Capitalism and laissez-faire
23 Apr 2008, 11:27 am
Companies employ workers to do a specific task for a specific reward. If they had the capability or drive to run a company then they should be doing that.
Workers are just that, workers. To whatever level of skill or responsibility they might rise, until they take on the risk of entrepreneurship... they should remain just that.
And investors have a say because it is THEIR money that is going into the company. They risk their money on a venture and so have a right of say in the use of that money. Workers are paid to perform a task, which does NOT grant them any such privilege.
Anubis
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23 Apr 2008, 12:28 pm
Neo-liberal economics is the problem.
Capitalism is neither good nor evil, in my opinion. There are several types of capitalist economy. It's how the system is run that's the issue. Whereas in a more mixed, but not command economy, the socio-economic inequality gap tends to be reasonable, in many free market economies, most notably the United States, the gap between rich and poor is very wide. As is shown, since the economic liberalisation of the eighties, consumption has gone up, and economic equality and government spending have gone down. Corporate interests have gained increasing influence over government policy, trade barriers have been removed, and many lower-skilled jobs have been lost. The more labour-intensive industries are dying, or have already, out in developed nations, and those jobs have gone to developing countries. Alot of modern economic policy revolves not around wealth redistribution, and a better life for everyone, but wealth creation. The trickle down effect is not evident. The rich are not as charitable as has been supposed.
Those who are not good with money, lose out.
With "unlimited" economic growth, comes dire consequences. Those at the bottom lose out without government help. Even the middle classes can lose everything if they fail to keep up with their mortgage and loan payments. Selfish capitalism only really benefits the rich. It is not freedom. It is tyranny disguised as such. Corporations are controlled by the consumer, true, but are consumers not ruled by their employers?
Unlimited economic growth also has the effect, of course, that it is unsustainable. No matter what swing you put on it, it involves consuming resources more and more and more and more and more and more and more and more and more and more... until they run out. Most resources are unrenewable at the moment. Thus, without regulation, it is unsustainable. There will always be a group at the bottom, with scare resources, in a laissez-faire economy.
I would put less emphasis on unlimited economic growth, but rather, directed economic and technological advancement in the "best" direction. Capitalism is compatible with a free, fair, and intelligent society, neo-liberalism is not.
_________________
Lalalalai.... I'll cut you up!
23 Apr 2008, 4:55 pm
I don't understand your reasoning. You claim that those paid to do a service by the owners have as much ownership as the actual owners? I do understand that capital and labor are both necessary for a company, but labor is merely a product sold to capital, just as pre-requisite parts for production would be. So, to me, to give labor the power to run the company is the same as making labor = labor +.5capital, thus making capital = .5 capital, which does not make sense to me.
Can you make your idea and reasoning clearer? I mean, I think I have explained sufficiently why the current logic makes more sense to me.
The problem is that you are making capital-centric assumptions that treat labor merely as a tool of capital and that a business's sole responsibility is shareholder profit. I view businesses as autonomous organizations that exist for the vital social need of meeting demand for various goods and services. Shareholder profit should not be treated as an end unto itself, but simply as a way society rewards people for investing capital in a business. In a proper, fair market economy Capital should be the servant of Labor and the Consumer, Labor and the Consumer should not be the servants of Capital.
23 Apr 2008, 6:55 pm
5 is mayhem. When the typical American cant
afford to drive to either one of their minimum
wage jobs, pandemonium will ensue
It's a good thing the typical America does not earn the minimum wage, then (although, if you want to go into the minimum wage in more detail, I'm all for it, it'll be fun). In Europe, they have much higher prices relative to the U.S. and we don't see "pandemonium" over there.
