I understand what you mean and we seem to agree which is great.
I also find economic arguments like you make here generally convincing, arguing against this (that risk increases costs which must be priced in) would be similar to arguing against the Laffer curve. This is essentially close to my position, but different to the person I originally replied to.
I do have an optimistic bent that, through either ignorance, arrogance or risk-seeking, people actually over-risk on experimental therapies, for example, launching Biomed spin offs. Because the personal gain (curing a disease, helping people, or becoming popular) can be so high, it can motivate risk beyond other busiensses. This is probably where I most differ from you: I know many businesses which should not exist, have never turned over profit, and maybe never will. But a rich family, or the savings from a lifetime of earnings sometimes get put into these shots at success. It's not like they get cut once the net profit reaches 0. Same with local shops: A number of the local shops you can't understand running profitably survive because they have paid-off mortgages and only have stocks/staff/licensing to deal with. It makes little financial sense to run them over renting the shop to someone else for more profit, yet people do.
Perhaps this extra reason to stay invested/risk on Biomed is matched by the fraud in that industry, though (Hello Theranos).
Regards the later point, I understood that though my comment could have been phrased better. The meaning was "the government will force [as necessary by asset seizure or bankruptcy] the breach-of-contract party to pay you".
I also find economic arguments like you make here generally convincing, arguing against this (that risk increases costs which must be priced in) would be similar to arguing against the Laffer curve. This is essentially close to my position, but different to the person I originally replied to.
I do have an optimistic bent that, through either ignorance, arrogance or risk-seeking, people actually over-risk on experimental therapies, for example, launching Biomed spin offs. Because the personal gain (curing a disease, helping people, or becoming popular) can be so high, it can motivate risk beyond other busiensses. This is probably where I most differ from you: I know many businesses which should not exist, have never turned over profit, and maybe never will. But a rich family, or the savings from a lifetime of earnings sometimes get put into these shots at success. It's not like they get cut once the net profit reaches 0. Same with local shops: A number of the local shops you can't understand running profitably survive because they have paid-off mortgages and only have stocks/staff/licensing to deal with. It makes little financial sense to run them over renting the shop to someone else for more profit, yet people do.
Perhaps this extra reason to stay invested/risk on Biomed is matched by the fraud in that industry, though (Hello Theranos).
Regards the later point, I understood that though my comment could have been phrased better. The meaning was "the government will force [as necessary by asset seizure or bankruptcy] the breach-of-contract party to pay you".