Capitalism only works...

[2ndRateMind]

If you don't have capital, it won't work for you.

This is because people, even those with masses of money, are loath to part with it. If you don't have money, and need to earn your living, you will be paid the absolute minimum people who do have money can get away with, so as to maximise their profit from your labour.

This is not a 'good' system for the majority of humanity. If it is not good, then it cannot be Christian.

Discuss.

Best wishes, 2RM.

[Furrowed Brow]

It isn't. That is why there needs to be more capitalism. The disparity is not because capitalists are taking advantage of the third world. It is because most in the third world are not living in capitalist economies. The majority of the poverty in the world is due to governments using goods and services as weapons to control the population. That is not Capitalism, that is socialism.

Let’s test this. The list of the poorest countries in the world is dominated by African Countries. According to wiki Somali has the smallest GDP per capita. I’d hazard a guess Somalian poverty has something to do with war. Next is the Central African Republic then Burundi and again war. Democratic Republic of Congo, Liberia, Niger, Eritrea are next. What features do these countries share? It is a similar picture of ex colonies beset by corruption, rebels, war, and neo-colonial intervention. Neo-colonnial intervention may mean coups and assignations and invasions or it may just mean corporations bribing local politicians or it may mean ensuring Western friendly elites and groups get all the funding they need. As John Perkins points out debt is a tool of this kind of capitalism. Working up from the bottom of the list we start to to see Asian and South American countries. As a rule of thumb ex colony/corruption/war/neo-colonial intervention is a more reliable pointer to the causes of poverty than arm waving about socialism. What is common to the countries towards the top top end of the list of poorest and richest nations is the richer countries have had much longer periods of political stability, have had until recently a more stable financial and banking sector, achieved industrialisation earlier and have been better at exploiting other nations and using them for cheap labour or forced markets or assets stripping.

The one country that is an unequivocal fit to the point “socialism is bad� is North Korea. Whilst it is also possible to point to the Soviet Union and China. The Soviet Union collapse was essentially economic. China however has not collapsed and seems to be practising a mix of political authoritarianism, central planning and capitalism. But then Europe has also practiced a form of socialism based on mixed economies since the WWII and has achieved much higher standards of living. So the picture is mixed. But to generalise and blame socialism as the poverty creator and characterising it as THE problem is looking at the world with one eye closed and ignoring the evidence provided by the very poorest countries.

For a sobering picture of how capitalism really works I suggest becoming acquainted with the writing and talks of John Perkins or the documentaries of John Pilger and other similar commentators who have had their feet on the ground of the poorest countries and have seen how neocolonialism plays out in reality.

the first video below is animated and draws a picture in 2 minutes. It is worth a watch. The narration is taken from a talk given by John Perkins.

[youtube][/youtube]

[youtube][/youtube]

[bluethread]

So, you are saying that a short term shift results in a long term change in the economy?

Does shuffling things around count as change? If so then yes, that is what I am saying.

No, I am talking about long term results, especially when it comes to a more equal distribution of assets, which appears to be what you are desiring.

First, markets are much more nimble than are governments. By the time the legislation takes effect, those with the means have already adjusted their behaviors.

Shops are going to preemptively increase the prices to counter minimum wage? Not in my experience. I am still paying the same price for bread and milk as I was five years ago. There is also such a thing as tracking above the inflation rate.

Now you are presenting a specific situation and comparing it to the market value of currency. First, they may not initially raise prices, but they might cut costs by reducing staff, increasing unemployment. Also, as I pointed out, the "middle class" employers might have to bite the bullet and do the actual labor as well as manage the company. Third, there might be a reduction in the number of businesses catering to a given market. Regarding tracking inflation, increased consumption instead of increased investment causes greater inflation because it produces less supply and increases demand. It is a double wammy, both demand and supply driven inflation at the same time. That is what created the high misery index of the Carter years.

Also, the chronic poor do not invest a short term windfall. They spend it on consumer goods and push for further transfers as the short term effects wear off.

That's all it takes sometimes, for someone to say switch form a part time job to a full time position.

