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Mega-corporations are best

Khaos_Mage
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7/27/2013 4:11:27 AM
Posted: 3 years ago
Economically speaking, since resources (labor, goods, etc.) are finite, would the world be better off without small businesses?

Think about it...
If there was only one grocery store, trucks would only need to stop at one place, which means less trucks on the road, and those materials could be used for other purposes. The cost for a supplier of food is reduced by not having multiple drivers delivering food, and the labor that is saved can go elsewhere in the economy.

Does my question make sense?
My work here is, finally, done.
wrichcirw
Posts: 11,196
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7/27/2013 11:22:27 AM
Posted: 3 years ago
At 7/27/2013 10:55:33 AM, tulle wrote:
If there was only one grocery store, how would people get to the groceries?

I think he meant only one grocery store COMPANY, so that in whatever area requires a grocery store, only one "mega-delivery" would be made.

Some arguments against the concept:

1) Competition ferments innovation.
2) Monopolistic pricing leads to an non-optimal market in the good, where less is supplied at a higher price to customers.
3) For necessities (like this example, food), a monopoly could take advantage of extremely inelastic demand to severely overcharge for products. If three square meals cost you an entire day's wage at this "mega-store", you'd essentially become a slave to it - without competition, no one else would be able to offer a better deal.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
tulle
Posts: 4,445
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7/27/2013 1:12:52 PM
Posted: 3 years ago
At 7/27/2013 11:22:27 AM, wrichcirw wrote:
At 7/27/2013 10:55:33 AM, tulle wrote:
If there was only one grocery store, how would people get to the groceries?

I think he meant only one grocery store COMPANY

lol my bad.
yang.
DanT
Posts: 5,693
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7/27/2013 2:20:18 PM
Posted: 3 years ago
At 7/27/2013 4:11:27 AM, Khaos_Mage wrote:
Economically speaking, since resources (labor, goods, etc.) are finite, would the world be better off without small businesses?

Think about it...
If there was only one grocery store, trucks would only need to stop at one place, which means less trucks on the road, and those materials could be used for other purposes. The cost for a supplier of food is reduced by not having multiple drivers delivering food, and the labor that is saved can go elsewhere in the economy.

Does my question make sense?

No. The more competition the better. Competition improves quality, diversity, and efficiency. Competition amongst suppliers pushes prices down, due to competitive pricing.

While Output is a function of Capital and Labor, the contribution of each variable is not fixed. The relationship between the capital to labor ratio and output is always changing. One year output might be maximized with a 3:1 ratio, while another year it might be a 1:3 ratio.

Competition is the reason you are able to choose between McDonalds and Burger King. While they offer the same product, their is a world of difference between the food they serve. Same can be said for Mac vs PC, or Pizza Hut vs Dominoes, just about any industry you can think of. Different companies will have variations in their products, despite it being the product. These variations generate prosperity and improve quality.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
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7/27/2013 2:22:12 PM
Posted: 3 years ago
There are only a few circumstances where competition is bad; Money, and National Defense can be counted among them.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
AnDoctuir
Posts: 11,060
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7/27/2013 2:25:36 PM
Posted: 3 years ago
Obviously eliminating division is to increase efficiency in some respects, but then what the f*ck would everyone else do for a living in the capitalist world?

If communism were ever correctly implemented, it would own capitalism in terms of efficiency.
AnDoctuir
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7/27/2013 2:29:12 PM
Posted: 3 years ago
If we were all to live in one big house we would be more efficiently heated than as we're currently living, separated.
jimtimmy2
Posts: 403
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7/27/2013 2:49:10 PM
Posted: 3 years ago
At 7/27/2013 2:25:36 PM, AnDoctuir wrote:
Obviously eliminating division is to increase efficiency in some respects, but then what the f*ck would everyone else do for a living in the capitalist world?

If communism were ever correctly implemented, it would own capitalism in terms of efficiency.

