[chordalkeyboard]

> Similarly, if you get rid of labor laws and reduce the minimum wage for Amazon's workers, it's not going to hire twice as many people just because it has the money. It'll increase its profit margins, because it's a business being run by smart people who understand how supply/demand works.

No, they will lower prices and keep margins constant. This prevents competitors from moving in.

Similarly, increased benefits from collective bargaining will result in higher prices for amazon goods and services, and more automation.

[danShumway]

> No, they will lower prices and keep margins constant. This prevents competitors from moving in.

I'm not sure what to say about this other than, no, they won't.

If you're a publicly traded company, your investors want profit margins to go up, not stay the same. Unless you can convince them otherwise because you're growing -- but even then, they still want your profit margins to eventually rise.

If you go into a business thinking "I want to make $X, and I'll lower my prices until I hit that target", then you're approaching your business the wrong way.

Even in cases where companies are trying to cement a monopoly or drive competitors out of business, they still don't make their pricing decisions based on the cost of material/labor, they make their pricing decisions based on what prices will drive competitors out of business. Companies like Uber famously lose money on many of their services because they're trying to cement monopoly statuses for those industries. They get VC money and they price based on what they think they need to price. Their decisions are based on what the market looks like, and they're willing to have negative profits in order to hit the prices that they think are necessary.

In both cases, no competent business owner is thinking "I only want to hit $X profits this year, and anything over that is going to the consumers as a gift so that they'll like me."

> Similarly, increased benefits from collective bargaining will result in higher prices for amazon goods and services

See above, that's not how markets work. You don't charge what a product costs to make, you charge what the market will bear. Literally the first thing you should learn in an economics class. Products cost what people will pay for them.

This is (arguably) the entire cornerstone of free market Capitalism -- the idea that the value of a set of inputs into a business is not necessarily the same as the value of its outputs. One of the big points of Capitalism is that products get priced based on what people are willing to pay, not based on what they cost to produce or based on some kind of predetermined formula. If you have to pay your workers more, tough luck. Under Capitalism, your products are still only worth what the market is offering.

> and more automation

As opposed to right now, where Amazon isn't trying to automate any part of its warehousing or delivery process?

And in any case, automation is good. We want to eliminate bad jobs. And even among automation-critics who worry about lost jobs and the cost of retraining, their goal in opposing automation is not to make those jobs periodically worse and worse to try and keep pace with the price of machines.

[chordalkeyboard]

> If you're a publicly traded company, your investors want profit margins to go up, not stay the same.

No, they want their return to go up. They don’t care about the margin, they care about the total yield (growth + dividend).

> Unless you can convince them otherwise because you're growing -- but even then, they still want your profit margins to eventually rise.

No, you want your net profit to rise. You want your margin to be low because then its harder for others to compete with you.

> If you go into a business thinking "I want to make $X, and I'll lower my prices until I hit that target", then you're approaching your business the wrong way.

This is true.

> Even in cases where companies are trying to cement a monopoly or drive competitors out of business, they still don't make their pricing decisions based on the cost of material, they make their pricing decisions based on what prices will drive competitors out of business. Companies like Uber famously lose money on many of their services because they're trying to cement monopoly statuses for those industries. They get VC money and they price based on what they think they need to price. Their decisions are based on what the market looks like, and they're willing to have negative profits in order to hit the prices that they think are necessary.

Glad you agree that companies are optimizing for their place in the market and not naively optimizing for a large profit margin.

> See above, that's not how markets work. You don't charge what a product costs to make, you charge what the market will bear. Literally the first thing you should learn in an economics class. Products cost what people will pay for them.

This is true and still misses the point that an increase in the cost of inputs results in an increase in costs, resulting in an increase in price.

> As opposed to right now, where Amazon isn't trying to automate any part of its warehousing or delivery process?

> more

> opposed

I think its well understood among people who are familiar with unions that increasing labor costs results in acceleration of an automation process that is already in progress.

[CryptoPunk]

I agreed with everything you said, except this:

>>I think its well understood among people who are familiar with unions that increasing labor costs results in acceleration of an automation process that is already in progress.

Increased labor costs slow the rate at which the economy automates.

The rate of automation is almost indistinguishable from the rate of economic growth. Almost all economic growth comes from the labor-cost savings, and those in turn come from automation and trade-derived specialization.

When one of the major inputs to production, like labor, is subject to arbitrary government imposed price floors, it leads to economic deadweight losses that reduce economic output, and in turn reduce the volume of economic resources available to invest in new capital that automates production.

Automation increases per capita production, and with it, wages.

[danShumway]

> No, you want your net profit to rise.

Which is determined by a combination of, among other things, your profit margin and your volume.

> They don’t care about the margin, they care about the total yield (growth + dividend).

