I’d say that fair profit is a ratio of materials+labor costs. Basically a supply chain merchant’s VAT. Find a rate at which a well run shop is able to turn a profit allowing it to hire more workers and expand if successful enough, and cap the “fair profit” at whatever that is as a ratio to labor and material costs.
Really the worst hit industries will be ones that are particularly prone to brand taxing, and it actually disincentivizes offshoring since cheaping out on labor and regulatory costs correspondingly limits your upper profit margins.
I kinda agree but not too much. National scale industrial companies are a necessity for modern complex products. Keeping companies from going international (or at least beyond multinational bloc scale for places like the EU or Mercosur) is more than fair in my mind.
Fast food cartels seem to work ok. Maccas, KFC, Hungry Jacks, Subway, Red Rooster, Chicken Treat, Nandos, Grill’d etc (and I use these examples because the americans will recognize some, but not others which are Australian or Western Australian only) can all coexist while also being statewide, national and/or international franchise chains. None of them can really squash out the others because the customer demands choice, and no one store can reliably deliver all the possible options that consumers seem to want. Sure, they have plenty of other ethical concerns attached, but so far, monopoly seems not to be one of them.
You can have an international product without international stores but Windows for example can be an OS but be banned from expanding into software or a cloud company for example. Google can be search engine but not an ad platform. Etc
In the medical device and pharmaceutical industries, this more or less already exists in countries with socialized medicine. It’s not as explicit as my formula, but the price of medications and devices are regulated. Industry needs to demonstrate the actual benefit of a new product over a prior product for the system to pay for it, and the price of the product is then set on the basis of the health economic value it brings.
Some say it stifles innovation, but honestly, it eliminates the bullshit minor changes that are only made to continue justifying high prices and exclusivity.
Anyway, I think the “Exodus of industry” argument is an empty threat the shareholder class makes when they feel threatened. A market is a market, and if they want to continue to sell in it, they have to follow the rules, even when they change.
Those countries do not manufacture or do R&D for most of their pharmaceuticals, right? That’s just externalizing the exploitation so far as I can tell.
It’s important to note that much of the R&D pharma relies on is publicly funded via academic grants in research carried out at universities. It’s not to say that pharma doesn’t also carry out clinical research, which of course does carry a cost, but a lot of the development dollars for a given drug are spent well before they make it into pharma’s hands.
I guess my point is that each of these countries individually does not do the majority of the R&D or production for the medications that they rely on. If we start bundling them together arbitrarily, the % they cover grows, sure. Meanwhile India manufactures >50% of the world’s vaccines, and a substantial amount of other medications. In particular India manufacturers many generics which many populations are heavily reliant on. This, of course, is because they keep their costs lower. An exodus of industry already did occur for this to become the case. And a domestic industry in other capitalist nations cannot be made viable without isolationism that would wreck the economy. My understanding is that most of the pipeline costs do fall on the corporations, and because they can go bankrupt, their continued operations depend on privatizing drug candidates, which is also incompatible in the long-term with a resilient domestic industry.
My larger point is that there is a limit to how much reform can improve a framework - to tackle issues at the fundamental level, the industry really needs detached from a profit motive. Right now the big motivator as I understand it is lifestyle drugs, and that is where significant funding is going because the revenue is similar to a subscription model. The profit motive is not and cannot be an optimal navigator when it comes to public health.
Studies have shown that, at least in the states, inflation is basically independent of wage growth.
Not to mention how being the guy who doesn’t jack up prices will automatically hand you a significant market advantage. In non cartel organized markets every competitor has a prisoner’s dilemma incentivizing them to betray the others if an unspoken price increasing agreement is put into effect.
Capitalism relies on the profit motive. “Greed is good,” remember? It is based on individual actors acting in their own best interests. Without the ability to exploit, there is no motive for action under capitalism.
And without profit, there is no accumulation of capital, which itself is a killing blow.
What stops corporations from raising their prices to capture the UBI value?
I would love to see regulations define “fair profit.”
Material costs + labor costs + fair profit = retail price.
Fair profit cannot be more than X% of retail price.
I’d say that fair profit is a ratio of materials+labor costs. Basically a supply chain merchant’s VAT. Find a rate at which a well run shop is able to turn a profit allowing it to hire more workers and expand if successful enough, and cap the “fair profit” at whatever that is as a ratio to labor and material costs.
Really the worst hit industries will be ones that are particularly prone to brand taxing, and it actually disincentivizes offshoring since cheaping out on labor and regulatory costs correspondingly limits your upper profit margins.