23 Apr 2008, 7:14 pm
I mean no offense, but do you know why most businesses exist and have existed? Individuals create them out of their own self-interest so they can go into the world and attempt to make more money. They don't have to care about a vital social need (although the market tends to meet them regardless), no businesses has its true goal as existing as you describe. That is reality, you could try and argue should a business do what you describe, but you cannot say that is why they exist presently or in the past. The market does not have to care about fairness, and I don't really see why we should be concerned about it anyway. Life is never fair, and people always have advantages and disadvantages (plus attempting to make the market "fair" usually makes almost everyone worse off than before), but if you are good at what you do, you can overcome those disadvantages or play heavily on your advantages. "Labor and the Consumer" do not serve capital either, they may serve in a company and have to exchange hours of their time for money or other compensation, but this deal happens willingly between both parties.
Also, your statement that profits should be a way for society to reward people for investing capital does not make any sense. Profits are what is given to shareholders after the company's costs are paid. I don't think it would be very effective to steal profits and then give them back to different people only if they "invest in capital".
23 Apr 2008, 7:51 pm
Well, I guess my issue is then trying to conceptualize how this new system will work. As you are not just adjusting capitalism, but attempting to overhaul the entire logic of the system.
Capitalism views businesses as creations of capital, owned by capital, that exist to fill vital social needs of meeting demand. The aims are not separate in a capitalist framework as noted in neoclassical microeconomics, as by seeking to pay capital the most, they seek profit maximization, and by seeking profit maximization the company satisfies demand. This works the other way around too, by satisfying demand the company creates high profits, and by getting high profits they attract capital. So, really, even though it is an end in and of itself for the company, it is also seen under the capitalist system as an effective means of reaching other goals.
Capital is served in order to push to create more capital, as capital creation is how an economic system grows. I don't see how this is necessarily more or less fair, in fact, if we hold to a libertarian definition of fairness then capitalism is completely fair so long as it is consensual, and if we hold to an egalitarianist definition, then what matters is not the hierarchy of production but rather the equality of consumption. I am sorry if this seems rather long-winded or apologetic for the system, I am just curious about your economic ideas.
23 Apr 2008, 7:52 pm
I mean no offense, but do you know why most businesses exist and have existed? Individuals create them out of their own self-interest so they can go into the world and attempt to make more money. They don't have to care about a vital social need (although the market tends to meet them regardless), no businesses has its true goal as existing as you describe. That is reality, you could try and argue should a business do what you describe, but you cannot say that is why they exist presently or in the past. The market does not have to care about fairness, and I don't really see why we should be concerned about it anyway. Life is never fair, and people always have advantages and disadvantages (plus attempting to make the market "fair" usually makes almost everyone worse off than before), but if you are good at what you do, you can overcome those disadvantages or play heavily on your advantages. "Labor and the Consumer" do not serve capital either, they may serve in a company and have to exchange hours of their time for money or other compensation, but this deal happens willingly between both parties.
Also, your statement that profits should be a way for society to reward people for investing capital does not make any sense. Profits are what is given to shareholders after the company's costs are paid. I don't think it would be very effective to steal profits and then give them back to different people only if they "invest in capital".
I am not talking about about motives, I am talking about the purpose, the function, of a business in a society. I am starting at the level of functionalist sociology and going from there.
23 Apr 2008, 7:58 pm
Well, I guess my issue is then trying to conceptualize how this new system will work. As you are not just adjusting capitalism, but attempting to overhaul the entire logic of the system.
Capitalism views businesses as creations of capital, owned by capital, that exist to fill vital social needs of meeting demand. The aims are not separate in a capitalist framework as noted in neoclassical microeconomics, as by seeking to pay capital the most, they seek profit maximization, and by seeking profit maximization the company satisfies demand. This works the other way around too, by satisfying demand the company creates high profits, and by getting high profits they attract capital. So, really, even though it is an end in and of itself for the company, it is also seen under the capitalist system as an effective means of reaching other goals.
