May 22, 2024

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A trip to Cuba will convince you, Kyriakos

A trip to Cuba will convince you, Kyriakos

Written by Kostas Stupas

1) A trip to Cuba will convince you, Kyriakos

Did you know that the government has set a limit on the gross profit at which private companies can produce and sell?

Unbelievable as it may seem. Progressing. Based on this innovation inspired by the Soviet era, the relevant minister imposed a harsh fine on one of the companies a few days ago.

But even stoners know that the profits of businesses that buy, process and sell e.g. Peas, beans, etc. are a function of many factors. Here are some of them:

– Price of raw material. In recent years, due to the high cost of energy, fertilizers, etc., the prices of agricultural products have increased. Labor shortages also increase costs.

A company that buys at a higher price has two options: either pass the increased cost on to consumers or reduce its profits.

The cost of transportation, processing and storage also changes depending on the price of energy and chemicals used in plastic packaging.

– If the company can transport for distribution the same amount of goods that it transports semi-road. Then it has lower operating costs. This allows it to sell cheaper or earn more. Sometimes she is allowed to do both at the same time.

– The speed of circulation of the product also plays an important role in shaping the final cost. For example, the cost of preserving a kilo of peas that will be stored for a month in the freezer is another, and another if it needs to be stored there for 6 months.

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This means that a company that handles inventory more efficiently so that it spends less time in warehouse freezers can have a lower cost per unit. This also allows it to sell cheaper and potentially earn more.

If the government fines this company because it violates the gross profit limit by selling at the same retail price as its competitors, it is punishing a good company and rewarding a bad company.

A company whose products go unsold and remain in warehouses will experience a loss that will worsen its gross profit margin. This action may be punished by clients but is not punished by the state.

Also, the company may have insightful management that purchases raw materials at times when the price is lower.

If someone predicts that the price of a product will rise in six months and fills warehouses at a time when prices are falling, should he be rewarded or punished?

If this manager makes a mistake and buys at a high price, and because of falling prices, is forced to sell at a low price, he will write a loss.

If it is a state-owned enterprise, taxpayers will pay damages. If private, the compensation will be paid by shareholders. If the private manager repeats the mistake too many times, the company will go bankrupt, emptying the corner and leaving room for competitors who make fewer mistakes to grow.

Therefore, the profit that the company will make depends on many factors. Good businesses are those that are trusted by consumers and are usually healthy and profitable. Profit in capitalism is the motive and engine for progress and prosperity. Fear of loss-making companies, not profitability.

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So it is unlikely that someone, usually a lay politician and some civil servant, who if you give them a balance sheet, they turn it upside down, will understand who is doing their job right and who is not.

The terms profiteering and exploitation are offensive and are often used by losers to justify their failure.

The only judge of whether something is cheap and good or expensive and of poor quality is the consumer who will go to the shelf and compare prices and products.

Thus, rich countries became rich and powerful, not poor and weak. If you don't know, where the state tried to control prices and gross profit the people starved.

A trip to Cuba will convince you…

2) Pathogenesis of Greek disease

Dear Mr. Stopa,

I'm surprised that preference intersectionality is rarely mentioned as one of the most serious causes of Greek disease. As long as the intersection of preferences remains in place, the country will remain hostage to the buying and selling of consciences and practices between politicians and citizens.

Giorgos Logothetis is a biographer of Olof Palme entitled Politics is a Matter of Principles.

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