Skip navigation


Though it may make sense in some countries, I’m not in favor of the state providing for health. But having lived with the mess of the US private medical insurance I do believe that this is one service that the state should provide, and Australia is a good example.

It is unfortunate that in the US, this last year the state has had to bail out some capitalist. This does not reflect very well on some parts of private enterprise.

My opinion is that done properly, there is no substitute for the power of competition. For example, looking at electric cars, competition allows us to know that GM Volt’s 40 miles per charge is a dud, because we know that another management team, Tesla, has achieved 244 miles per charge.

Without competition there is this opacity of internal business management. We really have no idea what is going on in a company, and can only infer that maybe management is good, bad or ugly. It is an information asymmetry.

Competition reduces the risk of this information asymmetry and enables us, without much effort on our part, to quickly figure out which is the better management team. In this case it is obvious that it is Tesla without a doubt. So I would not pay top dollar for the GM management team.

___________________________________________________________________
Disclosure: I’m a capitalist too, and my musings & opinions on this blog are for informational/educational purposes and part of my efforts to learn from the mistakes of other people. Hope you do, too. These musings are not to be taken as financial advise, and are based on data that is assumed to be correct. Therefore, my opinions are subject to change without notice. This blog is not intended to either negate or advocate any persons, entity, product, services or political position.
___________________________________________________________________

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: