The author of The Case for Legalizing Capitalism describes the topic of poverty as a key battleground in the war of socialism versus capitalism. He examines how much poverty exists in the United States, and how we can truly eliminate it. FULL ARTICLE by Kel Kelly
Source link: http://blog.mises.org/13821/the-poor/
The Poor
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Best of luck with this much-needed book!
Poverty has been one of the main stumbling blocks to embracing laissez faire …
Barry: Thanks for the link to your essay. It provides much food for thought.
“So the only real question is: Who can better provide these — civil society (“the market”) or the political state? The answer as it regards wealth has now been settled: “[C]apitalism has won,” conceded left-aligned economic historian Robert Heilbroner in 1989. “Socialism,” conversely, “has been a great tragedy this century.” Paul Samuelson’s famous textbook a few years later deemed state production the “failed model.”
Let’s put those quotes in context. By 1989 it was obvious that both were speaking of the American model of government-managed free enterprise. Heilbroner and Samuelson were not speaking from an Austrian POV. And demonstrably our way of life was more productive than was that of the Soviet Union, then in serious decline after never coming close to catching up with us.
“It is a society of free people, not coercive government, that produces wealth.”
Again, what he was saying was that it was the USA during the 1980s that produced wealth, as opposed to the Brezhnev central planning model. Anyone would be forced, from the evidence, to agree.
“And yet, most bizarrely, liberals still believe it is that government, not those people, that possesses the compassion necessary to redistribute some of that wealth to those who find themselves in need of aid (a percentage of any population).”
Maybe then there were still a few. Nowadays not many people of any persuasion would offer that our government leaned toward compassion. Whichever the party in power, our elected officials listen closest to those whose dollars speak the loudest. And they are not the poor.
Your premise is that it will be an ungoverned civil society that rescues the poor from their poverty. The only thing I would ask is that you go into the mechanics of such a thing; intuitively, it’s unlikely to ever happen. Untrammeled capitalism, free from regulatory influence or taxation, will over time accrue to itself all the money in the system. And the reason for that is, as I’ve said below, whenever a member of the working class gets a little money they have to spend it on necessary purchases. So the money they earn, quickly spent, will return to the profit stream.
They are perpetually beholden to their employers, trading their labors for alms when requested to, and going without when not. This in an atmosphere of perpetual cost trimming.
If there is no provision for any mandated counterflow, the poor will grow poorer… as they do currently. Because the gainers in a purely free-enterprise system have no inner mandate to bestow charity. They’re in business merely to maximize profit.
So, as you say, this condition is indeed a big stumbling block toward the establishment of a laissez faire regime. A majority among us would lose by such a move.
History tells me your logic isn’t very, well, logical.
You made a few critical errors that destroys your entire position:
1. You assumed the system is closed.
2. You assumed the system is zero-sum.
3. You assumed that money is what is valuable.
4. You assumed that the system is circular with a “resource leak”.
5. You assumed that money is accumulated as the end-desire.
6. You ignored the rapid reduction of poverty in this nation during the minimal government years of 1873-1898.
7. You assume that people are cruel and selfish and would be unable to provide for the services.
8. You assume that charity is the only end method of defeating poverty.
Now to demonstrate the errors:
1. New resources, competencies, and people are entering the market all the time. Old guards are also exiting. By your logic, some of the most powerful companies today should be Sears and Roebuck’s, Pan-Am Airlines, IBM, Apple Computers, and Westinghouse. However, those companies have either vanished, become bit players, or were purchased by newer rivals.
2. Wealth isn’t gained by taking it away from someone else. In a transaction, BOTH parties become wealthier. A company gets wealthy by satisfying the wants of the largest volume of people as possible. The more the merrier. Your assumption that companies simply prey on the consumer is absurd, it assumes that the consumer is a WILLING VICTIM. Are you willingly victimizing yourself?
3. Money isn’t valuable, it’s the end purchase that is. Compare yourself with John Rockefeller in 1880. He had, then, vastly more money than you can hope to have today. However, who is truly living the better life, him or you? I would say, without hesistation, that you enjoy a higher standard of living than the person that is considered to be the wealthiest man in all of human history (possibly vying with Caligula, who owned the entire treasury of Rome at its height). It doesn’t matter if the guy on top has more money if prices are constantly falling due to competition (see 1873-1898 below).
4. This is in line with #3, that somehow resources are slowly leaking out to just sit idly by in some rich person’s vault. That’s Socialist thinking. People don’t get wealthy because they sit on their resources. They get wealthy by hiring people, paying them good wages, making them more productive, and reinvesting their resources back into the system. Meaning hiring more people and expanding productivity.
5. People don’t go to work for money, they go to work for things. Today people simply overextended their resources into large things and promised too far into the future their resource production. They chose to accumulate those resources into houses and luxury items. The money itself only represents what was produced and what will be used. No one just sits on money.
6. The most rapid reductions in TRUE poverty in this nation happened without the existence of any sort of social safety net. No welfare, no social security, no food stamps, no minimum wages, nothing. Yet, somehow, poverty went away. Social safety nets were formed after the elimination poverty, and are only in place to “guarantee” a standard of living far above a legitimate poverty line.
7. The government is made up of people. Government cannot be any more or less honest and forthright than the people that live under it. If the people who live under it are greedy and selfish, then accumulating power into a single organism is the absolute peak of dangerous behavior. Government should not be permitted to engage in charitable behavior for any reason becuase it will clearly be to the detriment of those supposedly being helped. If people are not naturally greedy and selfish, then government is an unnecessary waste that has no business in existence as people will naturally care for the less fortunate. In both scenarios, government should not be formed as it will provide no good for the poor, either making them poorer or absorbing wasted resources that could otherwise be used for assistance.
8. Charity has been demonstrated to exasperate poverty and slow its elimination. Humans are biological in nature. Biology, whether its physical or mental, will always exert only enough effort to maintain ease in normal behavior. To get phsycially stronger, for example, you must introduce difficulties and pain on your muscles by lifting heavy weights. Your body will then respond by building more muscle to it can lift those weights with little effort. Poverty is, at its core, a mental weakness. Humanity naturally wants to live an easy a life as possible. Since you clearly didn’t read the article, only some 6% of the population ever stays poor and 30% of the poor become rich during the course of their lives. Poverty is a difficulty that the human works to overcome to settle into an easier lifestyle. By introducing charity, living in poverty becomes easier, thus reducing the chances of ever exiting poverty. Much like how you’ll never get strong sitting on the couch, watching television, and eating chips, the poor will never obtain the necessary skills and drive to be self-sufficient if charity is available. Biology is always about the path of least resistance, and charity is least resistant, so living off charity is superior to exerting effort to be self sufficient.
Very nice post, if not to Michael’s benefit, to anyone else reading this page!
You have the patience of Job.
Better seven plagues than one michael.
I find it’s best to be patient at all times, to rise above it all. But, like all humans, I still snap from time to time. Looking back on some of them, they’re epic.
J Murray: Thanks for a first rate response. This is the kind of thing I was asking for, and kind of expecting never to get. As you’ve gone into sufficient detail to support your arguments I’ll have to address them piecemeal, and not try to cover everything in one post.
1. You assumed the system is closed.
The system is leaky. An enterprise can only expand to the point where it satisfies its market. But increasingly, as buying power accrues to the wealthy and deserts the former middle class, we’re talking about a rich man’s market. There will be new opportunities to build and peddle high-end goodies like boats, watches, sports cars (a subject I note everyone here seems to follow), etc. But these pursuits don’t employ millions. They employ hundreds.
The millions left out by this shift in the market-driven economy are economic zeros. They constitute no demand. Therefore my question was, what compensating mechanism helps them go back to work and start buying stuff again? Anything?
It’s like one of the presidents of Brazil once said at a press conference: “The economy? It’s doing fine! The people? Not so good.”
2. You assumed the system is zero-sum.
Not zero sum, but one in which one party consistently makes greater gains over the other. Reiterate over time and you end up with a net loser and a net winner.
“Wealth isn’t gained by taking it away from someone else. In a transaction, BOTH parties become wealthier.”
The working poor, a very large number of Americans, would disagree. They become no wealthier but instead are fettered by either debt, if they avail themselves of it, or plain poverty: the inability to buy necessities with the wages they earn.
“A company gets wealthy by satisfying the wants of the largest volume of people as possible.”
Profit making forms do expand to meet demand. But demand is only composed of people with the ability and the desire to purchase. The model does not address people outside the equation, with the need but not the ability.
I will offer that once demand has been satisfied, a company would find it wise to offer easy credit in order to capture more customers. But this still will not reach those thrown out of work in a down economy… and I’ve noted many times here that the Austrian prescription would result in an imposed depression, from a shrinking amount of money in the system. We’d have millions of poor families with no source of income, who would be poor credit risks no one would touch.
3. You assumed that money is what is valuable.
For all practical purposes, when we enter the realm of microeconomics, money is what counts. There are an infinitely expansible number of products on the shelf, or that can be put on the shelf. The limiting factor for most of us is access to money, that is, buying power. Cheap credit, when available, is a poor substitute for wages.
Etcetera. Your comments earn higher marks than the norm here.
“The system is leaky. An enterprise can only expand to the point where it satisfies its market. But increasingly, as buying power accrues to the wealthy and deserts the former middle class, we’re talking about a rich man’s market. There will be new opportunities to build and peddle high-end goodies like boats, watches, sports cars (a subject I note everyone here seems to follow), etc. But these pursuits don’t employ millions. They employ hundreds.”
It’s called expanding the market. Yesterday’s rich man’s market is today’s common man’s market. Personal computing was a rich man’s market in the 1970s. Today, I can buy a competent computer for $200. This is a problem of a constantly shifting definition of rich and poor. I’m a middle-class individual, yet I am far weathier and better off than John Rockefeller could ever hope to be in 1880. I live a better life and enjoy more luxuries than nearly every individual in history that ever had the title King, Emperor, or equivelent. Nothing is leaking out. There will always be a gap between the top, middle, and bottom, the only question is if the entire system is shifing upwards. And since I laugh at how pathetic the lives the Caliphs of Baghdad, some of the richest men in all of history, were compared to mine today, it’s pretty clear that the system has shifted upwards. The Brazilian president doesn’t know what he is talking about. Poor Brazilians are better off today than the Roman Senators ever were.
“The working poor, a very large number of Americans, would disagree. They become no wealthier but instead are fettered by either debt, if they avail themselves of it, or plain poverty: the inability to buy necessities with the wages they earn.”
Again, see my first response. The working poor only THINK they’re poor because they’re judging themselves against a constantly moving standard. Every single working poor today would find themselves living a worse life if they traded with a 11th Century Chinese Emperor.
“I will offer that once demand has been satisfied, a company would find it wise to offer easy credit in order to capture more customers. But this still will not reach those thrown out of work in a down economy… and I’ve noted many times here that the Austrian prescription would result in an imposed depression, from a shrinking amount of money in the system. We’d have millions of poor families with no source of income, who would be poor credit risks no one would touch.”
