[disgruntledphd2]

Running unprofitable companies at a loss with no clear plan for making money (apart from the Pinky and the Brain plan of taking over the world) is not how capitalism is supposed to work, and only persistently low interest rates and a global savings glut have ever facilitated it.

This used to be called dumping, and was a crime.

The new part is that the companies don't even make any money at their core business.

Take Hailo, an uber-like startup that operated a franchise model. They made money, were expanding slowly and profitably, and followed the laws.

They were driven out of business by Uber who still (ten years later) have not made any money, and have been subsidised by deluded pension funds looking to juice their returns.

Whatever that is, it's not capitalism, which at base is a system designed for people to invest money in the hope of getting more money back in the future.

Hailo was capitalistic, Uber is some kind of weird mishmash of communism and hipsterism. It's like the performance art of capitalism; all of the trappings and none of the substance.

(For Uber, substitute your least favourite unprofitable unicorn).

[claudeganon]

However it works is how it works. Capitalism absolutely devolves into the corrupt oligopolies we have today, where businesses capture government and entrench their position and power over everyone else. Strong organized labor and various forms of social democracy can resist these trends, but what's happening in America is just Capitalism running its course.

[mxskelly]

Exactly this.

You can't take "well this is happening but it's not real capitalism" even though everyone's calling it capitalism. It's capitalism. Capitalism is busted and rewards greed and concentration of wealth.

It doesn't take a galaxy brain super genius to figure out that an economic system that relies on infinite growth doesn't exactly pan out in the long run, and what we're seeing in America today is just the late effects of the capitalist system that we allowed to run rampant because apparently any amount of socialism is communism and scary because reasons I guess.

[imtringued]

>Capitalism is busted and rewards greed and concentration of wealth.

Capitalism always had a cyclical nature presumably because humans are cyclical. Things go wrong and then they go right and then they go wrong in an endless cycle. It's like an engine that breaks down every now and then. You can fix it and you should.

>It doesn't take a galaxy brain super genius to figure out that an economic system that relies on infinite growth doesn't exactly pan out in the long run

Capitalism doesn't rely on infinite growth. It drives growth by rewarding increased productivity and innovation. However, since it does so through monetary rewards it is entirely possible that government policies make it easier to acquire money through non innovative or unproductive means. QE and low interest rates are a pretty good example of this. That money can be used to acquire competitors or simply stay alive for much longer.

[disgruntledphd2]

But this is not what I'm talking about.

Rewarding greed would indicate that the companies would be making money in some unwholesome way (e.g. selling formula milk to mothers in countries where there is no decent water, leading to the deaths of babies). Ditto concentration of wealth.

What I'm giving out about is the opposite, where money is thrown at these deeply unprofitable ideas which keep expanding on the basis of the greater-fool theory.

That's a really big departure from what capitalism used to mean, and I think it's worth calling this out.

[mxskelly]

Who cares. That's where capitalism is now because letting it run rampant created and caused this.

The bed was made, and now we all get to sleep in it.

[disgruntledphd2]

> Who cares. That's where capitalism is now because letting it run rampant created and caused this.

So you're not engaging with my argument, and just spouting off anti-capitalistic talking points (which I would agree with, if they were any way germane to the points we're making here).

I'm not sure there's much point in engaging further with you. Have a great day :)

[disgruntledphd2]

But if all businesses are run at a loss, the entire system will collapse, so the system requires some companies to be run profitably.

I still maintain that structurally unprofitable companies are an abberation caused by negative interest rates, and I don't think it would be recognised as capitalism by time travellers from the 70s.

[claudeganon]

>But if all businesses are run at a loss, the entire system will collapse, so the system requires some companies to be run profitably.

Not if all the businesses are monopolies. The concentration of wealth allow for an ever greater capture of markets as well as the government that would reign in their monopolistic behavior. This should be obvious with what just happened with Uber, who successfully bought legislation to defend their unprofitability but movement towards monopoly, and has large executive overlap with the former Obama/soon-to-be Biden administrations.

>I still maintain that structurally unprofitable companies are an abberation caused by negative interest rates, and I don't think it would be recognised as capitalism by time travellers from the 70s.

Maybe its not an "abberation," but fiscal policy put in place to further the wealth and power of existing Capital owners? It's also irrelevant in practical terms what people 50 years ago called something versus today. Countries, businesses, religions, ideologies etc both persist and change, regardless of whether they remain recognizable to anyone at a given point in time.

[disgruntledphd2]

> Not if all the businesses are monopolies. The concentration of wealth allow for an ever greater capture of markets as well as the government that would reign in their monopolistic behavior. This should be obvious with what just happened with Uber, who successfully bought legislation to defend their unprofitability but movement towards monopoly, and has large executive overlap with the former Obama/soon-to-be Biden administrations.

Are you joking?

You seem to be making some kind of corruption argument around large companies, which I think is fair. That's not what I'm saying though.

I am saying that if company A earns $90 and spends $100, then the extra $10 must come from somewhere (normally further investment).

As a thought experiment, I noted that this would not work if every company spent 10% more than they earned, because where would the money come from? You seem to say that this doesn't happen because the businesses are monopolies.

Can you clarify your argument on this specific point further, as I really don't understand it?

[8note]

The point of capitalism is that people with capital get to make decisions about what to do with it. They don't have to put it into things that make money, they just need control over it.

[mxskelly]

So it's not real capitalism even though this industry is, quite literally, called "Venture Capitalism"

okay.

[remram]

And North Korea is quite literally called the Democratic People's Republic of Korea. Are you surprised labels can be misguiding or outright lies?

[disgruntledphd2]

Yeah, structurally unprofitable companies are not capitalistic, as they do not facilitate the accumulation of capital.

There's a transfer of capital to service users and employees (and definitely executives), but this is dependent on the infusion of external capital (as the company does not produce enough capital to fund its own activities).

I feel like either I have gone crazy, or the world has.

[mxskelly]

> I feel like either I have gone crazy, or the world has.

Occam's Razor time: capitalism doesn't work!