Quizzes & Puzzles40 mins ago
Profit To One Entity
6 Answers
Leaving conspiracy theories aside for this question, as a nation why do we allow entities/businesses/one person to make profit?
You could argue, it's fair on specialist items or services but for example in the UK at least for utilities. Electric, gas, water, telephone. We are all paying a fortune and for many people now they can't simply afford it. Why can't at least utility companies be made profit free/charity based. We still pay for the real cost of energy and wages of staff and management (within reason), but simply do not allow a profit which only goes to one entity anyway. Then we would be only paying probably about 30% of what we are now.
Why do we allow as a nation one entity to make profit when 99.999999% would be better off?
You could argue, it's fair on specialist items or services but for example in the UK at least for utilities. Electric, gas, water, telephone. We are all paying a fortune and for many people now they can't simply afford it. Why can't at least utility companies be made profit free/charity based. We still pay for the real cost of energy and wages of staff and management (within reason), but simply do not allow a profit which only goes to one entity anyway. Then we would be only paying probably about 30% of what we are now.
Why do we allow as a nation one entity to make profit when 99.999999% would be better off?
Answers
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As a nation we allow it coz that's what neary everyone votes for. Communists and other fringe parties get a very small percentage of the vote.
And I'd really doubt that under your system you'd be paying 'about 30% of what we are now'. You'd be paying the same or more - the 'company' would have no incentives whatever to reduce costs.
And I'd really doubt that under your system you'd be paying 'about 30% of what we are now'. You'd be paying the same or more - the 'company' would have no incentives whatever to reduce costs.
Russia tried this with communism.
Everybody had a job, industries were owned, run and supported by the government. Hotels and restaurants were all government owned. Nobody had to make a profit.
What happened ?
Nobody had an incentive to do a good job, or improve their business. No incentive to reduce costs, or provide a better service than any other hotel or restaurant.
Often items cost MORE because they were never encouraged to save money or reduce costs.
Think of the UK a few years ago when we had British Rail.
Government owned, and the staff did not give a damn about the customers or providing a good service.
I remember a case years ago on a bank holiday with a reduced train service. I got to the station on time, but the train had gone.
I had to wait an hour for the next train. When I had a moan at the conductor he said that often when there are no passengers the trains arrived and leave early.
I said that was not very good, and he looked down his nose at me as if to say do you think I care.
Not saying trains are perfect now, but at least they have to try to maintain a good service, and meet targets. If they dont they can lose their franchise, so they do have some incentive.
Everybody had a job, industries were owned, run and supported by the government. Hotels and restaurants were all government owned. Nobody had to make a profit.
What happened ?
Nobody had an incentive to do a good job, or improve their business. No incentive to reduce costs, or provide a better service than any other hotel or restaurant.
Often items cost MORE because they were never encouraged to save money or reduce costs.
Think of the UK a few years ago when we had British Rail.
Government owned, and the staff did not give a damn about the customers or providing a good service.
I remember a case years ago on a bank holiday with a reduced train service. I got to the station on time, but the train had gone.
I had to wait an hour for the next train. When I had a moan at the conductor he said that often when there are no passengers the trains arrived and leave early.
I said that was not very good, and he looked down his nose at me as if to say do you think I care.
Not saying trains are perfect now, but at least they have to try to maintain a good service, and meet targets. If they dont they can lose their franchise, so they do have some incentive.
Also remember that profits often go back into the business, to improve facilities, or in research and development.
For example the water companies need to make a profit so they can maintain and upgrade the water pipes and sewer system which is a massive undertaking and very costly.
And OFWAT watch over them to make sure they DO upgrade their pipes.
(although I have to agree it is annoying when a utility company is owne by a German or Italian company who have no particular interest in the UK)
For example the water companies need to make a profit so they can maintain and upgrade the water pipes and sewer system which is a massive undertaking and very costly.
And OFWAT watch over them to make sure they DO upgrade their pipes.
(although I have to agree it is annoying when a utility company is owne by a German or Italian company who have no particular interest in the UK)
Why do people think that profit is a bad thing? It is what finances the company's investments. Without profit, the assets would deteriorate and no new assets would be acquired. A portion of the profit is used to pay shareholder's a dividend, which is the "interest" on their investment in the shares of the company. A typical company I just looked at (Centrica plc) pays about 3% "interest" ie dividends, and this is about 2.5% of it's turnover, and 30% of their profit - the rest is retained for investment. So, roughly speaking, a non-profit making company could reduce it's prices initially by say 2.5%, with all the issues described by other contributors. Not exactly the long term Utopia you had in mind I think Kreed! Care to re-think perhaps? Almost every nation who tried this has given it up now, except perhaps Cuba and if you have ever been there you might agree they would be better to change course as well!!
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