05 Jun Question While reading your comments on Tom Wood’s videos, a comment caught my eye
Question
While reading your comments on Tom Wood’s videos, a comment caught my eye
“the disadvantage which is “In the short run, the hands off approach destroys businesses” .
I further invite you to answer three follow up questions;
1) Why should we expect any business to last forever? I personally wish that many existing firms today would go out of business already, since they have long become obsolete and they are destroying the firms’ equity by staying operational. For example why is Radio Shack still around? In the world where we can find every single gadget at Walmart or Amazon.com and the information about the gadget is abundant on the web, including YouTube videos? Why do we still have K-Marts?
2) The main impetus to economic growth comes from a nation’s ability to innovate, as apposed to holding on to dying businesses. This process has been termed by Joseph Schumpeter as “Creative Destruction”, meaning that new thing come and elbow out the old things or technologies from the market. Consider cars that replaced horses, or CD’s that replaced tapes, or Digital music that is replacing CD….Now, who wants to go back to riding a horse for work? And what would happen if the government kept bailing out the cassette tape industry?
Many economists would argue that recession is a necessary stage that allows the economy to clean itself from the bad businesses and make cheaper credit available for new businesses. Many studies have also shown that business that were actually started during recessions are very successful and well managed, they are also very likely to last. From a perspective of a business owner and employees of a firm that is shutting down, we can agree that going out of business is a bad thing to happen in the short run – there is no argument there. What about from the perspective of consumers? Aren’t consumers that biggest winners from the process of creative destruction int he long run?
3) What about for the economy overall? Consider Joe who looses his job when K-mart shuts down. Joe will receive unemployment benefits, but if he is a good worker he will not stay unemployed for a long time. He may find a better paying job that is offered to him by a prosperous business or he may go through some training and acquire skills that will ultimately enable him to get a better job or a job that advances economic growth. Joe and consumers will be better off.
If Joe is a bad worker, then no one will hire him. Still, consumers are better off with Joe not in labor force.
Alternatively, even if Joe is a bad worker (but a hardworking person with good morale), he will be forced to get some skills to improve his situation to make himself employable again. Both Joe and consumers will be better off. That is where growth comes from. (no one said that growth comes easy or magically appears)
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.