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Thread: Communism and Capitalism: True Opposites?

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    Veteran Member skepticalbip's Avatar
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    Quote Originally Posted by steve_bank View Post
    ... snip ...

    Way back in Econ 101 the prof asked 'What is the purpose of capitalism?'. I responded something like to provide the greatest number of goods at the lowest cot for the most people.

    He pointed his finger at me and said sharply 'No ! The purpose of capitalism is to make a profit'.

    It took years on the job for that to fully sink in.
    That is true but simplistic. The way to make a profit is to supply a good or service that the customer wants and at a price the customer is willing to pay. It is a meeting of minds between the producer and consumer. (how much effort and expense are you willing to put in for the price you charge and how much is the consumer willing to pay for the final product? - when these two meet, there is a sale.) Also, since there is competition from other producers, the price and quality needs to be competitive to attract the consumer to your product or service rather than the competitor's.

  2. Top | #62
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    Quote Originally Posted by skepticalbip View Post
    Quote Originally Posted by steve_bank View Post
    ... snip ...

    Way back in Econ 101 the prof asked 'What is the purpose of capitalism?'. I responded something like to provide the greatest number of goods at the lowest cot for the most people.

    He pointed his finger at me and said sharply 'No ! The purpose of capitalism is to make a profit'.

    It took years on the job for that to fully sink in.
    That is true but simplistic. The way to make a profit is to supply a good or service that the customer wants and at a price the customer is willing to pay. It is a meeting of minds between the producer and consumer. (how much effort and expense are you willing to put in for the price you charge and how much is the consumer willing to pay for the final product? - when these two meet, there is a sale.) Also, since there is competition from other producers, the price and quality needs to be competitive to attract the consumer to your product or service rather than the competitor's.
    I was neck deep in it for 30 years designing and manufacturing products.

    It is simple, the law of supply and demand. The free market capitalist system dynamically adjusts wages, cost of resources, and prices for goods and services. In Adam Smith's vision everybody has equal access to resources and opportunity but we know that never completely happens., There is always advantages some have and others do not. How much gets made and prices vary with supply and demand.

    Supply and demand is often circumvented. Apple makes a number of units each year below demand to keep price up. There is a supply and price point that maximized profit.

    In contrast Soviet communism and Mao's communism set prices for everything. What and how much was produced was set by govt.

    It is all supply and demand along with maximizing profit. Developing customer relations and the like comes under the heading of business skill. It is what marketing and business students study. Large companies have psychologists on staff to profile customer bases. Before the Nazis the word propaganda was a common term in marketing.

    The general term today is 'best practices' which includes custom relations and satisfaction and product quality.

    There are a number of legal ways to make a profit. Developing a business to meet a cisuomer base neds and devloping relations with a good product is one.

    Another is the fad. Hula hoops and pet rocks. It plays on a human need for newness.Another is hype. Charge triple for shoes with Michael Jordan's name on them.

    Aint America great? The land of opportunity.

  3. Top | #63
    Veteran Member PyramidHead's Avatar
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    Quote Originally Posted by skepticalbip View Post
    Quote Originally Posted by steve_bank View Post
    ... snip ...

    Way back in Econ 101 the prof asked 'What is the purpose of capitalism?'. I responded something like to provide the greatest number of goods at the lowest cot for the most people.

    He pointed his finger at me and said sharply 'No ! The purpose of capitalism is to make a profit'.

    It took years on the job for that to fully sink in.
    That is true but simplistic. The way to make a profit is to supply a good or service that the customer wants and at a price the customer is willing to pay. It is a meeting of minds between the producer and consumer. (how much effort and expense are you willing to put in for the price you charge and how much is the consumer willing to pay for the final product? - when these two meet, there is a sale.) Also, since there is competition from other producers, the price and quality needs to be competitive to attract the consumer to your product or service rather than the competitor's.
    When one customer wants something and another one needs it, a sane and compassionate society would prioritize the need over the want. But under capitalism (or any market economy for that matter), the priority goes to whoever has the money to pay for it. The quality of a commodity doesn't need to be actually good, but only good enough to satisfy the desire of whoever has the most disposable money, in an environment where the producers conspire to engineer the desires of their clients through advertising and cultural saturation, and only in a way that will generate the highest likelihood of repeat purchases. E.g. the planned obsolescence of electronics, the addictive nature of cigarettes, the privatization of humanity's biological requirements, and so on.

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