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Theory vs Practice
(lemmygrad.ml)
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this post was submitted on 25 Aug 2023
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Alright, now we have a concrete example of a good transaction in capitalist society. It's buying almost expired food at discounted prices. I remain unconvinced though that it is an example of a good transaction - many others and I have waited until the food is almost expired to buy them at discounted prices. The store is forced to refrigerate and carry the good until it almost expires, and I am forced to wait until the food has gone almost bad to get it. The same transaction could have happened when the food was fresh. The store would be getting the same amount of money, increase their stock rotation and I would be getting fresher food.
As a show of good faith to demonstrate that I'm not trying to debatebro you, let me give you an example from a socialist society. Cuba. Cuba imports frozen chicken parts from the United States (Tyson Foods, Inc.) because they determined that the US can more efficiently raise and process poultry than they can. In return, Cuba sells paintings to America as Cuba has a thriving art scene encouraged by the state. The end result is that Cubans can draw art and eat chickens for a cheaper price (labor hours) than they would if they had to raise chickens themselves. This is not a unique transaction - Cuba has been engaging in this type of trade with many countries such as the former USSR and China for almost a century for other products such as sugar which Cuba can grow more efficiently due to their climate.
I have to say that I remain unconvinced that the capitalist mode of trade is better for the individual. You demonstrated that it is better for businesses such as ARM, Samsung, and Qualcomm, but the benefit for you or me, individual human beings, seem lacking.
The benefit to people from the business trade is getting products that otherwise would not be possible. ARM does not have the capacity or skill to build microprocessors, Qualcomm and Samsung don't know how to design them (in fact, at one point ARM had to build some just to show them everything they were doing wrong with their production designs). Under a communist state, there's every likelihood that ARM wouldn't exist - there wasn't a huge need for it before the market for smart phones exploded, so the development of their processors would likely have been stopped in favour of other technologies, and wouldn't have been sat there waiting to be utilised for phones.
With the expired food transaction, the same transaction could not be made earlier - not if the price was at cost. My suggestion was essentially "sell it to get back what you paid for it", which wouldn't account for the overhead costs of running the business. A normal transaction done earlier must cover these costs, at the very least. The issue is that a normal transaction does a lot more than cover these costs - that's people abusing capitalism.
Ultimately though I'm not arguing that capitalism is better or worse. I'm just saying that people are the problem, and if you frame the system as the problem then when you deal with it you're still probably going to have a people problem, in some shape or form.
Expired food transaction prices are closer to cost. It is the necessity for a profit margin that drives grocery stores to sell at a higher price (or as I call it, cost + profit price). Now, you may say that profit margins are bad for grocery stores, which is true (2~3%), which cannot account for discount on expired food (10~30%). However, The grocery store overall margin does not account for the cost of individual items. In terms of percentages, markup on dry goods (cereals, pasta, etc.) and canned goods are lower while the markup for prepared food, frozen food, and bakery goods are more than twice that of dry goods. Which items actually do go on sale then? The ones with higher margins. . The discounted price for fresh food is absolutely possible when you take profit margins out.
For the microprocessors example, I'll use the same example as to why that mode of complex production is more likely under communism than capitalism. By your account, ARM designed microprocessors while there wasn't a huge need for it, but the market for smart phones exploded later. Does this make sense? No, it doesn't make sense under capitalism, so let's look at the history of it. ARM (Acorn/Advanced RISC Machine) financially functioned by being funded by the BBC (British Broadcasting Corporation). ARM's nickname in the UK used to be BBC Micro! I don't think I need to go on about how communists are all about state-funded enterprises, so I rest my case.