Of course companies that sell climate change solutions stand to benefit as greenhouse gas emissions come to bear a price tag.
Daniel Esty Hillhouse, Professor of Environmental Law, Harvard University[1]
And why is forcing a business to be competitive bad?
The point was that some companies were too big and too diversified to be competently managed, and that the only way to get value out of operations was to spin them off to people who COULD manage them.
It's vital to the socialists to associate "capitalism" with the recent failures in our economy. But there is nothing capitalist about government mandating greenhouse gas reductions based on mythological global-warming.
There is nothing capitalist about having government mandated interest rates so low that housing price rises encourage incompetent lending practices.
And there is nothing capitalist about using government regulation to encourage "efficiency" reductions in use of energy that would not make economic sense without government meddling.
That’s the warning that our fellow Americans should really be paying attention to.
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http://digg.com/business_finance/OBAMA_TELLS_S_F_HE_IS_WILLING_TO_BANKRUPT_COAL_INDUSTRY
Investigating Obama: Career Path Toward a Neo-Marxist Presidency
http://investigatingobama.blogspot.com - spread the word!! - spread the word!!
Bttt
This article spouts far too much economic-illiterate nonsense:
“Of course there is a point to all this. If labour gets too efficient the chances of wringing more profits from industry get less. The more productive labour is, the lower, in the end, will be the rate of return on investments.”
Baloney. Rate of return on investments is based on profit margins X efficiency of capital. More efficient labor reduces labor costs and makes more efficient capital use possible. If anything, it tends to INCREASE return on investments to have more efficient labor. This is a win/win, the kind you see in a good, profitable high-tech firm.
” That is because the source of new value is living labour; but greater investment in new technologies tends to replace living labour with machines, which produce no additional value of their own.[2]”
Well - there’s your problem right there. That’s Marxist clap-trap, that only labor adds value. I assure you, replace 10 worker welders with one welding robot and you have definitely produced additional value. The robot programmer and repairman, if nothing else, are now doing the work of 10 previous workers. The combination of higher wage rates and higher return on capital can be achieved when it happens.
“Over time the rate of return must fall. Business theory calls this the diminishing rate of return.[3]”
That is more marxist clap-trap. Rate of return on capital only falls if (a) the competitors drive it so through being more competitive (ie lower costs, wages etc.) or (b) govt regulation and taxation takes the pre-tax profit and/or regulates away the rate of return. Note that if (a) happens, the ‘low cost producer’ or highest-quality/market-share winner takes the lion’s share of profit.
“Businessmen know it as the “race for the bottom” – the competitive pressure to make goods cheaper and cheaper, making it that much harder to sell enough to make a profit.”
More nonsense. Goods need to be cheaper to win market share, but profit margins - EVEN FOR LONG-STANDING COMPANIES IN TRADITIONAL INDUSTRIES - are NO LOWER NOW than in the past. For example, railroads in 2000-2008 had as good profit margins this decade as in many previous decades. They are getting healthier. Food companies, like Campbell’s or others - same story. You will see tradition ROE (Reutrn on Equity) rates above 10% for these companies.
” Super efficient labour would make the capitalistic organisation of industry redundant.”
Hogwash. Technology is always evolving and capitalism is required to fully provide the needed dynamism to take advantage of that.
” Manufacturing scarcity, restricting output and so driving up prices is one short-term way to secure profits and maybe even the profit-system.”
Restricting output is an impossibility in a non-monopolistic situation.
” Of course that would also mean abandoning the historic justification for capitalism, that it increased output and living standards.”
Actually, the justifcation for capitalism is that it is a component of our inalienable rights - it is the embodiment of ECONOMIC FREEDOM. Deny people economic freedom and you deny them ALL their freedom. Take away their property rights, and you have taken away their human rights.
The fact that the natural, capitalist economy is the most efficient, because it is in accord with economic reality, is simply a logical consequence of giving people freedom. Freedom begets wealth creation, and wealth creation begets prosperity. Prosperity is the natural condition and consequence of a free people.
” Environmentalism might turn out to be the way to save capitalism, just at the point when industrial development had shown it to be redundant.”
... only if you believe Marxist messed-up misunderstanding of capitalism.
” From megawatts to negawatts One of the most destructive examples of manufactured scarcity is “clean energy” and California’s “Negawatt Revolution”. “
This is a whole other avenue of wealth destruction - and it is ALL BASED ON GOVERNMENT RESTRICTING ECONOMIC ACTIVITY. Specifically, resource extraction and utilization.
“In 1997 the Club of Rome collaborated with Amory Lovins of the Rocky Mountain Institute to launch a new report “Factor Four” that promised to “halve resource use” while doubling wealth. The message was that you could get rich saving the planet. A privileged few did indeed double their wealth; but for the rest it was just a case of halving resources. “
We can easily halve resource use and double wealth - with technology. But Govt rules that dictate reductions in resource use dont make technology magically appear- ALL IT DOES IS KILL JOBS, WEALTH AND PROSPERITY.
For example, banning offshore drilling. Did that magically make alternative fuels work better? Nope. Make solar cheaper? Nope. All it does is make us more dependent on foreign oil and make us energy-poor. Result is poverty and misery.
The eco-extremists espouse policies that make us poorer. What they should do instead is let the creative juices of capitalism go to work and, over time, we will find new technological ways to do more with less and have prosperity that doesnt tax the earth as much as it did in the past. We see that already: The amount of oil we use today is not much greater than in the 1970s, something like 20%, yet the population and economy is much much larger. What happened? Efficiency, substitution, etc.
it’s a pity that a message like that is obscured in this article that mixes a bit of common sense with a lot of nonsense.
“[2] See Karl Marx, Capital, Volume Three, “The law of the tendency of the rate of profit to fall”, London, Lawrence and Wishart, 1959, pp.211-240.”
AHA! Marx as a reference! When I called some of his statements Marxist clap-trap, I didn’t realize how literally true I was.
No wonder he is saying things that make no sense.
As for ‘manufacturing scarcity’, I repeat that it can only be done via Govt action or monopoly action. Are eco-extremists engaged in a deliberate attempt to do this? YES! We know that because the eco-extremists were gleeful when oil was $140 a barrel. They WANT resource prices through the roof.