in the first paragraph is just outside the main gates of Disneyland, which is also closed.


_________________
TRE45ON!!
Anyone attempting to argue in defense of Donald Trump automatically loses the argument.


Nades
Velociraptor
Velociraptor

Joined: 8 Jan 2017
Age: 1930
Gender: Male
Posts: 443
Location: wales

19 Oct 2020, 2:34 pm

Fnord wrote:
During the middle of the day, Anaheim* within a half-mile of Harbor and Katella now looks like a ghost town. All of the entertainment, hospitality, retail, and tourist-based businesses are either closed or have limited their hours.  A year ago, it took more than 30 minutes to drive through that area because of all the people milling around and jaywalking.  Now it takes a little under 10 minutes to go the same distance if I hit all the green lights (which is not at all hard to do these days).

People I barely know have been begging me for job leads -- mostly club, hotel, restaurant, and retail workers.  I have to tell them that the only job openings I know of are in the engineering, medical, technical, and transportation fields.  The people looking for work are those who relied mostly on their social skills to land a job, while those whose skills require a professional degree seem to have little difficulty in getting or retaining employment.

It seems to be the same story everywhere; entertainment, hospitality, retail, and tourist-based businesses have been hit hard by the need for social isolation and the fear of contagion.  Those which already had an on-line presence are doing better than those which did not.  Those which kept up with the times are doing better then those which did not.  As old businesses have died, new ones have sprung up in their places offering on-line ordering and safe delivery.

"Ghost Kitchens" have become popular -- these are basically no-name, delivery-only restaurants that can put a professional-quality meal for 4 on your table in an hour or less.  We used to call such places "Caterers"; but since the average local caterer would only accept orders for 7-course meals for 100 to 300 people, the idea of ordering a main dish, 3 sides, and a desert for each member of your family seems like a novel idea.  Many Ghost Kitchens have "risen from the ashes" of popular mom-and-pop restaurants that went under soon after the coronavirus hit -- their owners adapted to the new business environment and they are thriving.

So yes, I can see some kind of economic Darwinism going on -- It's "Survival of the Fittest" and "Adapt or Die".  Those businesses which are already robust enough and those which can adapt will survive, while those which are stuck in their 20th-century business models are likely to die out.

That's just how it is.

:D *The Anaheim location mentioned in the first paragraph is just outside the main gates of Disneyland, which is also closed.


I've been thinking of starting a ghost kitchen. I live in an area with a lot of towns in close proximity and everyone here is obese anyway so I'm sure one would go down a treat here.



Fnord
Veteran
Veteran

User avatar

Joined: 6 May 2008
Gender: Male
Posts: 45,430
Location: Stendec

19 Oct 2020, 4:55 pm

Nades wrote:
I've been thinking of starting a ghost kitchen. I live in an area with a lot of towns in close proximity and everyone here is obese anyway so I'm sure one would go down a treat here.
How well do you interact with people?

How well do you interact with people who want their food prepared only one way (that you don't know about)?

How well do you interact with people who want a complete refund because the food arrived cold (but they ate it anyway)?

How well do you interact with people who were already sick before it even arrives, but who blame their illnesses on the food anyway?


_________________
TRE45ON!!
Anyone attempting to argue in defense of Donald Trump automatically loses the argument.