America, I salute you

[English assassin]

OK,so we have quite a bit negative to say about American culture in the backroom. And some of it we actually mean, though mostly we do it to annoy DD.

But I think we have to take our hats off to a country which enables one man to create enormous excess weath, which he then donates to charity, and where another man who also has enormous excess wealth sees this and thinks, That's a good idea, I'll have some of that. http://www.guardian.co.uk/usa/story/0,,1806137,00.html


It is a gift of unprecedented proportions and will send shockwaves through the world of super-rich philanthropy. The world's second richest man, Warren Buffett, is to give the world's richest man, Bill Gates, the largest charitable gift in history - an estimated $37bn (£20bn).
The 75-year-old doyen of the global investment community has pledged to give 85% of his stock in the investment company Berkshire Hathaway to the Bill and Melinda Gates Foundation started by Microsoft co-founder Bill Gates

Could this have happened under socialism? I think not. Would it have happened in the UK? Not on your nelly. So, America, I salute you.


(but I still love Satan):devil:

And yeah, I know about the tax break. But its still good.

[doc_bean]

*sniff* if all rich people acted like this, unrestrained capitalism might actually work !

[rory_20_uk]

Americans do give far more to charity than we do in the UK, and this act of philanthropy probably equals aid to the 3rd word for many years - and no trade tie-ins, no strict rules etc etc.

If we go back in time, the amount that people in this country gave to charities has decreased as tax has increased. Here there is a far greater expectation that the state should look after everyone - after all, we pay enough to the state!

There is an aspect of how much harm does one have to do to the world to accrue that amount of money? But at least some is bieng given to do some good. :thumbsup:

~:smoking:

[Kommodus]

There is an aspect of how much harm does one have to do to the world to accrue that amount of money? But at least some is bieng given to do some good. :thumbsup:

Yes, this is something I have wondered about quite a bit. I once held the very naive economic idea that whenever one individual got richer, it required someone else to get poorer. Some time ago a friend of mine opened my eyes to the fact that it's quite possible (and quite common) for deals to be made in which all parties are enriched (although admittedly, some will be more enriched than others). This is the principle of building wealth - something people like Warren Buffett, Bill Gates, Donald Trump, etc. are very gifted at. They're good at allocating capital and devising deals in which all parties profit.

This, as far as I can gather, is one of the great benefits of capitalism, and it also explains why capitalist societies are (at large) wealthier than socialist ones. Those who possess wealth use their wealth to gain more of it. While this may seem unequal (which it is), it can be a good thing as long as the rich reinvest their possessions into the community. It is only a bad thing when the rich hoard their wealth and acquire it unfairly or at the expense of others.

[rory_20_uk]

Everyone can have more money. Fine. But currently we are wrecking the environment at a rate faster than ever before. To get the best deal and make the most money such words as "ethical" and "enviromentally friendly" are not often used.

All business at the end of the day has to use natural resources - unless money is made recycling. To build wealth, more resources are generally used.

Can you honestly say that the increase in China has had no negative impact at all?

IMO I am not bieng naive. It is that I view more than the simple wealth of businessmen.

~:smoking:

[Alexanderofmacedon]

That's really great to hear.

I'm 15, so I'm not rich. Every once in a while I'll save up some money (right now I have a whole $200!):laugh4:

Anyway, I rake leaves for money in the neighborhood to send to charity organizations.

[Kralizec]

It's interesting to read how rich people handled their wealth in classical Greece. By then it was considered a societal obligaton of the wealthy to spend part of their wealth on public works. Athens' navy was financed this way, for example (the so called triearchy)

I always liked that system...

[Kommodus]

Rory, I understand you - you were speaking environmentally, while I was speaking economically. These are two different considerations, and I'm not terribly well-informed on the environmental impact of various business decisions. I am aware that there are serious negative environmental influences caused by irresponsible industrial practices.

Also, I don't think that the acquisition of material possessions should be anyone's primary goal in life. Everyone knows that more stuff does not necessarily equate to greater happiness or contentment. A culture driven by materialism is subject to all kinds of social decay (for example, sex is used to sell everything, and therefore cheapened). However, greed and depravity are human problems that can't truly be cured by a different economic system.

Perhaps it would require revolutionary changes to the underlying assumptions held by the modern world (materialism, etc.) to undo the damage we've caused. There are a lot of fallacies that are very foundational to Western (and Eastern) civilizations that we would have to go back and destroy.

[makkyo]

You're saying that these men have no right to use their own money the way they want to since they're rich if they were under socialism? :oops: No thanks. :no:

Bill Gates was going to donate all of his prophets to charity anyway.

[doc_bean]

You're saying that these men have no right to use their own money the way they want to since they're rich if they were under socialism? :oops: No thanks. :no:

Bill Gates was going to donate all of his prophets to charity anyway.

They just would have been taxed heavier and it would have been much harder to gain such an enormous fortune, what they had left after taxes would have been their own, people still get rich in socialist europe, even mega-rich, just not giga-rich :laugh4:

EDIT: I'm not sure if that was supposed to be funny myself...

