| > 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. |
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.