Competition is the defining regulatory force endemic to capitalism, it’s the reason half of the shitheaded capitalists of the world are eating dirt at any given time (50% of businesses fail within the first five years)
It also drives the whole lot of them into a desperate flight toward rentiership and anti-worker psychosis; to reduce costs, collect easy revenues and escape the battlefield of global competition
You’re right tho, there’s never been any such thing as “effective competition” there’s only the bloody mosh pit and the anarchy in production it generates, that’s the nature of actually existing competition
The assertion that “if they didn’t squeeze everything, they’d be competed out of the market” is patently untrue. If the market force had an iron girdle, it would barely have any room for profiteering shareholders. You genuinely wouldn’t be capable of giving an executive a bonus of $10M if the margins were that tight. If they were tight, you would see compensation for executives’ labor (something that takes virtually no acquired skill to do btw) driven down to approximately 3x the hourly rate of ordinary laborers. Since we do not see this happening, we can scientifically conclude that this is not a process that acts on the system.
They’re not rational, they’re not efficient, they are selfish and they are driven by selfishness. We really shouldn’t let economic orthodoxy masquerade as Marxist.
If the market force had an iron girdle, it would barely have any room for profiteering shareholders
Profitability is the point of the enterprise and is what the competition is centered around, firms that squeeze everything AND enrich their shareholders attract the profiteers in the first place, which attracts investment which leads to the firm winning the competition
The Iron Girdle doesn’t chase shareholders, they chase the girdle
Break yourself of the Keynesian notion that capitalist enterprise arises out of demand, profit is be all and end all and you don’t need demand to generate it, as the entire concept of Wall Street should demonstrate
Personal interest and drive doesn’t mean jackshit, IF YOU CAN’T COMPETE, every capitalist has a personal interest, every firm is driven toward profit, what matters is the mechanism that allows that interest and drive to be realized, and under Marx it’s called competition-as-war
I am reflecting on my own empirical observations of working for companies (90% of them being small businesses), piecing together all the clues I could to deduce their financials, and noticing similarities in what my friends would tell me about the businesses they worked for.
Competitive pressure is not when you see a Moe’s Diner and a Joe’s Diner on the same block. Competitive pressure is when the Joe’s Diner has to make cuts or even close because they don’t perform well enough to match the prices for comparable menu items at Moe’s.
You are contradicting yourself, though. They are not squeezing everything if they are enriching their shareholders.
By definition, if competition had driven the market to being tight enough to barely being able to allow actors to break even, they would dig into every source of expenditure to remain solvent. If the owners choose to close the business because it’s not allowing them to buy a new vacation home, that’s different from if the owners close the business because no one there makes 50k, or whatever a decent living is.
The logic/observation of narrow margins only works if you make the assumption that an enterprise can only operate if you pad the pockets of the owners/managers first and foremost, and that it is impossible to cut executive pay. But unequal compensation for labor is not a necessity to tun a business. If there is money to skim, there is slack in the budget. Period. If businesses close because there isn’t as much money as the owners want to skim, that is different from businesses closing because of competition making the business nonviable.
Empirically, we see income inequality increasing at the same time we see “profit” falling, and also at the same time we see productivity increasing and median wages stagnating. TRPF in recent decades is accompanied by a rise in ruling class compensation. “There’s no money to spare” because the rich are taking it all, not because these poor Job Creators are so squeezed that they’re barely making ends meet.
Ironically, you are advancing a classical economics position.
Competitive pressure is not when you see a Moe’s Diner and a Joe’s Diner on the same block. Competitive pressure is when the Joe’s Diner has to make cuts or even close because they don’t perform well enough to match the prices for comparable menu items at Moe’s.
There’s no dichotomy here, the location of those two Diners is just one ingredient that creates the competitive pressure, I never said location is THE ONLY gear in the machine
By definition, if competition had driven the market to being tight enough to barely being able to allow actors to break even, they would dig into every source of expenditure to remain solvent
Countless businesses do indeed do that
The logic/observation of narrow margins only works if you make the assumption that an enterprise can only operate if you pad the pockets of the owners/managers first and foremost
No, that assumption is totally unnecessary, all that matters is whether the firm is profitable; padding pockets, skimming, paying workers, not paying workers, owner buys a yacht, it’s irrelevant and incidental AS LONG as the firm’s profit rate forms a leading capital within it’s given sector, shareholders don’t care what you do (aside from paying workers) as long as you generate a growing profit rate, competition making the firm unviable is what transforms actions like bloated executive pay from a “spoil of war” to an accelerated “death sentence”
A healthy man can smoke a pack a day despite the net loss to his health, but a lung cancer patient on his deathbed cannot
Empirically, we see income inequality increasing at the same time we see “profit” falling, and also at the same time we see productivity increasing and median wages stagnating.
