[kwlug-disc] AI and social justice

[John Van Ostrand]

On Wed, May 27, 2026 at 5:36 PM Chris Frey <cdfrey at foursquare.net> wrote:

>
> I think the change we need is more people competing against the big
> brands.  McDonalds apparently has a 44% operating margin:
> https://finance.yahoo.com/quote/MCD/key-statistics/
> I'm told that in a competitive market it should be around 10%.  So why
> does McDonalds have such a high percentage?  How?  And why are we not
> creating competing businesses to eat McDonalds' lunch?  I'd love to
> know the answers to this.
>
> I want to see new entrepreneurs springing up in that 34% gap.
> That's the change I'd love to see, and even be.
>

There already are. Burger King, Harveys, Wendys, etc. are all major chains that
are trying to overtake McDonalds and continue to fail to do so.  McDonalds
has a such a grip on consumers that even large chains can't overtake them.
A small business has less chance.

I worked in the restaurant industry for about 8 years and managed one for
about 2 years. Economies of scale make it hard to compete. Most smaller
restaurants run on a 1/3 labour, cost 1/3 food cost and almost 1/3
overhead+profit. It's a business with slim margins. McDonalds can fine tune
the entire process and can spend millions in R&D shaving a fraction of a
percent in costs. The small guy doesn't have any R&D money and barely any ad
budget and certainly doesn't have teams of experts trying to improve
efficiency.


> As for the rest of his argument, that the ultra wealthy owe to society
> their fair share of taxes,


The argument is simple: Those who benefit the most from society should pay the
most back to society. I'm one of the few businesmen who have said that I
owe part of my success to our government. I needed educated people and I
didn't have to train them myself. I needed security for my business and I
didn't have to hire security guards. I needed business contracts and I
could lean on a legal system for that.  I needed to do business across
national borders and I could rely on trade agreements and UN protections
and standards to make contracts. Every time I called or sent a letter
across a border, government and UN standards come into play. The UN is a
government and it requires national governments to agreements with the UN.

In the past companies (local ones at least) had to care about their
employees more. Today companies can fire people knowing that they'll have
unemployent to lean on for a while, knowing that they'll have health care,
knowing there is a support system to help if it gets worse. It sounds
callous, but that typically helps small business more than large business.


> I ask: do we really believe that siphoning
> more money into government coffers, in order to dole it out to the
> poor through various stingy methods, will cause prices to go down?


I don't think that's the idea. "Dole it out" sounds like subsidizing. I'm
not sure that's a solution. The solution is things like right-to-repair and
restricting proprietary advantages. Maybe refactoring patent and copyright
laws and base its term partly on ROI.

Won't
> the wealthy just bake in the costs into the goods they sell from their
> major brands?
>

I don't think so. Company performance and most shareholder decision-making
don't take into account shareholder taxes, and for good reasons.  Every
shareholder has a different tax burden, They may actually be in a different
province or country and certainly they have different numbers on their tax
returns.

Corporations are run by shareholders, who put a management team in place.
So CEO taxes only come into play when they negotiate an employeement
contract.

I also think, at least for the very wealthy, it's not about money. They
already have more money than they can spend (mostly tied-up money.) It's
about their ambition, the size of their company, their wealth and it must
be compared to others.


> But if society and government is fixed, in order to promote a multitude
> of grassroots competitors to spring up, the large brand names will have
> no choice but to lower their prices, which will help all of the poor.
>

I don't think governments are as broken as people think. At least not any
more broken than any large organization.  However I do think one issue
today is lack of competitiveness. We have too many oligoplies and
monoploies. Anything that large needs more regulation to ensure that the
small guy can compete better. I have very few ideas on what that entails.

One issue I don't like is how large businesses have an effective proxy vote
of their employees, suppliers and their supply chain' employees. They can
ask the government for favours, subsidies, zoning changes, even
infrastructure changes by threatening the loss of jobs. I'm old enough to
remember the highway 8 extension to the 401 and how the businesses on Old
King complained about loss of business so the government changed the
highway, forcing all westbound traffic to stay on Old King. So for decades
we've wasted fuel and time for business that went out of business anyway.

To put this in practical terms, instead of taxing Elon Musk's current
> wealth, we should recognize that a significant amount of Tesla's
> battery and electric car tech was funded by government subsidy.
> Now some of that was in loans that were paid back, but I don't believe
> all of it was.  There is a precise calculation to do here.  But in the
> end, that is technological advancement paid for by public funds, at least
> in part.  I don't know about you, but I remember a time when such
> copyrighted intellectual property became public domain.
>
> Public funds?  Public tech, so everyone can build their own Tesla.
>

I like that idea. Tying grants and subsidies to IP ownership.


>
> The wealth tax doesn't go far enough, and like most communist solutions,
> doesn't fix the core problem.
>

Are you really using the term "communist" properly? Because your idea of
making IP public is kind of communist.

-- 
John Van Ostrand
At large on sabbatical
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