this post was submitted on 22 Jan 2024
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My fellow Lemmy user, we dont live in a post-scarity world because profits matter more than people in our Capitalist Society. We could live in a post-scarity world, but that would come at the cost of profits for the 1% who do effectively zero work.
We literally destroy food in this country instead of giving it to people who have nothing. The "scarcity" is entirely manufactured.
No we couldn't. If those profits went away, it wouldn't lead to a post-scarcity society, those companies would simply cease to exist. Along with the goods they produce and the jobs they create.
Actually, they wouldn't cease to exist without profits. Profits are income in excess of expenses.
Without profits, investors don't get dividends. Businesses can be entirely successful without every turning a profit because they "only" produce goods and distribute the income entirely to cover costs including labor.
If we did something radical like taking ownership of companies away from investors and holding them in public trust, you wouldn't see the companies cease to exist, you'd see prices come down, wages go up, or heavy infrastructure investment.
Profit is an indicator of market inefficiency. The equilibrium state for a market is zero profit.
You also end up with management and incentive issues. You can correct those with violence or starvation in the short term and hope everything works out in the long term.
What, to you, is the difference between the owners being the government, and the owners being investors, all else being equal?
Do you think people don't get paid if there's no profit? Profit is just money left over after everyone gets paid and the bills are settled. It just goes to investors, and the employees don't see it.
Do you think that transition would happen without severe turmoil? That's the period I'm referring to. I think there's a huge difference in incentives to create new businesses as well as to keep running them efficiently between private investment and government...I'm not sure what method you propose to regulate industry.
It doesn't matter if people get paid if shelves are empty. The economy isn't a magical portal that delivers toilet paper to those in need: it's an insanely complicated set of (highly compromised at the moment, thanks to rich fucks and the officials/politicians they buy) human behaviors that act as market signals.
Why do you think there would be severe turmoil? In existing cases where the government has taken control of a business in the US, it's typically reduced turmoil, which is why they've done it.
The difference in incentive is that private investment is looking for profits, and public ownership is usually more concerned with stability or public welfare.
What do you picture a change in ownership looking like? Do you think that somehow means massive layoffs and changes in management? Why would shelves go empty? What calamity befell the economy when we nationalized passenger rail, airport security, or mortgage financing? Or when we temporarily nationalized GM?
If changing ownership decimates the economy, then why hasn't it been decimated already by routing changed in ownership that businesses have?
All this is aside from the original point, which is that profitability is not the same thing as solvency.
Siphoning some percentage of the companies revenue to investors isn't what makes the business work.
Are you talking about tiny changes or an entire economy? I don't think it's at all similar. What do you plan on doing with the owners you've taken property from?
Fuck if I know? I wasn't even advocating for anything, I was just explaining that "no profit" doesn't mean a business ceases to exist. An example of this is state owned enterprises, which don't turn a profit but still add to the economy and provide value to society. They pay their employees, and things are fine.
In a nationalization scheme, you can either compensate the investors a fair value, or seize their assets. Emminent domain is typically more fair, although recently examples tend towards either buying a controlling share at bankruptcy prices, or seizing the business outright and leaving shareholders in the lurch.
My take would be that if we're taking the business for the public good, we should pay a fair value for it, and if it's to stabilize something important that it's fine for investors to take the fall, since without stabilization they also would have lost their money.
Fair enough.
I think you'd meet more resistance than you expect, and I'm not convinced the goals of government officials are as sane as we'd like.
If that value is market value, we're kind of fucked.
To be clear, I don't disagree with your initial assertion. Markets pay people that notice inefficiencies. I'm just not convinced there's a better model.
I don't know that there's a better model either, but I'm very confident that we vastly overvalue investors in our current setup.
In an ideal society, I think workers would be compensated for the value they produce not the value they'll accept, and that's just incompatible with a society that structurally predisposed to value investment above labor.
I don't think there's a quick or easy path to get there, but in the meantime I'm aggressively unsympathetic to investor class woes.
In terms of nationalization for the common good, I'm generally referring to things like Amtrak or the TSA. There's a fair value that can be assessed largely independently of any market value.
In my ideal society we'd take care of each other.
Don't use the TSA as a fucking model. Shit.
How do you feel about compensation for shit like QA at peeps like boeing? Lots of us don't 'produce' but we're huge into it.
I'm not pedantic about "production" being actual literal "fabrication", but just a contrast to "rent seeking" or "investment".
Fair enough. Thanks for the conversation.
What a dumb take. If I work all day to earn money, and I use some of it to pay my bills and save the rest, does that mean I'm being inefficient? Is my employer being inefficient by paying me more than I need?
That's literally a guiding tenet of capitalism. Profit is an indicator of market inefficiency because not enough of a good is being produced to satisfy demand. The existence of profit in a market segment signals to others that they should enter the market to try to capture some of the profit, which lowers the profit each party gets. As competition increases, profits lower until supply is in equilibrium with demand.
If it's a situation where competition isn't feasible, then profit is an indicator that the business is artificially charging more than they need to.
Market efficiency is one type of efficiency. Is a widget maker suddenly becomes more efficient at producing widgets, they can sell more widgets at the same price, leading to increased profits.
Production became more efficient, but the market became less efficient, signalling that other firms should find a way to compete and get those profits, until competition drives prices down to the cost of production.
https://youtu.be/b-4ry8ZLwoQ?si=1r0GU8HVCT7dC1OP
You are not a market segment, so your personal finances aren't comparable.
Your boss is being inefficient if they're paying more for labor than they have to. Labor is a market, and high wages signal to workers that they should enter a labor segment, which eventually drives wages in that segment down until an equilibrium is reached.
Exactly, you'd also see the inovation to drop, effectiveness of people's work would decrease slowly and also quality of products would go down. It's actually not that radical, many, many countries have tried that, both small and large, gigantic even. But rarely (if ever) it worked in a long run
Why do you think work effectiveness or innovation would drop? The people doing the work already don't see the profits. Nothing would change for them.
There's no difference between the board of directors being appointed by investors and then being appointed by elected officials, as far as the employees are concerned.
There's a difference between a state run and a state owned enterprise.
A publicly owned enterprise is perfectly common, and indistinguishable from any other business.
They're quite common around the world, and some of the largest companies on the planet are state owned.
So you honestly believe that if executive compensation was more modest, they would simply shut down their companies?
And if that did happen, that nobody else would jump into the gap in the market?
The means of production would still exist.
Do you know what the means of production are? Labor. Not magic!
Factories, farming equipment ,machinery all would still exist.
Which means they either need to be worked, i.e. labor is needed; or there is scarcity of food and goods. Neither option results in a post-scarcity society.
You clearly have not realized the sheer amount of food that stores throw away because it wasn't purchased. Not because it wasn't edible, but because it didn't turn X profit in Y time. Dumpsters are secured and food often deliberately made inedible. Very little is ever simply donated because that would call capitalism into serious question.
That is entirely irrelevant to the discussion here. The person I am responding to is arguing that we somehow could transform into a society where nobody has to work. Not one where everybody who works today still works, but with fairer and better distribution of the produced output.