Because we see productive technology diffusing across the globe, generating vicious competition on national scales leading to cut wages and austerity, super profits are squirrelled away either to keep up with the scale or to escape it through rentier transfers and speculation
Modern communication technology has collapsed time and space, leading to rapidly growing centralized capitals bumping into each other, which creates a regulatory effect on each other, which means despite productivity increases capitalists still demand wages be cut so they can compete on a global scale and maintain their enormous-but shrinking profit rates
“There’s no money to spare” because the rich are taking it all, not because these poor Job Creators are so squeezed that they’re barely making ends meet.
Again Marx’s theory of competition does not imply LEADING CAPITALS are “squeezed and barely making ends meets” on the contrary it describes the process behind WHY these massive firms are marshalling endless resources and money, it’s called competition AS WAR
Again, those countless firms that can’t marshal labor, resources and capital to compete WILL find themselves squeezed out by leading capitals who know how to wage war
classical economics position
lmao Marx IS A CLASSICAL economist and you’re advancing neo-Keynesianism and it’s concept of imperfect competition, a gordian knot of false dichotomies and ad hoc improvisations to neoclassical’s even more exploded theory of perfect competition
There are millions of capitalist firms on this planet, most won’t exist in a couple years time, but thousands of them form leading and regulating capitals within dozens of sectors across 200 national economies, there’s no contradictory dichotomy here, it’s an observation of victorious armies and defeated ones
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Above this, there is a line on the accounting books that factors in elite aggrandization; it claims to be the base line but is clearly not; it includes services paid to the ruling class, whether inside or outside the company.
Above that is the level of profit on the books.
A business whose revenues fall below the third line is doing fine. A business whose revenues fall below the second line may or may not be under some pressure, but is still doing fine. A business whose revenues fall below the first line ends up quickly folding. Everything below the first line is a matter of viability; everything above the first line is a question of distribution (and class war).
This is all without even considering shareholders, because countless businesses are privately held. About half the economy is small businesses; the small fish have not been simply eaten by bigger fish. There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
Some of the biggest companies often pay zero in taxes. They are not about to die in the bloody economic war though.
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly. They have a large degree of control over what they allocate money to. They do it in a way that is “unfair” because they are self-serving, and have a psychological drive to distinguish themselves above other humans. It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Your purported model works accurately for Subway franchisees, but that is a tiny part of the economy.
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Yeah it’s called profitability
This is all without even considering shareholders, because countless businesses are privately held
Countless privately held business have shareholders and every business has investors or an investment mechanism, the factor that draws in investment is called profitability, not “elite aggrandization”
There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
Yes it is, this is empirically how most businesses die or expand, what do you think the entire subsets in business theory concerning acquisitions, mergers, and market capture is talking about? You’re literally just denying observable facts about ANY given economy on this planet
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
It’s clear you don’t understand what profit is, companies that make no profit but stay afloat can only do so because investors are making a bet on the future, they’re anticipating profits TO COME and engaging in a deferred competitive strategy to wipe out rivials and gain market they leverage for greater profit
There is no such thing as an enterprise that doesn’t have a postive profit plan, you actually believe capitalist are handing over capital to dick head ceos so they buy without the promise of imminent or future gains?