Companies just need to be kept small, if they can afford to expand then it means they are making too much money
I kinda agree but not too much. National scale industrial companies are a necessity for modern complex products. Keeping companies from going international (or at least beyond multinational bloc scale for places like the EU or Mercosur) is more than fair in my mind.
Fast food cartels seem to work ok. Maccas, KFC, Hungry Jacks, Subway, Red Rooster, Chicken Treat, Nandos, Grill’d etc (and I use these examples because the americans will recognize some, but not others which are Australian or Western Australian only) can all coexist while also being statewide, national and/or international franchise chains. None of them can really squash out the others because the customer demands choice, and no one store can reliably deliver all the possible options that consumers seem to want. Sure, they have plenty of other ethical concerns attached, but so far, monopoly seems not to be one of them.
You can have an international product without international stores but Windows for example can be an OS but be banned from expanding into software or a cloud company for example. Google can be search engine but not an ad platform. Etc
I guess that too, I was imagining more for the prevention of shady tax dodging shiz
I like the general idea, but iirc in practice things like this tend to cause an exodus of industry and its capital.
However as far as reform goes, I do think you could hash something out on these lines (with extra parameters) which might lead to a net benefit.
In the medical device and pharmaceutical industries, this more or less already exists in countries with socialized medicine. It’s not as explicit as my formula, but the price of medications and devices are regulated. Industry needs to demonstrate the actual benefit of a new product over a prior product for the system to pay for it, and the price of the product is then set on the basis of the health economic value it brings.
Some say it stifles innovation, but honestly, it eliminates the bullshit minor changes that are only made to continue justifying high prices and exclusivity.
Anyway, I think the “Exodus of industry” argument is an empty threat the shareholder class makes when they feel threatened. A market is a market, and if they want to continue to sell in it, they have to follow the rules, even when they change.
Those countries do not manufacture or do R&D for most of their pharmaceuticals, right? That’s just externalizing the exploitation so far as I can tell.
It’s always externalized exploitation because they’re all multinational corporations.
It’s true that many of the big players are based in the US, e.g. Pfizer, J&J, Merck, AbbVie, Abbott, EliLily, etc.
But there are plenty that aren’t:
https://en.wikipedia.org/wiki/List_of_largest_biomedical_companies_by_revenue
It’s important to note that much of the R&D pharma relies on is publicly funded via academic grants in research carried out at universities. It’s not to say that pharma doesn’t also carry out clinical research, which of course does carry a cost, but a lot of the development dollars for a given drug are spent well before they make it into pharma’s hands.
I guess my point is that each of these countries individually does not do the majority of the R&D or production for the medications that they rely on. If we start bundling them together arbitrarily, the % they cover grows, sure. Meanwhile India manufactures >50% of the world’s vaccines, and a substantial amount of other medications. In particular India manufacturers many generics which many populations are heavily reliant on. This, of course, is because they keep their costs lower. An exodus of industry already did occur for this to become the case. And a domestic industry in other capitalist nations cannot be made viable without isolationism that would wreck the economy. My understanding is that most of the pipeline costs do fall on the corporations, and because they can go bankrupt, their continued operations depend on privatizing drug candidates, which is also incompatible in the long-term with a resilient domestic industry.
My larger point is that there is a limit to how much reform can improve a framework - to tackle issues at the fundamental level, the industry really needs detached from a profit motive. Right now the big motivator as I understand it is lifestyle drugs, and that is where significant funding is going because the revenue is similar to a subscription model. The profit motive is not and cannot be an optimal navigator when it comes to public health.
Can’t have corporations when suddenly everyone has freedom to choose what they do for work.
Co-ops already exist.
Studies have shown that, at least in the states, inflation is basically independent of wage growth.
Not to mention how being the guy who doesn’t jack up prices will automatically hand you a significant market advantage. In non cartel organized markets every competitor has a prisoner’s dilemma incentivizing them to betray the others if an unspoken price increasing agreement is put into effect.
You need competition. The milk surplus, you want that. Companies should compete and only demand what they need to keep going.
But if you do that, there is no real owning class. So you need other ways to finance innovation.
Capitalism relies on the profit motive. “Greed is good,” remember? It is based on individual actors acting in their own best interests. Without the ability to exploit, there is no motive for action under capitalism.
And without profit, there is no accumulation of capital, which itself is a killing blow.
Which means only people with other motives own companies. That could be a good thing.