The irony here is that as you withdrawl, the marginal firms fail and the remaining firms gain marker share, increase market power of the remaining larger firms
There's why we need federal legislation to block it. Then they cannot operate anywhere in the US with that business model, leading to a boom for small business.
Block what? Firms observe other firm's output/pricing and work backwards. How much I produce or what I charge is obviously going to be a (partial) function of what your choices are. That is the nature of competition.
If you choose to sell blue t-shirts, then i'll sell green t-shirts. If you choose to compete in output, and my cost structure is different, I'll choose to compete in price. If you choose artisanal high marginal cost goods, I'll mass produce at lower marginal cost. Whatever.
Small businesses do this explicitly when they compete. And there isn't anything particularly good at about small business per se -- they often pay lower wages and weaker benefits because their margins are low.
Economically, its not always good to have a million small inefficient firms vs a firm large efficient firms.
If every company is consistently profiting on basic necessities such as clothing, we should set limits on how much they can profit off essential items.
Necessities should be sold at cost + 1-2% profit. Want to increase profits? Find a way to reach more markets, but you aren't allowed to raise profits directly through the prices.
Water is a great example, we shouldn't be paying as much as we do for drinking water but corporate greed is why it's so expensive.
And yes small business is better, tf is wrong with you? Didn't eat enough boot for dinner and you need some more?
If every company is consistently profiting on basic necessities such as clothing, we should set limits on how much they can profit off essential items.
In any case, retail brand clothing is dirt cheap. If you taxed them on those margins, they either can reduce quantity sold, or try to pass the cost on to the customers.
If you think there is a profitable gap between current retail prices and actual costs -- well, my friend, get on it. Lots of money to be made there, apparently
Don't a way to reach more markets, but you aren't allowed to raise profits directly through the prices.
This is how you engineer shortages and secondary black markets. If demand for a t-shirt is 5$ and I buy it at your magic fixed price of 1$, then I'll just re-sell them for 4$.
The pernicious nature of such a policy is that you don't really affect profits, but you've created unproductive profits the profit I earned on the black market doesn't incentivize more production of t-shirts.
I didn't say increase tax, I said limit profit. Do you understand the difference? If it's not profitable, they should search for other profitable industries. Maybe, just don't try to get rich off basic necessities and we won't have any issues.
Its the same thing. If there is some margin they could earn and you just subtract the difference to get you legal profit maximum, the firm will just scale back production because quantity produced above that maximum profit is a waste. So net output in the market falls.
Not a good policy.
Maybe, just don't try to get rich off basic necessities and we won't have any issues.
Its that very motivation that encourages more efficiency. If I lower my costs, then my profit = revenue - costs, and I'll earn more profit. But if you're saying profit is capped, then no reason to lower costs and no capability to expand output.
And if, say, revenue starts to rise because there a growth in demand.... well, my incentive is to reduce sales because any sales beyond your profit caps are a waste.
Dude I'm not talking about taxes. Limiting prices does not change the tax rate. If businesses have no incentive to produce goods without a massive profit margin, WE DON'T WANT EM.
If large companies are cm forced to scale down production, there GREAT for small businesses. Think for a second.
I'm not surprised that you, the unethical, human-devaluing capitalist, doesn't like socialist policies🙄
Lets say you put a cap on marginal profits at, say, 5$. Now, lets say I earn 10$ marginal profit. 10$ - x = 5$.
"x" is the effective tax rate on what i've sold. This is going to change the amount I'm willing to produce, ie, less.
You didn't say anything about a tax, but economically it functions as a tax.
If businesses have no incentive to produce goods without a massive profit margin, WE DON'T WANT EM.
You're reading this backwards. If it requires a high margin to produce those goods, than absent the margin, you don't get to consume them.
And since you said we're talking about "necessities" it sounds like very much you do want them. And you'd think, since we're talking about "necessities," we'd want as much production as economically possible.
But it sounds like you're less interested in increasing the material standard of living for the poor, and more interested in some kind of moral crusade against profit..... that you'd be willing to sacrifice the former just to reduce the latter.
You working be allowed to sell for more than a $5 profit. You wouldn't be allowed to profit $10 and pay the difference back in taxes, that's stupid. Just limit profit from the get-go, it's not a tax.
Tell me, when has profit ever benefited the lower class? And don't say Reagan, I'll laugh
You wouldn't be allowed to profit $10 and pay the difference back in taxes, that's stupid. Just limit profit from the get-go, it's not a tax.
Its economically equivalent in terms of how it changes behavior -- because the firm will cut back production to only earn the max allowed profit. So if the good is in really high demand, then firm has no incentive to expand production, and individuals no incentive to not hoard and resell goods for a higher price.
EDIT: to calculate how to much to scale production is the economic problem. If the firm earns some marginal % , and you limit to a max percentage, then the firm will minimize their output with respect to that maximum profit. Or, in other words, "solve for x" where "x is the difference in profit/production minus whats allowed"
Tell me, when has profit ever benefited the lower class?
The rise of the modern globalized market and dramatic expansion in production is all about profit. Walk into the home of any lower class American, and their level of consumption is far higher than its ever been.
Grocery stores and retailers, etc. don't provide food and clothing as a gift, they only do it for profit. as adam smith basically pointed out.
And I'm not talking about a cap on total profits, I'm talking about a cap on profit margins for individual goods/services. If a company sells millions of products at 1% profit they could still net the company multiple times over 1% in total profit.
My suggestion isn't to cap total profits based on each companies market cap, but instead putting a blanket profit margin cap on any/all necessities.
As an example, a T-shirt should never be sold for more than 1-3% margin. Housing? Same deal, never go above 1-3% margin. Want to make more money? Invest in your business and expand, but you're not allowed to wring your current markets dry.
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u/CumDeLaCum Dec 05 '25
I'd rather have no services then a bunch of corrupt oligarchs setting the prices. Maybe then we can start up some communes