No, that creates inflation, because this short term windfall was taken from those who were using it to maintain current production. In order for the investors to get that back and then invested it as they originally intended, they have to to expend more on inflated resources.

Therefore, that windfall just ends up in the hands of those who do invest, i.e. those of means. Also, this windfall ends up coming from the "middle class", who do not have the time and ability to adjust as quickly as those of greater means. The upshot is that those of means increase market share, the chronic poor get a short term benefit that increase the poverty cycle and the "middle class" lose market share. Thus, this approach does just the opposite of it's intended purpose.

If that were true, why aren't the capitalist fat cats lobbying for more government interference?

They are. Soros, Warren Buffet, Bezos, etc. are all calling for greater taxation for wealth transfer, though they are free to do it themselves. Their argument for not doing so is that, if they do it themselves they will lose market share to those who do not do it. That is exactly the same principle that causes small and medium size businesses to loose market share when there is government taxation for wealth transfer. Those smaller firms do not have the flexibility that the big firms do. Also, the big firms can work behind the scenes to minimize any effect the taxation would have on their specific business.

[bluethread]

That is why there needs to be more capitalism.

OK, so you think the system that generated the problem, is the solution to the problem. This seems to me to be a triumph of hope over experience, but if you are happy that way, so be it.

I do not think that the disparity in wealth and life chances is due to capitalism. Though he seems to disagree regarding the effects of capitalism, Furrowed Brow shows how capitalism is not the only factor in the creation of that.

The disparity is not because capitalists are taking advantage of the third world. It is because most in the third world are not living in capitalist economies.

Actually, mostly they are.powerful. Africa, India, even China these days, and most of South America, all where most of the poor are, are living in economically capitalist systems.

China is mostly capitalist? They have allowed limited small scale capitalism and have allowed some industries to move from strict state ownership, to fascist private ownership. However, they are hardly a capitalist system. They just acknowledge capitalism on a global scale and the difficulty of maintaining communism on a micro scale. Regarding Africa, as I mentioned above, Furrowed Brow, agrees with me that there is way too much instability there to use it as an example of any particular economic model. Regarding India, the problems there are mostly cultural related to a mixture of Hinduism, Buddhism and Islam, which creates instability and supports certain antisocial behaviors. However, the increased application of capitalism of late is starting to turn things around.

The majority of the poverty in the world is due to governments using goods and services as weapons to control the population.

Evidence, please. Or is this just a convenient, congenial belief, that justifies some reluctance to get out there and actually do something about inequality?

See, Furrowed Brows last post. He disagrees regarding the solution, but does support that point.

A few years ago people were touting "micro loans".

Don't disparage micro-loans. Each month, I lend what I can afford, interest free, to where I think it will make most difference, and each month, this or that loan gets paid off, having transformed someone's life, and is ready to relend to transform another life. I can't save the world by myself, but if I can help lift a few individuals out of abject poverty, then I still think that to be a worthwhile exercise. And I mention this not to signal my own tattered virtue, but simply because if everyone with the means did the same, there would be no poor among us.

I am not. That is capitalism. If it is so virtuous on a micro scale, why is it not a good thing on a larger scale?

[bluethread]

For a sobering picture of how capitalism really works I suggest becoming acquainted with the writing and talks of John Perkins or the documentaries of John Pilger and other similar commentators who have had their feet on the ground of the poorest countries and have seen how neocolonialism plays out in reality.

the first video below is animated and draws a picture in 2 minutes. It is worth a watch. The narration is taken from a talk given by John Perkins.

[youtube][/youtube]

[youtube][/youtube]

Well, if we are looking at how things "really work", there is no good economic system. I was not blaming Socialism, but pointing out that Capitalism is not the cause. The cause is institutions established by men. Wealth redistribution does not address that. It just makes the government the overlord of industry. This does not make industry moral, it just makes it easier for the government to consolidate power. It is true that capitalism does not always work. First, there must be a sustainable social structure to enforce personal property rights and arbitrate contractual disputes. Once that is established, capitalism flourishes. The world banking system and global corporatism can occur in a socialist as well as a capitalist environment. In fact, it can be argued that socialism is what created the world bank and greased the skids for global corporatism. However, my point here is that those things are not necessary parts of capitalism. What is more important than capitalism for a healthy economy is a governmental structure that acts as an honest and impartial broker in enforcing personal property rights and arbitrating contractual disputes. From what I have seen, a government based on checks and balances, that takes into account competing self interests, as capitalism does, is the best way to achieve this.

