Shouldn't there be a limit on profits?
- Thread starter Radiation
- Start date
Why do some always see it this way?
Im all for a fair profit but im against the kind of greedy and waste we see, i don't see a good future with the current system, the signs are there and things must change, we'll either get very lucky with science and technology or not, don't count on business or government to do the right thing though.
Caporegime
This.
Business and Government will ultimately try and do one thing: survive. As much as doomsayers seem to fap themselves stupid to the prospect, nobody is going to sit idly by, arms folded, as the world descends into some kind of economic apocalypse.
Soldato
What on earth is wrong with greed?
Can't be a serious solution surely? Why would someone be motivated to work if their profits are restricted?! How does that make the economy more efficient or help anyone?
Maybe you'd be more settled in North Korea?
Where you sustain a certain level of risk you deserve a certain level of reward. If you are rewarded more than the amount of risk you take on (i.e. you make excess profits) then the market forces result in more companies coming in to take advantage of the excess profits until supply exceeds demand and the prices fall to an equilibrium at where normal profits exist.
Saved you from reading an economics book (not that you would).
Maybe you'd be more settled in North Korea?
Where you sustain a certain level of risk you deserve a certain level of reward. If you are rewarded more than the amount of risk you take on (i.e. you make excess profits) then the market forces result in more companies coming in to take advantage of the excess profits until supply exceeds demand and the prices fall to an equilibrium at where normal profits exist.
Saved you from reading an economics book (not that you would).
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Man of Honour
You're not seeing the big picture, without the profits you will have less wealth distribution. It's as simple as that.
Limiting profits just gives a socialist ****hole where there is no wealth and everyone is as poor as the other man in the street. Heaven on earth it isn’t and never will be.
Caporegime
By "it" I think you mean capitalism? I'd disagree and point out that what we have in the UK is nothing like what capitalism ought to look like. What ever happened to competition for example? Over the past 20 years we've tolerated mergers of banks and building societies, de-regulated utility companies into an appallingly short list of providers. Across the globe companies have been able to exploit new technologies to develop their own monopolies - Microsoft (especially), Apple and Google to name the main culprits - with regulators seemingly unwilling or unable to do anything about it.
I agree that what we have at the moment is doing more harm than good, it's good that you acknowledge it unlike many here who will continue to happily bury their heads in the sound. It's funny how no country in the world is happy with idea totally free markets, they all adopt mixed markets and argue to what extent regulation should intervene. Yet somehow when it comes to the Labour market many here will argue till the cows come home that any sort of intervention is bad, against the minimum wage at the bottom and any sort of measures that might stop unrestrained pay at the top.
Soldato
By "limiting profits" I assume you mean imposing a 100% income tax above a certain threshold. You can't honestly be proposing a threshold on the profits of publicly-traded firms.
Let's suppose that threshold is £150k pa. You'll see two effects:
a) Individuals capable of earning more than £150k will now have no incentive to do so; anything above the threshold is essentially slave labour. So they'll work less. Their labour, and the fruits of it, will now be more scarce, making them more expensive.
Even though 1,000 extra people want the widgets that Bob's firm produces, he has already shut up shop for the year; he's earned his lot, and has no incentive to produce any more.
b) You will lose a significant portion of tax income. If we take the United States as an example, although income distributions are more extreme there, the top 1% of earners contribute something like 50% of income tax, and the bottom 50% of households contribute nothing at all.
Let's suppose that threshold is £150k pa. You'll see two effects:
a) Individuals capable of earning more than £150k will now have no incentive to do so; anything above the threshold is essentially slave labour. So they'll work less. Their labour, and the fruits of it, will now be more scarce, making them more expensive.
Even though 1,000 extra people want the widgets that Bob's firm produces, he has already shut up shop for the year; he's earned his lot, and has no incentive to produce any more.
b) You will lose a significant portion of tax income. If we take the United States as an example, although income distributions are more extreme there, the top 1% of earners contribute something like 50% of income tax, and the bottom 50% of households contribute nothing at all.