Easy credit is a government driven problem, not a fault with Austrian thinking. The cost of credit is merely the supply of its availability, and in a government controlled system, the apparent availability of credit becomes infinite. When credit is based on savings, then credit cannot be extended to the point where it would put people into such a precarious state. There simply won’t be enough savers to feed the system.
“Cheap credit, when available, is a poor substitute for wages.”
I agree, which is why I support the end of central banking.
Again, a fine post. You’re on a roll, JM.
“Rich” and “poor” are indeed insufficient terms with which to describe the full range of income distribution. What I point to is the fact that our present distributional curve is characterised by one obvious trend: at whatever the portion of the scale you look, the upper incomes are outpacing the lower ones.
That is, the upper 50% outperform the lower fifty. The upper 10% outperform the lower 90%. The top one percent outperforms the lower 99%. And the top one-tenth of a percent out performs the rest of the top percentile. Money is accruing upward, and doing so at an accelerating pace.
I don’t care what a person’s political or economic affinity is. Everyone should recognize this trend as being both unhealthy and unsustainable.
A countertrend is implied. But this can’t happen in a purely free capitalist economy, because there’s no profit in it. Sure, some of the unemployed will always gain employment whenever an opening appears in the Maserati factory. But the trend is for more of these jobs to be lost than are created, in any time frame.
And as it progresses, markets will shrink. Let’s pause for a moment to observe that a million people, each with one modest income, will make more purchases than will one person with a million incomes and 999,999 with none. And that’s the trend we’ve been seeing since around 1980.
I harp on the primacy of markets over mere production for precisely this reason. Production, in our capital-intensive society, is easy. It’s a given that it can always rise to meet demand. But demand? That’s one thing that can’t be created just by giving an order and starting up the mill. It’s the practical limit to production.
I’ve asked many times for someone to illustrate why this isn’t so… so much so that everyone’s tired of me repeating myself. But so far, no one’s been able to do it. Or bothered himself to do it. As a group, you all seem to be remarkably reality-independent. There’s no need for any proof of logically convincing theorems!
2. “The working poor only THINK they’re poor because they’re judging themselves against a constantly moving standard.”
The working poor live in a condition of unnecessary and unpleasant want. They want jobs, medical care, security, adequate food and often just a roof of some sort over their heads. It trivializes their plight to say they occasionally have access to heat in the winter, when Henry VIII had none. Society, if it has any moral worth, has a task before it.
It is your right to disagree, and to not be a part of such a society.
3. Central banking is an issue that will have to wait for another day. It can be abused, but it does have its responsible uses. It’s like saying occasionally someone will get killed in a car wreck, or a gun mishap. Therefore we should ban all cars and guns.
This was actually a prediction of classical economics, one that was disproven long ago. The fact of the matter is wealth (NOT the money; Big Difference) grows much more quickly for the working classes than it does for the upper classes.
“The fact of the matter is wealth (NOT the money; Big Difference) grows much more quickly for the working classes than it does for the upper classes.”
Not the case, Seattle. All the econometrics that have ben performed show that income equality was increasing during the period 1942-73, and that it has been DEcreasing from about 1979-present. And in fact the trend is accelerating.
Additionally, you can’t “disprove” something that takes place over time. Because the full future hasn’t happened yet.
Furthermore, there’s only a single difference between “money” and “wealth” when applied to an individual. Someone with very little, in terms of his possessions plus cash, who still has more needs after all his money has been used up, has no wealth. But someone who, after he’s bought all the stuff he wants, still has a sum of money left over, has “wealth”. It’s the change that remains in his pocket. Plus, of course, his equity– the stuff he owns that has resale value.
You can use the metric of net worth. Zero or below, the guy’s short of money. Above zero and he possesses some degree of wealth.
I guess somebody learned a new word today. LOL, like you know anything at all about econometrics.
government-managed free enterprise.???
The problem of “poverty” is that it is constantly being redefined year after year. Poverty used to mean inability to obtain food or shelter. Poverty today means “Why can’t I have a PlayStation 3 or iPhone?”
The reality is that the United States eradicated true poverty decades ago. There isn’t an argument. Much like the free markets that are always getting blamed for our problems today, poverty in America is mostly a figment of the imagination.
There are poor people who are still living with their parents (of course with a bad relationship) or are out in the streets. The people who *claim* to be poor, but still own a cell phone are not really poor. Yes the poor are people who made mistakes in life, but in this day and age where everything is so riguerous in the finanical markets, it’s very hard for some people to put up with that or truly understand the job market, which can be contritued to the corrupt public schools. Although I do agree with the author that less taxes and less reguatlions in businesses would reduce poverty, none the less to deny there isn’t poor people is just riduclous. There is a reason why the income gap between the rich and poor is the widest this country has ever faced.
The author is not denying their existence. He is putting into perspective their so-called malaise. He conceded in some cases it’s genuine. Of course it is where the government stimulates it or where individuals are too handicapped to find work. But equally there is a lot of poverty that is not absolute but relative, and most of this is contrived, which is the author’s point I think. Misuse of statistics basically by soi-disant egalitarians.
skpg: You say “The people who *claim* to be poor, but still own a cell phone are not really poor.” But I would shed some light on the truly poor.
There are plenty of homeless looking for work. But if they have no phone, no one can call them back for a followup interview, or to offer them a job. So they need access to some sort of phone, and an office, in which to type up and copy their resumes, and a place to change their clothes to go on interviews. In fact they could use some clean, presentable clothes– not always an easy option when you’re living in your car or under a bridge.
Which is why offices for the homeless are such a good idea. They can’t have a cell phone because they don’t have a billing address– or indeed any address. So if someone funds an office, with a receptionist to take messages, they can at least get in the running for a job. They can have a locker to keep their spare set of clothes in. They have access to a word processor and a copy machine, and access to stamps and/or email. And maybe most of all, they have a businesslike environment from which to operate.
It wouldn’t cost that much. I’d have at least one such office in every city that was hard hit by the downturn. It keeps the situation of the laid-off and homeless from becoming hopeless.
“The reality is that the United States eradicated true poverty decades ago. There isn’t an argument.”
Really? Is this because of the mixed economy? The massive state-sponsored safety net? No, you’ll just ignore those things when you need to do so for the sake of your argument. You’ll claim it happened (which it actually didn’t – there is plenty of poverty in America) because of “the free market,” but what free market? We have state-capitalism with a massive state-supported safety net. You want to defend some results of this system as outcomes of “the free market” and decry others as byproducts of “socialism.” Clearly you can’t decide what the system actually is (hint: it’s state-capitalism).
Poverty ended long before most of the safety nets ever existed. It’s not inconsistent. It’s the safety nets that are priming the return of true poverty.
J. Murray pretty much knocked this out of the water, but what theoretical reasons do you have for this? The author has its own. What are yours? Even assuming it WERE true (and it sure as hell isn’t), where would the socialist state get the resources to redistribute wealth and enact welfare? By plundering the produce of the market, of course. Much like in my native country of Sweden.
And he isn’t saying there is no poverty simpliciter. Re-read the bloody article.
When I was about 10 years old, (1980) I used to smuggle food past my mother in my pocket to give to a kid that didn’t eat everyday.
In 4th grade, a classmate was sent to school in his pajamas. (Don’t know for certain, just guessing he didn’t get breakfast that morning)
I met my friend Leroy on the day he was being kicked out of yet another home. Met 6 other homeless teens that lived in the same home as Leroy. (I guess that technically means they were formerly homeless teens)
Travis, his girlfriend and their baby were living in a van a year after I met him in highschool.
Last year, I reported to my children’s principal that one of their classmates didn’t have lunch money and wasn’t eating.
It still exists.
Maybe all of that wealth exists for poor people because they don’t have to use all of their resources because of welfare. The past decades that have seen “the eradication of poverty” have also seen an increase in welfare.
Yes, it still exists, but the existence is so minor you have to resort to personal stories to really find any of it. Apart from the chronically homeless, whom are nearly all severely mentally damaged, there is little true poverty. Even the homeless are significantly well fed.
Tell me, did any of these horribly poverty stricken individuals look like this?
http://media.photobucket.com/image/starving%20child/pfallon/starving_child.jpg
Or was it a case of being somewhat uncomfortable now and again? That picture is what true poverty is. Failing to eat lunch once a week isn’t. None of the people in your story would have perished or even suffered ill health had you failed to smuggle snacks out from your house. All you did was relieve temporary inconvenience. That child in that picture is living in poverty and would trade his entire being to be considered poor by your silly definition.
Poverty today without social welfare would look exactly like the normal human condition of the 1800s. Even 1929-1948 could barely be referred to as poverty by any serious standard.
It’s heartening to know that you don’t consider a person to be hungry if he “eats lunch once a week”. All you’re saying is that you can’t see them from your world, and you don’t care to go looking for them. Therefore they don’t exist.
“HUNGER REPORT 2010
Hunger in America 2010 is the largest study of domestic hunger, providing comprehensive and statistically-valid data on our emergency food distribution system and the people Feeding America serves. Hunger in America 2010 is extremely detailed, drawing on data from more than 61,000 interviews with clients and surveys of 37,000 feeding agencies.
The report shows that hunger is increasing at an alarming rate in the United States, and our network is expanding its reach in response:
Feeding America is annually providing food to 37 million Americans, including 14 million children. This is an increase of 46 percent over 2006, when we were feeding 25 million Americans, including 9 million children, each year.
That means one in eight Americans now rely on Feeding America for food and groceries.
Feeding America’s nationwide network of food banks is feeding 1 million more Americans each week than we did in 2006.
Thirty-six percent of the households we serve have at least one person working.
More than one-third of client households report having to choose between food and other basic necessities, such as rent, utilities and medical care.
The number of children the Feeding America network serves has increased by 50 percent since 2006.”
http://feedingamerica.org/faces-of-hunger/hunger-in-america-2010/hunger-report-2010.aspx
This was just chosen at random. We have ample data to demonstrate widespread hunger in the US due to lack of money.
J. Murray: “Failing to eat lunch once a week isn’t.”
Michael: “It’s heartening to know that you don’t consider a person to be hungry if he “eats lunch once a week”.”
lol
Ya, rewriting the reference that’s a whole two inches above and then attributing it to that same person is funny.
It’s the most blatant example of intellectual dishonesty (outright trolling?) I’ve yet to see.
Yes, everyone in America has it good, even the poor souls taxed at 60% of their income.
No, it was more like a kid thrown out of his home by his alcoholic, drug addict mother than just a little discomfort. With the exception of Leroy, I don’t know what brought the other kids to their situation.
Kids like that don’t view the world as optimistically and logically as adults like you do. And, they have trouble growing-up if they ever do at all. I just don’t think kicking them in the balls with more harsh reality is the best we can do for the world. Luckily for Leroy, he found an adult that cared for him along with a few other kids in a similar situation, which probably did him more good than I could have done for him. They were all required to have jobs and do work around the house.
I have never met anyone that is in as dire shape as the child pictured. I believe social structure is too complicated for you to attribute the overall well-being of Americans to the free market alone, as I cannot fully credit the welfare system for the relative prosperity of the American poor.
