Hi Billy, On Mar 9, 2010, at 11:19 AM, [email protected] wrote: > Also from the vantage of Political Economy, no bottom line analysis can > possibly be complete unless you take into account the social costs involved. > A business makes a killing, say an Ichan organization, but leaves an entire > small city > in shambles, thousands out of work, local firms going under, etc. You may > actually > end up with a billion dollars worth of damages because Ichan made > a cool profit of $ 100,000,000. > > We should allow this because some people regard Adam Smith as the 5th gospel ? > I don't think so. But this seems to be one subtext in the material you sent.
It is an interesting question. To my mind, the key principles are: a) Improvements in production efficiency are *in general* a net social good, and should be encouraged b) This should *not* be confused with financial manipulation to create stockholder value by a brute focus on reducing costs without actually improving productivity, which should be *discouraged* [though to be fair, the line isn't always clear]. c) Increased efficiency in one sector typically creates greater opportunities to add value elsewhere "in the long term" d) There need to be safeguards to ensure efficiency improvements don't come at the price of reduced healthy and safety standards e) Deliberately reducing efficiency to protect jobs ends up i) dehumanizing workers, and ii) leaving us open to foreign competition (if not here, certainly abroad) -- and often rewarding incompetent companies. ;-( f) The crucial challenge is to *manage* the rate of industrial change and disruption. Technology always moves faster, but humans don't change. We can improve the safety net, but only up to a point. Would you disagree with any of the above? -- Ernie P. _______________________________________________ Centroids mailing list: [email protected] http://radicalcentrism.com/mailman/listinfo/centroids_radicalcentrism.com Archives at http://radicalcentrism.org/pipermail/centroids_radicalcentrism.com/