No, capitalists don’t care about cronyism as long as you generate positive profit rates, that’s all that matters, if you break that contract you end up like ENRON or that dummy from the Wolf of Wallstreet
A ceo who can’t deliver profit is simply a thief in the eyes of capitalists and while they can wait years, eventually they will come knocking for their money
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly
I’m sorry but this is patent liberalism, the capitalists “are simply bad guys” is not theory or an argument, capitalists are forced to exploit workers for the simple fact there’s no other way to aquire surplus value, workers are not gonna hand it over themselves and since there’s more than one capitalist at any given time, they have to automatically compete for that value because there is a ceiling in terms of resources, time and labor
They have a large degree of control over what they allocate money to
Precisely, and capitalists only allocate money to enterprises they deem profitable, this also create competitive pressure because higher profit rates attract greater investments
Otherwise wtf would be the point of investing money that wouldn’t pay off, people own private property so they can profit from alienated labor, not because they didn’t learn the golden rule in Sunday school
It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Not under capitalism friend, private property automatically generates alienated labor and that labor can produce surplus value, the incentives under capitalism point in one direction
You try to break that contract and the capitalists will break you, that’s why we socialists are abolishers not reformers
I just spelled out profit for you. Breaking even and having a tiny amount of money to allocate to anything that is not absolutely essential to the bare-bones functionality of the company is not profit. It’s viability.
Net revenue is what is kept in the business’s coffer after the minimum reproduction of functionality has been achieved. After that point it is a power game, a contest of who gets what from the leftovers. Some of it is management, some of it is labor, some of it is reinvestment in the company, some of it is paid out to either private owners or shareholders. Only the last item is characterized as profit. Revenue minus viability AND reinvestment AND employee remuneration above minimum is equal to profit. I shouldn’t have to walk you through this more than once.
There is no such thing as an enterprise that doesn’t have a postive profit plan
You’ve never heard of a non-profit organization? They are enterprises with financial models. They make money, and they often exploit workers, independent of any fiduciary requirement to turn a profit. They distribute everything above a certain line to reinvestment in the enterprise, and sometimes add some to increased remuneration. They exist in the world and have not been flattened out of existence in the 3+ decades of Western capitalist unipolar hegemony. Workers’ cooperatives exist too. Your model says that either they cannot exist or will be disintegrated, especially after 200-400 years of capitalism being in place. You can’t just say patently wrong things and rationalize them away “because Marx”.
You are claiming that all wages and salaries have reached equilibrium, that there’s no possible way to have any agency in the economy as it is, and treating the economy as monolithic. This is fatalism, pure and simple, and is very close to the market-worship that the Austrian economists engage in, just inverted in its approach.
The equilibrium price for managerial labor is no higher than that of general labor. If a company was compelled to profit at all costs, they would pay their executives pennies. We do not see that happening; from this we conclude there is slack in the system.
Just because there are a few less banks than there were in 2007 doesn’t mean that every company has a knife to its throat. What you are doing is like applying general relativity to the flight of an airplane. Yes, it is acting on the system and has a big effect in the long term, but it is not the causative factor.
If you have confidence in your model, you should be able to make predictions based on it. For instance, the fraction of small businesses in the American economy has not detectably shrunk in the past 20 years; your model dictates that there is a constant and prominent force compelling this to happen. It has decreased since the 18th century, but that’s not a time frame that constitutes a coercive power on entities that make business decisions on a scale of months, quarters, and years. A broad incentive is not the same as a compulsion; that’s my thesis.
I have no patience for assertions that don’t have a basis in reality. Either back up what you’re saying with concrete empirical observation, or don’t respond at all.
Let’s start over from the top, cause it’s obvious you haven’t comprehended a word I’ve said
Capitalism is profit driven, and yes it is compulsive, you know why? Because it’s a systemic emergent phenomenon from the means of production being held as private property, capitalists aquire profit either thru labor or buying cheap and selling dear, either way you’re making profit and HAVE to compete with other firms to aquire a finite amount of surplus value, that is a COMPULSION, because YOU dont have a say in the existence of other firms and the amount of surplus value out there
Profitability is the SOLE determinant of viability under a capitalist economy, breaking even is not sufficient, you know why? Because your business starts eating costs, losing investors and taking on DEBT, something breaks, someone quits, you’re on the road to bankruptcy
Net revenue is what is kept in the business’s coffer after the minimum reproduction of functionality has been achieved. After that point it is a power game, a contest of who gets what from the leftovers. Some of it is management, some of it is labor, some of it is reinvestment in the company, some of it is paid out to either private owners or shareholders. Only the last item is characterized as profit
This sentence proves you don’t know what profit is, the net revenue IS profit, costs are automatically subtracted before its accounted for under the gains column in a balance sheet
Reinvestment and dividends are not costs lmao Jesus christ, they are the point of the enterprise, labor, equipment, and rents are filed under costs
You’ve never heard of a non-profit organization? They are enterprises with financial models. They make money, and they often exploit workers, independent of any fiduciary requirement to turn a profit.
