[LINK] I'm going to throw something out there...

[Craig Sanders]

On Tue, Feb 17, 2004 at 09:39:19PM +1100, Deus Ex Machina wrote:
> Craig Sanders [cas at taz.net.au] wrote:
> > > you are *obscenely* overpaid relative to the average chinese.
> > 
> > yes.
> 
> lead  by example then. do to your salary what you expect "overpaid" CEOs to do.

lead whom?  CEOs aren't going to follow any example set by me - they're used to
enjoying the spectacle of worker salaries being reduced while theirs
sky-rockets.

in any case, my salary is NOT tens or hundreds of times the amount that other
workers around me make.  it's not much of an example at all.


> > also, from the user's/consumer's point-of-view, profit is an unneccessary
> > and undesirable inefficiency.  profit inherently means that they are paying
> > more than what the service costs to provide and maintain.
> 
> well no it doesnt. profit is the reward for taking risk. 

no, profit is not "reward for risk" in ordinary business.  what you are talking
about is speculative get-rich-quick schemes, not business.  speculation IS high
risk.

most businesses are low or no risk, with a steady, predictable return.  not
every business is a roller-coaster ride like gambling on long-shots on the
stock market.

essential services, like electricity, gas, water, all of which used to be state
government or council provided services are extremely low risk.  there is a
captive market, and a natural monopoly.  here is where profit IS an inherent
inefficiency.  here, profit means either that the service is being charged at
more than what it is worth, or that maintainence is being skimped in order to
make a profit, or both.  services like these should never have been privatised,
and should be run as a community service on a not-for-profit basis.

telecommunications infrastructure, including the "local loop" or "last mile"
and inter-city & inter-state lines, are also a natural monopoly and should also
be run as a not-for-profit community service.  if there is scope for profit in
the comms sector, it is in providing features & services over the top of the
public infrastructure (and even there, any business would be competing against
the no-frills basic service provided as part of the infrastructure).
 

> what you are saying is nobody should get any reward for taking any risk. 

i didn't say that at all.   try listening to what i actually say rather than
arguing against imaginary straw-men.


> that doesnt sound like a world that is going to get far beyond the stone age. 

we had water, gas, electricity, telephone and many other services provided as a
community service by government for many decades until only a few short years
ago.  then economic rationalist principles like yours took hold and businesses
managed to successfully lobby government to privatise these services.  since
then, prices have gone up and quality of service has gone down.

> different cultures have different ideas of what acceptable rewards are, and
> interestingly it seems the cultures that dont limit rewards are the ones that
> thrive and progress the quickest. modern cultures that have attempted to cap
> reward have been completly trounced by cultures that dont. and when you think
> about it, unlimited reward means greater risk will be undertaken with the
> potential for far greater value being generated for all concerned. and I
> again use the word value not necessarily in a cash sense.

the problem with your viewpoint is that you are living in a fantasy world where
growth continues without end.  contrary to current popular economic theory,
there is a limit to growth and any system which is based on the notion of
infinite and perpetual growth is doomed to crash.......just as the populations
of animals crash when circumstances temporarily allow them to outbreed the
carrying capacity of the environment they live in. 

corporate greed is not only allowing us, it is *forcing* us to temporarily
outgrow the carrying capacity of the planet.  eventually it will crash.


another problem with your viewpoint is that it completely ignores the obvious -
that if unlimited rewards encourage risk-taking, then they also encourage
illegal activity, which (from a business perspective) is just a different form
of risk.   e.g. HIH, OneTel, Enron, Haliburton and many many others.

> but to return to your point, the public indeed supports companies making a fair
> return on equity.

i don't think anyone has a problem with companies making a *fair* return.  the
problem is that companies often aren't satisfied by a fair return and, in fact,
public companies are required by law to *maximise* return for investors,
without regard to fairness.  fairness is not part of the equation, and it is
disingenuous of you to suggest that it is.

craig