[rory_20_uk]

Taxes are for the middle class. The lower class don't earn enough to be affected - and those that earn masses of funds usually find ways to aviod payments. The easiest way is to not get paid in the UK (or if so, choose the Isle Of Man or Channel Islands).

Even a pharmacist at the hospital where I worked said that for locum work they can get paid minimum wage in the UK, and the rest in the Isle of Man where taxes are far lower.

To get the best of all, just don't be in one place for over 4 months, and then no one can tax you.

~:smoking:

[English assassin]

To get the best of all, just don't be in one place for over 4 months, and then no one can tax you

Ah yes, hence my plan to design a giant solar powered airship to live on. How can they tax you if you never touch the ground eh? I'm still ironing out a few technical difficulties with this one though (eg, air to ground missiles are proving hard to source, are they a must have, or just a nice to have?) so, for now, its tax as usual. Bummer.

[Watchman]

Shall we establish some definitions here ? Namely, what's "socialism" mean this time around - really existing socialism of the old and now virtually extinct Soviet/PRC style (which didn't quite work), or the Scandinavian-style high-tax "welfare state" with its social security systems (which does work) ? Some people have a very annoying and occasionally confusing habit of using the word for the latter...

That aside, while I'm quite sceptical of the idea of leaving welfare services to the rather unreliable philantropy of the odd rich git with a generous streak I have nothing against them donating as an aside of proper institutionalized social security systems, and do like the attitude Gates has. Didn't he sometime say he was going to give away all his wealth eventually so his kids would have to get rich on their own merits and not on his inheritance...? :rtwyes:

[Aenlic]

Indeed he did say that, Watchman. Gates is on record as saying he intends to give 90% of his wealth away via his foundation, and that his kids can make do with the other 10%. Warren Buffett said essentially the same thing over the weekend, with the intent of giving away 85% of his $40+ billion. He stated that he sees no reason to create dynastic wealth when that money can be better used to help the 6 billion people who don't have that wealth. As a caveat, it should be noted that while the bulk of his giveaway will go the the Bill and Melinda Gates Foundation, the rest of the 85% is going to foundations run by his three children and another named for his deceased wife; so while they aren't directly getting the money, his children will still control vast amounts of it. :smile:

Considering the recent row that Redleg and I had in another thread about estate taxes, it's interesting to note that both Gates and Buffett signed on with a group called Responsible Wealth, which calls Bush's tax cuts irresponsible and are opposed to a repeal of the estate tax. :wink:

[JAG]

Could this have happened under socialism? I think not. Would it have happened in the UK? Not on your nelly. So, America, I salute you.



Oh dear EA, oh dear, do you really want me to bite on that? :no:

[Crazed Rabbit]

Considering the recent row that Redleg and I had in another thread about estate taxes, it's interesting to note that both Gates and Buffett signed on with a group called Responsible Wealth, which calls Bush's tax cuts irresponsible and are opposed to a repeal of the estate tax.

Gee, maybe because their children won't be affected by it, because they are tremondously rich, and they can afford a boatload of fancy lawyers to protect their money?


Oh dear EA, oh dear, do you really want me to bite on that?

The citizens of the USA gave away $250,000,000,000 to charity in 2004 - and no, not just because of the tsunami (charity related to that was 0.5% of the total).

Capitalism creates wealth. Socialism does not.

Crazed Rabbit

[Soulforged]

Capitalism creates wealth. Socialism does not.And I suppose that's called an idealogue comment...

It's not at all like that, socialists ideas are supposed to be means of wealth distribution no concentration. Therefore you really don't need a good hearted rich man like this one to give billions when you already distributed the riches of your country equitatively. That's at ideological level, of course, but I felt it was fitting.

[Aenlic]

Capitalism creates wealth. Socialism does not.

Crazed Rabbit

Actually, when you consider that the average surplus value of the average US workers is $33/hr while the average hourly wage for all non-supervisory on private non-farm personnel was only $16.11/hour in 2005. Looks to me like it's not just capitalism creating all that wealth, it's capitalists sucking off over half of the value of the worker's labor. The wealth is being created by the workers and being syphoned off by the rich. :wink:

I'd rephrase your statement and say:

Workers create wealth, and capitalism creates Paris Hiltons. :grin:

[scooter_the_shooter]

And I suppose that's called an idealogue comment...

It's not at all like that, socialists ideas are supposed to be means of wealth distribution no concentration.


Ahh socialism....they try to make every one middle class, and when they can't they make every one poor.


Tell me If I (or one of my ancestors) worked my(or his) ass off for years to get wealthy what entitles some crack whore or lazy person to it? Or a decent person who is poor? It's mine if I want to give it away it should be my choice. It's called property rights and freedom...pretty good ideas:2thumbsup:

[Papewaio]

I suggest reading up on Warren Buffetts methods of investing. He buys based on antiquated ideas like "bricks and mortar", "honest management", "products used at home", "understanding the business that he buys" and a few other things day traders ignore...