Capital is served in order to push to create more capital, as capital creation is how an economic system grows. I don't see how this is necessarily more or less fair, in fact, if we hold to a libertarian definition of fairness then capitalism is completely fair so long as it is consensual, and if we hold to an egalitarianist definition, then what matters is not the hierarchy of production but rather the equality of consumption. I am sorry if this seems rather long-winded or apologetic for the system, I am just curious about your economic ideas.
The problem I have with the Libertarian conception of fairness is that it is only "formal," or legal fairness and allows oppressive and exploitative power structures to develop. if your choice is between starvation and wage slavery the concept of "choice" is a cruel joke.
23 Apr 2008, 8:00 pm
I understand that you are not a libertarian Odin, that is not the basis of my post. You simply put down "fair" but no meaning. I am just curious about how your ideas work, and perhaps it can be taken as combative but I am trying to see how your system is better than capitalism as it is typically understood.
23 Apr 2008, 8:01 pm
A business' purpose and functions are determined by the motives of the people who are apart of it. The businessman may say, "I want to to open grocery stores because I think I can do it better than other people and make money". The purpose of that grocery store would be exactly that; however, other benefits are provided because the businessman wants to make a profit (people can now buy groceries, an important societal function, but not the primary one for that grocery store).
24 Apr 2008, 7:05 am
I don't understand your reasoning. You claim that those paid to do a service by the owners have as much ownership as the actual owners? I do understand that capital and labor are both necessary for a company, but labor is merely a product sold to capital, just as pre-requisite parts for production would be. So, to me, to give labor the power to run the company is the same as making labor = labor +.5capital, thus making capital = .5 capital, which does not make sense to me.
Can you make your idea and reasoning clearer? I mean, I think I have explained sufficiently why the current logic makes more sense to me.
The problem is that you are making capital-centric assumptions that treat labor merely as a tool of capital and that a business's sole responsibility is shareholder profit. I view businesses as autonomous organizations that exist for the vital social need of meeting demand for various goods and services. Shareholder profit should not be treated as an end unto itself, but simply as a way society rewards people for investing capital in a business. In a proper, fair market economy Capital should be the servant of Labor and the Consumer, Labor and the Consumer should not be the servants of Capital.
ahh okies! You want reality to be other than what it actually is... and are convinced that wishing will make it so!
Anubis
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Joined: 6 Sep 2006
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Anubis
Veteran
Joined: 6 Sep 2006
Age: 136
Gender: Male
Posts: 11,911
Location: Mount Herculaneum/England
24 Apr 2008, 3:24 pm
That labour and the consumer should not be dominated by capital, but rather, it should be the other way around. Also, that I am strongly against libertarianism for the said reasons. Society has moved on, and resources are plentiful enough, at least in developed nations, to ensure that everyone can have a good standard of life. Libertarianism and neo-liberal economics do not equal fairness. (in my relative opinion, though I think that it is common sense to see that suffering and poverty are negatives which can be avoided, and a basic standard of life should, and certainly can be provided, as a right. Naturally, some economic growth will be sacrificed, which isn't a bad thing. So long as the economy is still driving forward, new jobs are being created. Governments can work with business to create jobs. Inflation can be kept under control by various means.
I'm not saying that everyone should be able to afford new shiny cars, what I'm saying is that I think that everyone in developed countries should be able to afford enough food, and not worry about losing everything because they failed to keep up with mortgage payments. I don't believe that corporations should have as much power as they do now, and I don't believe that base-line poverty is at all neccessary in the modern world. Fair enough, some people may be very lazy, but alot of people are also unemployed, or wage slaves because of economic conditions, and their lack of skills. It isn't their choice. Wage slavery should be stopped. Some of these so-called low-skilled jobs require alot of hard work, and people should at least be able to live on their wages with something left over. Else it becomes a trap.
The free world doesn't seem so free when you see how much power corporations have, and how much suffering neo-liberal economic policies cause for the proletariat, and even the middle classes. People may get de jure equality, but de facto, socio-economic equality has declined since the 70's.
