928
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 26 Nov 2023
928 points (94.0% liked)
Asklemmy
43916 readers
845 users here now
A loosely moderated place to ask open-ended questions
Search asklemmy ๐
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- !lemmy411@lemmy.ca: a community for finding communities
~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~
founded 5 years ago
MODERATORS
Because stocks kept trading at higher and higher P/E ratios essentially saying "the market thinks this company can make much more money in the future than they are making now."
The problem is, most companies couldn't, and as we have hit a recessionary phase those companies are now scrambling to try to show continued growth justifying their price.
The way they do that is by cutting off their limbs and selling them for short term cash at long term consequence.
So you see them cutting costs in all kinds of ways that screw over their customers but can show quarterly profits. Even though it means customers may not stay customers if better options appear.
So we are in this sort of pendulum swing period where large corporations suck because there's effectively no competition that doesn't and sucking is the last way for them to squeeze water from a stone. The natural solution is that we'd see competition rise up that doesn't suck to take their customers away and force pro-customer changes.
This likely will eventually happen, but it's going to take time. There are emerging tech trends that will accelerate it, but are still a few years away from practically changing the equation.
In about a decade things should suck less, and a number of the crappy companies around right now may no longer be around, but in the meantime it's still going to suck for a while yet as things adjust to the dying of the old guard and birth of the new.
I don't really agree with this. It is the answer that I think classical economics would give but I just don't think it's useful. For one, it ignores politics. Large corporations also have bought our government, and a few large wealth management funds like vanguard own a de facto controlling share in many public companies, oftentimes including virtually an entire industry, such that competition between them isn't really incentived as much as financial shenanigans and other Jack Welch style shit.
Some scholars (i think I read this in Adrienne bullers value of a whale, which is basically basis for this entire comment) even argue that we've reached a point where it might be more useful to think of our economy as a planned economy, but planned by finance instead of a state central authority.
All that is to say: why would we expect competition to grow, as you suggest, when the current companies already won, and therefore have the power to crush competition? They've already dismantled so many of the antimonopoly and other regulations standing in their way. The classical economics argument treats these new better companies as just sorta rising out of the aether but in reality there's a whole political context that is probably worth considering.
Good point well made. I think it's usually naive wishful thinking (for a "just world" that makes sense and is going to be OK, actually) that allows a liberal capitalist apologist to point to classical economics and say "see the companies are hurting," but the companies don't have feelings, and the owners and shareholders are feeling just fine.
I woukd say it's even worse than that: Free Market only works if humans behaved in a certain way (the so called homo economicus) which has long be disproven by Behavioural Economics and in Markets with low barriers to entry (i.e. teddy bears or soap, not railways or internet service provision) and even then it can't deal will systemic problems (basically any Negative Externality such as Polution or Greenhouse Gas emissions, or over consumption of share resources - a.k.a. Tragedy of the Commons - such as with overfishing or in depletion of mineral resources).
People have been fed by politicians and think-tanks with shaddy funding an oversimplified theory that sounds amazing if you do not at all dig into the details, whilst not actually working in reality, not even close, but of course you're never be told that by the people who win the most from the system built on top of this theory.
(It's actually funny how this is the Capitalist mirror of Communism: beautiful high-level theory, never worked and can't work in practice - because people are as they are, the physical world is as it is and human systems work as they work - and the people whose priviledges come from the system created to implement said theories will never ever tell you they don't work and never will even after a half a century experiment: in fact they'll just tell you it's only not working as expected because it has not been done with enough "purity" and hence we need to double-down to make it work)