What is true prosperity to you? I read over and over that we would be prosperous if only we could get the Fed out of our business. What exactly is it that you are all bitching about?
You all have a very absolute outlook on life. The imagined loss of rights you all suffer is no more zero sum than the system you pine for. Requiring a minimum wage, supplemented by government subsidies for food and housing is hardly a zero sum transaction, considering the wealth we all enjoy. The 30% that make it out of poverty pay it back with a higher progressive tax rate.
Like Michael, you don’t have a working model of a pure free market to base your claims. Your blog is speculative. The debate between you and Michael is only hypothetical. We will never know what the purely free market will bring until we actually achieve it. The truth usually lies between extremes, so I think many of you are just as closed-minded as you accuse Michael of being. He gives well thought arguments, worthy of respectful debate.
And, pray tell, what did I accuse Michael of? If you’ll note something with me (you clearly don’t read the contents of my posts before blasting accusations), I don’t attack individuals, only ideas.
And, yes, getting kicked out of home is a minor inconvenience. It’s interesting how you didn’t tell me the age of this individual. Was Leroy 17? Are you just making Leroy up as a silly ploy to try and call me racist by picking that name when I still refuse to accept the concept of state “safety” nets? You have forgotten that American society is a gigantic EXCEPTION to the vast majority of all human history, including those living today.
I can go out in the world and find 3 billion people, right now, that would literally sell their very souls to be as fortunate as Leroy.
Missing lunch now and again? They’d love that. It sure beats eating away at your own body just to maintain heart and brain function to the point you’re so thin you can’t move.
Getting to stay home and not work until a certain age? They’d love that. Sure beats starting work at the shoe factory when you’re six and expecting to support the entire family.
Argument with Mom? They’d love that. Sure beats getting murdered, dumped, and have no one care at all over that argument.
It was barely 300 years ago when EVERYONE lived lives that would trade away everything to be Leroy. When the normal person had a life expectancy of 21, worked grueling 20 hour shifts at belching factories, wore fingers to the bone, literally, tilling fields by hand, spitting out offsprting by the age of 14 and dying a short 7 years later of pure exhaustion.
Leroy isn’t 70 pounds. Leroy isn’t going to perish at the age of 21 of heart failure. Leroy isn’t going to get poisoned by soot from a coal mine. Leroy isn’t going to till fields by hand and die of skin cancer from being out in the sun from sun-up to sun-down. Leroy will likely live to be 75, and if he isn’t a complainer, will have made something of himself. Tell me, where is the hardship in this? How is Leroy, someone who sometimes misses a meal now and again, on the same level as a Haitian farmer or Indian street urchin? Society’s perspectives of poverty and poor have been so warped that we’ve confused lack of total comfort as poverty. It’s become so warped we support policies of hiring thugs with guns to steal from total strangers to give to Leroy out of some confused sense of charity.
Why not send those thugs to Leroy’s mother’s house? Why not leave the rest us out of this, force her to pay the salaries of the thugs who are there to force her to support the child she brought into this world without the consent of the rest of us that are apparently being forced to be responsible for his care.
And the reason I don’t have a model of a free market is because that’s not what a free market is. A model is something we create for a CONTROLLED system. A free market is, by its very nature, uncontrolled. I can’t model a constantly morphing system. You can’t model a constantly morphing system. No one individual, committee, group, or even every person on this planet sitting down and designing one can model a constantly morphing system. What may be true at this very second in time is no longer true by the time I finish typing this sentence. It’s called the Socialist-Calculation Problem. Any attempts to model an economy will result in failure becuase no one has all the information to model it. That’s why it’s best to be left alone, any attempts to control the system, any attempts to model it, any attempts to apply mathematical formulas to it, will all end in making the whole thing worse. This includes the failure of welfare and safety nets, a system in place for over 60 years, to have any impact on what is oddly called poverty. By their standards, trillions of dollars and entire generations later, poverty hasn’t budged an inch after the rapid decline in the pre-safety net years. At the very least, we’ve seen that state support for the so-called poor doesn’t do any good and isn’t worth continuing.
JM: You seem to be joining the rush to trivialize poverty and hunger in this country. Yes, it’s true that there are poor countries, ones that haven’t the luxury of maintaining safety nets like ours. And hunger and absolute want exist on a scale not seen here.
Is that your argument for removing our own safety net? So we can be more like them?
Our safety net does essential work. The thought that it makes no difference at all in people’s lives is obviously comforting to you… but it’s not true. Without food stamps and ADF support, life would be worse for millions of families. Families that happen to live in areas where there’s no work to be had.
IMO it’s very small of any person to resent that pittance that comes from their taxes to alleviate this kind of want. Especially when the person claims first that poverty doesn’t exist, then that maybe it does, but government relief doesn’t help, etc., down the whole list of evasions and justifications.
It’s a specious nest of argument; as is this one:
“Any attempts to model an economy will result in failure becuase no one has all the information to model it. That’s why it’s best to be left alone, any attempts to control the system, any attempts to model it, any attempts to apply mathematical formulas to it, will all end in making the whole thing worse.”
We live in a world of nearly seven billion people. Everyone on the planet works on a basis of incomplete or faulty information… most especially people in private industry and working in a ‘free’ market. Does that invalidate every effort to ever do anything?
Are we supposed to then just sit with our thumbs in our noses, waiting for the end? To me, we work with what we have. And if we find a job that needs to be done, for instance to alleviate obvious suffering, we roll up our sleeves and get it done. That’s what a government is for, and I support it with my taxes as well as my private efforts.
I can quite understand if you feel resentful. You feel hungry hands grasping for your dollars. Maybe this is not the place for you.
I agree. Leroy has it good. So do you. What are you bitching about? What are you missing out on so badly that you can’t stand the fact that Americans are not impoverished like too many others in the world?
Leroy is white, by the way. My white wife is named Latesha, my white chocolate girl. (you wouldn’t be the first to assume she is black based on name) Wonderin’ what my race is, sir? My oldest daughter has a Jewish name, my youngest has an Arabic name.
Should we have the child you have pictured run cash registers for us in place of the ingrates that do it now? I think maybe our low prices, abundance of consumables and relative wealth are at least partially attributable to welfare. Walmart has an army of lazy dumb poor folk that are encouraged to apply for Federal aid so we can continue getting low prices…Always. Imagine how costly welfare would be if minimum wage weren’t in place to ensure that Walmart pays at least a little for the labor they use. We have decided as a country not to allow our children to sink into that kind of desperate poverty.
J Murray- Maybe “model” wasn’t the best use of words. I simply meant that there doesn’t seem to be many examples in the world that would qualify as a “free market”. The world appears to be evolving into a mixed economy.
“Why not leave the rest us out of this, force her to pay the salaries of the thugs…” I think we already do that. The best we’ve come up with is to jail someone that doesn’t pay child support, which is obviously counter-productive. We end-up paying for the Leroys of the world one way or another whether we like it or not. I imagine foster care would be more expensive than welfare. Keeping someone in jail is probably more expensive. (He was 16).
I apologize, I wasn’t refering to you as being disrespectful.
In case anyone hasn’t, I highly recommend reading Charles Murray’s book American Social Policy, it’s always a classic and very fun to read.
The sheer fact that you can walk into an American mall or bar and not be able to distinguish between those who are poor, lower middle class, middles class, upper middles class and rich is astonishing when you think about it. The sheer fact that those of lower income can pretend–and succeed– to look rich is amazing! You can’t imagine this being the case centuries ago
>The sheer fact that those of lower income can pretend–and succeed– to look rich is amazing! You can’t imagine this being the case centuries ago
One culture, maybe late medieval Europe, legally banned the poor and middle class from wearing the clothes of the rich, implying not merely absurdity by the spread of wealth.
Oilman J. Paul Getty complained that many of his executives could afford a car like his and thus he had no way to distinguish the rabble from the deserving. This was before the $1.2M Bugatti Veyron but its 240mph top speed that may have been a bit too racy for J. Paul.
Isnt this basically the liberal complaint? Andrew Jackson would horrify liberals today, allowing beer-drinking, t-shirted, country music listening, pick-up driving, blue-collar, high school grads into the White House! Why, the very idea! Quick, Michelle, the smelling salts.
Re: Stephen Grossman,
You hit the nail squarely on the head, Stephen. This call for “economic equallity” is nothing more than a ploy from rich liberals to return to the time of aristocracy, so the poor can be CLEARLY “the poor” and the merchant class be looked down with a frown.
>This call for “economic equallity” is nothing more than a ploy from rich liberals to return to the time of aristocracy, so the poor can be CLEARLY “the poor” and the merchant class be looked down with a frown.
I have thought it was merely Marxist equality but agree with your addition. If a university degree and the right clothes and liquor dont confer awed, submissive respect from the t-shirted, what good are they? Yes, the poor must be identifiable as such. Perhaps a big “P” on their clothes. A woman whose Town Hall criticism of Barney Frank in 2009 provoked the excitable Frank to compare her to a piece of furniture is now running against him as MA representative. Can this be tolerated?! Cant liberals pass a law against this…this upstart, this (sputter, sputter) unwashed…person? She probably doesnt even know what brie cheese is! Before theyre booted out, liberals should pass a new subsidy for depressed elitists. Theyre gonna need it. In fact ,the current, liberal New Yorker (online) has a cartoon in which a shrink tells a patient that these are goods times to be delusional. That explains a lot!
Concern for capitalism’s poor is basically an altruist demand to sacrifice to the poor. Its moral, not economic.
I see the poor at Walmart. Theyre unstylish ,fat and and have a difficult time carrying their electronic goodies to their SUVS. If they saw Karl Marx, theyd probably trample him to death.
“I see the poor at Walmart. Theyre unstylish ,fat and and have a difficult time carrying their electronic goodies to their SUVS. If they saw Karl Marx, theyd probably trample him to death.”
You perfectly capture the tone of contemptuous snobbery. That’s a wickedly accurate self-portrait… although less than accurate for “the poor”.
Try satirizing the guy that stands by the road at morning rush hour, holding his sign that says “will work for food”.
“Try satirizing the guy that stands by the road at morning rush hour, holding his sign that says “will work for food”.”
Pick him up and offer him some work around your house in exchange for food, he’ll likely laugh at you and ask for money to buy booze with.
Michael,
I saw you at Walmart. What is up with the pampers in your cart?
Once we raise the courage, as this author did, to list how well off the average poor person is, we need to go one step further. A topic that has been off limits has been the simple question: when is a person indigent and thus deserves our help? Should there be a bright line above which citizens are not only expected to carry their own weight but to also help others as they also have the means? How can we address public policy and liberty issues with respect to the poor when we are afraid of even defining who is “poor” and who is not?
A new thought might be “As ye sow, so shall ye reap.”
I think it’s a personal determination. There is no need to define anything. If one thinks someone deserves help then one can help them. No need for public policy definitions and cookie cutter laws, rules, regulations, etc., etc…..