Yeah it’s almost like they’re trying a make fuckin PROFIT, almost like the “non-profit” designation is a tax cheat scheme
Also you know perfectly well we’ve been talking about CAPITALIST enterprises this entire time, so don’t trot out the entirely of human organized activity as if that’s what I’ve been referring to, I’m not talking about your book club, your student council, your mutual aid org, or your online guild, I’m about entities that file capital gains with the IRS so spare me the disingenuous tangents
They exist in the world and have not been flattened out of existence in the 3+ decades of Western capitalist unipolar hegemony. Workers’ cooperatives exist too. Your model says that either they cannot exist or will be disintegrated, especially after 200-400 years of capitalism being in place. You can’t just say patently wrong things and rationalize them away “because Marx”.
You genuinely cannot be serious with this obtuse horseshit; worker cooperatives under capitalism ARE CAPITALIST ENTERPRISES, they compete under the same dynamic as capitalist led orgs, if they don’t make profit they go out of business, for the same reasons I described above and yes there is a ceiling to their existence UNDER CAPITALISM
Investors don’t like worker power so they don’t invest in cooperatives, which gives traditional capitalist enterprises a competitive advantage over coops, otherwise we’d be living in a coop utopia
that there’s no possible way to have any agency in the economy as it is, and treating the economy as monolithic. This is fatalism, pure and simple, and is very close to the market-worship that the Austrian economists engage in, just inverted in its approach.
Bro this genuinely fuckin hilarious, the delusional claim that you have agency under a capitalist economy is literally an Austrian school canard, you’ve moved on from neo-keynesianism to Virginia School public choice theory lmao
The right wing Virginia school claims the macro economy is unknowable (despite centuries of statical empirical work) and that only micro individualistic consumer behavior can be studied, you a right winger now? Do I need to explain concepts like input-output tables and interfirm networks?
The equilibrium price for managerial labor is no higher than that of general labor
Again here we go with the mangled keynesianism, there is no such thing as equilibrium of labor price, labor takes what it can fight for and capitalists pay labor what they can get away with, all it bound the overarching profitability model
This dynamic creates gigantic discrepancies across the globe in terms of the cost of labor and is the prime contradiction of capitalism
Also what is this bizarre idea of yours about CEOs being workers, do you know anything about corporate management? Owners dominate the leadership position of small businesses and in large firm shareholders or a board of investor representatives select the leadership from amongest themselves and pay primarily thru capital gain, options or shares, not a wage lmao
What you are doing is like applying general relativity to the flight of an airplane. Yes, it is acting on the system and has a big effect in the long term, but it is not the causative factor.
It’s actaully hilarious how you have this completely backwards, profitability isn’t gravity, it’s the fuel that keeps the plane in the air, THIS is the crux of your confusion because you have an idealistic conception of capitalism and not a materialist one
For instance, the fraction of small businesses in the American economy has not detectably shrunk in the past 20 years; your model dictates that there is a constant and prominent force compelling this to happen
Also the model does not imply the total number of businesses will shrink over time, a million businesses die and a million are born, again for the thousandth time what matters is their profitability, and that’s mediated through competition
I have no patience for assertions that don’t have a basis in reality. Either back up what you’re saying with concrete empirical observation, or don’t respond at all.
I have provided statistics, real world examples, systematic explanations, helpful metaphors and all I’ve gotten in return is willful ignorance, baseless assertions, non-sequiturs, and idealism
The market is not a sentient being that needs to be appeased, rather than as an unconscious, turbulent sea of patterns driven by individuals and policies.
Capitalists have a degree of agency over the exploitation they engage in. It isn’t handed down as an order, it’s an opportunity that is actively taken, like speeding on a road.
The starting point for bourgeois economics is individual intentions, and even they recognize that a worker must sell their labor to an owner of capital and that capital must outcompete others on a market. Marxism, on the other hand, looks for objective necessities and tendencies in this very society. It’s objectively true that it is in a worker’s interest to be payed well and worked little. It’s also the case that the capitalist’s interest is to pay as little as possible for wages and for workers to labor as hard as possible under them. Capital only maintains and expands itself by feeding off living labor. We call this exploitation. If a capitalist pays too much or sells to high, they are at a competitive disadvantage and reap less value.
