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Why shouldn't capitalism be better regulated?

I'm puzzled at how you can conclude that the third party has no stake in making accurate assessments. Its own business depends completely on the extent to which clients and the public trust and rely on its information.

What such businesses do is gather data on transactions that actually took place. The prevailing rate that is deemed correct corresponds to a group average or a group median value. In other words, the final arbiters are the many employers and employees who agreed to trade together, not a remote agency who tallies statistics on those transactions.

Moreover, their services will never include either providing or using as complete and detailed a dataset as possible. The things I listed regarding attitudes, cultural background and the like are known to be hard to measure and are not as readily available as data drawn from existing public surveys, though they're important ways to evaluate how useful someone can be in a specific context. And, with regards to analysis, I might find clients who wish to pin down in fine details mean or median values for specific groups of people or specific regions. However, this is quite a different task than to claim Joe, specifically, is worth more than Jane. Manifestly, I might very track various statistics of the labor market and sell this information, but it's also obvious that I'll make mistakes, sometimes even very ample mistakes, in pinning down the value of a specific worker doing a very specific set of tasks. However, if my business is not about being right in advance of all transactions about every person I will never lose a single client over it -- and their business definitely is not about pinning down the value of every last person.

On the other hand, you really have an incentive for employees to look for the best opportunity for selling their services. Their considerations will include wage, benefits, working conditions, distance from his home, security, and even perhaps the personality of the manager. No one but that worker can make a call as to how much any of these items should be weighed against the others and he has every bit of motivation for getting a good deal by his own account of what this means. Granted, the implied search is not free and it is likely he will stop short of the absolute best deal. But again, he's in a better position than anyone else to judge when searching becomes too costly, too risky, etc. Likewise, an employer has every incentive to be able to identify workers that will give them the kind of service they want at a price which is congruent with their objective of turning a profit. There is a limit to how rapacious they can be and that limit is set by poaching: you're never alone in the labor market looking for the best, the brightest, the most enjoyable or the most responsible people.

If you ever participated in the evaluation of prospective employees, their training or in partook the hiring process yourself as an employer, you would know that not everyone who calls themselves electrician, cook, welder, carpenter, computer scientist, etc. are the same, even though their nominal titles and nominal skill sets are the same. An employee who shows up on time, who learns well, and who do not require constant supervision to operate as you would like them to operate are employees you want to keep. For one thing, the guy or girl you see working every day is known to be as good as you what you see whereas pulling people out of unemployment is always subject to some uncertainty.
 
It's not the 1890's where a hand full of industrialists reign over vast monopolies and hoard vast amounts of wealth, and I noticed you didn't offer up any examples of these proper regulations.

In the 1970s, someone could have pointed to whatever measure of the share of sales accruing to General Motors and Ford in the US to make a sweeping claim about their respective market power. However, this only makes sense insofar as we are disposed to equate results that are observed ex post facto with conditions that prevailed ex ante, therefore eliminating by an assumption other possible explanations of the outcome, such as superior technology, decision making, marketing, more responsiveness to the needs of customers, etc. For one thing, Toyota would have certainly disputed this claim of market supremacy and even put ample resources to disputing this claim. History vindicated this dispute, although much later as General Motors was on the brink of bankruptcy not so long ago.

A more thoughtful way to put the problem of market power is to ask a very simple question: who are the players? The seeming obviousness of the answer that we're talking about a few car manufacturers is only surpassed by the obviousness of its falsity. Some very relevant players in markets are not only competitors but also prospective competitors. The extent to which a firm really has that big a window to move prices favorably depends on how easy it is for someone to enter the market and capture segments of it following the higher profit opportunities excessively high prices would create. The only way to make sure this is not a problem is when the government legislates away the potential competition.

It's not obvious at all that, therefore, when exactly the government should counteract large corporations. The most recent plea for breaking large corporations exist only because of the obvious moral hazard that is created by politicians who can finance failing businesses with public funds without any consequences for owners or management. If the government can't do bailouts in the first place, there is no need to "break up" big banks and their behavior might have been very different without the retrospectively very rational anticipation that some of them would see their a** saved.