Unfettered capitalism supports fewer, rather than more, employees. The reason is that they occupy a space in the expense, rather than the gains, column. Why, then, should we suppose that under a capitalism that is, by definition, not beneficent but rather profit-seeking in all its endeavors, either the plight or the numbers of the poor be alleviated?
What we would expect is that under a no-rules brand of capitalism, the sum total of money in circulation would gravitate toward an increasingly fewer number of pockets. The reason is that whenever poor people have some money they have to spend it on something they need– whereupon it returns to the profit stream.
For as long as you’ve been doing this, even the slowest of readers should have read the basics of Austrian economics by now (that are available for free on this site) that answer the inane questions you raise.
I agree. It’s obvious by now that Michael is not really seriously interested in learning anything about Austrian economics, or even economics in general. He’s only interested in trying to disprove any economic theory that doesn’t fit in with his pre-conceived notions of what the government should do to help the unfortunate. In order to learn Austrian theory, he would have to take it seriously, at least provisionally, and he is unwilling to do this.
He’s only doing his job.
Well, you gotta give the Devil his due; he’s good at his job.
do they answer truthfully or its it an incorrect answer?
Take me through it again, Heather. Everyone here likes to say that all the answers are contained in the Sacred Writings. But no one can ever seem to be able to put them into words. Which suggests that either you have never read those holy texts, or that you don’t understand them.
Under unregulated capitalism, there is no motivation to offer alms to life’s losers. By definition, helping them is a debit proposition, and capitalists only choose to operate to their own credit. So what countervailing mechanism do you suggest would be effective, in this ideal world you propose, in alleviating poverty?
michael,
If the number of unemployed rises, the price of labor falls, making new lines of production possible. Furthermore, as capital investment increases, the marginal product of labor likewise increases, raising real wages, even if money wages fall. This was the case during the 19th century, when the rich were getting richer and the poor were getting richer. Being, as you are, interested in the historical record, and given that the 19th century was much closer to “unregulated capitalism” than any period you have cited, this would seem to disprove your assertions.
As for alms, you seem to be interested in helping the poor, and you claim that a majority of people agree with you, so it seems rather odd to claim that charity would evaporate under “unregulated capitalism”–you and other charitable people would provide it.
Now he can pretend no mechanism was shown and continue blathering on his braindead theories.
“As for alms, you seem to be interested in helping the poor, and you claim that a majority of people agree with you, so it seems rather odd to claim that charity would evaporate under “unregulated capitalism”–you and other charitable people would provide it.”
As it so happens, it is a fact that fiscal conservatives donate more to charities than liberals do. Liberals apparently assume that all charity should/will be taken care of by the State.
michael wrote:
“Under unregulated capitalism, there is no motivation to offer alms to life’s losers.”
Here’s where your leftist colors show. Liberalism (in the proper, classical sense, of which minimal state libertarianism and anarcho-libertarianism are both variants) is just a political theory, not an ethical theory. The very point of classical liberalism is that a government should simply set up certain boundaries of behavior, and let people be free to do as they will within those boundaries. This is the space where non-political ethical behavior gets to play. Leftists believe that there should be no ethical sphere outside of the political sphere; they politicize all of ethics, and thus want to make true ethical behavior, such as voluntarily giving to charities, impossible. But classical liberals are not necessarily opposed to giving to charity; far from it. We just believe it should be freely given. What is the motivation? We just believe it’s the right thing to do! Is that so hard for Michael to understand? Or does he buy into the leftist myth that all classical liberals are hard-hearted monsters?
“If the number of unemployed rises, the price of labor falls, making new lines of production possible.”
Those new lines of production, to the degree they are labor-intensive, tend to occur in China. The world has a very large potential labor pool.
“Furthermore, as capital investment increases, the marginal product of labor likewise increases, raising real wages, even if money wages fall.”
Production based on high capital investment tends to rely minimally on labor. It’s more automated. So the result is that unemployment is scarcely affected. And for those who do have jobs, increases in real income (relative to prices) lag far behind unearned income, such as capital gains and dividends. That is, over time the rich get richer and the poor poorer. The only exception is that there will continue to be a small cadre of highly trained professionals whose earnings are in the very high range.
My cousin worked at a pulpwood mill with a hundred employees, making fairly good money. Then they automated, and cut the workforce to a dozen. He studied hard and kept his job, once he had mastered the new control system. In fact he got a nice raise.
The net result: a dozen gainers. 88 losers.
“As for alms, you seem to be interested in helping the poor, and you claim that a majority of people agree with you, so it seems rather odd to claim that charity would evaporate under “unregulated capitalism”–you and other charitable people would provide it.”
You’re looking through the wrong end of the telescope. Individual acts of charity wouldn’t begin to address a condition where there was a structural increase in unemployment… that is, where new job creation perpetually lagged behind population growth. That’s a crisis that pitching quarters into the poor box won’t alleviate.
“Those new lines of production, to the degree they are labor-intensive, tend to occur in China. The world has a very large potential labor pool.”
Asserted, not proven. If the US cannot compete, ask WHY can it not. Don’t just copy/paste bullshit you find here or there as if by itself it proves anything.
“Production based on high capital investment tends to rely minimally on labor.”
It makes labour more productive, hence more attractive to hire, especially as entrepreneurs open new sales opportunities, i.e. more work can be performed with less effort by one person, affording them higher pay. For those who are released from employment, it is not like there is a dearth of work, unless gov’t restrictions get in the way… though the delusional might think so.
Asserted, not proven.
“My cousin worked at a pulpwood mill with a hundred employees, making fairly good money. Then they automated, and cut the workforce to a dozen. He studied hard and kept his job, once he had mastered the new control system. In fact he got a nice raise.”
And the others couldn’t… because?
michael,
“Thinker: “If the number of unemployed rises, the price of labor falls, making new lines of production possible.”
michael: “Those new lines of production, to the degree they are labor-intensive, tend to occur in China. The world has a very large potential labor pool.”"
Firstly, you seem to be contradicting yourself by first claiming that a free market tends to reduce employment and then agreeing that an increase in unemployment produces negative feedback. This will result in a more-or-less constant equilibrium, not perpetually increasing unemployment. The only way I can see for you to reconcile this apparent contradiction is to claim that the equilibrium rate of unemployment will rise over time, which you so far have not done and is contrary to the historical record. If you have another solution, please elaborate.
Secondly, labor-intensive lines of production do not arise in China alone, or even predominantly. Entrepreneurs seek out undervalued labor wherever it is, whether El Salvador, Bangladesh, India, or any number of other places where labor is relatively abundant and capital is relatively scarce. By purchasing these peoples’ labor, entrepreneurs help them raise their standard of living by not only providing them with incomes but also increasing the number and quality of goods available to them. In America, a relatively wealthy country, there is more investment in capital-intensive lines of production because capital is relatively abundant here. It is a basic fact of international trade that capital-abundant countries trade with labor-abundant countries, making both parties better off. Your point about the world’s large supply of labor merely indicates just how much wealth-creating potential there is in the entire world–this hardly seems like a bad thing.
“And for those who do have jobs, increases in real income (relative to prices) lag far behind unearned income, such as capital gains and dividends. That is, over time the rich get richer and the poor poorer.”
The only thing wrong with this statement is the last word, “poorer.” All you have said is that real wages increase at a lower rate than does the real return on investment. This is not sufficient to establish that the poor grow poorer over time, merely that they do not grow as rich as fast as do the already wealthy. You need to elaborate.
“The net result: a dozen gainers. 88 losers.”
If the entire economy worked like a single factory, that might be true. However, as you have already agreed, the free market tends toward equilibrium in labor as in all other things, so what is it that makes you think that, say, 88 other people, or even the same people, will be able to find work now because the pulpwood mill is more efficient?
I should point out that for someone who holds historical evidence in such high regard, you seem to be ignoring the fact that during the 19th century, with a significantly freer market, the poor grew wealthier and unemployment did not systematically increase over time. You seem to be pointing at the last forty years, claiming that they represent the epitome of the free market, and criticizing them as such. This is formally called a “straw-man argument.”
“Individual acts of charity wouldn’t begin to address a condition where there was a structural increase in unemployment… that is, where new job creation perpetually lagged behind population growth.”
Perhaps, but you haven’t explained why job creation would systematically lag behind population growth. Why wouldn’t population growth slow as standards of living fell? Even Ricardo merely claimed that standards of living would remain constant over time due to increasing population; this seems like something new.
I normally wouldn’t bother with this, but for clarity outside of context:
“will be able to find work” should be “will not be able to find work.”
He’s a fetishist for “american jerbs” really.
“Asserted, not proven. If the US cannot compete, ask WHY can it not.”
In labor-intensive areas of industry? Wouldn’t that have something to do with the fact that in China typical hourly wages are in the 80 cent to $1.15 range?
You know that, of course. You’re just trying to be difficult.
“For those who are released from employment, it is not like there is a dearth of work, unless gov’t restrictions get in the way… though the delusional might think so.”
There is absolutely no foundational reason for such a belief. Nor, of course, do you provide one.
The reason my cousin kept his job while others didn’t is that it was announced: “You’ll all be losing your jobs except for the handful that can master the new technology”. It was the same kind of structural downsizing that’s moved through much of the economy, displacing millions faster than millions of new jobs can be created.
It does appear that the only times we can achieve full employment are those times, as in the chart currently posted here, when our economy has been flooded with cheap cash. Look at 2004-06. Plenty of jobs, but a dangerous speculative bubble forming throughout the derivatives and real estate industries.
Thinker: You’re living up to your handle, and raising some thoughtful points.
“Firstly, you seem to be contradicting yourself by first claiming that a free market tends to reduce employment and then agreeing that an increase in unemployment produces negative feedback. This will result in a more-or-less constant equilibrium, not perpetually increasing unemployment.”
In a free market, profit-driven execs will usually try to minimize payroll, as they do any other expense. Thus they have de-funded pension funds. They have downsized employees by the millions. They will attempt any way they can to reduce either wages or benefits, always seeking the least payout they can attain without losing their work force. And in a pinch they will even dump that workforce and move off to Bangla Desh. This is a plain fact of life, and stands alone.
Let’s look at my next assertion. In your words, “an increase in unemployment produces negative feedback.” Again, an observational fact, and one that stands alone. When the workforce shrinks there are fewer discretionary dollars out there looking for products to buy. The mercantile economy contracts, from reduced demand.
So putting these together, how does that result in a constant equilibrium? There’s only one way I can think of.
When we’re in a contracting economy, characterised by a shrinking supply of money available for ordinary purchases, the economy contracts and more and more jobs are shed until it reaches an equilibrium… at that point where a much smaller economy exists only to serve the needs of that nucleus of fortunates who still have lots of money. Stores like WalMart or Target do only a fraction of their former volume; but high-end golf resorts are doing well, and employing a handful of expert grounds keepers.
I think my point is, that’s not a GOOD thing. It happened back in 1929-32, when the money supply was shrinking uncontrollably. And if you’re comforted by the thought that it just reached a new equilibrium, far smaller and with millions of families thrust into destitution by market forces, I’m not. It was a tragedy, and something to be corrected by any means possible.
