Capitalism only works...

Two hot topics for the price of one

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Capitalism only works...

Post #1

Post by 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.

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Re: Capitalism only works...

Post #11

Post by bluethread »

Bust Nak wrote:
bluethread wrote: Whether I think the shifting is a bad thing or not, it is what will happen. The problem with your preference is that it undermines the currency...
Sure, but it takes time for the market to reach a new equilibrium, and during that time, those with less currency is given a boost. The effect on the actual economy may well be minimal, but boosting the economy is not the point. Wealth redistribution is the point. Given how wonky the distribution of currency is, a slight boost is all it takes to lift some people from long term poverty.
So, you are saying that a short term shift results in a long term change in the economy? :-k Ah, no. 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. 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. 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.
Last edited by bluethread on Fri Oct 13, 2017 12:17 pm, edited 1 time in total.

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Post #12

Post by bluethread »

2ndRateMind wrote:
So, if you want to persuade me that capitalism is 'a good Christian thing', explain to me why this disparity in wealth and life chances is 'a good Christian thing'.

Best wishes, 2RM.
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. Some is tyrannical socialism and some is simply philosophical socialism, but both have a similar effect. Under capitalism, the government just enforces property rights and arbitrates contracts. The market distributes the goods and services based on the ratio of ones consumption to ones investments. Those who invest their assets profit and those who consume their assets go without.

By the way, this is not tied to currency. The statistics are just stated on a currency scale for the sake of comparison. Transferring currency does not improve the plight of the poor, transforming the economy from consumption based to investment based is what improves the plight of the poor. Free market investment in the third world is the solution. However, as soon as the investments starts to take hold someone shouts "Imperialism" and things get shut down. A few years ago people were touting "micro loans". That is exactly the same thing on a small scale. So, it is ok to use capitalism to help the poor, but only if it done on a small scale? Sounds to me like these people are more interested in maintaining an ideology than actually helping the poor.

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Re: Capitalism only works...

Post #13

Post by Bust Nak »

bluethread wrote: 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.
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.
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.
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?

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Post #14

Post by 2ndRateMind »

bluethread wrote:
2ndRateMind wrote:
So, if you want to persuade me that capitalism is 'a good Christian thing', explain to me why this disparity in wealth and life chances is 'a good Christian thing'.

Best wishes, 2RM.
It isn't.



Well, I'm glad we are agreed on that, anyway!
bluethread wrote: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.
bluethread wrote: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. Africa, India, even China these days, and most of South America, all where most of the poor are, are living in economically capitalist systems. The problem is, they are living in unregulated capitalist systems, where the rule of law is undifferentiated from the rule of the rich and powerful.
bluethread wrote: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?
bluethread wrote: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.

Best wishes, 2RM.

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Post #15

Post by 2ndRateMind »

bluethread wrote: A few years ago people were touting "micro loans". That is exactly the same thing on a small scale. So, it is ok to use capitalism to help the poor, but only if it done on a small scale? Sounds to me like these people are more interested in maintaining an ideology than actually helping the poor.
Furthermore, it seems like you really need to get a hold of a copy of EF Schumacher's classic 'Small is Beautiful'. It seems that small scale, human scale interventions in economies are far more effective at alleviating poverty than the kind of massive, national or global scale projects capitalists are keen to promote, which plunge whole nations into debt, and prevent government investment in health care and education, but from which multinationals can extract profits of the magnitude they need to sustain themselves and pay for the CEO's private jet and gin palace yacht.

Best wishes, 2RM.

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Re: Capitalism only works...

Post #16

Post by 2ndRateMind »

bluethread wrote:
2ndRateMind wrote: If you don't have capital, it won't work for you.
Everyone has capital. If nothing else one has one's own body.
Thing is, the body can be an economic liability. One needs to feed it, clothe it, shelter it from extremes of climate, protect it when one is asleep, and so on. Sometimes, for the very young, the very sick, and very old, these needs are still imperative even when one cannot work to earn.

As Karl Marx noted, the result is that the employer, who need not necessarily hire, and even when so, need not necessarily hire any particular individual, is generally in the strong negotiating position, and in a position to drive down wages.

Consequently, I do not recognise owning one's own body as an unmitigated economic asset.

Cheers, 2RM.

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Re: Capitalism only works...

Post #17

Post by 2ndRateMind »

bluethread wrote:
2ndRateMind wrote: 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.

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Re: Capitalism only works...

Post #18

Post by Furrowed Brow »

2ndRateMind wrote: If you don't have capital, it won't work for you.
Yep.
2ndRateMind wrote:This is because people, even those with masses of money, are loath to part with it.
Whilst most likely true I don't think this is the major flaw in the capitalist model.

