Why has Communism failed everywhere ? A chance for commies to explain

[Kontiki]

Originally posted by Kidicious
Here you go Kontiki. Say you plan to build 4 factories. You calculate the risk of fire to any one factory to be .25 so that means you can expect that one factory will burn. Before you build the factories you calculate the loss of one factory into your profit forcasts. But no factories burn. So the loss was not realized but there always was a risk cost.

That doesn't make any sense in your equation, though. If I can expect one of my factories to burn, I can expect to have lower revenue than if none of them burned. So my revenue forecast already takes that into consideration. Why would I add a risk cost on top of that? Alternatively, why would I forecast my revenue to be unaffected by fire if I expect one of my factories to burn?

[Kidlicious]

Originally posted by Kontiki


That doesn't make any sense in your equation, though. If I can expect one of my factories to burn, I can expect to have lower revenue than if none of them burned. So my revenue forecast already takes that into consideration. Why would I add a risk cost on top of that? Alternatively, why would I forecast my revenue to be unaffected by fire if I expect one of my factories to burn?

The equation is not an equation used in business. Again, I'm trying to explain something that is very simple. Give me a break here. If you've taken the risk of loss into consideration when you forcasted your revenue then you have in fact considered the cost of risk.

[Kontiki]

Originally posted by Kidicious



If you want to predict revenue without considering the risk of loss feel free Kontiki. The actual revenue will not have a risk cost. It will have losses, or maybe not. That doesn't mean that there was never a risk cost.

Who said you would predict revenue without considering the risk of loss? Your predicition of revenue should already consider the risk of loss, not assume it doesn't exist and then build it in later. Otherwise you're falsely predicting revenue.

[Kidlicious]

Originally posted by Kontiki


Who said you would predict revenue without considering the risk of loss? Your predicition of revenue should already consider the risk of loss, not assume it doesn't exist and then build it in later. Otherwise you're falsely predicting revenue.

I don't know why you are arguing. You don't like my formula fine. I didn't claim that it was a law. I was using it as a teaching aid, because you guys seems to not know anyting about the relationship between risk cost and profit. It seems that you do, so I really don't know what your purposes are. Do you want to argue that profit is a premium for taking risk? Go for it.

[Berzerker]

Kid

You lost me. I'm not changing my argument that I know of. All economists believe that poorly run businesses should generally be allowed to fail.

You said some libertarians believe that poorly run businesses should be allowed to fail and the implication was that this somehow discredits libertarianism. Now all economists share this belief with libertarians? Fine, so how is your assertion that some libertarians believe poorly run businesses should be allowed to fail relevant? Not all economists believe that btw, some believe selected businesses that show themselves poorly run by their loss of marketshare to competitors should still be propped up if need be for other reasons inspite of the inefficiency.

The difference is that some believe that resources will not, and should not be used, and other believe that resources should always be used, and will always be used, save for govt intervention.

What does this have to do with what you said?

I didn't change the context. People perish when they have no means for survival. Isn't that a recession?

You did change the context, the word "recession" was no where in your post. Explain to me why it is wrong (or whatever negative connotation you were implying) to believe poorly run businesses should be allowed to fail.

The producers themselves are not superior to the inefficient producers. They just have some lower costs because of geography and or access to resources.

And given "equal" access to resources all businesses will be equally efficient?

[DinoDoc]

Die thread!

[Kidlicious]

Originally posted by Berzerker
Kid

You said some libertarians believe that poorly run businesses should be allowed to fail and the implication was that this somehow discredits libertarianism.

No it doesn't. It shows that libertarianism is compatable with natural selection. If this isn't so than show me in some document were libertarianism is incompatable with the idea that the weak should be allowed to perish, and that the govt should not intervene in the natural progress of society.

Now all economists share this belief with libertarians?

Um. No. Not necessarily. We're talking about mainstream economist and another school which is compatable with libertarian beliefs.

Fine, so how is your assertion that some libertarians believe poorly run businesses should be allowed to fail relevant? Not all economists believe that btw, some believe selected businesses that show themselves poorly run by their loss of marketshare to competitors should still be propped up if need be for other reasons inspite of the inefficiency.

Because that is the aspect that is similar to natural selection. The strong survive and the weak perish.