I'm still ironing out a few technical difficulties with this one though (eg, air to ground missiles are proving hard to source, are they a must have, or just a nice to have?)

Go for the solar powered Masers, you can get energy from the sun so you don't have to replenish stocks from the ground like missiles, and Masers on low will cook flying ducks so they are a useful addition for a BBQ.

[Keba]

Capitalism applies to human resources too. You are paid only as much as you are worth. And skill makes worth. You can be the best damn burger flipper in the world, but you're still just a burger flipper.

No, you are paid less ... since it obviously wouldn't be profitable otherwise. Next you say that they buy stuff from the highest, and not lowest, bidder.

[Keba]

I think you misunderstand. Low or Unskilled workers do not deserve higher pay. Supply and Demand. Pay is determined by what you bring to the organization that hired you, and how easy you are to replace.

Oh, that ... ya, then I agree.

[Watchman]

Tell me If I (or one of my ancestors) worked my(or his) ass off for years to get wealthy what entitles some crack whore or lazy person to it? Or a decent person who is poor? It's mine if I want to give it away it should be my choice. It's called property rights and freedom...pretty good ideas:2thumbsup:You know, that sounds a whole lot like how I'd imagine the tax-exempt aristocracy of them olden times to argue in modern terminology...

I'd also suggest you spend a few moments pondering on why Otto von Bismarck instigated several early "welfare state" policies, and why Marx's predictions of where the Revolution would happen went so bass ackwards.

[Aenlic]

Capitalism applies to human resources too. You are paid only as much as you are worth. And skill makes worth. You can be the best damn burger flipper in the world, but you're still just a burger flipper.

Exactly, GC. Except that workers aren't paid what they're worth. They're paid only a fraction of what they add to the value to the product. It's not about unskilled workers being paid less than skilled workers. That has nothing to do with it. It's about workers, no matter who they are or what they do, not being paid for the value of their production. The wealth is created by the difference between the end value of the production and what the workers in the production chain are paid for the production. The workers being everyone in the chain, not just the grunts on the factory floor.

As the production, whatever it is, goes up the capitalist ponzi scheme ladder of management levels, some value is added by each level. The final value is the total of all the surplus value added from the janitor to the CEO. The question is who added the majority of the value and were the reasonably compensated for their production? Would there still be a product if the CEO were erased from the equation? How about several levels of management? It's more likely than the alternative. Would there still be a product if the workers who actually make the product were just erased from the equation? No. Without the workers you just have a bunch of suits sitting around picking their noses. Using surplus value instead of wages as a guide, the lower level workers are highly underpaid and the suits at the top are highly overpaid. At some point in the chain, there's a mid-level management stooge being paid exactly what his surplus value is for the production. :wink:

[English assassin]

Except that workers aren't paid what they're worth. They're paid only a fraction of what they add to the value to the product

And, no disrepect, but if workers at every stage in the chain were paid the full amount of the value they added, how does the manufacturer acquire capital to develop the business, replace worn out machinery, or simply have a cash buffer against a downturn? They can't borrow or issue equity, because there is no surplus to pay interest or dividends. They can't save (which would often be economically inefficient anyway since it defers access to the capital) for the same reason.

The business would rapidly be outstripped by its competitors who siphoned off some of the value created by its workers for investment. Your full value workers would soon find out that they had killed the goose that laid the golden eggs. Rather like what happened in the Warsaw pact countries, in fact.

This is even without considering that a company that paid out full value might be paying more for one of its supplies (labour) than it needed to, because of a hard-to-rationalise decisio to focus on output value not input value. Why pick on labour as the priviledged supply here? Would you pay more fot the value added by utilities, by the landlord renting you a factory, by suppliers for raw materials? On what basis are the workers allowed to take out value based on their outputs, but everything else required in the business is still priced on its input value?

These are deep waters Watson.

[Ironside]

The citizens of the USA gave away $250,000,000,000 to charity in 2004 - and no, not just because of the tsunami (charity related to that was 0.5% of the total).

Capitalism creates wealth. Socialism does not.

Crazed Rabbit

Link on more details from that Giving USA foundation publication please.

Last time I did some checking about foregin aid earlier and atleast that part was quite small, infact the public charity together with the govermental aid was smaller than what several Europeian countries gave from the govermental aid.

But that was only foregin aid, so I'm curious on how much that is compared to total charity.

But I'm impressed that every American gives about 650 bucks in charity a year in average.


*sniff* if all rich people acted like this, unrestrained capitalism might actually work !
So true.

[GoreBag]

Bill Gates was going to donate all of his prophets to charity anyway.

How many prophets does he have?

[Leet Eriksson]

Isn't america the top in charity or is that only me?

[Devastatin Dave]

Isn't america the top in charity or is that only me?
Percentage wise, no. But in actual amount, yes. Another factor that I'm sure is not taken to account by most is the humanitarian aid supplied by our military.

[rory_20_uk]

Another factor that I'm sure is not taken to account by most is the humanitarian aid supplied by our military.