Thankfully, States like Texas challenged the EPA and the Obama administration in court which led to the Supreme Court issuing a stay which blocked Obama's Clean power plan.

The environment is a very problematic issue because property rights can seldom be suitably defined or practically enforced for vasts amounts of things such as rivers, air, animals, etc. Many people make stupid decisions as a consequence of the obvious fact that this organization problem means they do not take into account the full costs of their choices on others, something markets usually compel you to do in one way or another. It is very obvious to any economist there is a need for regulation here because of externalities.

With that being said, it's not an argument that any plan will do. Moreover, since we have to impose regulations, we get the trouble of figuring out a good, though a definitely imperfect way of getting regulators to do their job correctly. The EPA is a good idea, but it has obvious problems that plague all government agencies. One of them is that the president can unilaterally expand or contract its mandate, so short term political considerations can influence choices in ways that impose trade-offs that are far from reflecting the interests of everyone involved. Obama could win votes for Democrats from youngsters coming of age by pushing for environmental responsibility. Trump could get support for Republicans by insisting the costs these changes would impose on many business owners and some states that rely heavily on coal. They're both irrelevant concerns, from a social standpoint, on what exactly the EPA should do.
 
One of the main reason you want to keep government, away from the free market economy, is government leadership, at the highest levels, is composed of layman, compared to the experts in the field, who make the economy work. Name me one person in Congress who could form a $billion business, and be competitive in the free market? There is nobody. The level of competence, of the elected leaders, many people think should be running the economy, is too low.

Most of the top tier leaders in US government are lawyers. What does a lawyer know about business, that makes them even more of an expert, than someone who studies business, and specializes in business, and have a proven track record? Would it be a good idea to nominate a businessman as Attorney General? Wielding power is impressive, but does not equate to having competence in all areas of specialty. If you are uneducated, but win a lottery and become a millionaire, does the extra money make you brilliant all of a sudden? Power and money can create this illusion but do not equate to instant expert in all things.

When free market decisions are moved from the free market to the Government, we have layman in charge of complex fields of expertise. This explains constant deficit spending, since the layman does not understand, well enough, to be efficient. Instead, they depend on donors, from the free market, to give them free market advice exchange for donations. This is not free market, since business donors use money and power, to rig the system in their favor.

For example, big Oil and big Pharmacy, to name two of dozens, both lobby and give enough donations to the Leadership laymen to get special considerations, that go beyond the free market. If the elected official were the tops in the free market fields, clever lobbyists will not be able to con them.

If you look at the Democrat party and all their intrigue and investigations, this is actually what lawyers do best. They are using their expert skills, in law, but this is not helping the larger good of the country. They are actively staying away from layman activities, which is all the rest of the government business that needs to get done.

Picture, instead of voting for lawyers, we elected economics and business people who are experts in the economy and free market. This could be a solid foundation for government involvement. At the same time, since they are not lawyers, all the litigation and investigation, is way over their heads, so they would avoid this, and get down to business work.

In 2020, do not vote for anymore lawyers, unless you want more soap opera, since this is their area of expertise. Vote for experts in the fields that matter to you. Trump is good at business, which is why the economy is dong well. He is not a lawyer, so he is not as good at investigations, but has to subcontract that to others. This frees up his time so he can work on the economy, where he is competent and where real gains can be made.

We need health care reform, so we need more doctors in Congress and the Senate. I would except doctors from either party, over a lawyer from either party, if the goal was the best health care in the world.
 
We have FIRE regulations for a reason, yes?
Fire can be a useful tool, because it can warm your home, forge your steel and iron, cook your food, etc.
It can also burn down entire towns if left unchecked.

Capitalism is a lot like FIRE. Left unregulated and unchecked, it can become predatory and very damaging, and it can unearth some pretty awful unintended consequences. And yet when properly harnessed, capitalism can lift entire generations out of poverty, stimulate innovation and launch entirely new industries. Capitalism has demonstrated the capability to serve as a useful and rewarding tool to serve the middle class if it operates under the right kind of regulation.

So this thread is an effort to explore suggestions and ideas on how to properly regulate capitalism to do just that.