[bluethread]

This is because people, even those with masses of money, are loath to part with it.

This is false. People part with their money all of the time. That is how money works.

Of course they do. But only when they are persuaded the goods and services on offer are of greater value than the cash price asked for them. If you disbelieve this reluctance to otherwise part with money, pm me for my paypal account, and donate me $1000.00. I bet you won't do it.

Cheers, 2RM.

You are correct and that is my point. Your argument is that to some people little green pieces of paper are more valuable just sitting around than they are invested in productive activity. This may be true for the hoarder, but few hoarders are actually wealthy. The wealthy generally don't have any more little green pieces of paper than the average guy on the street. What they have is assets in production. When they are required to, for the sake of a transaction, they take assets out of production and trade them for goods and services, using those little green pieces of paper, as they go, just as the average guy on the street does. The only real difference is that they have more assets in production. So, regarding your offer, if I deemed your well being to be a better use of the assets, I already have invested elsewhere and which I could sell for the equivalent of 1000 little green pieces of paper, I would cash out that investment and either purchase or invest in your well being, depending on whether your well being is for my enjoyment, or for my enrichment. However, as of this moment, I have not determined that would be a better use.

[Aetixintro]

If you don't have capital, it won't work for you.

This is because people, even those with masses of money, are loath to part with it. If you don't have money, and need to earn your living, you will be paid the absolute minimum people who do have money can get away with, so as to maximise their profit from your labour.

This is not a 'good' system for the majority of humanity. If it is not good, then it cannot be Christian.

Discuss.

Best wishes, 2RM.

Capitalism under (true) democracy and human rights (UDHR) should be better than all other options as it rewards initiatives for making contributions toward improvements of all kinds. In this way, Capitalism serves people.

For example, a proof for the million dollar (USD) life for everyone under Capitalism:

Principally,
1 Mn people service the same 1 Mn people, including oneself. Then 1 Mn services if individual services by administration of robots. Then this means 1 Mn $ income by 1 $ for each person served, affording 1 Mn products and services including the service to oneself.

Proof: Everyone can become dollar-millionaires on Earth and at the same time affording many products and services if not exactly 1 Mn services and products, i.e., living the life of a dollar-millionaire!

The future looks really BRIGHT!

Value-added taxes (VAT, eg. 25% level) work very well under Capitalism in supporting decency for all as entitled by human rights.

In addition, there should be negotiating parties for all employers and employees to ensure there's no "financial slavery" at play. Transparency of companies should allow for the consumers to reward loyal, law-abiding companies which support society by being more or less generous and punish those that don't.

Socialism at this point easily ensures a practice that suppresses law-abiding people who have ideas for this or that end, even well within their private rights. When everything is supposed to be equal and to the common good, the condition may well turn into a kind of "terror" against "the basketball players who do well".

If something sparks happiness in terms of lawfulness, why speak against it? Why argue against people's lawful ideas? Thus, a kind of Labour-movement centered Capitalism may be the way forward, i.e., hiring people by decent wages is rewarded or encouraged.

[Bust Nak]

No, I am talking about long term results, especially when it comes to a more equal distribution of assets, which appears to be what you are desiring.

That is what I am desiring, but how is that not "shuffling things around" as I called it?

Now you are presenting a specific situation and comparing it to the market value of currency.

How is inflation not the only thing that is relevant when it comes to the market value of currency?

First, they may not initially raise prices, but they might cut costs by reducing staff, increasing unemployment. Also, as I pointed out, the "middle class" employers might have to bite the bullet and do the actual labor as well as manage the company. Third, there might be a reduction in the number of businesses catering to a given market.

