Friday, November 30, 2012

The Matrix (1st Issue)

First Issue: Financial
How should the company produce energy and make money?
How should the company control its finances and profits?

Economic Liberalism:
(Solutions) The company builds plants, sells assets and reduces operating costs to increase profits and inefficiency. There should be no government intervention. For example, Mirant sold its Philippine operations last year to another firm.
(Strengths) Efficiency and profit are good for a company under economic liberalism. The company can fund its operations over the long run and help environmental and social causes.
(Weaknesses) Too much focus on efficiency and profit can lead to a great deal of change and cost cutting. There is more work for a few talented people and no work for the many less qualified people. Growth and income are unequal.

(Solutions) The government has control of some industries, goods and public utilities. The company abides by the rates and programs of the government. For example, Mirant sells the electricity it produces to the government at fixed rates.
(Strengths) State control would be necessary to make the country and the citizens well off. Financial security would be more important than large profits or high efficiency.
(Weaknesses) The state may need to subsidize some plants of the company if they are not profitable. The company may become less efficient because it may tend to rely on the government rather than improving its own technology and operations.

Rational Choice:
(Solutions) The company builds plants where it is profitable. The local government supports the company's programs. For example, Mirant has built plants in rural communities. Both the company and the local communities benefit.
(Strengths) By acting rationally, the company produces much energy and profit. In the same way, citizens have jobs and opportunities. Each actor benefits from behaving on self-interest.
(Weaknesses) Because actors behave mostly on self-interest, the greater good may become sacrificed. Little costs, such as pollution and taxes, may cost the company and destroy the communities over the long run.

(Solutions) The state owns the entire company and controls the production and labor. The profit made from the company is reinvested in the country. For example, Mirant financially supports its own foundation in the Philippines.
(Strengths) The country benefits from state ownership because income is reinvested. The state controls the economy so livelihood and goods would become stable and affordable to many.
(Weaknesses) Those who want to work for profit cannot own their own business or have large incomes and property. Instead of benefiting from much innovation and free enterprise, the country suffers from the lack of good choices and freedom.

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