Globalization
POSTED BY: deepgirl187
UPDATED: Tuesday, August 26, 2025 22:20
VIEWED: 9221
PAGE 6 of 15
Quote:
Originally posted by SignyM:Quote:Apparently the idea of "aggregate" is foreign to you. If you can't handle the idea of aggregate, don't try discussing economics. My manufacturer is a stand-in for ALL manufacturers, as my nominal 10% profit is a stand-in for ALL profits.
If your idea is to isolate one economic element your argumant is baseless. In your simplification you have postulated a world where one manufacturer has a monopoly making something nobody would buy. In that case they go to the wall like buggy whip makers.
So, let me try this again: Why would ANY manufacturing invest in expanding production if the market wasn't there?
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Don't come that argument with me again. The day you publish your Master's degree in economics you can claim to be more qualified. Until then you're a sad little loser having a hissy fit because the world doesnt work the way he likes.
To answer your question. If your manufacturer represents all manufacturers, if nobody could make money selling anything, could make nothing new, could not offer any new service. If nobody grew food, mined material provided any kind of service then yes maybe. Since that is completely unrealistic we will ignore it.
Like I said the money supply reflects wealth in the economy. It's an analogue it is not the real deal. If all the money was burnt tomorrow people would still grow stuff, make stuff and trade stuff even if they had to barter.
Your "One manufacturer" simplification has the problem I have pointed out to you 3 times already. In that case yes there would be a problem because there would be no competition. In reality someone that doesnt have Megatechs market share and who wants some of the action will try to make widgets at a lower price, because they would want some of that dwindling money. In doing so they would generate economic activity that would make the few notes in circulation be worth more. It would put money in the pockets of diferent people that would buy stuff.
People have traded since before there was writing. If you trade for an extra banana with a view to trading that excess with someone else for something else you want that is economic activity even if no cash is exchanged.
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Quote:I don't want this discussion to degenerate into snark, so let me try this again because its' clear that you're not understanding my point (which has nothing to do with monopolization). IF you were to take all manufacturers and consider them as a whole (aggregate) then as a whole they have skimmed off some percentage of the available money supply as "profit". Their workers have that much less money to "buy stuff with". So now, the business is tryng to decide what to do with that profit.
Your "One manufacturer" simplification has the problem I have pointed out to you 3 times already.
What would YOU do?
BTW- Have you read Keynes? He was the one who identified this conundrum (and it IS a conundrum!) and figured out a solution.
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Always look upstream.
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So, these profits Sig, are they sitting as actual Cash in mattresses, or perhaps the business has put the money in a bank, CD, stocks....
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Quote:
Originally posted by SignyM:Quote:I don't want this discussion to degenerate into snark, so let me try this again. IF you were to take all manufacturers and consider them as a whole (aggregate) then as a whole they have skimmed off some percentage of the available money supply as "profit". Their workers have that much less money to "buy stuff with". So now, the business is tryng to decide what to do with that profit.
Your "One manufacturer" simplification has the problem I have pointed out to you 3 times already.
What would YOU do?
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Always look upstream.
Invest that money in new product development/ buy new machines/ pay dividends/ try to undercut my competitor or buy him out/ diversify into other businesses.
That is your problem. When you aggrigate all businesses you are then considering them a single entity. As such you are discounting that a significant part of any company's activity is competition with rivals. That is what they spend money on that is the mechanism that drives capitalism. If you say that a precondition is that these things are to be considered one entity and discount any competition then you have just discribed Stalinism not capitalism. And yes it doesnt work.
Let's cut the analogy stuff completely because it simply doesnt work for you. The feeling I get is that you view company profits as some kind of economic drag. If you do that then so are workers wages. In both cases they are rewards for having done work. No profit means no investment and nobody makes anything. No wages mean no workforce and nobody makes anything.
The thing you fail to recognise is that like wages profits get spent as income, either by the company itself or by it's shareholders and that they buy stuff in the same way the worker buys stuff. If both spend $1 they would generate equal amounts of economic activity.
You are still locked into this vision that profits equals fat cats lighting cigars with $100 bills. In most cases those profits make sure you have a job next week ( don't know who you work for but unless it's a government job your company is doing it for profit and if they didnt make money doing it you would be out of a job.) Those profits grow the business, they pay pensions, they pay taxes.
