Election 2019, Week 1

[Pierre]

Originally Posted by jfman

Nobody says that you can’t generate profits, as you say it creates tax revenues. My point, which you seem to have missed, is that economic theory is that suppliers enter the market and drive down prices

You’re obviously very knowledgeable in “economic theory”.......................

Supply, demand etc but most importantly choice, desire. Products that beat the market, and accelerate before competing suppliers can catch up and when they do their response is inferior.

iPod v zune

Windows v Top view, visi on, Gem

iPhone v no-one (it took years for anyone to get near it)

So these examples of apple v Microsoft ( and both made duds along the way) but they were both so ahead of everyone else they made their founders billions. Do say that is wrong? That they should have had their wealth stripped from them?

Both have massive charitable foundations by the way.

[nomadking]

Originally Posted by jfman

Nobody says that you can’t generate profits, as you say it creates tax revenues. My point, which you seem to have missed, is that economic theory is that suppliers enter the market and drive down prices in the consumer interest. You know, the interest of the 99% of us that don’t own significant shares in previously nationalised industry and are isolated from genuine competition - like EU workers competing for our jobs but for companies.

The theory has failed.

---------- Post added at 18:59 ---------- Previous post was at 18:29 ----------



Lays golden eggs... in Monaco it would appear.

https://www.theguardian.com/business...ax-monaco-move

His businesses will still pay tax, and the article says "planning", not "has".


If you drive down profits by imposing additional costs, there reaches a point where they go bust. In the meantime, the tax revenue goes down, investment goes down, ability to expand goes down, etc.


Where exactly has Communism/Socialism actually succeeded? Russia? China? Cuba?

[jfman]

Originally Posted by Pierre

You’re obviously very knowledgeable in “economic theory”.......................

Supply, demand etc but most importantly choice, desire. Products that beat the market, and accelerate before competing suppliers can catch up and when they do their response is inferior.

iPod v zune

Windows v Top view, visi on, Gem

iPhone v no-one (it took years for anyone to get near it)

So these examples of apple v Microsoft ( and both made duds along the way) but they were both so ahead of everyone else they made their founders billions. Do say that is wrong? That they should have had their wealth stripped from them?

Both have massive charitable foundations by the way.

It’s a failure of capitalism, yes. Those billions aren’t coming from thin air, they’re coming from the pockets of consumers because competition doesn’t exist. That’s literally the economic definition of market failure.

The example you cite are innovative yes, but many are not in the previously nationalised industries. They’re benefiting from taxpayer investment previously made and being sold off cheap.

The fact they have charitable foundations is an irrelevance to the matter.

---------- Post added at 19:15 ---------- Previous post was at 19:09 ----------

Originally Posted by nomadking

His businesses will still pay tax, and the article says "planning", not "has".

If you drive down profits by imposing additional costs, there reaches a point where they go bust. In the meantime, the tax revenue goes down, investment goes down, ability to expand goes down, etc.

Where exactly has Communism/Socialism actually succeeded? Russia? China? Cuba?

I think it’s safe to say people planning to save £4bn in tax don’t wake up one morning with a dose of altruism and decide to pay it.

It’s okay though, they made £1bn of investment for some good news stories so the net loss of £3bn.

Originally Posted by Pierre

You’re obviously very knowledgeable in “economic theory”.......................

Supply, demand etc but most importantly choice, desire. Products that beat the market, and accelerate before competing suppliers can catch up and when they do their response is inferior.

I think there are two questions that then come from this:

1) How much of that profit should be channelled into one person's hands?

2) What happens when a product dominates the market to such an extent even superior products can't get a look in? This is especially true of products where critical mass is important - think Uber - so first mover advantage becomes the only thing that matters.

The danger we face now is more and more processes will become automated which will cut more people out of the jobs in creating that wealth giving more of it to a narrower group of people at the top. The people who generally can afford to implement these systems of automation will be those with the money to do so. More and more money will go to fewer and fewer people and it won't matter how hard you work - robots can work harder - or how much education you have.

It's not a simple question but an interesting one.

[nomadking]

Originally Posted by jfman

It’s a failure of capitalism, yes. Those billions aren’t coming from thin air, they’re coming from the pockets of consumers because competition doesn’t exist. That’s literally the economic definition of market failure.

The example you cite are innovative yes, but many are not in the previously nationalised industries. They’re benefiting from taxpayer investment previously made and being sold off cheap.

The fact they have charitable foundations is an irrelevance to the matter.

---------- Post added at 19:15 ---------- Previous post was at 19:09 ----------



I think it’s safe to say people planning to save £4bn in tax don’t wake up one morning with a dose of altruism and decide to pay it.

It’s okay though, they made £1bn of investment for some good news stories so the net loss of £3bn.

The alleged £4bn has already been subjected to UK tax.

Which nationalised industries has the likes of Apple and Microsoft benefited from?

Prices have been driven down by lower production costs in India and China.

Where do you think all the available money for giving out mortgages, business loans, and personal loans comes from?

[jfman]

Originally Posted by nomadking

The alleged £4bn has already been subjected to UK tax.

Which nationalised industries has the likes of Apple and Microsoft benefited from?

Prices have been driven down by lower production costs in India and China.

Where do you think all the available money for giving out mortgages, business loans, and personal loans comes from?

He can’t save £4bn in tax if he’s already paid tax on it. You are muddying they waters between corporate tax and personal tax.

I don’t get to say if prefer to opt out of PAYE but I’ll still pay national insurance but not income tax. Why should billionaires get to choose?

Absolutely mystifying logic.

Where did I describe Apple or Microsoft as benefiting from nationalised industry? You’ve just threw up a straw man because of your flawed logic.

You’ll actually find banks invent money out of fresh air to provide mortgages as a multiple of cash deposits held.

[Pierre]

Originally Posted by jfman

It’s a failure of capitalism, yes. Those billions aren’t coming from thin air, they’re coming from the pockets of consumers because competition doesn’t exist.

Because competitors don’t exist because they can’t come up with a product as good, for the price. That’s not market failure, everyone else had the same opportunity, one of Microsofts competitors for a windows type OS was IBM. Much bigger and better funded.

There are always winners and losers, new entrants into a market by their presence do not guarantee competition, they have to have a desirable product.

As long as they are given the chance to market and sell their product fairly, that is all that is required. The consumer decides.

You also didn’t answer whether Gates and Job’s family, should be stripped of their wealth.

They’re benefiting from taxpayer investment previously made and being sold off cheap.

BT was sold off 35 years ago, before Optical Fibre was even a thing. Deregulation of telecommunications in the U.K. was , and is, a resounding success.

If telecoms was still a state run utility, Jesus! you think it’s bad now? We’d probably still on dial-up.

The water and energy sectors were privatised over 30 years ago. Who are the billionaires makes billions after investing billions in Victorian infrastructure?

Also people forget that the utilities also had their own operational arms. I.E. the guys that dug up the roads, designing, maintaining and installing. That is all now contracted to 3rd parties providing real competition and value in the sector, with cross sector savings and expertise passed back to the consumer. I bet they don’t re-nationalise those bits.


As someone well versed in “economic theory”, you don’t show it. Especially in the area of once nationalised utilities.

[nomadking]

Originally Posted by jfman

He can’t save £4bn in tax if he’s already paid tax on it. You are muddying they waters between corporate tax and personal tax.

I don’t get to say if prefer to opt out of PAYE but I’ll still pay national insurance but not income tax. Why should billionaires get to choose?

Absolutely mystifying logic.

Where did I describe Apple or Microsoft as benefiting from nationalised industry? You’ve just threw up a straw man because of your flawed logic.

You’ll actually find banks invent money out of fresh air to provide mortgages as a multiple of cash deposits held.

The £4bn comes from post-tax profits of the businesses. They are entitled to live anywhere in the world, or the profits could go to another parent company that could be based anywhere in the world. Still no UK tax liable.



You said.

The example you cite are innovative yes, but many are not in the previously nationalised industries. They’re benefiting from taxpayer investment previously made and being sold off cheap.

The examples given were Apple and MS.


Banks can't "provide mortgages as a multiple of cash deposits held". There are liquidity rules. The nearest they can do is essentially recycle the money by selling on the mortgages, as Northern Rock did. Somebody still has to "buy" those mortgages with money from somewhere real.

[Carth]

All this talk about profits . . is this profit before the reinvestment to maintain and improve the infrastructure required to keep their competitive edge?

[jfman]

Originally Posted by Pierre

Because competitors don’t exist because they can’t come up with a product as good, for the price. That’s not market failure, everyone else had the same opportunity, one of Microsofts competitors for a windows type OS was IBM. Much bigger and better funded.

There are always winners and losers, new entrants into a market by their presence do not guarantee competition, they have to have a desirable product.

As long as they are given the chance to market and sell their product fairly, that is all that is required. The consumer decides.

You also didn’t answer whether Gates and Job’s family, should be stripped of their wealth.

I didn’t see the value of responding to your point. You are describing market failure. Over and over you are describing market failure.

BT was sold off 35 years ago, before Optical Fibre was even a thing. Deregulation of telecommunications in the U.K. was , and is, a resounding success.

If telecoms was still a state run utility, Jesus! you think it’s bad now? We’d probably still on dial-up.

And BT continue to benefit from the customers and infrastructure carried over from the nationalised company. The network isn’t just the fibre, it’s the poles, ducts, property and network they benefit from.

A competitor can’t just dig up Britain and deploy an identical network and give us competition which is why regulation is required.

The water and energy sectors were privatised over 30 years ago. Who are the billionaires makes billions after investing billions in Victorian infrastructure?

From their own pockets or from the revenues. If it’s the latter, which we know it is, ultimately that comes from the customer.

Also people forget that the utilities also had their own operational arms. I.E. the guys that dug up the roads, designing, maintaining and installing. That is all now contracted to 3rd parties providing real competition and value in the sector, with cross sector savings and expertise passed back to the consumer. I bet they don’t re-nationalise those bits.

If there’s genuine competition and innovation why would they?

As someone well versed in “economic theory”, you don’t show it. Especially in the area of once nationalised utilities.

Far from it.