You express that exploitation is a moral evil, but insodoing, you imply a command to the capitalist to deny their own interest: make less money and be less competitive.
The point of Marxism is not to build a society with “fair” wages, but to abolish the wage labor system that pits people’s immediate material interests in such direct conflict. In capitalism, wealth needs poverty. The latter is not an immoral mistake.
You’re talking about leading capitals not your average capitalist enterprise, for the vast majority of businesses the profit margins are indeed tight
You mistook an outlier for the average, your average franchise owner is not playing at the same level as the owner of Wal Mart
Since we do not see this happening, we can scientifically conclude that this is not a process that acts on the system.
That’s patently false, go to any plaza or retail center within the United States and tell me competition “isn’t acting on the system”, you think Wal-Mart and Costco are parked across the street from each other by accident?
We really shouldn’t let economic orthodoxy masquerade as Marxist.
Neoclassical orthodoxy asserts any firm at scale isn’t competing properly and that capitalist competition is a perfect sorting machine that optimizes outcomes
That’s not a description of the Marxist conception of competition as a bloody, dirty war with mass causalites, which is what I’m using
Ironically you’re advancing a neo-Keynesian position
Competition is the defining regulatory force endemic to capitalism, it’s the reason half of the shitheaded capitalists of the world are eating dirt at any given time (50% of businesses fail within the first five years)
It also drives the whole lot of them into a desperate flight toward rentiership and anti-worker psychosis; to reduce costs, collect easy revenues and escape the battlefield of global competition
You’re right tho, there’s never been any such thing as “effective competition” there’s only the bloody mosh pit and the anarchy in production it generates, that’s the nature of actually existing competition
The assertion that “if they didn’t squeeze everything, they’d be competed out of the market” is patently untrue. If the market force had an iron girdle, it would barely have any room for profiteering shareholders. You genuinely wouldn’t be capable of giving an executive a bonus of $10M if the margins were that tight. If they were tight, you would see compensation for executives’ labor (something that takes virtually no acquired skill to do btw) driven down to approximately 3x the hourly rate of ordinary laborers. Since we do not see this happening, we can scientifically conclude that this is not a process that acts on the system.
They’re not rational, they’re not efficient, they are selfish and they are driven by selfishness. We really shouldn’t let economic orthodoxy masquerade as Marxist.
Profitability is the point of the enterprise and is what the competition is centered around, firms that squeeze everything AND enrich their shareholders attract the profiteers in the first place, which attracts investment which leads to the firm winning the competition
The Iron Girdle doesn’t chase shareholders, they chase the girdle
Break yourself of the Keynesian notion that capitalist enterprise arises out of demand, profit is be all and end all and you don’t need demand to generate it, as the entire concept of Wall Street should demonstrate
That is literally what I started off saying.
Personal interest and drive doesn’t mean jackshit, IF YOU CAN’T COMPETE, every capitalist has a personal interest, every firm is driven toward profit, what matters is the mechanism that allows that interest and drive to be realized, and under Marx it’s called competition-as-war
I am reflecting on my own empirical observations of working for companies (90% of them being small businesses), piecing together all the clues I could to deduce their financials, and noticing similarities in what my friends would tell me about the businesses they worked for.
Competitive pressure is not when you see a Moe’s Diner and a Joe’s Diner on the same block. Competitive pressure is when the Joe’s Diner has to make cuts or even close because they don’t perform well enough to match the prices for comparable menu items at Moe’s.
You are contradicting yourself, though. They are not squeezing everything if they are enriching their shareholders.
By definition, if competition had driven the market to being tight enough to barely being able to allow actors to break even, they would dig into every source of expenditure to remain solvent. If the owners choose to close the business because it’s not allowing them to buy a new vacation home, that’s different from if the owners close the business because no one there makes 50k, or whatever a decent living is.
The logic/observation of narrow margins only works if you make the assumption that an enterprise can only operate if you pad the pockets of the owners/managers first and foremost, and that it is impossible to cut executive pay. But unequal compensation for labor is not a necessity to tun a business. If there is money to skim, there is slack in the budget. Period. If businesses close because there isn’t as much money as the owners want to skim, that is different from businesses closing because of competition making the business nonviable.
Empirically, we see income inequality increasing at the same time we see “profit” falling, and also at the same time we see productivity increasing and median wages stagnating. TRPF in recent decades is accompanied by a rise in ruling class compensation. “There’s no money to spare” because the rich are taking it all, not because these poor Job Creators are so squeezed that they’re barely making ends meet.