I think the board game Monopoly points to a deep flaw of capitalism. Everyone starts out equal - it is a free market - but eventually someone ends up owning all the streets and all the hotels and has all the money. Never known a game where that is not the end result. In doesn't matter if someone is greedy or not or just playing for fun, the rules and math of chance ensures the same outcome. In 2017 in the real world it is starting to look like we are in the later stages of the game of monopoly.

And of course in the real world people don't even start out equal. Like starting a game of monopoly where some people already have hotels and some people start with no money. Of course the lucky and more able player could building a fortune from nothing and the unlucky fool could lose a fortune...but on average the poor stay poor and the rich stay rich.

Instead of focusing on the extreme I tend to ask about the average standard of living and the life chances of the average person with average abilities who is prepared to put in an average amount of work. What does capitalism offer them? And the answer to that....in the US wages have stagnated for forty years and in the UK wage have declined in the last ten years. On the other hand wages in China have seen robust increases. However terms and conditions are still poor. Whist the cheerleaders for capitalism may point out this a matter of markets finding their equilibrium there is a human cost attached to the decline in the West and dreadful working conditions in the East. Focusing on the West this decline is not down to lazy people not prepared to work this is working people and the average they can expect. Even if this decline is unavoidable and the best of all possible worlds the economist's phrase "equilibrium" and other similar turns of phrase should invite a feeling of unease at least when measuring human suffering in such cold terms.

And for a moment I will turn to the more extreme end of the spectrum. Judging by the explosion of homeless sleepers appearing in the doorways of my local high street with sleeping bags there is a lot of suffering right now. Anecdotally - the other evening I watched one of those doorway sleepers picking up cigarette butts to make a smoke. This was not an old drunk this as a young guy who looked like he should be at university or on a training scheme. There are two way to respond to these kinds of stories. Blame the poor person for not pulling themselves up by their bootstraps or blame the system. I look at it this way - if one person is doing something then blame them, if thousands of people or doing something then question the system.

2ndRateMind wrote: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.
Yes this is the metric. We also happen to live in the age of globalisation where wages have to compete with the rest of the world and we have a looming future where millions of jobs will be lost to automation. Automation that when it is ready and fit for purpose will inevitably be introduced to lower the cost of labour to the capitalist. It is uncertain whether innovation will be able to replace those jobs at a sufficient rte to avoid major social dislocation.

One trend that is clear at least in the UK is that many of the traditional well paid working class jobs are in decline. For example Uber has hit the income of London black cabs badly and taxis generally. Driving a heavy goods vehicle was once a very well paid job. Not so now. Just a couple of examples of many. In this mature phase of capitalism the chances of a working class person making a good living is diminishing.
2ndRateMind wrote:This is not a 'good' system for the majority of humanity. If it is not good, then it cannot be Christian.
I would point to the Quakers who have an excellent history of industrial relations. Quaker owned business in the UK have a history of ensuring education and good housing for their employees. They saw their business as means to do good.

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Re: Capitalism only works...

Post #19

Post by 2ndRateMind »

Furrowed Brow wrote:
2ndRateMind wrote:This is not a 'good' system for the majority of humanity. If it is not good, then it cannot be Christian.
I would point to the Quakers who have an excellent history of industrial relations. Quaker owned business in the UK have a history of ensuring education and good housing for their employees. They saw their business as means to do good.
I agree with pretty much everything you have said. I'd just like to point out that as far as Quaker employment practices were concerned, though undoubtedly enlightened by 18th and 19th century standards, they were also patriarchal and patronising by standards of today. If the wealth of the mill and factory owners had been more equitably distributed, then their self-serving charity to their workers would have been less necessary.

Best wishes, 2RM.

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Re: Capitalism only works...

Post #20

Post by paarsurrey1 »

[Replying to post 18 by Furrowed Brow]
Furrowed Brow wrote:
And for a moment I will turn to the more extreme end of the spectrum. Judging by the explosion of homeless sleepers appearing in the doorways of my local high street with sleeping bags there is a lot of suffering right now. Anecdotally - the other evening I watched one of those doorway sleepers picking up cigarette butts to make a smoke. This was not an old drunk this as a young guy who looked like he should be at university or on a training scheme. There are two way to respond to these kinds of stories. Blame the poor person for not pulling themselves up by their bootstraps or blame the system. I look at it this way - if one person is doing something then blame them, if thousands of people or doing something then question the system.
I look at it this way - if one person is doing something then blame them, if thousands of people or doing something then question the system.
That is correct. Humanity demands that every human should get clean air, clean drinking water, a safe place to sleep and something healthy to eat. These are the basic needs, the system should provide, otherwise, the whole society will suffer.

I like one's matter of fact approach.

Regards

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