This video I saw recently had some good ideas:
 
If you ever participated in the evaluation of prospective employees, their training or in partook the hiring process yourself as an employer, you would know that not everyone who calls themselves electrician, cook, welder, carpenter, computer scientist, etc. are the same, even though their nominal titles and nominal skill sets are the same. An employee who shows up on time, who learns well, and who do not require constant supervision to operate as you would like them to operate are employees you want to keep. For one thing, the guy or girl you see working every day is known to be as good as you what you see whereas pulling people out of unemployment is always subject to some uncertainty.

I actually have done so, and the ones that are exaggerating on paper tend to be easy to spot even before the calls for interviews begin. At that point, questions about punctuality, self-motivation, and so on can be asked from the person's references. It doesn't completely wipe out the uncertainty, but IMO it does a good job of minimizing the chance of issues going forward.
 
I mean, that's pretty much the progressive agenda (ie Bernie Sanders and AOC) in relation to labor, yeah, and I largely agree with it. the point of this topic isn't discussing what "libruls" wanna do, though, it's discussing why things are fine the way they are, or what you think should be done, and why.

pure and simple, few business and corporations are willing to treat their employees properly without being forced to - so clearly something is needed. what do you think it is, since i'm assuming that you don't agree with any of the points you laid out?

So you hate success?
 
No one hates success. That's such a silly non sequitur. We hate exploitation and insane inequality.

No exploitation, no one is forced to work for the wages they are, to spend the way they do, stop it. And income inequality is only an issue for those not educated enough to understand the issue.
 
No exploitation, no one is forced to work for the wages they are, to spend the way they do, stop it. And income inequality is only an issue for those not educated enough to understand the issue.

You're clearly not educated enough to understand the issue, and yet you feel as if it is not an issue. Sounds about right.
 
Trouble is government is incompetent; government is corrupt. Some regulations is good more is not necessarily better.

Sent from my SM-G892A using Tapatalk
 
Trouble is government is incompetent; government is corrupt. Some regulations is good more is not necessarily better.

Sent from my SM-G892A using Tapatalk

topic title: Why shouldn't capitalism be better regulated?
 
We have FIRE regulations for a reason, yes?
Fire can be a useful tool, because it can warm your home, forge your steel and iron, cook your food, etc.
It can also burn down entire towns if left unchecked.

Capitalism is a lot like FIRE. Left unregulated and unchecked, it can become predatory and very damaging, and it can unearth some pretty awful unintended consequences. And yet when properly harnessed, capitalism can lift entire generations out of poverty, stimulate innovation and launch entirely new industries. Capitalism has demonstrated the capability to serve as a useful and rewarding tool to serve the middle class if it operates under the right kind of regulation.

So this thread is an effort to explore suggestions and ideas on how to properly regulate capitalism to do just that.

Government should have nothing to do with harnessing or regulating the Free Market Economy. The absolute only exceptions are basic law enforcement, contract enforcement and anti monopoly regulations. Since monopolies can usually only be established by crony capitalism: corporations and Government colluding, in a truly Free Market even anti monopoly regulations would seldom be needed.

Although the market will always have it's ups and down, every major depression or recession the US has ever suffered came from Government trying to Regulate or Harness the economy.
 
What makes you think capitalism is NOT regulated? There are huge volumes of laws and regulations on the books governing the operation of our businesses. Probably far more than necessary. The reason corporate misbehavior makes news is because it's rare. There are tens of thousands of corporations and businesses out there doing business lawfully, and honorably.

Most regulation in the US is to protect the company not the consumer/people. Yes there are many businesses that are doing it "lawfully", but that does not mean it is morally good or that it is good for capitalism. Just because you follow regulations you put in place with the help of a willing politician, does not mean that the regulation is good.

It varies from country to country of course, but regulation in Europe is primarily used to protect the consumer and the taxpayer. It is also used only if the "free market" is not abused by the corporations.

Take car emissions or/and how far the car can go on a gallon. In the US, the big 3 car companies managed to infect the legislation so much, that no mandatory improvement on mileage or emissions was done on a federal level for almost 40 years. This was clearly a bad regulation put in place by corporations. In Europe, the opposite happened. Here much to the hatred of the car companies (especially the German), the EU forced through improvement after improvement because they have a duty to protect the consumer.