Were the group here able to wave their magic wands and take over the American economy today, their prescription would be the same: shrink the money supply. Eliminate federal spending, both for social programs and for corporate welfare. And the result would be the same: equilibrium might eventually be attained… but possibly only with 20% of the population unemployed.
“The only way I can see for you to reconcile this apparent contradiction is to claim that the equilibrium rate of unemployment will rise over time, which you so far have not done and is contrary to the historical record. If you have another solution, please elaborate.”
I don’t follow. I see no contradiction, and I don’t assert that “the equilibrium rate of unemployment will rise over time”. Try it again, please, with more connecting thoughts.
2. “Secondly, labor-intensive lines of production do not arise in China alone, or even predominantly. Entrepreneurs seek out undervalued labor wherever it is, whether El Salvador, Bangladesh, India, or any number of other places where labor is relatively abundant and capital is relatively scarce. By purchasing these peoples’ labor, entrepreneurs help them raise their standard of living by not only providing them with incomes but also increasing the number and quality of goods available to them.”
Very true, about seeking out cheap labor. China itself is outsourcing now, to places like Zambia and Cambodia.
That’s the utility of globalization. That was the core justification of how NAFTA was presented to us: we would raise the Mexican standard of living and they would in turn promote American manufacturing– by buying more of our goods with their paychecks.
It didn’t work out that way. The Mexicans lost more jobs than they gained (and came here looking for work). And so did we, in the manufacturing sector. Of all the nations, China was the first to capitalize on the trend.
Which is nice for the Chinese, really. But my concern is with domestic affairs. If America can just find some way to add more new jobs than it loses old ones, I’ll be very happy. And about the only way I can see for us to do that is to expand the money supply recklessly, as was done in 2004-06, inflating bubbles galore and creating the groundwork for an impressively full employment.
That’s not the model we should continue with, of course. I’d like to see whether we couldn’t find another engine for jobs, one that’s more sustainable.
My contention: “.. over time the rich get richer and the poor poorer.”
Thinker: “All you have said is that real wages increase at a lower rate than does the real return on investment. This is not sufficient to establish that the poor grow poorer over time, merely that they do not grow as rich as fast as do the already wealthy. You need to elaborate.”
Hard evidence:
“The typical American household made less money last year than the typical household made a full decade ago.
“To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.
“In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise.”
http://economix.blogs.nytimes.com/2009/09/10/a-decade-with-no-income-gain/
Check out the data this article bases itself on. Employees have a very basic and essential role in both wealth creation and in productivity increases. Yet they’ve had no share at all in the emoluments that flow from these endeavors.
michael,
“When the workforce shrinks there are fewer discretionary dollars out there looking for products to buy. The mercantile economy contracts, from reduced demand.”
I’m afraid this doesn’t help clarify your argument. Your first contention is that a free market economy will tend to increase unemployment over time. You then claim the above. Putting the two together yields the conclusion that a free market economy will always be contracting as firms shed jobs, which reduces demand, which forces firms to cut jobs, and so on. This could make some sense if you had claimed this occurred only in a recession, but instead you claim that this is the norm, which is contradicted by the historical record.
From a theoretical perspective, I’m having difficulty fitting your claims into a macroeconomic model. In AD/AS terms, you seem to be claiming that increased capitalization of production has no effect on the SRAS curve, but causes the AD curve to shift left. This reduces the equilibrium level of output and lowers prices, encouraging firms to capitalize their production processes even more. However, this is contradictory, as in order for an economy to have reached the level of output at which begin our analysis, increased capitalization must have had a positive effect on equilibrium output, not the negative on you are claiming.
“So putting these together, how does that result in a constant equilibrium?”
Capitalization of production causes workers to be laid off, which increases unemployment. This increase in unemployment reduces wages and allows new and preexisting firms to hire more workers. This is an equilibrating process. The best interpretation of your claims that I can come up with is that structural unemployment will increase over time. This is contradicted by historical evidence, particularly from the 19th century, when there was a much freer market than there is today.
“It happened back in 1929-32, when the money supply was shrinking uncontrollably. And if you’re comforted by the thought that it just reached a new equilibrium, far smaller and with millions of families thrust into destitution by market forces, I’m not. It was a tragedy, and something to be corrected by any means possible.”
This has been belabored almost to death. You are ignoring the enormous government intervention that took place during that period, from the Smoot-Hawley Tariff and global trade war, increased taxes and government spending, efforts to keep wages high, etc. Before blaming the Great Depression on the market process, you need to explain how none of these other factors are to blame.
“Were the group here able to wave their magic wands and take over the American economy today, their prescription would be the same: shrink the money supply. Eliminate federal spending, both for social programs and for corporate welfare.”
If the Austrians had their way, they would not shrink the money supply–they would allow the money supply to fall, if demand for cash balances increased. In the short run, this would indeed cause unemployment and a drop in output. However, in a fairly short period of time (historically it has been just a year or two), unemployment would be back at the natural rate and output would be increasing again…and there would be no serious danger of a double-dip. The Austrian way is painful in the short-run, but healthy in the long-run; the Keynesian and Monetarist ways are less painful in the short-run, but provide a less healthy economy in the long-run.
“Employees have a very basic and essential role in both wealth creation and in productivity increases. Yet they’ve had no share at all in the emoluments that flow from these endeavors.”
Firstly, your data seems to contradict your claim, as median household incomes were rising from the 1970s to 2000. That would seem to indicate that workers are benefiting from increased productivity. Second, over the past several decades, household size has been shrinking, so the fact that household incomes fell in the 2000s should not be terribly surprising. Fewer income earners per household yields lower household incomes; there is nothing sinister about this.
Third, even if you don’t accept my first two points, this doesn’t establish that the market process is to blame. If workers are becoming worse off presently, what makes you think that is due to characteristics of the free market rather than of an inflationary monetary policy and government redistribution? The Austrian theory predicts that when there is inflation, those who receive the new money first (the already wealthy) will benefit at the expense of those who receive it later (the already poor). It also predicts that government regulations will protect businesses with political power from competition with less established firms, slowing the process of raising wages to match increases in productivity and also the process whereby unemployed workers are reintegrated into the workforce. Please elaborate on why you think this interpretation is not valid.
“In labor-intensive areas of industry? Wouldn’t that have something to do with the fact that in China typical hourly wages are in the 80 cent to $1.15 range?”
Why are they so low? Why is it a problem? Why is your view so horribly static? Why can US workers not relocate, why do foreign firms not come to the US? Why should they not invest in lower wage workers who were adversely impacted by colonialism and communist regimes? Stop blathering around potentially false, worthless statistics and start thinking for once. Assuming you’re not a troll. Very little evidence that you arent…
“You know that, of course. You’re just trying to be difficult.”I don’t “know” anything of the sort.”There is absolutely no foundational reason for such a belief. Nor, of course, do you provide one.”
Utter gobshite. The foundational reason is, of course, that consumer wants are endless. There are always new, unanticipated wants to be serviced, leading to profit opportunities, whether it includes competing with incumbents or engaging in a little Schumpeterian creative destruction. Why would there be a dearth of them anyway? Such a downright ridiculous proposition. Add a minimum wage, though, and mandatory healthcare provision, and I can tell you why… I don’t consider you worth providing a reason. But that, for the benefit of the non-retarded, is one.
“The reason my cousin kept his job while others didn’t is that it was announced: “You’ll all be losing your jobs except for the handful that can master the new technology”. It was the same kind of structural downsizing that’s moved through much of the economy, displacing millions faster than millions of new jobs can be created.”
Still doesn’t answer my question and still doesn’t prove anything because you are arguing from a rather vague one off situation and extrapolating to the economy at large.
“It does appear that the only times we can achieve full employment are those times,”
Why is “full employment” desirable? What is “full employment”?
” as in the chart currently posted here, when our economy has been flooded with cheap cash. Look at 2004-06. Plenty of jobs, but a dangerous speculative bubble forming throughout the derivatives and real estate industries.”
I don’t see any proof behind that contention whatsoever. Makeshift work is not productive work nor is it economic. But of course, you’re arguing against a regulated economy sans bubbles and juxtaposing it against one with bubbles. Mayhap the retarded regulations should go instead to allow for this “full employment”?
“It happened back in 1929-32, when the money supply was shrinking uncontrollably.”
Why do you repeat this? Not only were countervailing factors at work but Rothbard has contested this with data in AGD, arguing against the distinctly monetarist thesis that the money supply IN TOTAL fell… If you’re too lazy to read AGD he summarises the data in For a New Liberty. Seriously, stop being so intellectually indolent…
Thinker: I really wish you would stop thinking as though universal rules were in place that always dictated that one thing might happen, or that another thing can never happen. It’s an approach for which there’s no basis.
And you assume I argue from the same principles, which I’ve been telling you repeatedly that I don’t. Please digest this.
First, this: “Your first contention is that a free market economy will tend to increase unemployment over time.”
No I do not. Free market economies have diverse effects. They may increase employment, or decrease it, or have no effect on it.
Then this: “You then claim the above. (“When the workforce shrinks there are fewer discretionary dollars out there looking for products to buy. The mercantile economy contracts, from reduced demand.”)
Would it have made more sense to you if I’d said “WHENEVER the workforce shrinks”? If so, please substitute that wording. It’s a fairly good rule of thumb that when you have fewer middle income earners there will be fewer consumer dollars entering the marketplace.
“Putting the two together yields the conclusion that a free market economy will always be contracting as firms shed jobs, which reduces demand, which forces firms to cut jobs, and so on.”
Wrong.
“This could make some sense if you had claimed this occurred only in a recession, but instead you claim that this is the norm, which is contradicted by the historical record.”
Quote me. That’s something I believe is dumb, so I can’t see myself as having written anything like it.
This whole thing is a repetition of your earlier comment:
“michael: “Those new lines of production, to the degree they are labor-intensive, tend to occur in China. The world has a very large potential labor pool.””
And you: “Firstly, you seem to be contradicting yourself by first claiming that a free market tends to reduce employment and then agreeing that an increase in unemployment produces negative feedback. This will result in a more-or-less constant equilibrium, not perpetually increasing unemployment. The only way I can see for you to reconcile this apparent contradiction is to claim that the equilibrium rate of unemployment will rise over time, which you so far have not done and is contrary to the historical record. If you have another solution, please elaborate.”
The best thing to do, if you’ve the interest, would be to wipe your brain free of all those spare electrons and then go back to read what I said afresh.
michael,
“I really wish you would stop thinking as though universal rules were in place that always dictated that one thing might happen, or that another thing can never happen. It’s an approach for which there’s no basis.
And you assume I argue from the same principles, which I’ve been telling you repeatedly that I don’t.”
If there are not universal rules in place, then how is it that you have any idea what causes what? If X causes Y sometimes, c.p., and sometimes does not, how do you know when X causes Y? You need some universal rules in order to make that determination. Otherwise, you are ascribing causal relations not based on any actual connection between events, but merely because you want there to be a causal relationship in that particular instance. Try imagining that you made that statement to a physicist instead; you would be dismissed as a nut, and justly so. I simply have a bit more patience.
