this post was submitted on 08 Sep 2023
234 points (94.3% liked)
Asklemmy
43394 readers
1544 users here now
A loosely moderated place to ask open-ended questions
Search asklemmy π
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
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Not to defend capitalism in general, but itβs really good at answering these sort of βis it worth the cost?β aquestions. The whole point is to allocate scarce resources efficiently; the problem is that it assumes nobody is a scumbag and all the costs are accounted for.
You can't.
It's also really good at "externalizing" costs one does not want to factor in -- making it worthless for the stated purpose.
It isn't. Most decision makers of capitalism are very unaware of science. You'd know this if you work in research. The ideas that see light of day do so not because they're good in any quantifiable sense. It is because they convince the capitalists. This can be affected by so many things that aren't merit or even cost based.
Some things make sense from a cost perspective, but not a profitability perspective. Profit isn't just about cost. There's margins, competition, longevity, etc. Something can be of moderate costs, but if the margins are too low or it is too long term or a project, it is of low value to capitalists.
I'm really struggling to understand what you're getting at here.
Whether or not a decision maker is aware of science, their products will still be subject to the laws of physics.
For example?
To simplify it, when capitalism answers "is it worth the cost?", it is not answering "is the benefit of this thing to society worth the cost?". They're answering "are the profits I would get out of this and the risk worth the cost?". And profits do not always agree with what's good for society.
One example of moderate-to-low cost investments that are of demand in society but not very profitable and hence does not see focus is low-income housing (at least in the US). Housing developments disproportionally target high income or even luxury housing, as the margins on those are far better (but the costs are also much higher). Even nowadays, that this trend has been going on for a while, and luxury housing has really fallen out of demand (which greatly increases the risk), it continues. Luxury housing still looks a better investment to investors, when society does not need more luxury housing. It needs more moderate and low income housing.
Perfect
I think OP is just thinking of βcostβ to mean capex. Whereas most real-world cost evaluations consider capex, opex, and opportunity cost, among others. Something having low cost but low margins will usually have a large opportunity cost, which increases the total real cost.
The current, dominant form of capitalism isn't and doesn't, though. It maximizes short-term profits and ignores all other medium and long-term costs. The efficient allocation of scarce resources doesn't happen when inefficient allocation yields greater short-term profit. The stock market ensures that high short-term yields with lower total returns will be favored over the inverse. In particular, it emphasizes competition over cooperation, which is more resource wasteful for the gestalt.