So, how would communism be correctly implemented?
jimtimmy2
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7/27/2013 2:51:24 PM
Posted: 3 years ago
The OP is wrong here.

If there were only one big corporation, the corporation would become desensitized to consumer needs. There would be no competition so the company would not need to maintain high quality of service to keep customers.

Competition increases consumer welfare dramatically. This same flawed thinking about competition was behind the failed experiments in central planning.
AnDoctuir
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7/27/2013 2:54:26 PM
Posted: 3 years ago
At 7/27/2013 2:49:10 PM, jimtimmy2 wrote:
At 7/27/2013 2:25:36 PM, AnDoctuir wrote:
Obviously eliminating division is to increase efficiency in some respects, but then what the f*ck would everyone else do for a living in the capitalist world?

If communism were ever correctly implemented, it would own capitalism in terms of efficiency.


So, how would communism be correctly implemented?

Everyone wanting it and having the means to achieve it. A libertarian evolution, say, to match our technological readiness.
AnDoctuir
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7/27/2013 2:59:30 PM
Posted: 3 years ago
At 7/27/2013 2:51:24 PM, jimtimmy2 wrote:
The OP is wrong here.

If there were only one big corporation, the corporation would become desensitized to consumer needs. There would be no competition so the company would not need to maintain high quality of service to keep customers.

Competition increases consumer welfare dramatically. This same flawed thinking about competition was behind the failed experiments in central planning.

This is complete nonsense. Mega-corporations are in fact forming as is, because mass-production will beat out small-scale individual enterprise any day. What's to stop them crushing small-scale business? Nothing.
Khaos_Mage
Posts: 23,214
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7/27/2013 3:45:58 PM
Posted: 3 years ago
People, perhaps you are misunderstanding my question.

I am not asking if monopolies are best overall, but strictly in economical terms. I am aware of the pitfalls of non-competition.

Instead of 3 businesses in a town providing the same service, each encompassing 1000 sq ft and 10 employees. Is it not a better use of resources to only have one business encompassing 2000 sq ft and 20 employees (i.e. a better use of resources)? Does this idea not extend all the way to the conclusion of one company per industry? Why not?

Again, there are pitfalls dealing with treatment of consumers and such, but do economists deal with that? I thought they cared about the best use of resources.
My work here is, finally, done.
DanT
Posts: 5,693
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7/27/2013 4:38:11 PM
Posted: 3 years ago
At 7/27/2013 2:25:36 PM, AnDoctuir wrote:
Obviously eliminating division is to increase efficiency in some respects, but then what the f*ck would everyone else do for a living in the capitalist world?

If communism were ever correctly implemented, it would own capitalism in terms of efficiency.

This is just plain false.

The more heterogeneous a population the more decentralization is required, and the more homogeneous a population the more centralization is required. This is true for all organizations.

If an organization is too centralized or too decentralized, it loses efficiency.

There are only a few industries that do better without competition. The 2 that immediately come to mind are money and national security.

As a medium of exchange, money is most efficient when centralized, because monetary exchange rates defeat the purpose of a medium of exchange.

As for National Defense, the Battle of Agincourt is a perfect example of what happens when armies compete for providing national defense. The French Nobles possessed their own private armies. Although the French had a superior force, the English won the battle of Agincourt, because the French Nobles competed with each other for glory rather than working together to defeat the English. The French forces received contradicting orders, and the lack of cohesiveness lead to their crushing defeat. A defense force works best when organized under a single commander, with a set command hierarchy.

These two examples are an exception to the rule. For most industries, more competition increases prosperity and efficiency.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
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7/27/2013 4:49:34 PM
Posted: 3 years ago
At 7/27/2013 3:45:58 PM, Khaos_Mage wrote:
People, perhaps you are misunderstanding my question.

I am not asking if monopolies are best overall, but strictly in economical terms. I am aware of the pitfalls of non-competition.

