Robert Reich
The price of Huggies diapers went up 6% between April- June 2023.
Inflation, right? Wrong.
Kimberly-Clark, the maker of Huggies, reported that the cost to make its products fell by $75 million.They took the money and ran, banking $168 million in operating profits in Q3 2023.
Now, new research shows that corporate profits drove 53% of inflation during the 2nd and 3rd quarters of 2023. During the 40 years prior to the pandemic, profits drove just 11% of price growth.
GhostOnTheHalfShell
@rbreich Adam Smith:
"Smith thought that high profits were a symptom of serious market disequilibrium: they were ‘always highest in the countries which are going fastest to ruin.’ "
https://www.economicsobservatory.com/does-adam-smiths-theory-really-imply-todays-inequality
If markets are central to capitalism and high profits are a symptom of dysfunction in its core pillar, high profits are, in essence, anti-capitalist.
Conservatives don't defend capitalism, they destroy it. The Left is actually doing more for healthy markets.
feld
feld
GhostOnTheHalfShell
Without real competition there is no real market. Go read Adam Smith. High profits are a sign of a diseased market. It is in fact anti-capitalist.
Eventually people will go back to cloth, I suppose. At which point, cloth diapers will cost $1000, washing machines $10000 and laundry soap $100 a gram
feld
GhostOnTheHalfShell
Please refer to the studied phenomena. The cost of raw materials is largely a tiny fraction of the price we pay. The global economy is largely driven by cartels/oligopoly. Without competition, markets are dead.
Hazlitt was not even an economist and promoted the Austrian school. This school is debunked mathematically and behaviorally. Everything touched by it kills the pillars of capitalism. That school is anti-capitalist.
feld
GhostOnTheHalfShell
No.
Your is a logical fallacy. You are assuming that the antithesis of the Austrian school is Keynesian. It speaks to the academic poverty of the economic field that anyone would resort to that argument as a rebuttal.
Economic theory that assumes systemic equilibrium is bunk because the assertion is mathematically false. Much more of economics is bunk because it is inconsistent with human behavior. Keynes was subject to these fallacies as well.
Coach Pāṇini ®
SlicerDicer
GhostOnTheHalfShell
That’s only possible if the entrants can muster an entry. In tech, the whales buy up or put out of business any potential rival. EG Amazon bankrupting diapers.com by selling below cost. It ended up buying then dismantling the company. This manouver is replicated constantly to the point now in tech, companies are formed simply to cash out.
Similarly in food processing, giants like Cargill or Kroger|Albertsons dominate their respective sectors. 🧵
SlicerDicer
feld
GhostOnTheHalfShell
https://www.amazon.com/Dynamic-Economic-Systems-Keynesian-Approach/dp/0873322150
Blatt was a theoretic physicist, who upon hearing the assertions of economics, said it was a load of garbage, then proceeded to wreck economic theory mathematically. Also there are quite a few economists who have worked to found theory on solid math and accounting identities.
feld
GhostOnTheHalfShell
You’re talking about the legal infrastructure and economic system of several decades ago. The landscape is completely different and it’s anticompetitive structure repeatedly demonstrated in studies. Amazon itself forces higher prices on vendors and uses its hegemonic position to force disadvantaged to competing e-commerce sites. It’s well known in the valley, you don’t plan to complete with the whales, but be bought out.
This is standard now.
Bobby
feld
GhostOnTheHalfShell
But this assertion is made by means of rightwing economic models.
You are assume that the antithesis of standard economics is the assertion that price controls are the “fix” and that standard economics knows markets work so what they say about them is correct. This is patently wrong because they deny the math than defines the conditions where a healthy market can exist.
Friedman is responsible for the death of price discovery. The Chicago school is worse than Stalin.
GhostOnTheHalfShell
You are not a serious person economically. Chicago school models are used to prove why Ticket Master and Live Nation are OK.
They are monopolies. Amazon is a platform feudalist economic system.
Again, M Friedman assertions about economics underpins the Bork doctrine, which eviscerated the Sherman act, a proper response to the anti market power of the Gilded Age.
feld
feld
GhostOnTheHalfShell
Then cast down the Chicago school etc. Toss out Friedman. They all have models describing how economies work. The economics you embrace say they know.
What you are saying is that in essence the invisible hand, markets are not provably optimal and your assertion about what works better is groundless.
GNU social JP is a social network, courtesy of GNU social JP管理人. It runs on GNU social, version 2.0.2-dev, available under the GNU Affero General Public License.
All GNU social JP content and data are available under the Creative Commons Attribution 3.0 license.