Ironically, you are advancing a classical economics position.
There’s no dichotomy here, the location of those two Diners is just one ingredient that creates the competitive pressure, I never said location is THE ONLY gear in the machine
Countless businesses do indeed do that
No, that assumption is totally unnecessary, all that matters is whether the firm is profitable; padding pockets, skimming, paying workers, not paying workers, owner buys a yacht, it’s irrelevant and incidental AS LONG as the firm’s profit rate forms a leading capital within it’s given sector, shareholders don’t care what you do (aside from paying workers) as long as you generate a growing profit rate, competition making the firm unviable is what transforms actions like bloated executive pay from a “spoil of war” to an accelerated “death sentence”
A healthy man can smoke a pack a day despite the net loss to his health, but a lung cancer patient on his deathbed cannot
Because we see productive technology diffusing across the globe, generating vicious competition on national scales leading to cut wages and austerity, super profits are squirrelled away either to keep up with the scale or to escape it through rentier transfers and speculation
Modern communication technology has collapsed time and space, leading to rapidly growing centralized capitals bumping into each other, which creates a regulatory effect on each other, which means despite productivity increases capitalists still demand wages be cut so they can compete on a global scale and maintain their enormous-but shrinking profit rates
Again Marx’s theory of competition does not imply LEADING CAPITALS are “squeezed and barely making ends meets” on the contrary it describes the process behind WHY these massive firms are marshalling endless resources and money, it’s called competition AS WAR
Again, those countless firms that can’t marshal labor, resources and capital to compete WILL find themselves squeezed out by leading capitals who know how to wage war
lmao Marx IS A CLASSICAL economist and you’re advancing neo-Keynesianism and it’s concept of imperfect competition, a gordian knot of false dichotomies and ad hoc improvisations to neoclassical’s even more exploded theory of perfect competition
There are millions of capitalist firms on this planet, most won’t exist in a couple years time, but thousands of them form leading and regulating capitals within dozens of sectors across 200 national economies, there’s no contradictory dichotomy here, it’s an observation of victorious armies and defeated ones
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Above this, there is a line on the accounting books that factors in elite aggrandization; it claims to be the base line but is clearly not; it includes services paid to the ruling class, whether inside or outside the company.
Above that is the level of profit on the books.
A business whose revenues fall below the third line is doing fine. A business whose revenues fall below the second line may or may not be under some pressure, but is still doing fine. A business whose revenues fall below the first line ends up quickly folding. Everything below the first line is a matter of viability; everything above the first line is a question of distribution (and class war).
This is all without even considering shareholders, because countless businesses are privately held. About half the economy is small businesses; the small fish have not been simply eaten by bigger fish. There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
Some of the biggest companies often pay zero in taxes. They are not about to die in the bloody economic war though.
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly. They have a large degree of control over what they allocate money to. They do it in a way that is “unfair” because they are self-serving, and have a psychological drive to distinguish themselves above other humans. It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Your purported model works accurately for Subway franchisees, but that is a tiny part of the economy.
Yeah it’s called profitability
Countless privately held business have shareholders and every business has investors or an investment mechanism, the factor that draws in investment is called profitability, not “elite aggrandization”
Yes it is, this is empirically how most businesses die or expand, what do you think the entire subsets in business theory concerning acquisitions, mergers, and market capture is talking about? You’re literally just denying observable facts about ANY given economy on this planet
It’s clear you don’t understand what profit is, companies that make no profit but stay afloat can only do so because investors are making a bet on the future, they’re anticipating profits TO COME and engaging in a deferred competitive strategy to wipe out rivials and gain market they leverage for greater profit
There is no such thing as an enterprise that doesn’t have a postive profit plan, you actually believe capitalist are handing over capital to dick head ceos so they buy without the promise of imminent or future gains?