Is that the gross aid they supply or the net aid?

E.g. If something gets destroyed by bombs and something smaller is rebuilt, is that viewed as on the plus column (they have built a small building) or on the minus column (they have not replaced what was destroyed).

~:smoking:

[Ironside]

Isn't america the top in charity or is that only me?

DD covered the foreign part of the charity/aid.

As for total charity, the US might be a good candidate (per capita that is, for the total amount I would be very surpriced if someone gave more)) but that would require a thorough look on the numbers to make a valid comparation. For example, donating money to universities counts as charity and while I agree with it after thinking about it for a while, it's not something I would include into that category instinctivly.

That statistically mad Sweden doesn't even has statistics on any charity at all makes it even harder.
We do spend about 1,785% of our foodcosts on soft, white bread and 2,094% on soft, light (pale?) bread, in average, though. :book: :balloon2:

[Divinus Arma]

Yes, this is something I have wondered about quite a bit. I once held the very naive economic idea that whenever one individual got richer, it required someone else to get poorer. Some time ago a friend of mine opened my eyes to the fact that it's quite possible (and quite common) for deals to be made in which all parties are enriched (although admittedly, some will be more enriched than others).

Actually, the beauty of capitalism is that all parties to trade are made richer by it.

Consider:

If I can only bake bread. I bake 40 loaves a day.
Devastation Dave makes rocking chairs, and makes five a day.
Solypsist takes pretty pictures, at 20 a day.

Solypsist wants bread and a chair to eat it in.
Dave wants bread and some pictures to look at.
I want some pics and a chair to sit in.

We all, trade and thus we all benefit.

Now exchange barter for currency, and have you have the exact same thing. And the more that your product is desirable, whether you make it desirable or it is inherently desirable, the more chairs, bread, and pictures you get. And the invisible hand ensures that if prices get to high, they will be brought down by a lack of demand at that price.

It's really quite simple. I don't understand what all the fuss is about.

[Kralizec]

That's a pretty simple scenario, Eclectic.

Economics (rightly) point out that a working free market with full competition maximises wealth creation. Everybody will agree that maximised wealth creation is good, but the real issue is the partition- depending on the variables the contrast between rich and poor could be huge- but that's a political issue and not an economic one.

[Watchman]

Or when the already really rich figure they can keep on getting richer better if they use their financial and whatever resources to ...adjust... conditions a little to their liking. Say, by driving smaller competitors out of the game by sustaining a period of low or even negative returns through price-gouging, leaving them closer to de facto monopoly, or something similar. (You get the idea.)

Which sort of thing AFAIK isn't exactly good for this "healthy free market" animal.

[L'Impresario]

You can also add to the mix information asymmetry and the adverse selection situations.
The guy that wrote this article (http://www.econlib.org/LIBRARY/Enc/Information.html) has done a fair bit of writing on information economics.

[Watchman]

Ah, the limitations of the "game theory" in its original form.
...
...Stiglitz... Stiglitz...
I've seen that name somewhere before. Lemme check.

Oh. This Stiglitz. (http://en.wikipedia.org/wiki/Stiglitz)

Incidentally, Eclectic (isn't that DA after an unexplained name change?) is correct in that the capitalist economy principle does, indeed, allow essentially infinite generation of yet more wealth. Back during the days of Mercantilism the big shots hadn't yet quite figured this out, and approached it through the old feudal zero-sum land-ownership paradigm.

It does not, however, have any particular built-in mechanisms to ensure that wealth is distributed even remotely equally or fairly - left purely to its own devices capitalism can right well produce a tiny, ludicrously rich upper class living it large on the backs of really many really poor people, and will probably self-destruct sooner or later.

[Soulforged]

Eh, no. Like I said, you are only worth as much as someone is willing to pay you. If you have replaceable skills, all bets are off. If you're highly skilled, there's no excuse for being underpaid, as there are always opportunities if you look hard eough.
Ah yes... the wonders of freedom to make a choice. You're not considering every point exposed by Aenlic, GC. What Aenlic said was very basic to understand capitalism, Marx discovered it. What you're proposing in your opinion is a kind of economic cohertion, also treated by some communists authors, it's a phenomenum supported and even apreciated by society, but it's far from fair, you're like you said, at the mercy of the employer, the employer and many other people forget that they're, beyond exercising his private right to property, a social service, not only by providing products to the demand of those products, but by providing a way for humans to develope in their integrity. That's why in the last century it was made sure, by international convention, that States should guarantee the individual, at least, their freedom to change job and to have equal oportunities on any job, based only upon their skills. But again it's far from fair.

[littlelostboy]

Three words - "Everything is interdependent". When one small party loses, the big party is affected too. A good point on "environmental" problems. When the environment is affected, the big party fails (i.e. government, business). Either way, economy is just the same.

