- Capitalism and Alternatives -

The company is a great investment without any need for a price war, even if there are competitors.

Posted by: DonS ( USA ) on December 07, 1999 at 22:33:46:

In Reply to: Hmmm... I'll avoid inserting a Mass into teh debate, style pun thing. posted by Red Deathy on December 03, 1999 at 14:24:22:

: : Don: It is not clear to me why a capitalist would be concearned with market-share if the market is sufficiently large. If my Evil Capitalist Candy Bar Company is running full blast making candy and selling it for $100 a pop, why do I want to increase my market-share?

: Competition for investment. If your shares return a better dividend, more people give you money, you can invest more, improve your production, and make even more money - likewise, if you ever fall behind, you get into trouble, coz your competition out invests you.

Don: Huh? Already, my company is running full blast making candy bars and selling tham at $100 a pop. The company is a great investment without any need for a price war, even if there are competitors.

: Recently Sainsbury's here laid off staff, despite making a huge profit, because their profit was less than their main competitor's. Its like saying that your horse went round the track in 5 minutes - you're mot interested in that, you're interested in where it finished in the race.

Don: No, you are interested in profit. Most likely, the people laid off were dead wood. Divisions that were not making a profit.

: : Don: True, I could try to increase production. I could buy more machines, hire more downtrodden workers, use a bigger whip on my workers, etc. If I'm making such a profit, it stands to reason I will reinvest some of this profit (that which doesn't go into my yachts, planes, cars, pretty young females, overseas bank accounts, and golden parachutes) in the company, thereby increasing profits more. It also stands to reason that other capitalists will enter the field of selling $100 candy bars. At some point, the market will be saturated, and no one will be willing to pay $100 for a candy bar. Consumer demand will be satisfied. All the evil capitalists will have to drop prices because of this. Because consumer demand is finite.

: And hence a crisis of over-production ensues, and the workers work themselves out of a job - thats the reward of hard work under capitalism, unemployment.

Don: On the contrary, prices are the best feedback to prevent over-production. The various socialist and central planning systems are more likely to suffer a crises of over-production (and under-production and mass starvation as well).

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