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If it was this simple, why have so many gigantic corporations gone out of business over the years? Sears was once the world's largest retailer and built the world's tallest building to use as its headquarters. Now it's a penny stock. Why didn't they just lower their prices to push out competitors? Remember every town in America had a Blockbuster and AOL was synonymous with the internet? What happened to those companies?
Even feudalism had numerous examples of once-powerful barons being deposed, but that didn't mean inherited privilege and killing off weaker competitors weren't characteristics of the system.
While financing this might become profitable after the competitor goes bankrupt and A raises prices again, there is a continuous stream of competitors trying to profit, which might erode A's capital to a point where it's not worth dumping.
There is also the risk of a bankrupt competitor open-sourcing their product out of either spite or benevolence, significantly and permanently demonetizing the product in question, damaging A (the dumper's) finances.
And yet another risk is the competitor not going bankrupt, but merely scaling down while A is done with its dumping.
You can say something is flawed, but compared to what, and how would you improve it?
I can see that my car is sputtering black smoke when I drive it and correctly identify that it's a problem, but I bring it to an expert for a suggestion to fix it since I don't have much knowledge in this topic either.
If you are against it and you don’t have a solution then you are simply destructive.
1. Regulated Capitalism
2. State Funded Infrastructure.
ad 1) Capitalism isn't a bad system per-se, but needs to be kept in check. States need to ensure that un-competitive behavior is kept in check, that too-large monopolies are reigned in, that consumers are protected, that fair taxes are paid and that private wealth has no undue influence on politics.
ad 2) Structural systems required for a society to function properly have to be, at least partially, state funded, state controlled, or even state owned, thus ensuring the availability and baseline quality of structural services to as many citizens as possible, with regard for revenue generation being a secondary concern.
They also rely heavily on the public being educated enough, interested enough and participatory enough to reflect bad behavior in their voting decisions.
None of this however is an argument for less regulation. It is an argument for education and political participation.
It's not an easy process, it is active work in fact, but it is possible.
This is why we have cronyism in the first place. Who do you think is writing the regulations? Who's funding the think tanks and the "grassroots" organizations? Who's paying for the campaigns?
"$35BN Match Group file multiple lawsuits against muzmatch following repeated failed acquisition offers" -
"Lets provide the better product/service at a lower price" is, by far, not the most common business tactic.
- Law for frivolous lawsuits created with criteria
- Company A engages in said behavior
- Company B files motion to dismiss based on said criteria
- Judge agrees and dismisses lawsuit, and warns of contempt if the behavior continues
As long as that capital is devoted to productive activities, such as investment in a company that employs people, or equipment that had to be manufactured and is used productively, I've no problem with that. None of those economic functions could have been substituted by labour, it took capital to do it, and in fact those activities promote and reward labour.
So we need to incentivise productive uses of capital, and tax unproductive uses. What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
I would agree that this would probably improve the situation, yes, as long as the concentration of wealth isn't leveraged to drive wages down.
>What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
However productive the economy becomes, if its fruits are not shared more widely than they are today, it won't benefit society as a whole in the long run. In the last 40 years overall productivity has boomed, but the wealthy have grabbed a wildly disproportionate share of the resulting economic growth simply because their disproportionate share of capital gives them the leverage to do so.
The issue we have today is one where the elite are completely devoid of any morals, or they have convinced themselves that they are acting morally in some fashion.
This is the issue with any system, whether it be capitalism, socialism, fascism, or communism. A select group of individuals eventually rise to the top, and they work to manipulate the system to their advantage -- just look at the conspiracies that were occurring immediately after Hitler and Stalin's deaths. Watch closely when Kim Jong inevitably passes, and there is a power void in North Korea. History repeats itself time and time again.
We, in general, are a morally bankrupt people, and everyone has been conditioned to act in one own's best interest. "I'm gonna get mine" because everyone believes the system is corrupt and that's how you have to behave to survive, but what people don't understand is it is the people that are corrupt, and this behavior simply perpetuates the corruption.
Too many people think it's a system issue. This place too much faith in structures created by man. This is an issue of hearts and minds. Always has been.
It's useful to suggest that everyone behave morally, if more did so the world would be a better place. But it's unwise to build a system where that suggestion is the only check on bad behavior.
Not sure I necessarily agree with this. I can understand how 1 might come to see it this way. Capitalism is about measuring ones contribution to society.
>What happens in practice is an accumulation of wealth == power in the hands of a small elite, which then no longer need to compete, cronyism or not, because they have the resources to defeat every competitor, even if the competing product is superior.
In our current system which is a regulated capitalist system this happens. It would be a strawman to assert this against capitalism and exclude any impact that government regulation may provide. I'm pretty most people could see government monopolies as abusing capitalism.
>Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.
Lets evaluate.
Tesla: Market Cap of ~1,030 Billion $ off of ~$30 billion revenue.
Ford: Market Cap of ~100 billion $ off of $150 billion revenue.
GM: Market cap of ~100 billion $ off of $150 billion revenue.
Stellantis: Market cap of ~64 billon $ off of $100 billion revenue.
Very clearly shows why Ford and GM are rushing to get EVs out to market. Stellantis who had good plans has basically not arrived to market with anything. This is one of the highest regulated industries and capitalism is working great here.
>Okay, but the consumers still get X' when A buys the patents from the now bankrupt B, right? Maybe.
Patents != capitalism. A true free market would not have any patents. If you build something new and unique, everyone would be able to come in and copy it. We could debate the merits of the patent system and perhaps from society's point of view it's a good thing. However, it the current subject, this isnt capitalism you're arguing against.
>They have eliminated their competition anyway, so why bother, when they can just continue printing money by making X, right? Remember, the maxime is maximize-your-profit not deliver-the-best-product.
I think this is a good spot to come back around. Capitalism is not competition. Yes it engenders competition but that's the wrong way to look at it. This is something business owners need to learn. Capitalism is about solving problems and contributing to society. Capitalism measures this in one of the most effective ways.
Its a common straw man to treat capitalism as equivalent to greedy businesses screwing over everyone and everything in the name of profit.
That's not what it is. And I think you will find that everybody aside from said businessmen find that reprehensible.