These are acceptable costs.

Regarding tracking inflation, increased consumption instead of increased investment causes greater inflation because it produces less supply and increases demand.

Why would supply be lessen though?

No, that creates inflation, because this short term windfall was taken from those who were using it to maintain current production. In order for the investors to get that back and then invested it as they originally intended, they have to to expend more on inflated resources.

But it's taken from those and given to others who will use it to maintain current production.

They are. Soros, Warren Buffet, Bezos, etc. are all calling for greater taxation for wealth transfer, though they are free to do it themselves. Their argument for not doing so is that, if they do it themselves they will lose market share to those who do not do it.

The what now? These are liberals, they do do it themselves.

That is exactly the same principle that causes small and medium size businesses to loose market share when there is government taxation for wealth transfer. Those smaller firms do not have the flexibility that the big firms do. Also, the big firms can work behind the scenes to minimize any effect the taxation would have on their specific business.

And yet, these large firms are fighting against minimum wages and higher taxes. Why?

[Furrowed Brow]

Well, if we are looking at how things "really work", there is no good economic system.

Here I think we may be near agreement. Certainly there is no perfect system. A degree of pragmatism and flexibility is needed.

I was not blaming Socialism, but pointing out that Capitalism is not the cause. The cause is institutions established by men.

Here I think we near agreement again. There has always been inequality and wealth and power has always tended to accumulate to a thin layer of society. It does not matter which system we are talking about i.e. monarchy, feudal, slavery, totalitarian attempts at communism, fascisms and the various attempts at capitalism. However some systems seems to be more preferable than others and give better results depending on the metric we apply.

Wealth redistribution does not address that. It just makes the government the overlord of industry. This does not make industry moral, it just makes it easier for the government to consolidate power.

Hear we begin to diverge.

Here's where I stand. Whilst government can become totalitarian and authoritative, under a capitalist dominated economy I have only two protections from employers. Theres are government and unions. I actually want government to have sufficient power to protect my interests and work on my behalf. True - reality can often be a let down but I fear the world where anti unions laws are strong and governments are weak to intervene.

It is true that capitalism does not always work. First, there must be a sustainable social structure to enforce personal property rights and arbitrate contractual disputes. Once that is established, capitalism flourishes. The world banking system and global corporatism can occur in a socialist as well as a capitalist environment.

True.

In fact, it can be argued that socialism is what created the world bank and greased the skids for global corporatism.

I think the world bank is guilty of doing just that but hardly socialism. That is a thin reach.

However, my point here is that those things are not necessary parts of capitalism. What is more important than capitalism for a healthy economy is a governmental structure that acts as an honest and impartial broker in enforcing personal property rights and arbitrating contractual disputes. From what I have seen, a government based on checks and balances, that takes into account competing self interests, as capitalism does, is the best way to achieve this.

I'm sorry I just don't see capitalism as healthy. We can point to the oceans full of plastic bags and detritus as both symbolic and a practical problem. We can point to factories collapsing in Bangladesh, lock-ins in Indonesia and the nets around the roofs of Chinese factories to prevent the worker from throwing themselves off. We could point to the American rust belt, to the chemicals in our foods, to workers tagged in Amazon warehouses, the fact we have to get in a car and drive to a supersized supermarket because there are no more local stores. I could point to the way corporations externalise their costs like the the roads and rail they transport their good upon, the long term cost of cleaning up the pollution they have created, etcetera and how in this mature stage of capitalism they have skilful managed to slinked out of paying the bill. And from my previous post all that colonial, neo colonial stomping around the world I clearly see as a product of government working in the interest of capital and major corporations pursuing the self interests of their owners and shareholders. I could go on and on.

But we also need to dig deeper and ask about those competing self interests and how they are created. Marx identified that the capital owner formed a different class to the laboured worker and they have competing self interest. But this competition of self interests arises within the capital model. I could point to the cooperative business model to give a practical example of how to break down this competition.