Instead of 3 businesses in a town providing the same service, each encompassing 1000 sq ft and 10 employees. Is it not a better use of resources to only have one business encompassing 2000 sq ft and 20 employees (i.e. a better use of resources)? Does this idea not extend all the way to the conclusion of one company per industry? Why not?

that is called a geographical monopoly. More competition is always better. If a McDonald's opens up a block from your house, your proposal would prevent a Burger King from opening up across the street from McDonald's. McDonald's would thus have a geographical monopoly on that block. People would be more inclined to go to McDonald's because it is closer, not because they prefer McDonald's over Burger King. When you factor in transportation cost i.e. driving to the restaurant, it becomes more expensive to eat at Burger King, plus it takes more time out of your schedule.

If you take into consideration delivery. Some pizza places would not be able to deliver to your house, because other pizza places have a geographical monopoly. If they have to get to your house before the Pizza gets cold, but they have to set up shop a certain distance from your house, they won't be able to deliver to your house in time. As a result, you would have to drive to the restaurant if you want pizza (especially if the other place does not deliver).

Again, there are pitfalls dealing with treatment of consumers and such, but do economists deal with that? I thought they cared about the best use of resources.

There are two forms of economics; Micro and Macro. Micro economics deals with the individual consumers and suppliers, while Macro economics deals with aggregates. Since aggregates are the sum of individuals, Macro-economics is based on microeconomics. You cannot say that the utility of a resource is maximized, if individual utility is not maximized.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
AnDoctuir
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7/27/2013 4:51:23 PM
Posted: 3 years ago
At 7/27/2013 4:38:11 PM, DanT wrote:
At 7/27/2013 2:25:36 PM, AnDoctuir wrote:
Obviously eliminating division is to increase efficiency in some respects, but then what the f*ck would everyone else do for a living in the capitalist world?

If communism were ever correctly implemented, it would own capitalism in terms of efficiency.

This is just plain false.

The more heterogeneous a population the more decentralization is required, and the more homogeneous a population the more centralization is required. This is true for all organizations.

If an organization is too centralized or too decentralized, it loses efficiency.


Bare assertion, and then you get onto your preconceived ideas on the matter. Why mightn't communism provide for diversity?
AnDoctuir
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7/27/2013 4:55:26 PM
Posted: 3 years ago
Communism means we must all wear read and no other colour besides? Um, no it doesn't. And then I'd be severly decrying "capitalist efficiency." Think pyramids.
wrichcirw
Posts: 11,196
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7/27/2013 6:57:36 PM
Posted: 3 years ago
At 7/27/2013 3:45:58 PM, Khaos_Mage wrote:
People, perhaps you are misunderstanding my question.

I am not asking if monopolies are best overall, but strictly in economical terms. I am aware of the pitfalls of non-competition.

Instead of 3 businesses in a town providing the same service, each encompassing 1000 sq ft and 10 employees. Is it not a better use of resources to only have one business encompassing 2000 sq ft and 20 employees (i.e. a better use of resources)? Does this idea not extend all the way to the conclusion of one company per industry? Why not?

Again, there are pitfalls dealing with treatment of consumers and such, but do economists deal with that? I thought they cared about the best use of resources.

IMHO it goes back to competition and innovation. I understand what you're getting at, that having redundant services where only the winners are efficient and the rest are massively inefficient due to lack of enough customer demand is not a very "overall efficient" use of resources.

But, that assumes that what we are capable of doing now is the best of all possible outcomes. The capacity to innovate clearly trumps such a perspective. Waste for the sake of innovation via competition is not waste, rather it is simply "if at first you don't succeed, try try again".

This is IMHO the historical reason why the West did better than the "rest". Competition continually forces all competitors to exceed what is currently known as the best. It compels humanity to innovate, or die trying.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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7/27/2013 7:03:41 PM
Posted: 3 years ago
At 7/27/2013 3:45:58 PM, Khaos_Mage wrote:

Again, there are pitfalls dealing with treatment of consumers and such, but do economists deal with that? I thought they cared about the best use of resources.

