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A Lego Model of Capitalist Central Planning
If you think capitalism is about free markets, you're missing half the picture
In my Lego Model of Financial Capitalism I showed how a small real estate company might finance a building in chunks with a combination of equity - shares - and debt in the form of loans and bonds… In the capitalist system, profit emerges if input costs are lower than output revenues, so to reduce the former managers might seek to drive down wages of workers, and dominate over suppliers, each of which carries its own geopolitical risks. The day-to-day life of a BP manager, then, involves balancing off a range of parties, cutting tax deals with different governments, or lobbying against new policies that may affect them, all while trying to suppress worker unions.
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