Another good example is your internet companies and telecoms. Local, state and federal laws that prevent competition, put in place by monopolistic telecoms (local and regional) to protect their markets from competition. This means insane high prices for even basic internet and lack of real investment in infrastructure... why should they, since they will earn billions regardless. It is crazy that I have far more choice in Spain on mobile and fiber internet connections than the average American, and I dont even live in a town. Oh and the telecom infrastructure is kinda crap here as well, but there is competition. In the nearest town there are at least 6 companies providing 100mb fiber internet.. some even doing 1000mb. Just saying..

So it comes down to who the regulatory system is designed to protect... the 1% and corporations or the people. In the US it is the 1% and the corporations.
 
Most regulation in the US is to protect the company not the consumer/people. Yes there are many businesses that are doing it "lawfully", but that does not mean it is morally good or that it is good for capitalism. Just because you follow regulations you put in place with the help of a willing politician, does not mean that the regulation is good.

It varies from country to country of course, but regulation in Europe is primarily used to protect the consumer and the taxpayer. It is also used only if the "free market" is not abused by the corporations.

Take car emissions or/and how far the car can go on a gallon. In the US, the big 3 car companies managed to infect the legislation so much, that no mandatory improvement on mileage or emissions was done on a federal level for almost 40 years. This was clearly a bad regulation put in place by corporations. In Europe, the opposite happened. Here much to the hatred of the car companies (especially the German), the EU forced through improvement after improvement because they have a duty to protect the consumer.

Another good example is your internet companies and telecoms. Local, state and federal laws that prevent competition, put in place by monopolistic telecoms (local and regional) to protect their markets from competition. This means insane high prices for even basic internet and lack of real investment in infrastructure... why should they, since they will earn billions regardless. It is crazy that I have far more choice in Spain on mobile and fiber internet connections than the average American, and I dont even live in a town. Oh and the telecom infrastructure is kinda crap here as well, but there is competition. In the nearest town there are at least 6 companies providing 100mb fiber internet.. some even doing 1000mb. Just saying..

So it comes down to who the regulatory system is designed to protect... the 1% and corporations or the people. In the US it is the 1% and the corporations.
Utter nonsense. Questionable cherry picking doesn't negate the fact the unnecessary regulations costs businesses, and therefore consumers billions of dollars every year.
 
we dont live in a democracy

never have, never will

and if you want a socialistic society move to one....

A trite and crap answer. But if that's all one has ... :shrug:
 
Trouble is government is incompetent; government is corrupt.

Government regulators and people involved in private management have a very similar educational background. The problem definitely is not that government is run by idiots, the replacement of whom would suddenly welcome an era of unbounded prosperity. The real issue is that politicians and bureaucrats do not face the same incentives, nor benefit from the same ease of feedback from the public as does private businesses.

An example would be how tolls are set up when the government is involved. Usually, the terms set for payments are attractive to regular users and not occasional users of roads and bridges. From a social standpoint, this is manifestly a bad choice: it's when a road, bridge or highway is heavily used, as during high traffic hours, that every additional vehicle imposes large costs on others. Moreover, it is during those rush hours that the capacity of a road, highway or bridge is binding for circulation. If it would need to be bigger to accelerate transit, it's not the lone man who crosses the bridge at 2 am that will benefit from a 5th lane. The reality is that the price would need to be high precisely when everyone wants to use the bridge and low when virtually no one crosses it. The marginal cost of one more car on other users when no one is there and the bridge already exists is virtually zero. However, public institutions respond to popular pressures, not the utilization rates and scheduling preferences of users. It is obvious how the bulk of people who use the bridge often can hurt the political prospects of a politician, or the budget granted to a public agency. The costs of the more appropriate pricing policy would be very concentrated on this majority, making it easy for them to organize against a policy change. It's not exactly the case of the few people who travel at 2 am.

Once you frame the problem of "what shall we do" as the preliminary issue of "how shall we decide what to do," it becomes clear why the government is often ill-suited to solve the problem it seeks to solve: the people who need to make choices are not facing either the right incentives, nor the right feedback to make informed choices. You can put as many businessmen as you like in a position of authority in our public institutions. They'll still make very similar choices to those pursued by others.
 
Take car emissions or/and how far the car can go on a gallon. In the US, the big 3 car companies managed to infect the legislation so much, that no mandatory improvement on mileage or emissions was done on a federal level for almost 40 years. This was clearly a bad regulation put in place by corporations. In Europe, the opposite happened. Here much to the hatred of the car companies (especially the German), the EU forced through improvement after improvement because they have a duty to protect the consumer.

How do you sell cars without being responsive to consumer preferences?

The truth is that any feature of a motor vehicle can be incrementally modified with no alternative being better than the next, except in the sense that you or I might prefer some combinations over others. Each additional degree of comfort, safety, appearance, size, power, durability, customization, etc. comes at a certain cost. All that we have here are trade-offs and the real problem is to determine who's going to choose how to strike those trade-offs. Most articulated discussions of these issues will use a profoundly inappropriate categorical language, ignoring obvious problems that arise when the implied positions are correctly carried out to their logical conclusion.

For example, I might say that a certain set of devices on cars would save lives at the expense of, say, a slightly less comfortable ride. The question then becomes one of comparing added security with reduced comfort. Someone might say that life categorically is more valuable than comfort -- indeed, that security is paramount. The curiosity here is that this statement will be made with much confidence and stated without proof or argument as something obvious in spite of the fact that, if it was so obvious to everyone, you wouldn't need to arm-twist manufacturers into making safer cars. If you can notice that it is better, so can others and someone who would notice it without the competition following in step would capture a larger share of the market as consumers flocked to sacrifice comfort for safety. The mere existence of the law confirms that the answer is not obvious because very many people must disagree unless the law is a waste of ink and paper. Moreover, if security must always take precedence, we would find ourselves in the very stupid position of sacrificing all matters of advantages in the non-security aspects of a car, no matter how large, to reduce risk by incrementally smaller amounts, no matter how small.

The only thing "consumer protection" does is to substitute the choice of a third party not privy to a transaction to that of the parties involved. I see no reason why manufacturers would not at least eventually oblige consumers if a certain combination of qualities for any good was both uniquely desired by consumers and technically feasible at a cost that would suit both parties. If only one manufacturer sees it, they have a huge competitive advantage over others; and, if you think remote public officials detached from the pressing need to turn a buck are apt to just "know" what consumers want, it is certainly true of manufacturers as well. The story of the evil car manufacturers that won't oblige consumers and will impose on them "cost-cutting" measures to screw them out of as much money for as little service or quality goods as possible is nonsense on the face of it. Even if the CEO of a car company was the Devil himself, insofar as transactions are voluntary, it wouldn't change anything. The pressure is systemic: give people the kind of compromise they want or run the risk of loosing increasingly more ground to people who do. It even works regardless of why others happen to make the correction you refuse to make: they can be complete morons who stumble across the right attributes out of sheer luck while doing acid.

The only genuine issue with the example you gave is that the trade-off involves the environment for which there exists known property rights issues that makes market pricing poor conductors of information on those matters.
 
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Originally Posted by Checkerboard Strangler
So this thread is an effort to explore suggestions and ideas on how to properly regulate capitalism to do just that.

Capitalism | Definition of Capitalism by Merriam-Webster
Capitalism definition is - an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Thank you for your post. A very complicated topic. I hope everyone will stay on task, as we need to define and refine our focus. Let's start by defining the shortfalls and establishing the target improvement required to benefit all sides.

MY OPINION:

Capitalism makes the dollars go round.
Business and Government are the masters of Free Enterprise.
Employees are the soldiers.
Free Market is the battlefield.
Regulations govern the "Rules of combat" and the distribution of the booty.

Where do we start, there are existing regulations that need amendment or removal, and new regulations need to be established.

Cheers...