[Soulforged]

Eh, you assume those things are universally accepted. While I'm not a fan of it, I do think an employer has the right to hire whoever he wants. Based on race, skills, hair color, whatever. The ones that hire on skills only will be the successful ones in the long run.
You say that you don't care if the employer dismisses or fires somebody because of they skin color? I know that the system in USA is a little different from my, but I suppose you at least give the discriminated person a right to review the employers action right?

Anyway, it was pretty easy though. Here's "Das Kapital (http://www.marxists.org/archive/marx/works/1867-c1/index.htm)" by Karl Marx. The volume I. However it's enough to know about capitalism. Notice that Marx does a scientific critic on capitalism, not an ideologic apreciation. (For download, Win or Mac)

[Crazed Rabbit]

You know, EA, I got rather caught up in the thread and forgot to properly thank you for your kind words about America:
Thank you, good sir.


You say that you don't care if the employer dismisses or fires somebody because of they skin color? I know that the system in USA is a little different from my, but I suppose you at least give the discriminated person a right to review the employers action right?

A racist employer only hurts themselves by hiring according to race (or gender, or whatever). If they get rid of a skilled person who's skin is a different color, and hire a less skilled person in their place, they lose. And the person fired gets to work for someone who sin't a racist.

Crazed Rabbit

[Watchman]

Marx is generally regarded as having been about gazillion times better analyst and critic of capitalism than he was at devising alternatives or looking into the crystal ball. But then, it'd have been kinda spooky if he'd been that perfect.


In a totally free market, such things can be circumvented by importing from other "big money" companies, which keeps competition going.

Still, an abusive monopoly is unsustainable, and while bad in the short term will lead to fracturing and and a breeding ground of smaller businesses in the long run. The problem is when it takes hold of the government, like the East India Company in the 1700s did to Britain.Sort of what I meant. In a totally free market, what's there really to keep whoever's clawed his way to the top from starting to restrict that freedom for his own ends, should he only be capable of mustering the resources for it - even if those ends are on the long run ruinous even for himself ?

[Lord Winter]

Could this have happened under socialism? I think not. Would it have happened in the UK? Not on your nelly. So, America, I salute you.

The question more is would a socialist welfare state, gather and distribute the money better then the non profits which are being donated too.

[Watchman]

Honestly? I don't suppose anything will stop someone that determined to cause harm. But we're now delving into the invevitable economic pendulum, which is a pattern and not a system.Determined to cause harm ? No. Merely pursuing his own interests as a rational actor. There exists specific terminology for this sort of thing in the relevant social and economic disciplines - some terms I can recall are "contrafinal choice" and "sub-optimal alternative" or something to that effect. The main point, anyway, is that individual rationality is not automatically a quarantee of objective rationality - in other words, what comes across as the immediately rational choice for the individual may well be counter-productive for the "common good" and/or on longer run the individual himself.

Institutionalized corruption would be a pretty good example of this, I understand.

[Aenlic]

Nobody said life is easy. Attempts to make it so via the welfare state will only make things harder in the long run.

Bottom line is that people who do what you say are shooting themselves in the foot, and that will come back to push them away after awhile.

Ah, now, you're confusing a welfare state with system derived from mutual benefit. One is socialist and one is based in part on socialism, but is in fact merely capitalism with large doses of socialist theory covering the gaping holes. Your task, is to figure out which is which. :smile:

[Soulforged]

A racist employer only hurts themselves by hiring according to race (or gender, or whatever). If they get rid of a skilled person who's skin is a different color, and hire a less skilled person in their place, they lose. And the person fired gets to work for someone who sin't a racist.
I'm sorry CR, but I'll have to disagree with you. Many people get harmed by every demostration of racism, mainly the ethnic group wich is being directly affected by it. I don't have such an idealist view of a mecanic society, I try to focus on getting rid of bigotrism and prejudice, not by forcing anyone, but by educating them, and education never ends.

[Watchman]

Okay, let me try to rephrase this. The problem is that due to various circumstance - limited information, constrained resources, considerations of surroundings, whatever - choices that are objectively bad may right well appear individually rational, because the other alternatives are determined to be even worse. If things are bad enough this may be the norm.

Example. Let's say you're a basic low-level bureaucrat or something comparable in a thoroughly corrupt society. Now, let's assume you actually have some professional ethics and would prefer to be a honest worker. But you know right well pretty much all of your peers take bribes, and that's how things are done here. You're also going to be offered bribes, that's for certain. Sure, you can refuse them - but what's the point ? The other guy will just find some other functionary to bribe to get his business taken care of, that guy will get the money, and you'll have to try feeding yourself and your family with your crappy wage which rarely comes in time anyway without the windfall. So why bother ? It's not like any moral spine you might want to display is going to change anything anyway.

As the saying goes, "who wants to be the sucker ?"

So, the individually rational course of action for our hypothetical functionary above is to simply take the money and play along, and everyone'll be reasonably happy. Objectively speaking, of course, this'll just contribute to the maintenance of the corrupt, inefficient and unreliable status quo.

The above scenario is, mutatis mutandis, perfectly applicable to "the market" too and can be easily elaborated further.

