See BF comments below-- In a message dated 3/9/2010 11:30:30 A.M. Pacific Standard Time, [email protected] writes:
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 True 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]. What do you actually mean? In other words, a community willingly may incur a variety of costs in order to sustain decent employment levels, infrastructure, social services like a new clinic, etc, but then a company decides to sell in order to make a profit. A business may well earn a good return, say 20%, but stockholders demand 35 % and the local business is sold off while no-one cares in the least about the costs to the community that has sustained the business over the years. Not an academic matter since this has happened all over the Rust Belt in the past 10 - 15 years. c) Increased efficiency in one sector typically creates greater opportunities to add value elsewhere "in the long term" True. d) There need to be safeguards to ensure efficiency improvements don't come at the price of reduced healthy and safety standards Obviously. 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. ;-( Who is talking about reduction of efficiency ? 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. Yes, but I'm not sure what the point is. 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/
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