No, capitalists don’t care about cronyism as long as you generate positive profit rates, that’s all that matters, if you break that contract you end up like ENRON or that dummy from the Wolf of Wallstreet
A ceo who can’t deliver profit is simply a thief in the eyes of capitalists and while they can wait years, eventually they will come knocking for their money
I’m sorry but this is patent liberalism, the capitalists “are simply bad guys” is not theory or an argument, capitalists are forced to exploit workers for the simple fact there’s no other way to aquire surplus value, workers are not gonna hand it over themselves and since there’s more than one capitalist at any given time, they have to automatically compete for that value because there is a ceiling in terms of resources, time and labor
Precisely, and capitalists only allocate money to enterprises they deem profitable, this also create competitive pressure because higher profit rates attract greater investments
Otherwise wtf would be the point of investing money that wouldn’t pay off, people own private property so they can profit from alienated labor, not because they didn’t learn the golden rule in Sunday school
Not under capitalism friend, private property automatically generates alienated labor and that labor can produce surplus value, the incentives under capitalism point in one direction
You try to break that contract and the capitalists will break you, that’s why we socialists are abolishers not reformers
I just spelled out profit for you. Breaking even and having a tiny amount of money to allocate to anything that is not absolutely essential to the bare-bones functionality of the company is not profit. It’s viability.
Net revenue is what is kept in the business’s coffer after the minimum reproduction of functionality has been achieved. After that point it is a power game, a contest of who gets what from the leftovers. Some of it is management, some of it is labor, some of it is reinvestment in the company, some of it is paid out to either private owners or shareholders. Only the last item is characterized as profit. Revenue minus viability AND reinvestment AND employee remuneration above minimum is equal to profit. I shouldn’t have to walk you through this more than once.
You’ve never heard of a non-profit organization? They are enterprises with financial models. They make money, and they often exploit workers, independent of any fiduciary requirement to turn a profit. They distribute everything above a certain line to reinvestment in the enterprise, and sometimes add some to increased remuneration. They exist in the world and have not been flattened out of existence in the 3+ decades of Western capitalist unipolar hegemony. Workers’ cooperatives exist too. Your model says that either they cannot exist or will be disintegrated, especially after 200-400 years of capitalism being in place. You can’t just say patently wrong things and rationalize them away “because Marx”.
You are claiming that all wages and salaries have reached equilibrium, that there’s no possible way to have any agency in the economy as it is, and treating the economy as monolithic. This is fatalism, pure and simple, and is very close to the market-worship that the Austrian economists engage in, just inverted in its approach.
The equilibrium price for managerial labor is no higher than that of general labor. If a company was compelled to profit at all costs, they would pay their executives pennies. We do not see that happening; from this we conclude there is slack in the system.
Just because there are a few less banks than there were in 2007 doesn’t mean that every company has a knife to its throat. What you are doing is like applying general relativity to the flight of an airplane. Yes, it is acting on the system and has a big effect in the long term, but it is not the causative factor.
If you have confidence in your model, you should be able to make predictions based on it. For instance, the fraction of small businesses in the American economy has not detectably shrunk in the past 20 years; your model dictates that there is a constant and prominent force compelling this to happen. It has decreased since the 18th century, but that’s not a time frame that constitutes a coercive power on entities that make business decisions on a scale of months, quarters, and years. A broad incentive is not the same as a compulsion; that’s my thesis.
I have no patience for assertions that don’t have a basis in reality. Either back up what you’re saying with concrete empirical observation, or don’t respond at all.
Let’s start over from the top, cause it’s obvious you haven’t comprehended a word I’ve said
Capitalism is profit driven, and yes it is compulsive, you know why? Because it’s a systemic emergent phenomenon from the means of production being held as private property, capitalists aquire profit either thru labor or buying cheap and selling dear, either way you’re making profit and HAVE to compete with other firms to aquire a finite amount of surplus value, that is a COMPULSION, because YOU dont have a say in the existence of other firms and the amount of surplus value out there
Profitability is the SOLE determinant of viability under a capitalist economy, breaking even is not sufficient, you know why? Because your business starts eating costs, losing investors and taking on DEBT, something breaks, someone quits, you’re on the road to bankruptcy
This sentence proves you don’t know what profit is, the net revenue IS profit, costs are automatically subtracted before its accounted for under the gains column in a balance sheet
Reinvestment and dividends are not costs lmao Jesus christ, they are the point of the enterprise, labor, equipment, and rents are filed under costs
Yeah it’s almost like they’re trying a make fuckin PROFIT, almost like the “non-profit” designation is a tax cheat scheme
Also you know perfectly well we’ve been talking about CAPITALIST enterprises this entire time, so don’t trot out the entirely of human organized activity as if that’s what I’ve been referring to, I’m not talking about your book club, your student council, your mutual aid org, or your online guild, I’m about entities that file capital gains with the IRS so spare me the disingenuous tangents
You genuinely cannot be serious with this obtuse horseshit; worker cooperatives under capitalism ARE CAPITALIST ENTERPRISES, they compete under the same dynamic as capitalist led orgs, if they don’t make profit they go out of business, for the same reasons I described above and yes there is a ceiling to their existence UNDER CAPITALISM
Investors don’t like worker power so they don’t invest in cooperatives, which gives traditional capitalist enterprises a competitive advantage over coops, otherwise we’d be living in a coop utopia
Bro this genuinely fuckin hilarious, the delusional claim that you have agency under a capitalist economy is literally an Austrian school canard, you’ve moved on from neo-keynesianism to Virginia School public choice theory lmao
The right wing Virginia school claims the macro economy is unknowable (despite centuries of statical empirical work) and that only micro individualistic consumer behavior can be studied, you a right winger now? Do I need to explain concepts like input-output tables and interfirm networks?
