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)

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.

[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.

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.

[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!)

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.

[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.

[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?

[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.

[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

[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

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 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.

I'd rephrase your statement and say:

Workers create wealth, and capitalism creates Paris Hiltons.

[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.

[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.

[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.

[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.

[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.