“No I do not. Free market economies have diverse effects. They may increase employment, or decrease it, or have no effect on it.”
Allow me to quote you:
“There will be new opportunities to build and peddle high-end goodies like boats, watches, sports cars (a subject I note everyone here seems to follow), etc. But these pursuits don’t employ millions. They employ hundreds. The millions left out by this shift in the market-driven economy are economic zeros. They constitute no demand.” That is, the number of unemployed will increase over time.
“But this can’t happen in a purely free capitalist economy, because there’s no profit in it. Sure, some of the unemployed will always gain employment whenever an opening appears in the Maserati factory. But the trend is for more of these jobs to be lost than are created, in any time frame.” That is, the number of unemployed will increase over time.
“Unfettered capitalism supports fewer, rather than more, employees.” That’s about as clear as you can get.
You said what you said. Admit it.
“Would it have made more sense to you if I’d said “WHENEVER the workforce shrinks”? If so, please substitute that wording. It’s a fairly good rule of thumb that when you have fewer middle income earners there will be fewer consumer dollars entering the marketplace.”
That’s what I was assuming you meant. It’s still absurd.
“Thinker: “Putting the two together yields the conclusion that a free market economy will always be contracting as firms shed jobs, which reduces demand, which forces firms to cut jobs, and so on.”
michael: Wrong.”
I don’t suppose you would care to critique my reasoning, by means other than decrying my use of universal rules?
“Quote me. That’s something I believe is dumb, so I can’t see myself as having written anything like it.”
See above. Believe it.
“If there are not universal rules in place, then how is it that you have any idea what causes what? If X causes Y sometimes, c.p., and sometimes does not, how do you know when X causes Y? You need some universal rules in order to make that determination.”
You’re taking far too deterministic a view of economic behavior. It’s a soft science, not a hard one. The rules are all mushy.
Let’s rephrase my comments thusly: One of the trends in a capitalist economy is that profit-oriented owners will always be on the lookout for opportunities to reduce payroll. Another trend is that when markets widen, they hire new employees. That’s why employment levels sometimes go up, sometimes down. It depends on which trend is ahead.
2. “You need some universal rules in order to make that determination. Otherwise, you are ascribing causal relations not based on any actual connection between events, but merely because you want there to be a causal relationship in that particular instance. Try imagining that you made that statement to a physicist instead; you would be dismissed as a nut, and justly so.”
There ARE no universal rules when it comes to describing human behavior. There are when it comes to describing the motions of subatomic particles. What we have to work with when trying to describe economic behavior is more like extrapolations from evidence. Thus it’s largely a matter of opinion.
BUT… if you tell me there’s some universal rule that X is the case, and I come up with a single instance where X is NOT the case, then I have demolished your statement.
3. When you say “Allow me to quote you:” is there some gap between the first paragraph you quoted and the second? It seems as though some vital connecting thought has been deleted. Any way you could give me a link?
4. However “Unfettered capitalism supports fewer, rather than more, employees.”
I still agree. Unfettered capitalism is always open to opportunities to reduce the number of people on the payroll, without sacrificing productivity. That seems a truism. However that is NOT the same thing as saying that in any capitalist system, the number of employees must go down.
I see your method of argument, to try to pick away at any stray thread you can find. No matter how many words I expend in trying to totally qualify my statements, you always like to take them as saying things like “always” or “never”. Which I rarely do. I’m trying to make my comments no wordier than they have to be… but this sort of thing tries my patience.
A. Profit-oriented ventures are ever on the lookout for opportunities to reduce costs. Payroll is usually a major cost.
B. In a capitalist economy employment may rise. Or it may fall. It depends on a variety of conditions.
How can I make this any clearer?
michael,
“You’re taking far too deterministic a view of economic behavior. It’s a soft science, not a hard one. The rules are all mushy.”
The rules are all qualified with ceteris paribus. You are correct to point out that ceteris numquam paribus sunt, but that does not make the rules any less valid.
“One of the trends in a capitalist economy is that profit-oriented owners will always be on the lookout for opportunities to reduce payroll. Another trend is that when markets widen, they hire new employees. That’s why employment levels sometimes go up, sometimes down. It depends on which trend is ahead.”
Okay…so what’s your point? All you seem to be saying is that in a capitalist economy, unemployment may go up or down. This is no great insight, and certainly not sufficient to condemn the free market, as you have been doing.
“There ARE no universal rules when it comes to describing human behavior.”
Counterexample: Man acts. Perhaps instead of simply declaring this to be so, you could trouble yourself to read Mises and see how he does? Otherwise, you’re simply expressing your opinion.
“It seems as though some vital connecting thought has been deleted. Any way you could give me a link?”
They’re actually from different posts; I just forgot the closing quotation marks. And I’m in a bit of a hurry, so you’ll just have to scroll up on your own.
“Unfettered capitalism is always open to opportunities to reduce the number of people on the payroll, without sacrificing productivity.”
Firms are interested in reducing their work pool, but the economy as a whole is not. You have not explained why the entire economy functions exactly like a single firm.
“… but this sort of thing tries my patience.”
You have no idea…
“A. Profit-oriented ventures are ever on the lookout for opportunities to reduce costs. Payroll is usually a major cost.
B. In a capitalist economy employment may rise. Or it may fall. It depends on a variety of conditions.”
If this is all you were claiming, we would not be arguing.
“The rules are all qualified with ceteris paribus. You are correct to point out that ceteris numquam paribus sunt, but that does not make the rules any less valid.:
This kind of thing is absurdly pretentious. In English, why don’t you just say you have no adequate response to my comments?
Also, thanks for ‘fessing up that you were patching together different comments of mine, so that taken from any context they appeared to be making an incoherent point. Those are not quotes, they constitute disinformation. Please don’t use words like that and attribute them to me.
I don’t think highly of your tactics. If you want to comment on something i’ve said in the future, please start with what I actually said, and say something in reference to it.
michael,
“This kind of thing is absurdly pretentious. In English, why don’t you just say you have no adequate response to my comments?”
Minime, quod tu caudex es. I don’t say that I have no adequate response because I do have an adequate response, you have just ignored it. All economic laws, in fact all scientific laws, are qualified with ceteris paribus. You claim that there are no economic laws, which allows you to make whatever absurd statements you like without having to actually justify them. You have no way of avoiding the post hoc ergo propter hoc fallacy, consequently make it repeatedly, and refuse to even admit the possibility that you are making it. This is both extremely annoying and intellectually dishonest.
“thanks for ‘fessing up that you were patching together different comments of mine, so that taken from any context they appeared to be making an incoherent point. Those are not quotes, they constitute disinformation. Please don’t use words like that and attribute them to me.”
I did not “confess” to any kind of intentional disinformation. All I said was that I forgot to add the closing quotation marks. And looking back at what I wrote, I didn’t even do that (I was in a hurry when I wrote my last comment). After each of your statements, I rephrase them. You do not dispute my interpretations, but merely claim that I am not being true to your statements by how I arrange them. This is quite disingenuous, and highly annoying.
“I don’t think highly of your tactics. If you want to comment on something i’ve said in the future, please start with what I actually said, and say something in reference to it.”
Well I don’t like your tactics either: making sweeping claims; when they are dismembered, qualifying them to the point of being meaningless; and refusing to accept that you made your original claims. I do use your actual statements, and if you had any intellectual integrity, you would admit it. At this point, I think you’re just being petulant about having been proved wrong.
Thinker: Here is the specific nature of your intellectual dishonesty. You offer two disconnected quotes from me, with an implied connection:
One: “There will be new opportunities to build and peddle high-end goodies like boats, watches, sports cars (a subject I note everyone here seems to follow), etc. But these pursuits don’t employ millions. They employ hundreds. The millions left out by this shift in the market-driven economy are economic zeros. They constitute no demand.”
Two: “But this can’t happen in a purely free capitalist economy, because there’s no profit in it. Sure, some of the unemployed will always gain employment whenever an opening appears in the Maserati factory. But the trend is for more of these jobs to be lost than are created, in any time frame.”
By offering these in this manner you make it appear as though I am making the argument that (a) employment will be reduced in an economy where disposable income becomes concentrated at the top… but that (b) this can’t happen in a purely free capitalist economy, because there’s no profit in it. And this is an argument that (a) I never made, but (b) is easy to ridicule. It’s disingenuous and no way to approach any intelligent level of discourse.
To which charge you blithely reply “I did not “confess” to any kind of intentional disinformation. All I said was that I forgot to add the closing quotation marks. And looking back at what I wrote, I didn’t even do that (I was in a hurry when I wrote my last comment). After each of your statements, I rephrase them. You do not dispute my interpretations, but merely claim that I am not being true to your statements by how I arrange them. This is quite disingenuous, and highly annoying.”
No. I don’t accept that. It was fraudulently intended.
Do I dispute your interpretations? Every one of them. Do I dispute the evidence you offer? That too. The issue, at bottom, is that you believe we can know nothing unless there’s some handy universal law that can be applied, proving that A must ALWAYS be the case while B must NEVER be the case. And using a lot of pretentious Latin in the process of argumentation. And life’s just not that simple.
People are unpredictable sorts and their economic behavior is as hard to describe as their sex behavior. We are liable to do most anything. And when you try to describe something as complex as the economic interactions of seven billion of us, there’s no simple set of rules that suffices. Economics can only be founded on observation. Any generalizations that can be formed have to come much later, and be hedged about by caveats.
So you, arguing from within your framework of beliefs, have this to say: “At this point, I think you’re just being petulant about having been proved wrong.” But I would say that economics is not an arena in which anything can be “proved”. It’s my scenario against your scenario. Which one best fits the facts in evidence? I believe mine does.
Here’s your initial response: “If the number of unemployed rises, the price of labor falls, making new lines of production possible. Furthermore, as capital investment increases, the marginal product of labor likewise increases, raising real wages, even if money wages fall.”
That’s merely a theoretical overview, a one-size-fits-all statement. When you apply such a rule to our present circumstance, you MUST add that during any of our increasingly frequent credit seizures, large numbers of employees get furloughed, and that this sudden dampening of consumer demand leads to further downsizing on the part of business– a loss of productivity in the face of slack demand.
The workers are still there, ready to get back to work. The consumers are still there, anxious to resume consuming. And the owners of plant are still there, anxious to resume making a profit. The only thing that’s missing is some money to make the engine start running again.
I see no problem with adding some money. We can always pay it back later, once business is humming and we can afford to repay the loan. What’s the problem you see?
michael,
If I were in the mood to point out various examples of your own intellectual dishonesty, it would not be hard. It’s kind of amusing that you’re criticizing me for what you have done repeatedly, and all the more so for the fact that your criticism is dishonest.
If I may quote in full:
““There will be new opportunities to build and peddle high-end goodies like boats, watches, sports cars (a subject I note everyone here seems to follow), etc. But these pursuits don’t employ millions. They employ hundreds. The millions left out by this shift in the market-driven economy are economic zeros. They constitute no demand.” That is, the number of unemployed will increase over time.