This. Cap is a daft idea.
Caporegime
Pretty much.
Imagine plumbers - because of the cold weather he has had a good 2 months, earn so much that he's hit his ceiling by December, and for the next 4 months until the next tax year, no matter what he does, he won't earn a penny.
What would YOU do?
I'd sit at home, do nothing, play golf for 4 months?
or do you work for free?
I mean that's ok for the plumber, what about you, the customer? live without hot water until April? Sure, you'll say there are plenty of other plumbers around...well, they'll get more work as a result of the above and eventually they will hit that ceiling too so VERY quickly they will call it quits for a few months.
You don't need a degree in economics to realise it won't work.
How does more people having money hinder wealth distribution?
More people with money can afford stuff so sustaining and creating jobs, people have to make a living, money has to be spent, overall quality of life for everyone goes up, instead of mostly just for the few.
The incentive is if they wish to keep their higher than average paying job they will keep working, plenty of others will be happy to take their place if greed was the only motivator for working that job.
If bob can afford to shut up shop then it just shows his widgets were over priced in the first place, he should adjust things so he stays working the whole year, of course more holidays will be part of this new system as well, so quality of life again just went up!
Caporegime
Ah, good thing there is something call "Equal pay for Equal Work" eh?
Directive 75/117/EEC
"Whereas implementation of the principle that men and wonnen should receive equal pay contained in Article 119 of the Treaty is an integral part of the establishment and functioning of the common market;"
Which means, if you are working for free to keep a job, where the next guy is working and still getting pay....the above law is broken.
So, you idea won't be legal, it is a european directive, and applies in the UK and the UK cannot implement your idea without getting into some SERIOUS trouble....after a revolution probably.
Soldato
How do you propose this would work with jobs that carry vast responsibilities; such responsibility that any rational individual would demand more than £150k pa compensation to take on?
Bob's business had been tough for the five years prior and he'd amassed substantial debts to keep his business afloat and his employees in work. It all paid off this year, things went his way and sales of his widgets exploded.
Trouble is, he amassed debts of £150k over the previous five years, you are now capping his profits for this year at £150k, and the forecast is bleak for future years...
Bob's widgets were not overpriced. If they had been, another firm could have entered the market and undercut Bob. Bob would not have sold any widgets at all...
I never said exactly how much profit is allowed, only that it would be reasonable based on a new economic model of true value and set profits, most of you are seeing this idea happening in the current world to a select few but it would be happening at all levels so costs would be low at every stage, i would expect many more changes to take place than just this so everyone will benefit and people wouldn't see the need for massive profits as they'll be living in a fairer and more abundant world.
Obvious solution is obvious. The state takes over and produces everything and all Bobs now work for the state who gives them coupons to exchange for food and clothing items. All housing belongs to the state and everybody is rewarded equally (well, some more equal than the others). That way we can ensure that people work all year round, that profits are controlled (the state keeps all of them), avoid those pesky tax and administrative issues.
The state takes care of all these things and quality of life and prosperity in the country blossoms. Obviously we will need to close the borders so that Bob's cannot take their trade/skills elsewhere and it's best that we don't allow foreigners to come in, just in case they influence our Bob's to revolt against their just and glorious leader who takes good care of them. We don't want to revert back to the capitalist filth.
Finally, we need to ensure our survival against attacks from the evil capitalists who envy our way of life and our prosperity. Thus we will engage in developing our own nuclear weapons so that the capitalist pigs cannot touch us. Thinking about the borders issue and the capitalist threat we might need some allies to ensure we get enough resources imported for our projects. Perhaps China could help as they seem to have lots of it and are friendly to our enlightened and honourable regime.
Let's all drink to the health of our honourable leader! For real quality of life and equal distribution of wealth. Hip hip hooray!
Soldato
Just one question: Where do I sign up?
Asinine comment and patently untrue.
Ridiculous socialist twaddle like this merely perpetuates the dire circumstances that the economy is in.