Want Universal healthcare Siggy? Want a decent education standard for your kids? You better hope that folks keep making profits because at the end of the day profits from a strong economy pays for all of that.
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Fletch2, you are (again) entirely misdunderstanding my point, which is not to paint corporateers and businessmen as fatcats lighting ciagrs with $100 bills, but simply to follow the flow of money.
Okay, I spend my profits on better machines which means that I can lay off a third of my 100 workers. So for the several months that I install and debug the machines I have an extra five guys on-board, and then after that and for the forseeable future I employ only 67 people. So now I've reduced the potential market even further.
Now what?
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Always look upstream.
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Quote:
Originally posted by SignyM:
Fletch2, you are (again) entirely misdunderstanding my point, which is not to paint corporateers and businessmen as fatcats lighting ciagrs with $100 bills, but simply to follow the flow of money.
Okay, I spend my profits on better machines which means that I can lay off a third of my 100 workers. So for the several months that I install and debug the machines I have an extra five guys on-board, and then after that and for the forseeable future I employ only 67 people. So now I've reduced the potential market even further.
Now what?
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Always look upstream.
Now I cut price and expand my market share, or I hire 100 people to develop my new killer product, or I open a second line to make more. Or I invest in that new startup that hires 120 new people or...
Making money is not about screwing workers and cutting costs. You have to develop products to stay ahead. You have to be able to increase demand and meet it. Cost cutting comes on a downturn in an economic cycle. During an uptick you are so desperate to make money while you can that you hire people.
Laying folks off and THEN spending the "several months" to automate? This guy is making dumb decisions because he's desperate not because he's greedy. Think of all the profit he has lost? The only explanation is that he closed a line that was unprofitable anyway and was then trying to reopen it with new technology.
The funny thing. I come from a country that has a real working class, real class division and really militant trade unions and I have never heard class hatred like I hear from you. Companies exist to make profits, the fact that they employ people to do that is a side effect not their reason for existance. As a worker you find the best deal you can with the company that treats you best and you move on if you don't like them.
Profit IS the point everything else is just great and lucky. You need a European to tell you this?
BP massive profits. Love it, my pension fund is heavily invested, that's security for my dotage. All that lovely money going to the NHS thanks to corporate taxes? Means if I got sick I don't have to worry about paying for it.
Lovely jubbly.
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Quote:So my market SHARE goes up. Good for me! But those laid-off people cannot afford my product no matter how low the price, because they're not working. So the total market has declined. I have more profits. What do I do with that?
Now I cut price and expand my market share
BTW, my businessman did not lay off and "then" autmate. What I said was
Quote:Which makes 105
So for the several months that I install and debug the machines I have an extra five guys on-board
Quote:
and then after that and for the forseeable future I employ only 67 people.
BTW- Have you EVER read Keynes? Seems not.
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Always look upstream.
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Quote:Not class hatrd. Economic analysis
The funny thing. I come from a country that has a real working class, real class division and really militant trade unions and I have never heard class hatred like I hear from you.
Quote:I'm getting there, don't rush me.
Companies exist to make profits, the fact that they employ people to do that is a side effect not their reason for existance
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Always look upstream.
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So, to continue the analysis:
So now, I'm ahead of the pack. I have a bigger market share, and more profits. Meanwhile, the competition is not sitting still. Factory B has invested in even better technology. They can operate with only 50 workers. Factory C has wrested a 55% wage and benefits concession from THEIR employees. Now, everyones' prices have gone down, but so has the consumer market.
Does this sound like a downward spiral? It should because it is. It's the genesis of a classic depression. Which is a FACT of economic life under capitalism. It's not an unresolveable conundrum, however, and Keynes had quite a clever dodge around the problem. I wonder if Fletch2 can follow his reasoning.
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Always look upstream.
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Quote:
Originally posted by SignyM:Quote:
BTW- Have you EVER read Keynes? Seems not.
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Always look upstream.
Yes I have, and I knew you had when you thought that using "aggrigate" made you sound like a REAL grown up economist. Pity that like all economic theories his was imperfect.
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