“But this can’t happen in a purely free capitalist economy, because there’s no profit in it. Sure, some of the unemployed will always gain employment whenever an opening appears in the Maserati factory. But the trend is for more of these jobs to be lost than are created, in any time frame.” That is, the number of unemployed will increase over time.” My statements are in italics.
An honest reading of the above will not yield the conclusion you are reaching. I at no point do I claim that you were arguing that “(a) employment will be reduced in an economy where disposable income becomes concentrated at the top… but that (b) this can’t happen in a purely free capitalist economy, because there’s no profit in it.” In as much as I deal with the specific statements I quoted, it was in a purely isolated context. At no point did I ever criticize you for claiming the above. You are attacking a straw-man.
“No. I don’t accept that. It was fraudulently intended.”
You are, of course, well within your rights to completely ignore what I said when it becomes inconvenient. That doesn’t stop it from being intellectually dishonest to do so.
“Do I dispute your interpretations? Every one of them. Do I dispute the evidence you offer? That too.”
Actually, you have conceded a few of my interpretations and pieces of evidence, and ignored a few others. There are several possible reasons that you ignored my points that I can think of: (1) you were pressed for time in writing your posts and so had to economize; (2) you were being lazy; (3) you just didn’t notice some of my points; and (4) you intentionally ignored them because you couldn’t address them. If (1), I do wish you could have found more time to make your comments as complete as possible as this might have saved us both quite a few headaches; if (2), tsk, tsk; if (3), please go back and review this conversation so that we can deal with the things you left out; if (4), shame on you.
“The issue, at bottom, is that you believe we can know nothing unless there’s some handy universal law that can be applied, proving that A must ALWAYS be the case while B must NEVER be the case. And using a lot of pretentious Latin in the process of argumentation.”
If you’re intimidated by the Latin, I’ll happily explain what it means and why it is used. “Ceteris paribus” means “all other things being equal,” giving us the form of all scientific laws: if X, then Y will be different from how it would have been if not X. For all your love of qualifications, you seem to ignore this incomparably important one. My statement “ceteris numquam paribus sunt” means “all other things are never equal.” This is also true for all sciences: if I shoot an electron through an downwardly directed electric field, on the surface of the Earth, the Universal Law of Gravitation says that the electron will fall, whereas Coulomb’s Law says the electron will rise. It may in actuality either rise or fall or even do neither if the parameters are precisely right. Such an experiment would not invalidate either of the laws because they are both qualified with ceteris paribus, whereas in the experiment ceteris non paribus sunt. “Post hoc ergo propter hoc” means “after this therefore because of this,” which can be rephrased as “at time t, A happened; at time t+n, n>0, B happened; therefore A caused B.” The fallacy in this should be obvious. I used this phrase to point out that your purely empirical “method” of economics cannot identify causal relationships. The most you can say is “at time t, A happened; at time t+n, n>0, B happened.” This may very well be interesting information, but is insufficient grounding for theory. Latin is used in science because, long ago, all scholarly activity was conducted in Latin and a number of Latin phrases are more concise than their English translation. There is nothing pretentious or sinister about this. As for my other Latin phrase, I’ll leave you to translate that; and I won’t even bother pointing out the incredibly obvious straw-man in your claim.
“And when you try to describe something as complex as the economic interactions of seven billion of us, there’s no simple set of rules that suffices.”
I don’t suppose you have examined how the Austrians, and economists in general, derive the basic rules governing all economic interactions, like the law of demand or the quantity theory of money, have you? They seem to do a pretty good job of explaining economic phenomena. So far, you have not provided any logical critique of economic science, merely denying its validity ex nihilo (out of nothing) as a fallback position when your sweeping claims are shown to be absurd. If you have such a critique, please provide it. Otherwise, I personally recommend you begin with Mises’s Human Action.
“It’s my scenario against your scenario. Which one best fits the facts in evidence? I believe mine does.”
Of course you believe your scenario fits the evidence better–that’s why you believe it. But why should anyone else accept your scenario over the Austrian interpretation when the rules you claim to be operating, when generalized, are absurd, whereas the rules the Austrians claim to be at work are consistent?
“Here’s your initial response: “If the number of unemployed rises, the price of labor falls, making new lines of production possible. Furthermore, as capital investment increases, the marginal product of labor likewise increases, raising real wages, even if money wages fall.”
That’s merely a theoretical overview, a one-size-fits-all statement.”
For the sake of clarity, I’ll provide the statement to which I was replying. As it happens, the first sentence you quote was referring to unemployment, and the second sentence was referring to your claim that the lot of the poor will systematically to grow worse over time. I will note that in this post you do not specifically claim that these things occur during the specific case of a business cycle downturn; as such, I interpreted them as statements about the normal state of the economy. If that was not your intention, you should have included your qualifications in the original post. Where specificity is not included, generality is assumed. Also, I was assuming that you were using ceteris paribus implicitly, which was apparently not the case.
“Unfettered capitalism supports fewer, rather than more, employees. The reason is that they occupy a space in the expense, rather than the gains, column. Why, then, should we suppose that under a capitalism that is, by definition, not beneficent but rather profit-seeking in all its endeavors, either the plight or the numbers of the poor be alleviated?
What we would expect is that under a no-rules brand of capitalism, the sum total of money in circulation would gravitate toward an increasingly fewer number of pockets. The reason is that whenever poor people have some money they have to spend it on something they need– whereupon it returns to the profit stream.”
I have quoted your entire comment, so there is nothing taken out of context here.
In my first sentence, I say that increased unemployment will lower wages and make new production processes possible. You concede this point. The conclusion I was expecting you to draw was that these new production processes would employ the previously laid-off workers. The only question remaining is whether the increased employment from these new production processes would be sufficient to counteract the initial fall in employment. I claim that they will because, ceteris paribus, markets clear (which I assumed you understood); you claim otherwise and still have not explained why you think so.
In my second sentence, I point out that capital increases the marginal product of labor, which increases real wages. Your response to this point was somewhat ambiguous: on the one hand, you agreed that capitalization has no meaningful effect on unemployment (“So the result is that unemployment is scarcely affected.”) and on the other claimed that unemployment would increase with increased capitalization and that even those who remained employed would be worse off in the long run. Your explanation was muddled, but I think your major points were, “And for those who do have jobs, increases in real income (relative to prices) lag far behind unearned income, such as capital gains and dividends. That is, over time the rich get richer and the poor poorer,” when you claim that people who are still employed will become poorer, and “The net result: a dozen gainers. 88 losers,” dealing with increased unemployment. Your post is rather confused, so whatever your intended meaning, it was not conveyed very well. I exploded both of those claims in subsequent posts, at which point you fell back on denying the existence of economic laws.
“I see no problem with adding some money. We can always pay it back later, once business is humming and we can afford to repay the loan. What’s the problem you see?”
Your description of a business cycle downturn is missing an important aspect: expectations. According to ABCT, the bust is caused when investors realize that there has been a misallocation of resources and they will not being able to finish all of their projects. In reallocating resources, investors want to be sure of two things: (1) that they will be able to finish their projects, and (2) that they will be able to do so with a return at or above cost. These expectations cause investors to withhold the money required to fund various projects for a time; when they are confident of (1) and (2) once again, they will invest in certain of these projects and the recovery will follow. You don’t seem to be claiming that new money should be created, merely that existing money should be put to use, which it will naturally in a fairly short period of time (it has historically taken just a year or two). Monetary stimulus, on the other hand, will slow the process of reallocating resources by obscuring the malinvestment and cause new distortions, setting in motion another business cycle. Fiscal stimulus also obstructs the reallocation process, and increasing government regulations create “regime uncertainty” that makes investors even more wary.
“Under unregulated capitalism, there is no motivation to offer alms to life’s losers.”
Michael, I think I’ve discovered why it is so hard to be polite to you. You make these sweeping condemnations of capitalism, like the one I just quoted above after having quoted extensively from the website of a privately-funded charity (I checked) that “provides food to more than 37 million low-income people facing hunger”. Do you not see the contradiction?
Obviously there are many people who are willing to donate to charity to “offer alms to life’s losers” as you put it, and to do so without having the money forcefully collected from them. Often, these are very wealthy individuals or corporations. Maybe their motivation is good publicity, but why should motivation matter if the end result is to help people?
“By definition, helping them is a debit proposition, and capitalists only choose to operate to their own credit.”
As someone else questioned you, why the word “capitalists” here? Why not “entrepreneurs”, for example? It looks to me that you are being careful to distinguish the “bad” people in business from the “good” ones, seeing yourself in the latter class.
Moving on, you seem to view an increase in productivity as a bad thing. To you, this means firing employees while holding wages steady. In my experience, this is not at all the case. To use a concrete example, I develop software applications for data analysis. One of the primary objectives of my job is to cut down on the time required to complete a process. If it takes ten minutes to set up and run a report, but I can redesign it to run in ten seconds, I’ve just saved nine minutes and fifty seconds that would have been spent paying an analyst to wait for that report to finish. In your world, I’ve just taken a bit of wages away from a deserving employee and contributed to the fattening-up of the “capitalists”.
In actual fact, what happens in my business is that the employee is freed up to perform other tasks. There are projects continually on the books, meetings that must be held and moderate development work to be done by those analysts. The more I can automate tasks and free them up, the better for them and for the company.
These people are assets to the company that are paid because of essential tasks that they perform. No, they are not charity cases, paid out of pity for their dire straits, but neither are they continuously put out of work and treated as waste expenses to be eliminated.
“I think I’ve discovered why it is so hard to be polite to you.”
At least you’re civil, Scott. That’s all that’s required.
Here’s the website you no doubt accessed:
http://feedingamerica.org/faces-of-hunger/hunger-map.aspx
It’s true, they do a good job with very little in the way of funding. But I know you know what I was saying. If society splintered, and everyone was only concerned with enhancing his personal bottom line (other than a bunch of liberals like me) the income gap between rich and poor would soon become insurmountable. Remember, Feeding America works within a context of an America that still provides food stamps. In your world there would be none. Thus the hungry would be hungrier than ever, no matter how many humanists and liberals were trying to bail out the rowboat.
In fact we’d be increasingly hungry ourselves, and in no position to help.
2. “Moving on, you seem to view an increase in productivity as a bad thing. To you, this means firing employees while holding wages steady. In my experience, this is not at all the case.”
I don’t blame the ‘bad’ entrepreneurs, or praise the ‘good’ ones. They’re in business to make a profit. And if they don’t meet payroll, everyone’s out of work. Including the boss. Remember, I used to be one of those petty capitalist entrepreneurs. And I retired with my nest egg intact, not a miserable bankrupt.
I don’t blame capitalists for doing what they do. I just understand there has to be a compensating tendency in society to keep the inadvertently poor afloat. I don’t mean handsomely paid for doing nothing, I just mean kept off the bottom.