I don't accept the idea of selfish capitalism, which is inherently unfair in terms of socio-economic equality. It is not fair that people are economically downtrodden because of their circumstances. Ultimately, the rich mostly owe their successes to their company's employees and customers.
In an ultra-capitalist economy, exploitation is more unfair than ever. The capital controls the worker, not vice versa. Because, without capital, the worker and their family will starve.
Wage slavery. Originally, the slave was in physical chains. Now, those chains are economic. As I have said before, capitalism is not inherently bad. It is the type of capitalist economy which is "good" or "bad". In the typical economy of 50s - late 70s Europe, the labour controlled the capital. There is strong evidence, that the worker still does have much more economic freedom in European countries than in the United States and most developing countries which have adopted more neo-liberal economic models, since the massive economic liberalisation of the 80s. The UK seems to be more of a mix of the two, though its policies are much closer to those of mainland European nations in some ways. It is nowhere near as much of an economic jungle in the UK as it is in the US.
_________________
Lalalalai.... I'll cut you up!
24 Apr 2008, 3:43 pm
I'm not saying that everyone should be able to afford new shiny cars, what I'm saying is that I think that everyone in developed countries should be able to afford enough food, and not worry about losing everything because they failed to keep up with mortgage payments. I don't believe that corporations should have as much power as they do now, and I don't believe that base-line poverty is at all neccessary in the modern world. Fair enough, some people may be very lazy, but alot of people are also unemployed, or wage slaves because of economic conditions, and their lack of skills. It isn't their choice. Wage slavery should be stopped. Some of these so-called low-skilled jobs require alot of hard work, and people should at least be able to live on their wages with something left over. Else it becomes a trap.
The free world doesn't seem so free when you see how much power corporations have, and how much suffering neo-liberal economic policies cause for the proletariat, and even the middle classes. People may get de jure equality, but de facto, socio-economic equality has declined since the 70's.
I don't accept the idea of selfish capitalism, which is inherently unfair in terms of socio-economic equality. It is not fair that people are economically downtrodden because of their circumstances. Ultimately, the rich mostly owe their successes to their company's employees and customers.
In an ultra-capitalist economy, exploitation is more unfair than ever. The capital controls the worker, not vice versa. Because, without capital, the worker and their family will starve.
Wage slavery. Originally, the slave was in physical chains. Now, those chains are economic. As I have said before, capitalism is not inherently bad. It is the type of capitalist economy which is "good" or "bad". In the typical economy of 50s - late 70s Europe, the labour controlled the capital. There is strong evidence, that the worker still does have much more economic freedom in European countries than in the United States and most developing countries which have adopted more neo-liberal economic models, since the massive economic liberalisation of the 80s. The UK seems to be more of a mix of the two, though its policies are much closer to those of mainland European nations in some ways. It is nowhere near as much of an economic jungle in the UK as it is in the US.
I completely agree.
I think the problem is that the Libertarian types in this thread have conceptions of the nature of the individual and society that are so different from mine that we are shouting past each other. I am a philosophical communitarian (I consider the Self to be a psychological construct dependent on our social environment for it's formation) while Libertarians tend to be Social Atomists.
24 Apr 2008, 4:09 pm
I understand that you are not a libertarian Odin, that is not the basis of my post. You simply put down "fair" but no meaning. I am just curious about how your ideas work, and perhaps it can be taken as combative but I am trying to see how your system is better than capitalism as it is typically understood.
IMO the major Achilles' Heel of Capitalism is the placement of maximizing shareholder profits above everything else, including the law, morality, and social and ecological responsibility. If it is more profitable for a company to break a law and pay the fine then it is to obey the law the company will break the law. If it is profitable to lay off some employees and squeeze more productivity out of the remaining employees the company will do that even if it is bad for the well-being of the employees. If it is profitable for companies to subvert democracy by bribing politicians companies will do so (which is why economic power is political power, they cannot be separated); and then politicians will appoint judges that protect those bribes as "free speech."