And the moral of the story is simply that individual rationality - often regarded in worrisomely simplistic and idealized terms in "right-wing" or "conservative" circles, commonly as a vulgarized version of the "invisible hand" - should not be relied on overmuch, as it has no inherent quarantee of collective rationality.


Attempts to make it so via the welfare state will only make things harder in the long run....and this is based on...?

[Crazed Rabbit]

Watchman, to argue against capitalism, you use an example of government bureaucrats with too much power. That's self defeating- are we supposed to fight the evils of capitalism by giving more power to those who you identify as causing the problem?


It does not, however, have any particular built-in mechanisms to ensure that wealth is distributed even remotely equally or fairly - left purely to its own devices capitalism can right well produce a tiny, ludicrously rich upper class living it large on the backs of really many really poor people, and will probably self-destruct sooner or later.

Yet such a thing has never happened.

Wealth should not be equally distributed unless all people have an equal value in the marketplace. And capitalism does ensure fair wealth distribution-you get paid for what you do.

Crazed Rabbit

[Aenlic]

So you're saying that Paris Hilton is a more productive member of society, based on her income, than a single mother working two jobs to feed her family who also finds time to volunteer at the local food bank on weekends? I don't think so. :wink:

Ken Lay with his several mansions is a more productive member of society, based on his net worth, than someone who worked 30 years for an Enron subsidiary and lost their entire retirement and their job as well just a few months before they would have retired? I don't think so.

Executives, whose compensation has increased from an average of 30 times that of the average hourly worker 30 years ago to an average of more than 400 times that of their hourly workers today, are worth more to society than those hourly workers, who haven't seen their compensation even keep up with inflation during that period? I don't think so. Just for comparison, in Japan, the average executive makes just an average of 11 times that of the hourly workers.

The idea that people are paid what they're worth in a corporate capitalist system, especially in a corporate system run amuck like in the USA, is a complete and utter crock.

There's a tipping point at which the corporate leeches will find themselves up against the wall with a cigarette and a blindfold if they aren't careful. Luckily for them, in the US and many other places, they have the majority of the population wandering about in blissful, education system brainwash-fed ignorance. :ballchain:

[Aenlic]

:laugh4:

I rest my case. :wall:

[Aenlic]

Perhaps you are right, GC. My apologies for the sentiment; but I just don't think it's possible to have a constructive debate on the issue when the response is:


That Enron worker, however, is a dime a dozen.

[doc_bean]

Yet such a thing has never happened.



The masses of the poor have never risen up and overthrown a rich upper class in a bloody conflict ? :dizzy2:

Capitalism isn't some new brillant system of economics, capitalism is the natural way for people to act in an economy. Argueing against capitalism is argueing against human nature, yet capitalism, unrestrained, isn't completely stable. For one thing it leads to monopolies (think also guilds, mercantilism) which often leads to a cocnentrationof (political) power with a minority of individuals who can use this power for their own good (and thus screw over the masses, wealth creation remains the same, or might even icnrease, but parreto efficiency is all but lost), this leads to a poor underclass which can lead to a lot of problems (remember the french not having enough money to buy croissants ?)

The beauty of capitalism is that it's *nearly* fully stable, by its very nature it requires several generations of people with sufficient funds to use them 'wisely' and demands that no one else manages to screw them over. This is rather hard to do but not impossible.

Still, I'd say accounting for externalities and assymetric information are the biggest problems with capitalism, most 'socialist' countries try to help reduce the first one, at least.

[doc_bean]

Worth is determined replaceability value. There is only one Paris Hilton. While we hate her, she's a person we love to hate. Indeed, even in hating her we are fueling societies demand for her. Therefore she's worth as much as she's being paid.

That Enron worker, however, is a dime a dozen.

While true, the socialist will wonder wether this is fair, and whether economical value equals intrisic value, or indeed, even relates to it. Another important point is whether their true economic value is reflected by their earnings.

A lot of artists, for instance, lived and died poor, although for some their work became invaluable for society. Therefor economical' value' (at a certain point in time) can not be the same as the true value of an individual to society.

Furthermore, companies can exploit fear. Let's say a company has 100 employees, and about 5 people fit for hiring but not employed because they aren't needed. Now, in a true capitalist economy without unions, everyone of the 100 employees would fear for their job if even one of the 5 is willing to work for less pay. So therefor, in order to ensure their employment, they have to lower their standards, and in the end, the person with the least demands determines what the others get, even if the average employee isn't really satisfied with the conditions. They are effectively paying their company for job insurance.

[doc_bean]

my apologies for spamming this thread, but...


Let's not get emotional here. Rationally, you can't refute the truth of that statement. The less skilled you are, the easier you are to replace. The easier you are to replace, the less you are worth.

Now, this is only partially true. In the example given above, the employer could only replace 5 individuals, but because (without unions) he could play them all against eachother and since in 'perfect' capitalism their would be no such thing as welfare, they'd all end up accepting the lowest possible standard, since they need a job to take care of their family and/or themselves.