And again, how is that determined? Does profit margin and net profit often play a role in dividend policies by any chance?

> Glad you agree that companies are optimizing for their place in the market and not naively optimizing for a large profit margin.

Are you trying to argue that Amazon is in an underdog position and has to fight for market dominance in online retail right now? Are you trying to argue that there's some fundamental rule that says that if a company has a way to increase profit margins, they should always ignore it and lower costs instead?

Do you think that Amazon right now is purposefully pushing it's profit margins to the bare minimum that is possible for them to stay alive because they're so devoted to growth? Do you think there's some kind of fundamental rule that means if they had more profit they would be forced to invest it into growth or change their position in the market -- that profit can only ever be reinvested? Are you aware that Apple exists?

I mean think through what you're saying right now. Amazon did see record profits this year. Did they lower the price of Amazon Prime? Did they lower the threshold of free shipping from $25 to $20? They didn't, because getting record profits doesn't change their positioning strategy in the market. Even ignoring the basic theory, what you're saying is observably not true, because we can look at Amazon's profits increasing right now, and the shipping prices aren't going down and they're not paying their workers more.

> This is true and still misses the point that an increase in the cost of inputs results in an increase in costs, resulting in an increase in price.

No, it doesn't miss the point, the point you're making is wrong. The cost of a product's inputs do not determine what it is worth. Only the market determines what a product is worth. The moment you tie it to cost of material/labor, you are no longer talking about Capitalism.

> I think its well understood among people who are familiar with unions that increasing labor costs results in acceleration of an automation process that is already in progress.

And? Accelerating automation is good. It's going to happen anyway, and it's a waste of time for us to make factories miserable trying to delay it. And again, even if you don't like automation, no one who opposes automation is arguing that the solution is to make jobs awful.

[chordalkeyboard]

> Which is determined by a combination of your profit margin and your volume.

Yes, and a lower margin keeps the volume high by making it more difficult for people to compete.

> And again, how is that determined? Does profit margin often play a role in dividend policies by any chance?

Yeah the amount of profit impacts the decision to issue a dividend.

> Are you trying to argue that Amazon is in an underdog position and has to fight for market dominance in online retail right now? Are you trying to argue that there's some fundamental rule that says that if a company has a way to increase profit margins, they should always ignore it and lower costs instead?

No, and no.

> I mean think through what you're saying right now. Amazon did see record profits this year. Did they lower the price of Amazon Prime? Did they lower the threshold of free shipping from $25 to $20? They didn't, because getting record profits doesn't change their positioning strategy in the market. Even ignoring the basic theory, what you're saying is observably not true, because we can look at Amazon's profits increasing right now, and the shipping prices aren't going down and they're not paying their workers more.

Look, its clear that you have a perspective and you’re not interested in other perspectives. Good, do you.

> The cost of a product's inputs do not determine what it is worth. Only the market determines what a product is worth. The moment you tie it to cost of material/labor, you are no longer talking about Capitalism.

I’m not talking about what its worth, but what it sells for. My point has as much to do with accounting as it does economics.

> And? Accelerating automation is good. It's going to happen anyway, and it's a waste of time for us to make factories miserable trying to delay it. And again, even if you don't like automation, no one who opposes automation is arguing that the solution is to make jobs awful.

And so it is disingenuous to push unions as though they will help workers out when you know you’re actually helping convince amazon to replace them.

[danShumway]

> Look, its clear that you have a perspective and you’re not interested in other perspectives.

I'm not going to force anyone to debate with me, but if your economic theory says that Amazon's prices should have dropped this year, and they didn't, then your economic theory is wrong and/or incomplete. That seems like a pretty straightforward test.

Sometimes companies make more money and they don't lower prices, pass those increases onto workers, or expand. This is something that is observable just by looking at price/wage trends in different industries/companies and comparing them with the associated profit increases.

We know that "profits go up, prices go down" is too simplistic and/or flawed of a model to talk about the real world because it's not accurately predicting what companies do in the real world.

[chordalkeyboard]

> I'm not going to force anyone to debate with me, but if your economic theory says that Amazon's prices should have dropped this year, and they didn't, then your economic theory is wrong and/or incomplete. That seems like a pretty straightforward test.

Right, except that’s not what I said. So when you insist on a gross misreading of my theory, that happens to also not coincide with some fact you refer to, I question your sincerity in discourse.

> Sometimes companies make more money and they don't lower prices, pass those increases onto workers, or expand. This is something that is observable just by looking at price/wage trends in different industries/companies and comparing them with the associated profit increases.

It is for this reason that theoretical predictions in economics are considered ceteris paribus

> We know that "profits go up, prices go down" is too simplistic and/or flawed of a model to talk about the real world because it's not accurately predicting what companies do in the real world.

Yeah we do.