To be honest I don't have much of an issue with an economy dominated by mom-pop businesses. But we don't live in that world so much anymore. We live in a world of major corporations. I see this as deeply negative and not the fault of oversized government. Like my monopoly analogy the math of capitalism was already taking us here.

I guess the difference between us is that I see wealth and power as always managing to tip the monopoly board in its own favour.

[Furrowed Brow]

Capitalism under (true) democracy and human rights (UDHR) should be better than all other options as it rewards initiatives for making contributions toward improvements of all kinds. In this way, Capitalism serves people.

Hmm. Capitalism serves to deliver profit to the capitalist. This may promote wider social good or it may not. Capitalism has proven itself particularly good at providing a wide range of consumer goods and entertainment to a mass of people. But it has it's negative side. the problem shows itself if we ask the question why would the capitalist want the consumer to want to consume less? The question answers itself. an obvious application of the point would be cigarettes but the point also shows itself when we look at how fat people are getting. As the comedian George Carlin pointed out we have plenty of choice of ice-cream flavours. It is true there is a wider choice of produce from around the world available, but it is clear people are getting fatter on a high calorie high in sugar and high in salt diet heavily marketed to them. Poor areas are often saturated with fast food outlets where there is a near desert of healthy produce available. Those who prefer to accentuate personal choice as the root of the problem probably miss the point that capitalism often puts hurdles in the way of people making better choices and is particularly adept at putting temptation in their way. For example the largest owner of play areas in America is McDonalds because research shows that if a child gets the taste of a food before the age of 7 they will always want to eat that food. So McDonalds puts play areas in close proximity to their food outlets wherever possible. This is McDonalds using their initiative.

The point about initiative and improvement is moot. If we look at the technological change: the innovation with maybe the most profound social ramification in the last twenty years it is the internet. This was developed within a government project and given away free by its inventor and then controlled by governments. As economist Mark Blyth and Yanis varoufakis like to point out the Apple iPhone is full of military patents. GPS for example was developed within the military. The history of capitalism shows it is not particularly innovative and is often resistance to innovation. For example Thomas Edison was opposed by gas companies who lobbied against his new electrical lighting and then Edison lobbied against the innovations of his competitors most notable Nicholas Tesla. Another example is how Standard oil successfully lobbied city official across America to the remove the new electric buses and trams and replace them with the combustion engine. I could point to the plethora of rumours of new technologies squashed by big oil but that is difficult to quantify and wanders into conspiracy theory. But there is evidence major corporations lie and misrepresent data - be that motor companies hiding data about emissions or big-pharma misrepresenting studies into some new product is not what they pretend it is. then there are the socially worrying trends like just six companies owning mainstream media, news and entertainment.

The point is capital seeks out the innovation it can sell at a profit and where is can it seeks to dominate its market and control the consumer.

Principally,
1 Mn people service the same 1 Mn people, including oneself. Then 1 Mn services if individual services by administration of robots. Then this means 1 Mn $ income by 1 $ for each person served, affording 1 Mn products and services including the service to oneself.

Proof: Everyone can become dollar-millionaires on Earth and at the same time affording many products and services if not exactly 1 Mn services and products, i.e., living the life of a dollar-millionaire!

The future looks really BRIGHT!

I am not so hopeful. When the robots come...and they are coming....I suspect wages will be reduced to zero. At this point the need for a mass industrial work force will be gone and unemployment is going to spike and remain permanently high. The age of the consumer will wither. When that happens we will be facing major social dislocation. The survivors of the violence that will ensue may be the ones facing a brighter future.

Socialism at this point easily ensures a practice that suppresses law-abiding people who have ideas for this or that end,

I've worked for too many companies where management is determined not to listen to the brightest workers with the best ideas. Decision and innovation trickles down not up. I think what is true is the pyramid management structures stifles innovation. This is true of government, socialism and large corporations.

[help3434]

[Replying to post 1 by 2ndRateMind]

To borrow from Churchill capitalism is the worst economic system except for all the others that have been tried. Sure it has its downsides especially for those who don't have a lot of resources, but alternative is there that doesn't have bigger cons.