this post was submitted on 08 Sep 2023
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To simplify it, when capitalism answers "is it worth the cost?", it is not answering "is the benefit of this thing to society worth the cost?". They're answering "are the profits I would get out of this and the risk worth the cost?". And profits do not always agree with what's good for society.
One example of moderate-to-low cost investments that are of demand in society but not very profitable and hence does not see focus is low-income housing (at least in the US). Housing developments disproportionally target high income or even luxury housing, as the margins on those are far better (but the costs are also much higher). Even nowadays, that this trend has been going on for a while, and luxury housing has really fallen out of demand (which greatly increases the risk), it continues. Luxury housing still looks a better investment to investors, when society does not need more luxury housing. It needs more moderate and low income housing.
Perfect