I think that a certain model will do well in the market and keep producing a large quantity of that model as a result of error of judgment, how is this going to help the economy?

You will go bankrupt, the stocks of your company will plummet to zero and all the investment to your company will be directed to some other more profitable industry.
This is how Market works, the stock investors are ruthless, they can’t even see one thing out of the place, if they do, they will screw you over within minutes.

When Satyam announced to buy Maytas Infra, the stock market investors revolted against it. They started selling the shares right and left, the stock price came down from $13 to $6, thereby forcing Satyam to cancel the plans, and it later caused the company to come out and unravel its huge mess.
But my question is how is your argument for or against protectionism, I don’t understand. Protectionism means, creating high barriers of entry to foreign products, and creating laws to prevent the sale of competing foreign products in order to help the domestic industries.

Second thing is why is that everything everybody do must help everybody else?
If you think you will make profit through a business model, but its a very erroneous model then you will make huge losses. The faster you learn how to correct the model, the smaller loss you will make.

If you are Bill Gates, you can’t really waste billions of dollars on a stupid project, because you are a billionaire that means you must have the basic requirement of not being a gambler.
If you are anybody else with not that much amount of money, you will need stock market investors, and stock investors are highly dynamic in evaluating your company’s policies and worth of its shares.

But if you allow govts to set up rules and regulations, what is the guarantee that the rules and regulations are always correct?
Take for example, when govt puts a minimum wage law, without realizing what market wants, Market simply fires any employee who is less profitable than $7.95 per hour wage(the minimum wage according to the law in many places).

Market will not hire someone who does the job of $5 per hour, but is required to be paid $7.95 per hour, rather they will hire 1 person offer him $15 per hour and have him do the work of 3 people. That means hundreds and thousands of people are left unemployed because of minimum wage laws.

When govt screws thing up at such a massive scale, their investors don’t pull out all their investment and makes them bankrupt, like it would happen to a company, rather the voters elect the people back, because now they will make a law of “hiring at least 100 people if you have job for 100 people”.

When you make stupid laws people try to make way around it, when you patch that way, people try to find another way around both the laws. When you have patched every single possible hole, people just start breaking the laws. They just ignore the laws.

For example, my friends in America who are students they are hired at $8, $10, $15 per hour illegally, in a state where minimum wage law is $7.5 per hour. Now why is that? Why do businesses hire someone for a higher wage, if it can be kept out from the govt. Because if they hire someone at $7.5, they will have to pay him health insurance, and will have to jump from other govt hoops.

Paying someone $7.5 per hour, AND providing insurance, paying employer taxes on  a person for a cashier’s job, is actually worth payin$15 to a guy without any taxes or insurance. About double the wage.

Destination Infinity