Furthermore, there is a clear problem with information here. The worth of a person is often difficult to determine, certainly for high tech jobs and management. Top managers are often paid millions (or more) yet I have yet to see evidence that they can actually created an added value to the company (in relation to their pay). If a company hires such a person they will have to save money somewhere else, for instance by lay offs. There is no way of knowing whether this will create more wealth or if it won't. So we've entered one of two situations:

1. People are payed their perceived worth
2. Stock owners are just gambling

The first one is of course problematic, as also demonstrated in my first example, since people don't actually get paid what they are worth, some people get paid more and some people get paid less. This also implies that the creation of wealth isn't automatically optimized. Which leads to the second case:

Stock owners usually don't give a **** about a company, employees, society or whatever. They want to make money without actually working for it. Lots of money, and fast. This leads to a few very obvious problems: stock market crashes being probably the most widely damaging. But single companies can sometimes get ruined because of simple speculation. This also leads to another problem: outsourcing. The stock owners are just in it for the money, they don't care if the wealth is generated in china or in the US, so in order to maximise their profits they force companies that would have been sustainable in the western world to move to the far east. While this isn't really a problem with capitalism per se, it does force people to accept a 'global' standard at which they want to work. In practice this often means the west has to lower its standards and gets poorer. The wealth generated will go to the stock owners and not to the people manufacturing. This leads to a concentration of wealth which then can lead to all kinds of social problems (which I touched upon in a previous post iirc).

[doc_bean]

For the fun of it, explain why it isn't fair. Why is it "good"?

This is a moral judgement, not an economical one, as I pointed out.

In the long run there can be the problem of concentration of wealth, which is mostly a social and political one, but can lead to distortions of the 'ideal market'. Monopolies and asymmetric information for one, state subsidized economy too, think about how the military industrial complex in the US works, or how so many oil companies receive government funds.

[Watchman]

By their very nature, and according to undeniably frequent historical testemony, governments are corrupt. In order to perpetuate the welfare state, or a planned economy, the government has to get bigger. The bigger the government gets, the more corrupt it gets, and the more corrupt it gets the more it has to leach from the people, and thus it has to get bigger. Which, of course, makes it more corrupt.

That's always been the way it works. Not just for socialist or communist nations, but any nation where the government is given too much free reign, such as despotisms and monarchies. Examples to the contrary have been few and far between, and almost always shortlived.BS. The one I live under, as well as my immediate Scandinavian neighbours, are quite brilliant examples of high-intervention, high-tax high-public sector governements with some of the lowest indications of corruption in the world. How's that go with your determinism ? There's a few other ones around the world who've managed to work out ways to minimize corruption and graft in the public sector too, and I don't think those were exactly laissez-faire ones either.
The ones with corruption problems keep having them entirely regardless of the size and power of the state apparatus. The dynamics behind that are rather different from what you seem to imagine.

Besides, the welfare state and what is normally meant with planned economy are quite different things. Get your damn terminology right.


Watchman, to argue against capitalism, you use an example of government bureaucrats with too much power. That's self defeating- are we supposed to fight the evils of capitalism by giving more power to those who you identify as causing the problem?Are you reading selectively or something ? Such choice-making scenarios are perfectly applicable on the private sector; I merely used the "corrupt adminstration" one as it happened to be one I remembered.

Put this way: I take it you understand what antitrust laws and similar safeguards against major players in "the market" skewing things in their favour exist for ?
Protective legislation to ensure workers get paid proper wages and dangerous work environments have assorted safety systems to (hopefully) entirely remove accidents ?
Laws against child labour ?
Limits on what kinds of working hours employers can demand from their employees ? ("Do your workers live in those hovels?" "Oh no, they just sleep in them a little.")
Assorted state organs and other overwatch organizations that keep an eye on what, exactly, the actors of "the market" are trying to push on the consumers (if you believed the tobacco industry, smoking would be the next harmless thing from cheese... and what of that funny babies' milk-substitute thingy out in the Third World a few decades back ?), and similar quality-control and ombudsman systems ?
Who, anyway, keeps employing illegal immigrants because they're cheap regardless of it being illegal ?
Why insider trading and similar "unfair" business practices are criminalized ?
And you know, someone keeps buying those diamonds from all those mines controlled by assorted atrocity-prone Tupac Armies in Congo...
Back in the Spanish Civil War, do you know why those assorted urban Anarchist parties and workers' associations were already pretty experienced urban guerillas ? 'Cause they'd been dealing with the hired gunmen and killers of whom Marx would have defined as "capitalists" for a while already...
I hear activists who get too noisy about unscrupulous gold mining in South America have a funny habit of ending up dead. Wonder who'd have a motive to put a hit on them...?

Put another way: if you want to see what genuinely free and unrestrained capitalism looks like, look at organized crime. No laws, no rules, no morals, just profit. Legitimate "big businesses" demonstrate an uncomfortable tendency to employ worrisomely similarly ruthless methods when they think they can get away with it - usually meaning out in some developing country where the official sector cares only about its kickbacks and getting a cut, and screw law enforcement. But then again, do you know the nice business of those mines run by the Anaconda Corporation in the US, around Thirties and Forties or so...?


