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I think that drive for growth, mediated by personal interest, is way more influential than competition.
There’s just way too many shitheaded capitalists for them to be doing effective competition.
Competition is the defining regulatory force endemic to capitalism, it’s the reason half of the shitheaded capitalists of the world are eating dirt at any given time (50% of businesses fail within the first five years)
It also drives the whole lot of them into a desperate flight toward rentiership and anti-worker psychosis; to reduce costs, collect easy revenues and escape the battlefield of global competition
You’re right tho, there’s never been any such thing as “effective competition” there’s only the bloody mosh pit and the anarchy in production it generates, that’s the nature of actually existing competition
The assertion that “if they didn’t squeeze everything, they’d be competed out of the market” is patently untrue. If the market force had an iron girdle, it would barely have any room for profiteering shareholders. You genuinely wouldn’t be capable of giving an executive a bonus of $10M if the margins were that tight. If they were tight, you would see compensation for executives’ labor (something that takes virtually no acquired skill to do btw) driven down to approximately 3x the hourly rate of ordinary laborers. Since we do not see this happening, we can scientifically conclude that this is not a process that acts on the system.
They’re not rational, they’re not efficient, they are selfish and they are driven by selfishness. We really shouldn’t let economic orthodoxy masquerade as Marxist.
If the market force had an iron girdle, it would barely have any room for profiteering shareholders
Profitability is the point of the enterprise and is what the competition is centered around, firms that squeeze everything AND enrich their shareholders attract the profiteers in the first place, which attracts investment which leads to the firm winning the competition
The Iron Girdle doesn’t chase shareholders, they chase the girdle
Break yourself of the Keynesian notion that capitalist enterprise arises out of demand, profit is be all and end all and you don’t need demand to generate it, as the entire concept of Wall Street should demonstrate
I am reflecting on my own empirical observations of working for companies (90% of them being small businesses), piecing together all the clues I could to deduce their financials, and noticing similarities in what my friends would tell me about the businesses they worked for.
Competitive pressure is not when you see a Moe’s Diner and a Joe’s Diner on the same block. Competitive pressure is when the Joe’s Diner has to make cuts or even close because they don’t perform well enough to match the prices for comparable menu items at Moe’s.
You are contradicting yourself, though. They are not squeezing everything if they are enriching their shareholders.
By definition, if competition had driven the market to being tight enough to barely being able to allow actors to break even, they would dig into every source of expenditure to remain solvent. If the owners choose to close the business because it’s not allowing them to buy a new vacation home, that’s different from if the owners close the business because no one there makes 50k, or whatever a decent living is.
The logic/observation of narrow margins only works if you make the assumption that an enterprise can only operate if you pad the pockets of the owners/managers first and foremost, and that it is impossible to cut executive pay. But unequal compensation for labor is not a necessity to tun a business. If there is money to skim, there is slack in the budget. Period. If businesses close because there isn’t as much money as the owners want to skim, that is different from businesses closing because of competition making the business nonviable.
Empirically, we see income inequality increasing at the same time we see “profit” falling, and also at the same time we see productivity increasing and median wages stagnating. TRPF in recent decades is accompanied by a rise in ruling class compensation. “There’s no money to spare” because the rich are taking it all, not because these poor Job Creators are so squeezed that they’re barely making ends meet.
Ironically, you are advancing a classical economics position.
Competitive pressure is not when you see a Moe’s Diner and a Joe’s Diner on the same block. Competitive pressure is when the Joe’s Diner has to make cuts or even close because they don’t perform well enough to match the prices for comparable menu items at Moe’s.
There’s no dichotomy here, the location of those two Diners is just one ingredient that creates the competitive pressure, I never said location is THE ONLY gear in the machine
By definition, if competition had driven the market to being tight enough to barely being able to allow actors to break even, they would dig into every source of expenditure to remain solvent
Countless businesses do indeed do that
The logic/observation of narrow margins only works if you make the assumption that an enterprise can only operate if you pad the pockets of the owners/managers first and foremost
No, that assumption is totally unnecessary, all that matters is whether the firm is profitable; padding pockets, skimming, paying workers, not paying workers, owner buys a yacht, it’s irrelevant and incidental AS LONG as the firm’s profit rate forms a leading capital within it’s given sector, shareholders don’t care what you do (aside from paying workers) as long as you generate a growing profit rate, competition making the firm unviable is what transforms actions like bloated executive pay from a “spoil of war” to an accelerated “death sentence”
A healthy man can smoke a pack a day despite the net loss to his health, but a lung cancer patient on his deathbed cannot
Empirically, we see income inequality increasing at the same time we see “profit” falling, and also at the same time we see productivity increasing and median wages stagnating.