My understanding of economics is that they care about maximal utility. "Best use of resources" would be the use that leads to maximal utility...that does not necessarily have to mean that all resource use has to have a positive utility, merely that when all is said and done, the positives outweigh the negatives by the greatest amount possible.

Essentially, imagine a monopoly - if you had one entity with a million resources, and each one gave one unit of utility, you'd have one million utility. If, instead, there were many companies, and one company with 100,000 resources somehow created 10 utility with each resource (think of the iphone when it first came out), then the owners of the other 900,000 resources could do jack-sh!t, and as long as they provided minimal utility, the iphone outcome would be preferable to the monopoly outcome. This is what economists would call "best use of resources".
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
DanT
Posts: 5,693
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7/27/2013 7:08:48 PM
Posted: 3 years ago
Microsoft has a stock price of $31.62/share with a market cap of $263.33 billion. Compare that to Apple, who has a stock price of $440.99/share with a market cap of $400.61 billion.

Microsoft's Price is 7.2% of Apple's price, even though their Market Cap is 65.7% of Apple's. This is a pretty good indicator that Apple's prices are too high.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
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7/27/2013 7:09:30 PM
Posted: 3 years ago
At 7/27/2013 7:08:48 PM, DanT wrote:
Microsoft has a stock price of $31.62/share with a market cap of $263.33 billion. Compare that to Apple, who has a stock price of $440.99/share with a market cap of $400.61 billion.

Microsoft's Price is 7.2% of Apple's price, even though their Market Cap is 65.7% of Apple's. This is a pretty good indicator that Apple's prices are too high.

oops wrong thread
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
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7/27/2013 7:15:47 PM
Posted: 3 years ago
At 7/27/2013 4:51:23 PM, AnDoctuir wrote:
Why mightn't communism provide for diversity?

Why doesn't Burger King serve McDonald's fries?

Different organizations have different ways of doing things. When an economy is centrally planned, there is only one way of doing things. If there is only one way of doing things, there is no diversity.

The best way to achieve product diversity is to allow competition in the industry.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
AnDoctuir
Posts: 11,060
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7/27/2013 7:37:32 PM
Posted: 3 years ago
At 7/27/2013 7:15:47 PM, DanT wrote:
At 7/27/2013 4:51:23 PM, AnDoctuir wrote:
Why mightn't communism provide for diversity?

Why doesn't Burger King serve McDonald's fries?

Different organizations have different ways of doing things. When an economy is centrally planned, there is only one way of doing things. If there is only one way of doing things, there is no diversity.

The best way to achieve product diversity is to allow competition in the industry.

So you're saying communists can only have one type of fries?
AnDoctuir
Posts: 11,060
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7/27/2013 8:07:45 PM
Posted: 3 years ago
And that's just such a retarded objection anyway. Different types of french fries... and that's about as deep as it goes.
DanT
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7/27/2013 9:06:18 PM
Posted: 3 years ago
At 7/27/2013 7:37:32 PM, AnDoctuir wrote:
At 7/27/2013 7:15:47 PM, DanT wrote:
At 7/27/2013 4:51:23 PM, AnDoctuir wrote:
Why mightn't communism provide for diversity?

Why doesn't Burger King serve McDonald's fries?

Different organizations have different ways of doing things. When an economy is centrally planned, there is only one way of doing things. If there is only one way of doing things, there is no diversity.

The best way to achieve product diversity is to allow competition in the industry.

So you're saying communists can only have one type of fries?

What I am saying is over-centralization destroys diversity, because you only have 1 way of doing things. Who ever it is directing and planning the economy will determine what products are produced and how varied those products will be.

