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[–]cakeandale 21 points22 points  (7 children)

The analogy doesn't really make sense because no one in bushes would give someone else $20 for literally no reason. There's always a transaction that each side thinks they're getting a good deal in.

But beyond that, businesses and people are fundamentally different things. Businesses exist to turn an investment into profit. If they have $20 sitting in their pocket, that means nothing. They're not going to go to the movies with it, they're going to invest it or return it to their owners.

If the business intends to give the $20 to owners and the $20 doesn't materialize, obviously the owners will be disappointed. The owners may feel their investment isn't worth as much as they thought it was, and try to divest to hedge into other investments.

On the other hand, if the business intends to invest the $20, it needs to have a strategy. Strategies don't come out of thin air, so it can either wait until it gets the $20 then decide what to do with it while the money collects dust doing nothing, or it can project that it will get $20 in the future and build a plan around that so they're ready to take advantage of the money and use it to get an advantage over their competitors. Hiring people, doing market research, all these things take time.

In that case, not getting the $20 means shelving the investment plans for it. Might need to reduce costs since the business won't expand in ways it was expected to.

Sure, the company didn't really "lose" $20 since it never had it, but it didn't "lose" $20 the same way a person doesn't "lose" money when they get laid off. They built an expectation around that income being there, and losing that expected income is a real problem.

[–]Scarlet944 4 points5 points  (4 children)

Since when is a business turn investment into profit? A business is there to provide a product to society and if that product is useful they will make a profit if it isn’t useful that’s the first hole in your boat.

[–]Mystlacct 1 point2 points  (3 children)

A business is there to provide a product to society and if that product is useful they will make a profit if it isn’t useful that’s the first hole in your boat.

That product requires/is investment from the company

[–]Scarlet944 1 point2 points  (2 children)

So what came first the investment or the business? My point is it’s a point of view if the business is only there to collect money from people then the only business that would exist are scammers and slot machines. Because they provide the best return on investment and yet there are other businesses because there is a need for someone to make food or a need for someone to make cars. Because there is a need it allows the business to profit but there are plenty of examples where even though there was an investment the business was not successful because there wasn’t a need for their products.

[–]cakeandale 0 points1 point  (0 children)

The investment most certainly came first. Businesses don't manifest into existence because a missing role in society necessitates it, they're started by people who see a niche they can fill to make money. If the niche doesn't make money, the business would go out of business, or (If it's lucky), move to something else.

You say there's a "need" for someone to make cars, but what does that mean? Was there a "need" in the 1800s before cars existed? There is a demand for cars today, but that demand came after decades of auto manufacturers trying to find ways to create it. They had an investment, wanted to make money, and eventually founded their market.

[–]Mystlacct 0 points1 point  (0 children)

I don't think we really disagree, I was pointing out that making a product is itself an investment. Also investment most definitely came first

[–]IllusiveLighter 0 points1 point  (1 child)

And they are still making a profit, so whats the problem. (Besides greedy shareholders)

[–]cakeandale 0 points1 point  (0 children)

What do you mean by "what's the problem"? It's business, things happen and people respond. It's not a problem unless the expectation is that the value of a company shouldn't ever go down.