Because we see productive technology diffusing across the globe, generating vicious competition on national scales leading to cut wages and austerity, super profits are squirrelled away either to keep up with the scale or to escape it through rentier transfers and speculation
Modern communication technology has collapsed time and space, leading to rapidly growing centralized capitals bumping into each other, which creates a regulatory effect on each other, which means despite productivity increases capitalists still demand wages be cut so they can compete on a global scale and maintain their enormous-but shrinking profit rates
“There’s no money to spare” because the rich are taking it all, not because these poor Job Creators are so squeezed that they’re barely making ends meet.
Again Marx’s theory of competition does not imply LEADING CAPITALS are “squeezed and barely making ends meets” on the contrary it describes the process behind WHY these massive firms are marshalling endless resources and money, it’s called competition AS WAR
Again, those countless firms that can’t marshal labor, resources and capital to compete WILL find themselves squeezed out by leading capitals who know how to wage war
classical economics position
lmao Marx IS A CLASSICAL economist and you’re advancing neo-Keynesianism and it’s concept of imperfect competition, a gordian knot of false dichotomies and ad hoc improvisations to neoclassical’s even more exploded theory of perfect competition
There are millions of capitalist firms on this planet, most won’t exist in a couple years time, but thousands of them form leading and regulating capitals within dozens of sectors across 200 national economies, there’s no contradictory dichotomy here, it’s an observation of victorious armies and defeated ones
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Above this, there is a line on the accounting books that factors in elite aggrandization; it claims to be the base line but is clearly not; it includes services paid to the ruling class, whether inside or outside the company.
Above that is the level of profit on the books.
A business whose revenues fall below the third line is doing fine. A business whose revenues fall below the second line may or may not be under some pressure, but is still doing fine. A business whose revenues fall below the first line ends up quickly folding. Everything below the first line is a matter of viability; everything above the first line is a question of distribution (and class war).
This is all without even considering shareholders, because countless businesses are privately held. About half the economy is small businesses; the small fish have not been simply eaten by bigger fish. There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
Some of the biggest companies often pay zero in taxes. They are not about to die in the bloody economic war though.
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly. They have a large degree of control over what they allocate money to. They do it in a way that is “unfair” because they are self-serving, and have a psychological drive to distinguish themselves above other humans. It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Your purported model works accurately for Subway franchisees, but that is a tiny part of the economy.
There is a base line for materials and socially necessary labor. If you’re above that line, you can operate as a business.
Yeah it’s called profitability
This is all without even considering shareholders, because countless businesses are privately held
Countless privately held business have shareholders and every business has investors or an investment mechanism, the factor that draws in investment is called profitability, not “elite aggrandization”
There are big fish eating small fish, certainly, but this is not a strict and unyielding rule across the economy.
Yes it is, this is empirically how most businesses die or expand, what do you think the entire subsets in business theory concerning acquisitions, mergers, and market capture is talking about? You’re literally just denying observable facts about ANY given economy on this planet
You can have a company that makes zero profit because it is on the brink of insolvency, and you can have a company that makes zero profit because it pays a random rich guy millions of dollars to do something that is not market-rate. Call it cronyism, call it money laundering, call it whatever you like; there are viable and lucrative business models that do not turn a profit.
It’s clear you don’t understand what profit is, companies that make no profit but stay afloat can only do so because investors are making a bet on the future, they’re anticipating profits TO COME and engaging in a deferred competitive strategy to wipe out rivials and gain market they leverage for greater profit
There is no such thing as an enterprise that doesn’t have a postive profit plan, you actually believe capitalist are handing over capital to dick head ceos so they buy without the promise of imminent or future gains?