---------- Post added at 20:12 ---------- Previous post was at 20:07 ----------

Originally Posted by nomadking

The £4bn comes from post-tax profits of the businesses. They are entitled to live anywhere in the world, or the profits could go to another parent company that could be based anywhere in the world. Still no UK tax liable.

That’s fine. Old Boy’s golden eggs go to Monaco. That’s exactly my point.

You said.

The examples given were Apple and MS.

It’s have benefitted from a hyphen between “not” and “in” to make the distinction.

Banks can't "provide mortgages as a multiple of cash deposits held". There are liquidity rules. The nearest they can do is essentially recycle the money by selling on the mortgages, as Northern Rock did. Somebody still has to "buy" those mortgages with money from somewhere real.

They don’t. They need reserves as a percentage of the loans. The rest doesn’t exist except on a spreadsheet.

[Pierre]

Originally Posted by Damien

I think there are two questions that then come from this:

1) How much of that profit should be channelled into one person's hands?

2) What happens when a product dominates the market to such an extent even superior products can't get a look in? This is especially true of products where critical mass is important - think Uber - so first mover advantage becomes the only thing that matters.

Define “superior” ?

Betamax was supposedly technologically superior to VHS. But VHS was superior on price, availability, manufacture.............

The danger we face now is more and more processes will become automated which will cut more people out of the jobs in creating that wealth giving more of it to a narrower group of people at the top.

And that is different from the Luddites and saboteurs of a few hundred years ago how?

---------- Post added at 20:46 ---------- Previous post was at 20:36 ----------

Originally Posted by jfman

I didn’t see the value of responding to your point.

Because you can’t. Well not with an intelligent argument anyway

And BT continue to benefit from the customers and infrastructure carried over from the nationalised company. The network isn’t just the fibre, it’s the poles, ducts, property and network they benefit from.

A competitor can’t just dig up Britain and deploy an identical network and give us competition which is why regulation is required.

Ha, that is what is happening all over the nation as we speak. As It did in the early 90’s

Please don’t comment on sectors you clearly know nothing about.

From their own pockets or from the revenues. If it’s the latter, which we know it is, ultimately that comes from the customer.

I asked who the billionaires were, clearly you don’t know, maybe there aren’t any, maybe there are.......but you don’t know either way.

If there’s genuine competition and innovation why would they?

so you agree privatisation works in principle?

[jfman]

Originally Posted by Pierre

Because you can’t. Well not with an intelligent argument anyway

It’s a straw man argument unworthy of reply. My point is that billionaires arise from supernormal profits, which occurs in market failure. Your leap that they should be “stripped of wealth” isn’t related to my point.

Ha, that is what is happening all over the nation as we speak. As It did in the early 90’s

Please don’t comment on sectors you clearly no nothing about.

Also I didn’t say this wasn’t happening, I said BT benefit from the existing state funded infrastructure. That’s a statement of fact, regardless of what investment may (or may not) be taking place. Equally, a small number of providers in a market doesn’t necessarily benefit the consumer as it trends to oligopoly pricing not perfect competition (as I’m sure you “no”).

I asked who the billionaires were, clearly you don’t know, maybe there aren’t any, maybe there are.......but you don’t know either way.

Irrelevant to my point. There’s so many straw men here you could have a rugby team.

so you agree privatisation works in principle?

No. Perfect competition works in principle. Where a large number of suppliers offer directly comparable products in a market where there are low barriers to entry. It fails where there are high barriers to entry, or products aren’t directly comparable or easily substituted for each other. Like an Eastern European migrant taking an unskilled job in the industrial heartlands of England - easily substituted.

If the barrier to entry is building a £30bn fibre network, I don’t think my mates and I can just go down to the bank in the morning and set up our own broadband company.

Originally Posted by Pierre

And that is different from the Luddites and saboteurs of a few hundred years ago how?

I am not advocating stopping the rise of automation but pointing out that the current system will likely cause the benefits of that automation to be largely won by the people who get their first by having the wealth to do so.

The industrial revolution was eventually met with a response in the form of the labor movement and more rights for workers. There is nothing wrong with a governmental and/or societal response to changes in work and wealth creation. The latest challenge we face is the march of automation and how that will radically change our society. I think this particular revolution is different as well because of the speed at which it'll happen.

How do we handle it? Where will the good new jobs come from? Even the jobs made by deliveroo - with low wages and few employment rights - are fleeting until that can be automated. Universal Income, 4 day weeks are at least examples of people thinking about these things rather than dismissing them as if nothing ever changes or the market is a uncontrollable force that never needed to be challenged by government.

[pip08456]

Originally Posted by jfman

If the barrier to entry is building a £30bn fibre network, I don’t think my mates and I can just go down to the bank in the morning and set up our own broadband company.

A&A is a broadband company and doesn't own a fibre network as are Spectrum, Zen etc.

[jfman]

Originally Posted by pip08456

A&A is a broadband company and doesn't own a fibre network as are Spectrum, Zen etc.

And presumably wholesale Openreach products. That’s not genuine competition when the underlying price is a single product and supplier.

It is a way regulators intervene in a market that doesn’t naturally trend to competition though.