The markets that Apple, Google and Amazon are in are quite dynamic in that although there are only a handful of firms doing the same thing as them, they are producing goods that actually compete with a lot of different things outside their markets because they are essentially providing things to do with finding information, reading, watching videos, taking photographs, listening to music, and there are existing products that do all of these things. So they are involved in quite a competitive market structure.

The reason these firms make large supernormal profits is because they are innovative enough to produce products that are differentiated from what is out there and people want them, so this is driving innovation which is how technology improves and living standards rise.

The traditional market power of advertising is starting to ebb away now because of the proliferation of review sites and blogs etc. In the old days you could produce an average product and clever marketing could increase the value of it: the emperors new clothes effect. But now if you produce something thats a bit crap, it will get ripped to pieces on the internet and its easily accessible to people that want to research the product online.

The internet is good for improving capitalism because it makes information accessible, and when there is more information, firms lose market power and consumers become more powerful. I remember reading something recently about how in the cosmetics industry there has been a big market shift because traditionally cosmetics rode off the back of womens magazines and advertising: if you placed your product there it was one of the few products that the consumers got to hear about. However now a prime chunk of their audience (ie females aged 14-30) are now not influenced by direct advertising they get their information on cosmetics from reviews on fashion and beauty blogs most of which have just been started by some random 18 year old girl who then gets loads of followers. Peer influence and peer reviewing is becoming more significant and it is a threat to the advertising industry.

So what you are saying is I can't show you a company that makes super normal profits through exploiting its staff? The firms you quoted especially Apple and Google will be at the top end of pay and conditions as they need to attract the best people.

So if we gave the 14% directly to the low paid that would indeed be a two way win - the employee would get the money directly and it would closer to the living wage and we would cut out needless bureaucracy redistributing the funds

It would be interesting if you, or anyone else could define this.

If you accept the principle of limited accountability, limited or no checks, just trust then "needless bureaucracy" is of course the way to go.

2 observations.

No one, to my knowledge, has defined needless bureaucracy.

When the last great " light touch, don't dig too far system was set free", the entire world economic system nearly went belly up.

Amazon and how it treats its employees.

Amazon and how it treats its employees.

Mintball wrote:Amazon and how it treats its employees. Albeit, in that piece she's not an Amazon employee but engaged by Amazon through an agency, and notably doesn't get the same T&Cs as permanent staff.

Mintball wrote:Amazon and how it treats its employees. Albeit, in that piece she's not an Amazon employee but engaged by Amazon through an agency, and notably doesn't get the same T&Cs as permanent staff.

This argument can be applied for Unions and workers too. Regulation is necessary for all walks of life but over regulation is as bad as under regulation. The EU is an example where over regulation has restricted its development and led to it being uncompetitive.



The banking crisis was not caused by under regulation. But it was certainly assisted by regulators who were not up to the job. In the UK we contrived to create the climate for disaster when Buster Brown (of no more boom and bust notoriety) moved from one regulator to three regulators. "Oh I thought you at the BofE were checking that"....."And I thought you at the FSA had a handle of that...oops!"

The term "Free Market" is misused. I doubt if anyone would want a totally free market with no rules & regulations whatsoever.

Most businesses would argue for a "Free Trade" market where there were no import/export duties and simple, clear and fair regulations that apply market wide and that could be easily enforced, otherwise there will never be a level playing field. This can be achieved within your own borders but is unlikley to gain agreement on a world wide basis.

However Governments and civil servants do not understand business and therefore they are not the best people to make these regulations on their own.

Capitalism is far from perfect but so far all the alernatives have failed. Profit and the private sector should be encouraged and we need a smaller state to reduce the burdon.

Greed is not a product of capitalism - it is a human condition. There will always be greedy businessmen, greedy shareholders (including the pension funds etc), greedy unions and greedy workers.

That said much could be done to target a fairer society. I would like to see the shareholder rules change for public companies so that the employees own a substantial percent of the shares - say 40%. This would curtail some of the greed of the top executives, reward the employees by incentive and prevent unwanted take overs (if say a 75% shareholder vote was required)

This is the classic phrase of businesses that want to lobby for special protections/subsidies/advantages from government.

Let me guess, government doesn't understand business so they need that business to provide advice on how to do it!

Personally I don't think the RFL understands rugby league and I would much rather they asked Simon Moran from Warrington what the rules should be, as at least he's a rugby man and you could be sure that the correct decisions on administering the game would be made.

Isn't that why Adrian Beecroft paid a few thousand to the Conservative Party to let him make up some bonkers suggestions for how to make more people depend on legalised loan sharks?