No, capitalists don’t care about cronyism as long as you generate positive profit rates, that’s all that matters, if you break that contract you end up like ENRON or that dummy from the Wolf of Wallstreet
A ceo who can’t deliver profit is simply a thief in the eyes of capitalists and while they can wait years, eventually they will come knocking for their money
Back to the original argument. Capitalists are not forced by market dynamics to exploit proletarians; they exploit proletarians often directly
I’m sorry but this is patent liberalism, the capitalists “are simply bad guys” is not theory or an argument, capitalists are forced to exploit workers for the simple fact there’s no other way to aquire surplus value, workers are not gonna hand it over themselves and since there’s more than one capitalist at any given time, they have to automatically compete for that value because there is a ceiling in terms of resources, time and labor
They have a large degree of control over what they allocate money to
Precisely, and capitalists only allocate money to enterprises they deem profitable, this also create competitive pressure because higher profit rates attract greater investments
Otherwise wtf would be the point of investing money that wouldn’t pay off, people own private property so they can profit from alienated labor, not because they didn’t learn the golden rule in Sunday school
It is possible to have an enterprise which does not favor a parasitic class, and is more competitive as a result, even while paying workers more than the typical rate.
Not under capitalism friend, private property automatically generates alienated labor and that labor can produce surplus value, the incentives under capitalism point in one direction
You try to break that contract and the capitalists will break you, that’s why we socialists are abolishers not reformers
It’s not “either or.” The market demands exploitation and capitalists themselves have an interest in exploitation.
profit is be all and end all and you don’t need demand to generate it, as the entire concept of Wall Street should demonstrate
That is literally what I started off saying.
I think that drive for growth, mediated by personal interest, is way more influential than competition.
Personal interest and drive doesn’t mean jackshit, IF YOU CAN’T COMPETE, every capitalist has a personal interest, every firm is driven toward profit, what matters is the mechanism that allows that interest and drive to be realized, and under Marx it’s called competition-as-war
You’re talking about leading capitals not your average capitalist enterprise, for the vast majority of businesses the profit margins are indeed tight
You mistook an outlier for the average, your average franchise owner is not playing at the same level as the owner of Wal Mart
Since we do not see this happening, we can scientifically conclude that this is not a process that acts on the system.
That’s patently false, go to any plaza or retail center within the United States and tell me competition “isn’t acting on the system”, you think Wal-Mart and Costco are parked across the street from each other by accident?
We really shouldn’t let economic orthodoxy masquerade as Marxist.
Neoclassical orthodoxy asserts any firm at scale isn’t competing properly and that capitalist competition is a perfect sorting machine that optimizes outcomes
That’s not a description of the Marxist conception of competition as a bloody, dirty war with mass causalites, which is what I’m using
Ironically you’re advancing a neo-Keynesian position
Profit comes from wage labor. Exploitation is in a capitalist’s interests regardless of competition, you’re right.
It doesn’t matter if they personally care or even know about competition. If they grow slower than a firm that offers the same product, they cease to matter.
I believe that about as much as I believe “if you raise the minimum wage, businesses will move out of the state”.
It’s a fairy tale. Have you ever delved into a firm to quantify its money flows? Between the small businesses that have demonstrable gaps that nobody thought of bridging, and the C-corps that are so unwieldy they can barely detect where the rot is inside them, across the whole economy you do not see businesses operating inside narrow margins.
It is not pecuniary necessity that makes them exploit workers, it is labor discipline and other manifestations of class warfare.
It’s true that the talk about competition plays a deceiving role in liberal propaganda. But the very real role it plays in capitalism is also analysed in great detail by Marx. The labor theory of value for example relies on it. Competition disciplines firms that cannot produce at or below the socially necessary labor time.
Individual corporations can be very ineffective from an objective point of view. Even most of them. But the effect of competitive advantage is still felt on average across an industry and over time. Individual firms and capitalists don’t have to be rational for this effect to work. Hypothetically, if everyone were equally ineffective and irrational, an increase in productivity/the power to exploit would still create a competitive advantage.
You can argue about things that limit the extend to which competition effects certain aspects of life within capitalism at a certain point in time and space. That’s perfectly good dialectics. There are always opposite forces at play. And today, there exist many monopolies, that have reduced the effect of competition.
But, why do you think corporations do everything to acquire a monopoly position? It’s to avoid competition. Even in late-stage capitalism, where real competition has in large part been eliminated by monopolies and oligopolies, it’s still the drive to avoid renewed competition, that determines the politics of these mega corporations.
While capitalism has a certain tendency towards concentration of wealth, it can hardly abolish itself. That requires full social control and abolition of markets. Capitalism has its counter-tendencies as well—crises, wars, innovation, planned obsolescence—which maintain the competition and profit rate necessary for continuation.
