Excellent article and you bring up many valid concerns. Knowing that the sole purpose of a corporation is to make money, I think it's very easy to deduce that our best interests (the consumer) are not at the heart of the matter. There comes a point in time when a company gets so large that all their decisions in essence become binary in nature. It's all about making more money and taking a larger part of market share. That's it and that's all.
This goes against my capitalist beliefs, but I say yes that a company can become too big. There are exceptions to every rule and as the evolution of business continues to develop, we are seeing some of these pitfalls occur in real time today.
The shortsightedness of business is what's most concerning to me presently. The larger and medium sized corporations are inter-locked in their survival of the fittest economic warfare that they are failing to see the long term ramifications. They keep cutting, cutting, cutting, to gain a competitive leg up or to just keep pace with Amazon that eventually there will be no one left with meaningful employment to buy their products or services. You can only cut overhead in the form of materials so much that they are turning to human labor as their last line of defense. I feel that inflationary pressures are also largely to blame for this. The runaway money printing is decreasing the value of fiat dramatically, even though you'll hear this mentioned on MSM. The costs are simply going up for everything, so in order to remain competitive, they must cut costs somewhere, and human labor is the last line of defense.
We have a major problem on the immediate horizon with Amazon and some other large corporations. When Mcdonald's starts installing self serve kiosks to cut down on human labor to maintain a competitive advantage, your warning bells should start going off in your head. They're simply cutting their nose off to spite their face by thinking short term and not long term in solving their problems, but in their profit only way of thinking, it's makes perfect sense to them, until it doesn't
I live in New York - Manhattan to be specific. The vast majority of McDonald's have already installed these self serve kiosks. And it's not just fast food. Home Depot, CVS, Whole Foods, and just about every other large store utilizes self serve kiosks. One might say these aren't quality jobs to begin with, but that paycheck means something to a lot of people who live in the outer boroughs.
Darwins theory is becoming transparent.
Wow that is an amazing answer, worthy of a post in itself. Can't really add much.
The idea of short sightedness applies not just to business but to government too. It seems to be recurring theme in modern society.
It is partly also responsible for the type of boom and bust cycles that we see in major economies too.
boom bust cycles are also, always and everywhere a monetary phenomenon, (along with our human condition of course)
both business and government are shortsighted institutions by design.
Only the next earnings report, or the next elections matter
Not sure how this fits into the topic.
well, I am not sure how I am going to make you privvy to it then.
I did try, if you like, there's a more elaborate post in this same comment thread...
(responding directly to the comment that you did)
I am happy to try to explain further, but I don't understand why you think a discussion of the boom bust cycle, and it's ultimate or root cause doesn't fit into a discussion about same,
and well,
I am unsure where to go from here.
happy to stay out of your posts and comments if you would prefer
No don't stay out and I don't mean to seem harsh it is a fun discussion (I didn't mean any harm) I'm just not sure how it fits in directly and wanted you to elaborate:)
did you see the other comment and feel like you understood the connection?
Writing about these themes is not my game, only reading about them usually.
but I'll have to practise my communication skills around these topics, as I think I have plenty to add to this sort of conversation.
I think the effects of monetary policy are often dismissed as irrelevancies, when they are actually the root cause of the phenomenon in question, such as, in this case, the rise and rise of the mega-corp
would never have happened without the distortions caused by many years of zero interest rate policy.
No company could have done what amazon has done in a world with historically normal interest rates.
the capital would have wanted to see return on capital, if there was an alternative.
and as Bill Bonner calls it, Amazon is the river of no returns.
I'm not saying that amazon didn't do what they should have or anything else, just that they couldn't have done it without free money.
OK I get what you are saying now. Sometimes when there are a lot of comments it gets hard to keep track of what people said before and it can lead to confusion.
The interest rate thing is strange - I think there are a lot of knock on effects - not just in relation to megacorporations get larger amounts of money for next to nothing but also the effects on regular people.
The ultimate result is that regular people who make traditional savings and investments get very little returns. On the other hand the rich who can make their money work either by starting or investing in corporations have benefited.
One could argue that it creates a flow of money from the poor to the rich.
The solution to monopolies in Saskatchewan, where the geography is vast, and the population sparse, has been to create Crown Corporations. In Amazon's case, this is their single payment system to reach many retailers, which solves the problem of reinventing the wheel each time a vendor wants to collect payment online and ship goods.
It makes little sense to put in multiple electricity delivery wires, or multiple natural gas pipes to the same locations, so sharing the infrastructure becomes a social concern, especially when a single privately held corporation has that level of basic control. Amazon is clearly too big (to fail, ugh), so what are we going to do about ensuring the public has a hand in making it run equitably?
nothing, unless you want to buy into amazon and try and change it from the inside.
what is the idea of a business running equitably? it has been tried and mostly has failed, or eventually become so successful as to turn into the same old old
you almost got there and then you turned in a different direction. It is entirely a monetary phenomenon.
Zero percent interest rates mean that capital has no value, zero, literally.
This allows, nay, forces distortions such as the rampant off-shoring and automation as the money is free to organise these sometimes massive changes, and any company not going there will be punished by the shareholders, who as we know, usually don't have a long term vision.
And probably punished by various levels of government bureaucracy too.
Companies are not cutting off their noses to spite their faces, they are acting in their own best interests in an unheard of monetary regime.
Think about Nirp, for just one second (Negative Interest Rate Policy) the idea that you should pay every year to let someone else use your accumulated capital.
not in any reality does this make sense, yet there is some huge quantity of negative yielding bonds in the market right now. I just looked for a current figure and was not successful quickly.
but it's trillions.
just my two cents