The companies are smart enough to learn from it. The problem is that in a late-stage capitalist market, companies have already grown so large that the easiest way to continue to grow profits is to cut costs as much as possible.
It’s pretty obvious that in many cases, this incentive is entirely opposed to human health and flourishing. Sure, you can cut costs in consumer electronics like TVs without harming anyone. (Assuming regulations that enforce a baseline quality in electrical components.) You can’t do that in aviation or health care.
Another aspect is that lower costs don’t make it back to consumers in many industries with little competition. A more “financially efficient” Boeing means more money for shareholders, not cheaper airplanes.
A counterpoint is that disasters should provide an economic incentive to the company to fix problems that cause disasters. As you point out, this simply isn’t happening. There was apparently not enough market incentive after the B737max crashes to fix their quality control problems. That means it’s cheaper for Boeing to crash its planes than to have really strong quality control. Obviously, the capitalist incentives in this system are no longer working for society.
These late stage, massive companies are not about making good products. They are legally about returning value to shareholders. The people in charge are therefore all about optimizing the company finances.
The only way to counteract this frequently terrible incentive is by us people (the government) creating the incentives that work for society. That could mean huge, costly fines in these situations such that the only way to get money for shareholders is to make quality products, since what should be a market incentive has gotten so messed up.
> The only way to counteract this frequently terrible incentive is by us people (the government) creating the incentives that work for society. That could mean huge, costly fines in these situations such that the only way to get money for shareholders is to make quality products, since what should be a market incentive has gotten so messed up.
The US government could also get more aggressive about blocking mergers and breaking large companies up for being large. If you blew up Meta as an example, you'd force all of its ventures to compete with each other on the open market again. If you blew it up in to regional or state-level companies and prevented them from merging with each other they would all have to figure out how to work as they each invaded each others' markets. That "inefficiency" of the market would naturally create jobs and upward wage pressure as companies attempted to hire each others' staff away from each other.
It’s pretty obvious that in many cases, this incentive is entirely opposed to human health and flourishing. Sure, you can cut costs in consumer electronics like TVs without harming anyone. (Assuming regulations that enforce a baseline quality in electrical components.) You can’t do that in aviation or health care.
Another aspect is that lower costs don’t make it back to consumers in many industries with little competition. A more “financially efficient” Boeing means more money for shareholders, not cheaper airplanes.
A counterpoint is that disasters should provide an economic incentive to the company to fix problems that cause disasters. As you point out, this simply isn’t happening. There was apparently not enough market incentive after the B737max crashes to fix their quality control problems. That means it’s cheaper for Boeing to crash its planes than to have really strong quality control. Obviously, the capitalist incentives in this system are no longer working for society.
These late stage, massive companies are not about making good products. They are legally about returning value to shareholders. The people in charge are therefore all about optimizing the company finances.
The only way to counteract this frequently terrible incentive is by us people (the government) creating the incentives that work for society. That could mean huge, costly fines in these situations such that the only way to get money for shareholders is to make quality products, since what should be a market incentive has gotten so messed up.