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The assumption isn't always safe

posted 2006.08.31 Thursday

It's easier to formally model the behavior of firms if we assume they are only interested in maximizing pecuniary profit.  However, I think in the case of Dov Charney's American Apparel, something else is also being maximized.

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1. Michael Thomas left...
2006.09.01 Friday 1:18 pm :: http://www.productivityshock.com

clearly people are allowed to enter and leave employment. I am not sure why the author thinks that the factory, the company, the investment, and the particular grouping of workers at the factory are not property of the owner. The author quotes the UNITE union as claiming that the owner is "paternalistic." I am convinced that the underwear culture of the ads is a spillover from the errotic perversion of the owner, but I don't think it is out of line with what else is in the market. How do you sell sexy underwear and erroticisim without being errotic? I have sucessfully avoided seeing these ads until now, because markets work. I am sure that if I was looking for this type of thing it would be available. It is the bleeding heart that is being paternalistic by seeking to do this business harm, not the owner of a private business.