What does this have to do with what you said?

You may not believe that there is a natural way of companies and workers being eliminated when they are not productive, but there are some libertarians who do. They believe that the govt should not provide welfare, not because it is just a violation of rights, but because it maintains inefficiencies.

You did change the context, the word "recession" was no where in your post. Explain to me why it is wrong (or whatever negative connotation you were implying) to believe poorly run businesses should be allowed to fail.

I don't necessarily believe for one that a company fails because it is poorly run. The companies fail for example because there is a recession.

And given "equal" access to resources all businesses will be equally efficient?

An assumption that neoclassical economists use is that all firms can aquire any resources that they need. Don't blame me for that assumption. Obviously scarcity provides that they do not.

[Berzerker]

Kid

No it doesn't. It shows that libertarianism is compatable with natural selection. If this isn't so than show me in some document were libertarianism is incompatable with the idea that the weak should be allowed to perish, and that the govt should not intervene in the natural progress of society.

Libertariansim is based on freedom, survival of the fittest is not. Under communism the strong will and do literally kill off the competition so communism can survive. Now there's a similarity...

Um. No. Not necessarily. We're talking about mainstream economist and another school which is compatable with libertarian beliefs.

You just said ALL economists agree failing businesses should be allowed to fail, I pointed out why you are wrong.

Because that is the aspect that is similar to natural selection. The strong survive and the weak perish.

The last time you said that I asked you to explain the survival of babies. Comparing surivial of the fittest to a business failing because of inefficiency is Kidiculous. I said survival of the fittest includes killing the competition and I'm still waiting for you to refute that after claiming I was wrong.

You may not believe that there is a natural way of companies and workers being eliminated when they are not productive, but there are some libertarians who do.

"Killed" or put out of business? You seem to equate the two, I don't.

They believe that the govt should not provide welfare, not because it is just a violation of rights, but because it maintains inefficiencies.

Geez Kid, you just keep changing the subject when you can't support your past assertions. Does this "right" to welfare now refer to business subsidies to keep wasteful businesses afloat?

I don't necessarily believe for one that a company fails because it is poorly run. The companies fail for example because there is a recession.

It doesn't matter why you think a business fails, you didn't mention recession until very recently, i.e., you changed the context.

An assumption that neoclassical economists use is that all firms can aquire any resources that they need. Don't blame me for that assumption. Obviously scarcity provides that they do not.

You can't even answer that question? I'll ask it again:

And given "equal" access to resources all businesses will be equally efficient?

So what is it?

[Flubber]

Originally posted by Kidicious
Here you go Kontiki. Say you plan to build 4 factories. You calculate the risk of fire to any one factory to be .25 so that means you can expect that one factory will burn. Before you build the factories you calculate the loss of one factory into your profit forcasts. But no factories burn. So the loss was not realized but there always was a risk cost.

bull. The probability of losing factories appear to have probabilities approximately as follows

zero ==31.6%
one 42.2%
two 21.1 %
three 4.68%
four less than one percent


You calculate all of this into a weighted risk assessment including revenues lost in each scenario. The reality is that the almost 25% chance of losing two of more factories will likely result in a risk weighted rate of return that is unacceptable if not less than zero. But its possible this project would happen if the projected profits in the zero or one loss scenarios were big enough and say the two factory loss scenario was break even or even a small loss. But its far more complex than a risk cost number and this was a simple example with only one variable.

There is no number of risk cost in dollars that gets added. Its simply not how it is done. Reality is you usually have dozens of variables with contingent costs and contingent revenues leading to hundreds of possible outcomes. In the end you come up with an analysis that might say

1% chance of 80% return or more
1% chance of 25% to 80 %
48% chance of 20 to 25%
40% chance of 15 to 20 %
5% chance of 0 to 15%
4% chance of 0 to negative 200%
0.5% chance of negative 200% to negative 500%
0.5% chance of in excess of negative 500%

This is obciously simplified and is usually represented better graphically as that can show any spikes or blips in the projections

Note that I could have done an example where there is ZERO chance of loss and you still do the same assessment. WHY?? because you would have to assess the investment looking at the projected rates of return-- If they don't meet your threshold you don't do the project

[Kidlicious]

@ Berz

I don't even know how our conversations get off on such tangents. If libertarianism in not compatable with Social Darwinisn then show me a document. I won't accept that you simply say that libertarians believe in freedom. A lot of parties believe in what they call freedom.