Again here we go with the mangled keynesianism, there is no such thing as equilibrium of labor price, labor takes what it can fight for and capitalists pay labor what they can get away with, all it bound the overarching profitability model
This dynamic creates gigantic discrepancies across the globe in terms of the cost of labor and is the prime contradiction of capitalism
Also what is this bizarre idea of yours about CEOs being workers, do you know anything about corporate management? Owners dominate the leadership position of small businesses and in large firm shareholders or a board of investor representatives select the leadership from amongest themselves and pay primarily thru capital gain, options or shares, not a wage lmao
It’s actaully hilarious how you have this completely backwards, profitability isn’t gravity, it’s the fuel that keeps the plane in the air, THIS is the crux of your confusion because you have an idealistic conception of capitalism and not a materialist one
lmao you’re pulling my leg right? You think I pulled the 50% of businesses fail within 5 years stat out my ass or something, that’s a real statistic which is why I used it https://www.chamberofcommerce.org/small-business-statistics/
Also the model does not imply the total number of businesses will shrink over time, a million businesses die and a million are born, again for the thousandth time what matters is their profitability, and that’s mediated through competition
I have provided statistics, real world examples, systematic explanations, helpful metaphors and all I’ve gotten in return is willful ignorance, baseless assertions, non-sequiturs, and idealism
YOU DONT KNOW WHAT YOURE TALKING ABOUT
It’s not “either or.” The market demands exploitation and capitalists themselves have an interest in exploitation.
The market is not a sentient being that needs to be appeased, rather than as an unconscious, turbulent sea of patterns driven by individuals and policies.
Capitalists have a degree of agency over the exploitation they engage in. It isn’t handed down as an order, it’s an opportunity that is actively taken, like speeding on a road.
The starting point for bourgeois economics is individual intentions, and even they recognize that a worker must sell their labor to an owner of capital and that capital must outcompete others on a market. Marxism, on the other hand, looks for objective necessities and tendencies in this very society. It’s objectively true that it is in a worker’s interest to be payed well and worked little. It’s also the case that the capitalist’s interest is to pay as little as possible for wages and for workers to labor as hard as possible under them. Capital only maintains and expands itself by feeding off living labor. We call this exploitation. If a capitalist pays too much or sells to high, they are at a competitive disadvantage and reap less value.
You express that exploitation is a moral evil, but insodoing, you imply a command to the capitalist to deny their own interest: make less money and be less competitive.
The point of Marxism is not to build a society with “fair” wages, but to abolish the wage labor system that pits people’s immediate material interests in such direct conflict. In capitalism, wealth needs poverty. The latter is not an immoral mistake.
You’re talking about leading capitals not your average capitalist enterprise, for the vast majority of businesses the profit margins are indeed tight
You mistook an outlier for the average, your average franchise owner is not playing at the same level as the owner of Wal Mart
That’s patently false, go to any plaza or retail center within the United States and tell me competition “isn’t acting on the system”, you think Wal-Mart and Costco are parked across the street from each other by accident?
Neoclassical orthodoxy asserts any firm at scale isn’t competing properly and that capitalist competition is a perfect sorting machine that optimizes outcomes
That’s not a description of the Marxist conception of competition as a bloody, dirty war with mass causalites, which is what I’m using
Ironically you’re advancing a neo-Keynesian position