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by shi314
2051 days ago
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What if increasing marketplace efficiency is just a by product instead of cause of great change? I mean main objective of business is wealth maximisation of shareholders and management (in modern times). It has nothing to do with efficient allocation of resources. The country that alleviated most people from poverty is a communist country. Communism uplifted a poor nation Russia to become one of the Superpower in 20th century. |
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But it wasn't Russia. It was China. And China did it by privatizing and opening up its markets to capitalism (and by capturing the subsequent efficiency gains). Not by command-and-control allocation of resources by a central body.
China lifted roughly 850 million out of extreme poverty over the past 30 years according to the World Bank...more than the 6X the population of Russia: https://en.wikipedia.org/wiki/Poverty_in_China
Yes, the main objective of business is wealth maximization. But to create wealth (without stealing it), you must create value for other people. Theft is a zero sum game. Value creation is not. The search to create value by millions of different individual actors is how resources are so much more efficiently allocated in free market economies.
Russia has still reduced poverty by roughly 10-20% since the fall of the USSR via more open markets. The reason this number isn't even larger, is because of widespread theft (see the above paragraph) by a corrupt oligarch class. This is super common in any country with lots of oil and no democracy (ask Venezuela for more info).