[Kidlicious]

Originally posted by Flubber


bull. The probability of losing factories appear to have probabilities approximately as follows

zero ==31.6%
one 42.2%
two 21.1 %
three 4.68%
four less than one percent


You calculate all of this into a weighted risk assessment including revenues lost in each scenario. The reality is that the almost 25% chance of losing two of more factories will likely result in a risk weighted rate of return that is unacceptable if not less than zero. But its possible this project would happen if the projected profits in the zero or one loss scenarios were big enough and say the two factory loss scenario was break even or even a small loss. But its far more complex than a risk cost number and this was a simple example with only one variable.

There is no number of risk cost in dollars that gets added. Its simply not how it is done. Reality is you usually have dozens of variables with contingent costs and contingent revenues leading to hundreds of possible outcomes. In the end you come up with an analysis that might say

1% chance of 80% return or more
1% chance of 25% to 80 %
48% chance of 20 to 25%
40% chance of 15 to 20 %
5% chance of 0 to 15%
4% chance of 0 to negative 200%
0.5% chance of negative 200% to negative 500%
0.5% chance of in excess of negative 500%

This is obciously simplified and is usually represented better graphically as that can show any spikes or blips in the projections

Note that I could have done an example where there is ZERO chance of loss and you still do the same assessment. WHY?? because you would have to assess the investment looking at the projected rates of return-- If they don't meet your threshold you don't do the project

Interesting, and I mean that. It still doesn't dispute the fact that the basic way to decide about undertaking a project is to examine the forcasted risk and return. You pursue the project if the return outways the risk. They profit that you make if you are successfull it over and above the risk. So I like your figures here, but I'm just wondering if you still disagree with my general assessment.

[Berzerker]

Kid

I don't even know how our conversations get off on such tangents.

I do Odin said libertarianism is based on social Darwinism and you "defended" his assertion from my rebuttal.

If libertarianism in not compatable with Social Darwinisn then show me a document.

Show me a communist document that proves communism and social Darwinism are incompatable. I've already explained why libertarianism is incompatable with social Darwinism, libertarians believe in freedom and freedom is incompatable with social Darwinism. Should the people who devise the libertarian philosophy also mention that btw, freedom is incompatable with social Darwinism?

I won't accept that you simply say that libertarians believe in freedom. A lot of parties believe in what they call freedom.

Are they right? Just because a fascist claims to believe in freedom doesn't mean others making the same claim are full of it. We can compare the definition of freedom with their actions and stated beliefs to see if they are full of it... Would you like to show why libertariansim violates the actual definition of freedom or is your "proof" the fact some people falsely claim to believe in freedom?

Are you going to answer me? Here it is once again:

And given "equal" access to resources all businesses will be equally efficient?

You said businesses fail because of unequal access to resources and geography, equalise these two and explain why businesses are all equally efficient, please.

[Kidlicious]

Originally posted by Berzerker
Kid

I do Odin said libertarianism is based on social Darwinism and you "defended" his assertion from my rebuttal.

I didn't really intend to defend his assertion. So maybe I shouldn't have made any comment. I don't think it's 'based' on it. I merely mean that it's compatable with it. I don't know of any reason why a person couldn't be both, and you only say because you believe in freedom. As far as I know social darwinism really isn't against any freedoms that you are. In is not necessary for a Social Darwinist to believe in killing.

[Kidlicious]

Originally posted by Berzerker
You said businesses fail because of unequal access to resources and geography, equalise these two and explain why businesses are all equally efficient, please.

Well this is one of those tangents. I was talking about someone elses ideology. I don't want you to think I'm defending it. :P

[Berzerker]

As far as I know social darwinism really isn't against any freedoms that you are.

The freedom to exist? Social Darwinism is based on survival of the fittest, and thats based on kill, be killed, or run like hell. The Nazis "justified" killing all sorts of people based on a belief in their superiority and killing undesirables strengthened society.

In is not necessary for a Social Darwinist to believe in killing.

True, thats just the logical conclusion given how it derives from survival of the fittest in the animal world.