How to Play Capitalism (with Pictures) - wikiHow
Capitalism is commonly played as a drinking game and there a couple of different rules that can be added to make the game a little more fun: Anytime a card value is played that equals the amount of players (i.e. a 4 of diamonds and four players or a 6 of clubs for 6 players), then everyone takes a drink.
 
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We have FIRE regulations for a reason, yes?
Fire can be a useful tool, because it can warm your home, forge your steel and iron, cook your food, etc.
It can also burn down entire towns if left unchecked.

Capitalism is a lot like FIRE. Left unregulated and unchecked, it can become predatory and very damaging, and it can unearth some pretty awful unintended consequences. And yet when properly harnessed, capitalism can lift entire generations out of poverty, stimulate innovation and launch entirely new industries. Capitalism has demonstrated the capability to serve as a useful and rewarding tool to serve the middle class if it operates under the right kind of regulation.

So this thread is an effort to explore suggestions and ideas on how to properly regulate capitalism to do just that.

If you're thinking about regulating Capitalism you better think globally.
 
Trouble is government is incompetent; government is corrupt. Some regulations is good more is not necessarily better.

Sent from my SM-G892A using Tapatalk

People are incompetent. People are corrupt. People compose both the government, as well as the companies that compose the markets.

This is the issue with free market freedom fighters. You ignore how corrupt, greedy and ruthless a lot of business owners are. How bereft of morals, how bereft of dignity, and how bereft of decency some of them are.

You can wax poetic about the merits of the free market, but without government as a regulating force for the general public, unfettered laissez faire would lead directly to where it always leads - robber barons, obese grain peddlers, and roaring 20's indignation which destroyed the economy.

Regulation is necessary when human beings are involved, end of story. More regulation is better than less in the realm of restoring fair business practices and actually undoing all the monopolizing that has been going on unchecked for decades.
 
Utter nonsense. Questionable cherry picking doesn't negate the fact the unnecessary regulations costs businesses, and therefore consumers billions of dollars every year.

I disagree. Cutting taxes on business did nothing to reduce the cost of product at the point of sale. I've realized zero economic benefit from Trump's plan, since the lie peddled by conservative thinkers always claims tax cuts will reduce cost; maybe it does, but it sure does not reduce cost for the consumer, and that's frankly all I care about.

If businesses can pass on costs to consumers, they sure as hell are unwilling to pass along savings to consumers - and that is a fact.
 
I disagree. Cutting taxes on business did nothing to reduce the cost of product at the point of sale. I've realized zero economic benefit from Trump's plan, since the lie peddled by conservative thinkers always claims tax cuts will reduce cost; maybe it does, but it sure does not reduce cost for the consumer, and that's frankly all I care about.

If businesses can pass on costs to consumers, they sure as hell are unwilling to pass along savings to consumers - and that is a fact.
The tax cuts are barely a year old and they are NOT magic mushroom laws. I can't comment on your particular tax situation because there are dozens of factors involved but somewhere between 70% and 90% of all workers who actual pay taxes received a cut. Not to mention those with no tax liability but qualify for EITC who saw twice as much tax credits.
 
The tax cuts are barely a year old and they are NOT magic mushroom laws. I can't comment on your particular tax situation because there are dozens of factors involved but somewhere between 70% and 90% of all workers who actual pay taxes received a cut. Not to mention those with no tax liability but qualify for EITC who saw twice as much tax credits.

Oh spare me. We all know not a single cent in savings will ever be passed along to consumers. Businesses are used to obtaining a certain price point, and taxes are used as an argument to bolster their claim taxation and pricing are intrinsically tied together. When we raise taxes they raise prices. I've -never- seen them reduce cost from a tax break, instead they shill it all off to their board members.

Why do you lot insist on ignoring these glaring weaknesses in your arguments?
 
Oh spare me. We all know not a single cent in savings will ever be passed along to consumers. Businesses are used to obtaining a certain price point, and taxes are used as an argument to bolster their claim taxation and pricing are intrinsically tied together. When we raise taxes they raise prices. I've -never- seen them reduce cost from a tax break, instead they shill it all off to their board members.

Why do you lot insist on ignoring these glaring weaknesses in your arguments?
Most of those so-called "glaring weaknesses" are merely loony left factless mantras.
 
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