Yet such a thing has never happened.Yeah, right. Why do you think so many parts of the world still have some sort of peasant guerilla movement out in the hills ? Or why countries where wealth is allowed to concentrate in the hands of small wealthy elites essentially unopposed and unregulated also tend to be poster children of graft, coruption and poverty ? The only reason the "West" (ie. Western Europe and the USA) didn't get their equivalents of the Russian Revolution was the defusal of proletariat militancy through legislation that removed the worst sources of their complaints and ensured fair pay for fair work. Here the "capitalists" were willing to compromise, particularly as the governements had started taking the workers' side. More backwards countries dominated by their wealthy and short-sighted elites failed to take these steps, or failed to do so soon enough; examples include Russia, Spain, many Latin American countries and sundry, and we all know what happened to them...


Wealth should not be equally distributed unless all people have an equal value in the marketplace. And capitalism does ensure fair wealth distribution-you get paid for what you do.Incorrect. In capitalism - or most any other economic system, really - you ultimately get paid what you can convince the other guy to pay you. If he thinks he can get away with it, he's only too likely to pay you way less than what can be regarded as "fair" - what the Hell do you think minimum-wage laws were made for anyway ? If you've managed to convince him what you do is way more valuable than it actually is, odds are he'll pay you more than what can be regarded as "fair".

Besides, getting genuinely rich in the capitalist system goes through getting yourself into a position where you can profit from what others do - think shareholders. In principle all you really need to do in such a position is own the appropriate things (Marx called them "means of production"), and make sure you keep owning things that bring you profit...
It's not actually all *that* different from the ancient landholding feudal aristocracy, when you think about it. They too primarily just owned things, and lived on what the people working on those things earned them.

[rory_20_uk]

It is easy to wish capitalism was less restrained sitting in the comfort of Europe / the USA where it isn't. One always looks at the utopia that their myopic eyes believe would be there if only...

Even so, it took time for Enron to be taken down, or parmelat in italy or Bearing's Bank in the UK. Unrestricted capitalism in action. No rules, only profits for those at the top.

~:smoking:

[doc_bean]

I don't see why this is so hard to understand. Managers and CEOs are worth so much because they are able to keep the rest of the company down, as it were. The rest of the company is kept down because they don't have the skills to make them worthwhile to the company.

:sigh: did you even read my post ?

People are payed their PERCEIVED worth, not their actual worth.




An efficient business makes money. For who? For the person running it.

True, I'm just saying this isn't always a good thing, especially socially. I fully support arrangements where the employees own a large part of the company. It's kinda ironic that often the people whose jobs are threatened have money in the bank/private funds/whatever where it is used to invest in third world competition. Pure capitalism only works in a world of perfect information, that's also (iirc) the first assumption of basic economic theory :inquisitive:

[Watchman]

The elementary rational-choice theory, anyway. Which AFAIK hasn't been taken seriously in academic circles for quite a few decades now, as it has been found to be based on some pretty kooky and unrealistic presumptions (such as the aforementioned "perfect information"), doesn't really take into account differing value-sets, and has proven to be incompatible with the empirical reality of how people actually make choices.

And God knows I've waded through enough pages on the subject in the last few months to have learned that much. Sociologists seem to dislike incursions of theoretical economics into their field.

[Kralizec]

And you know, someone keeps buying those diamonds from all those mines controlled by assorted atrocity-prone Tupac Armies in Congo...

De Beers probably. Notorious for buying out all (potential) newcomers to the diamond market and as such holds a de facto monopoly on the world diamond market.

[Watchman]

*shrug* Them or some quasi-deniable proxy or middleman. I don't think the distinction is particularly important for our purposes.

[doc_bean]

The elementary rational-choice theory, anyway. Which AFAIK hasn't been taken seriously in academic circles for quite a few decades now, as it has been found to be based on some pretty kooky and unrealistic presumptions

Still, this is what is thought, even in universities, externalities and inperfections are usually only mentioned at the end of a course as 'remarks' :furious3:

[Watchman]

Huh. My lecturers and textbooks seem to make a point of underlining those. We even have a mandatory course right at the start where they try to teach us a healthily sceptical attitude at theories in general and established orthodoxies in particular.

Maybe it's a PolSci/Sociology thing ? I dunno.

'Course, how much of that actually sticks in most students' heads is an entirely different question...

[doc_bean]

I took the basic economy course in engineering, and courses in macro and micro engineering from the economics department as well as a course econometrics from the agricultural economy department. Most where highly theoretical, focussing more on simple math (straight lines, first order derivatives !) than reality. The concepts are pretty sound and the economical methods are pretty useful in certain cases, but I was really disappointed with the lack of actual critical thought.

I think you might have a point about the PolSci/Sociology thing, after all, for a pure economist it doesn't matter as much were the results come from if the model can be used to satisfaction. Human behaviour tends to an annoying factor that just messes up the statistics ~D