With centralized planning progress is much slower, because instead of multiple organizations using trial and error, there is only one organization using trial and error. In addition, it is harder to judge the success of the product, because there is nothing to compare it to, besides past products. So it is much harder to tell if you are headed in the right direction, and it is much easier to head down a dead end road. Without competition there is also little to no motivation to innovate or invent new products. The only reason we put a man on the moon, and launched satellites into orbit was because of competition between Russia and the US. Both countries were considering scrapping the program, but was motivated by the rival country. Competition drives progress.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
AnDoctuir
Posts: 11,060
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7/28/2013 9:21:43 AM
Posted: 3 years ago
At 7/27/2013 9:06:18 PM, DanT wrote:
At 7/27/2013 7:37:32 PM, AnDoctuir wrote:
At 7/27/2013 7:15:47 PM, DanT wrote:
At 7/27/2013 4:51:23 PM, AnDoctuir wrote:
Why mightn't communism provide for diversity?

Why doesn't Burger King serve McDonald's fries?

Different organizations have different ways of doing things. When an economy is centrally planned, there is only one way of doing things. If there is only one way of doing things, there is no diversity.

The best way to achieve product diversity is to allow competition in the industry.

So you're saying communists can only have one type of fries?

What I am saying is over-centralization destroys diversity, because you only have 1 way of doing things. Who ever it is directing and planning the economy will determine what products are produced and how varied those products will be.

With centralized planning progress is much slower, because instead of multiple organizations using trial and error, there is only one organization using trial and error. In addition, it is harder to judge the success of the product, because there is nothing to compare it to, besides past products. So it is much harder to tell if you are headed in the right direction, and it is much easier to head down a dead end road. Without competition there is also little to no motivation to innovate or invent new products. The only reason we put a man on the moon, and launched satellites into orbit was because of competition between Russia and the US. Both countries were considering scrapping the program, but was motivated by the rival country. Competition drives progress.

You, my friend, are a stupid f*ck. Two types of fries is not progress. Khaos is also a troll, definitely. Or trying to come across a troll anyway. Dunno. Don't care.
DanT
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7/28/2013 11:59:10 AM
Posted: 3 years ago
At 7/28/2013 9:21:43 AM, AnDoctuir wrote:
At 7/27/2013 9:06:18 PM, DanT wrote:
At 7/27/2013 7:37:32 PM, AnDoctuir wrote:
At 7/27/2013 7:15:47 PM, DanT wrote:
At 7/27/2013 4:51:23 PM, AnDoctuir wrote:
Why mightn't communism provide for diversity?

Why doesn't Burger King serve McDonald's fries?

Different organizations have different ways of doing things. When an economy is centrally planned, there is only one way of doing things. If there is only one way of doing things, there is no diversity.

The best way to achieve product diversity is to allow competition in the industry.

So you're saying communists can only have one type of fries?

What I am saying is over-centralization destroys diversity, because you only have 1 way of doing things. Who ever it is directing and planning the economy will determine what products are produced and how varied those products will be.

With centralized planning progress is much slower, because instead of multiple organizations using trial and error, there is only one organization using trial and error. In addition, it is harder to judge the success of the product, because there is nothing to compare it to, besides past products. So it is much harder to tell if you are headed in the right direction, and it is much easier to head down a dead end road. Without competition there is also little to no motivation to innovate or invent new products. The only reason we put a man on the moon, and launched satellites into orbit was because of competition between Russia and the US. Both countries were considering scrapping the program, but was motivated by the rival country. Competition drives progress.

You, my friend, are a stupid f*ck.
When someone resorts to name calling it is usually a sign they lost the debate.
Two types of fries is not progress.
Two types of fries is diversity, and diversity of a product leads to progress. By having two types of fries, you have a point of reference to compare the success of your company's fries. This assists in the trial and error process, to determine which fries are more profitable. This is another reason why centralized planning does not work; what is profitable in one area might not be profitable in another area.
Khaos is also a troll, definitely. Or trying to come across a troll anyway. Dunno. Don't care.

(adj) Troll (Someone AnDoctuir doesn't agree with)
"Chemical weapons are no different than any other types of weapons."~Lordknukle