That mechanism is a benevolent government. Without that, the profit motive ends up soaking up every dime out there. Because every time a poor person gets a little cash he has to spend it on something. Then he’s broke again. But at the same time, every time he spends a dollar, well placed people at the top get a piece of it. So without some form of redistribution, over time the money all gravitates upward.
If the Austrians had their way, they would not shrink the money supply–they would allow the money supply to fall, …….how would an austrian money supply fall or shrink??
why is an austrian way apinful in a short term?? is it painfual as you claim because it is switching from a non austrain way?? has there ever been an austrian way??
” Your first contention is that a free market economy will tend to increase unemployment over time.”
was the contention that businesses will try to minimize payroll??? is that different???
“was the contention that businesses will try to minimize payroll??? is that different???”
Very different, James. I point out thinker’s mistaken summary of what I said, above. A free market can have diverse effects on employment. It does not inexorably result in an increase in unemployment. That’s one thing.
And businesses try to achieve maximum profits– a general rule to which I would be hard pressed to find any exception. This is often attempted by minimizing payroll or other cost inputs.
You also offer this: “If the Austrians had their way, they would not shrink the money supply–they would allow the money supply to fall, …….how would an austrian money supply fall or shrink??”
Instead of saying “Austrians” let’s just suppose there are people out there who would like the Fed to fold its tents and disappear. Hopefully, taking the fiat money it had created with it. And there’s only one way this could happen.
The Fed would have to liquidate all its assets, selling its bond portfolio back onto the market. Then it would retire all the money it made from the sale, jump through its own hind hole and disappear like the Cheshire Cat.
This would do two things. First it would destabilize bond prices from the injection of all those bonds onto the market, and then it would result in a huge monetary contraction. Can you think of any way it wouldn’t?
“…there is no motivation to offer alms to life’s losers.”
I feel sorry for you if that’s how you feel.
I feel sorry that you need the boss-man to motivate you in helping life’s losers.
And be careful in your response, Michael. For, if you parrot any defensive faux sympathy, blathering on about how much you do for “them”, then you contradict your entire premise; that is, if you have the intellectual honesty (or even capacity) to recognize the contradiction.
I often wonder if many other state apologists are this callous, cynical and, ultimately, conniving. I hope not, because that would indicate social workers do it only for the money, resting their heads on their pillows after a day’s work, full belly and all, praying that their “market” continues to swell.
“And be careful in your response, Michael. For, if you parrot any defensive faux sympathy, blathering on about how much you do for “them”, then you contradict your entire premise; that is, if you have the intellectual honesty (or even capacity) to recognize the contradiction.”
This entire screed is impossibly twisted, and has nothing to do with anything I’ve said. No comment. Continue talking to yourself.
“This entire screed is impossibly twisted…”
The irony is utterly mind-boggling.
Franklin, you’re obviously laboring under a mistaken assumption. You’re attributing to me the sentiment that there is no motivation to offer alms to life’s losers. But you must have noticed that in context, what I was saying was that in a perfect state of free capitalist endeavor, with no compensating force of government, that would be the universal condition.
Entrepreneurs seek profit. Feeding the poor operates at a loss. Hence no one would start a business to alleviate suffering, other than a few frivolous sorts who could never obtain significant funding. How much of your own income would you donate to such a cause?
“Feeding the poor operates at a loss.”
Another unproven contention.
“Hence no one would start a business to alleviate suffering, other than a few frivolous sorts who could never obtain significant funding. How much of your own income would you donate to such a cause?”
Funny, private charities should not exist by this “logic”. But they do.
“Feeding the poor operates at a loss.”
“Another unproven contention.”
Let me put it this way, Inky. If you were to start up a profit-oriented business feeding the poor (by definition, unable to pay), how would you make a profit? Wouldn’t your scheme have to rely on funding from an onerous State? Or would you be relying on the kindliness of a charitable foundation that somehow preferred to utilize you and pay you your profit instead of running their charity operation themselves, the way they best saw fit?
Re: Michael,
Unfettered capitalism supports fewer, rather than more, employees.
It’s PRODUCTIVITY that supports more employees, Michael.
When I pay the guy that paints my house, I place the amount on my expense column as well, Michael. Maybe you would like to reinvent accounting – be my guest.
Precisely BECAUSE of profit-seeking. The REAL money is in making the poor LESS poor, not more poor, by producing stuff for THEM.
Right. Because, given the opportunity, the rich would be like Scrooge McDuck and love taking skinny dips on their coin vaults, whereas everybody else would be pennyless.
Mex: it looks like my response to your comment failed to appear. Here’s something like it:
“It’s PRODUCTIVITY that supports more employees, Michael.”
One has to stop and note the role labor plays in productivity. Without labor you’ve got no goods or services to sell. We are basic to the efficacy of the capitalist mode. Yet we don’t share in its returns.
“The typical American household made less money last year than the typical household made a full decade ago.
“To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.
“In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s.”
http://economix.blogs.nytimes.com/2009/09/10/a-decade-with-no-income-gain/
Check out the data this article is based on. We create the profits you enjoy. We just don’t get a share in them.
Then I say “The reason is that they occupy a space in the expense, rather than the gains, column.”
And you reply “When I pay the guy that paints my house, I place the amount on my expense column as well, Michael. Maybe you would like to reinvent accounting – be my guest.”
So we both agree: for the employer, wages would be an expense. We on the same page?
3. “The REAL money is in making the poor LESS poor, not more poor, by producing stuff for THEM.”
I seem to recall a few weeks ago trying to make this point to everyone here, and being met with universal disdain. Yes, I think there are more profits to be made by expanding the amount of money in the work force’s pockets. But you don’t. Or didn’t.
Now you do? Great, that’s incredible progress!
Your last sally is too dumb to be worthy of a response. But I’m impressed that you now see the utility of paying good wages, so workers can consume more products and add to your bottom line. Henry Ford thought the same thing.
michael,
Hopefully, socialist-zero-sum-worlders like yourself are only speaking figuratively with respect to the space occupied by employees. But to continue with your economics / accounting delusion, given that other inputs to production such as raw materials and depreciation also show up in the “expense column”, are you suggesting that “unfettered capitalism” results in fewer of these, as well?
Frank, the purpose behind profit-driven modes of production is to minimize the cost of ALL inputs. A competent manager maximizing profit would seek to either use less labor, or cheaper labor. He would also, if feasible, try to use fewer raw materials or cheaper ones. Etcetera. Are you quite certain that this is an “accounting delusion”?
The argument is scurrilous and unfounded. You’re just trying to be difficult.
If you wanted to open up a productive line of debate you could always lay out a scenario by which an unfettered free market would increase the amount of total employment or total payroll. The tendency we see is quite the opposite.
Until you prove that no more work need be done in the world, then you might have a point on total employment. Until then, you’re wrong.
Also, payroll doesn’t mean anything. It’s what you can and how much you buy that counts.
That’s a red herring, htran. There are immense amounts of work in the world needing to be done. We have overwhelming problems. But none of these are commonly addressed by capitalism, for the reason that they COST MONEY. Capitalists only like projects that make them money. So whenever we run out of those, the paid work stops.
“Also, payroll doesn’t mean anything. It’s what you can and how much you buy that counts.”
I think you mistake my POV. What I was saying is that capitalist ventures always try to minimize payroll, as it is for them merely an expense. Workers, on the other hand, always hope to maximize their pay. Only they have no say in the decision-making process.
The effect of these processes is that jobs are constantly disappearing from our economy, either from attrition due to cash flow factors or to migration overseas. In order to keep apace we have to constantly be creating new jobs… which implies that new markets for products or services must constantly be discovered.
It’s not an easy task. My opinion is that an unfettered market with profit as its only motive would constantly be shedding jobs. If you know of a mechanism that might counteract this, let us in on it.
“But none of these are commonly addressed by capitalism, for the reason that they COST MONEY. Capitalists only like projects that make them money. So whenever we run out of those, the paid work stops.”
We don’t. Try again.
“Only they have no say in the decision-making process.”
Prove it.
“It’s not an easy task. My opinion is that an unfettered market with profit as its only motive would constantly be shedding jobs.”
Prove it.
Inquisitor: You’re saying that you don’t prefer to operate at a profit? That employees do play a part in the decision-making process? And that a profit-oriented company wouldn’t always be hoping to minimize payroll?
And then you say that the onus is on me, to ‘prove’ those absurdities are not so?
That appears to be a stunning display of intellectual dishonesty. I’m sure you like operating at a profit, and that your employees don’t decide how the company will be run, and that you’d take every opportunity that presented itself to reduce your payroll.
“You’re saying that you don’t prefer to operate at a profit?”
Where did I imply that?
“That employees do play a part in the decision-making process?”
Yes.
“And that a profit-oriented company wouldn’t always be hoping to minimize payroll?”
Indeed. Maximising returns =/= minimising payroll.
“And then you say that the onus is on me, to ‘prove’ those absurdities are not so?”
Yeah.
“That appears to be a stunning display of intellectual dishonesty.”
You’re not one to speak.
Wow, I didn’t know we had an unfettered market recently such that you would know that was the tendency… So exactly what are you relying on?
Nice try, michael. The point behind profit-driven modes of production is is to maximize profits, not to minimize inputs. Presumably, since the vast majority of us* are much better off than our ancestors were with respect to consuming more and higher quality outputs, your premises and conclusions are indeed scurrilous and unfounded.
* Excepting N. Koreans, Cubans and other poor sods living in socialist utopias
Frank: Profit-driven corporations are constantly minimizing inputs in the quest to maximize profits. The two are sides of the same coin.
Much of that famous increase in productivity back in the 1980s was due to the novel approach of corporate downsizing. A new CEO would obtain a contract with performance-based bonuses. And would then eliminate 30% of the workforce. He’d then tell the remaining employees they could keep their jobs if they took up the slack… at no increase in pay.
The resulting leap in productivity would look very impressive, and he’d grow rich on his bonuses. Of course those would be short-term gains, bought at the possible expense of long-term viability. They company would now be operating with a frightened and demoralized, overworked skeleton staff.
We’ve now trimmed the excess fat, bone and muscle in that way about as far as we can go. But still, if a CEO wants to increase profits by addressing productivity, the first thing he looks for is someone he can fire.
Frank: Profit-driven corporations are constantly minimizing inputs in the quest to maximize profits. The two are sides of the same coin.
ha that shown itself to be so?? has any company steadily grown by always getting bigger rather that minimizing inputs?? or have minimizing inputs, in the form of employees, always been the case??
“Unfettered capitalism supports fewer, rather than more, employees. The reason is that they occupy a space in the expense, rather than the gains, column. Why, then, should we suppose that under a capitalism that is, by definition, not beneficent but rather profit-seeking in all its endeavors, either the plight or the numbers of the poor be alleviated?”
Gee, Michael, it sounds as if you’re going off of a theory here! At least it seems that way to me. It sounds as if you’re saying “Employers under capitalism don’t care about employees as much as profits, therefore we should expect the employees to suffer”. But where are your facts? Contrary to your theory, it seems that in fact the employees of Walmart do much better than the people under Soviet Communism did. Doesn’t that falsify your “theory”?
” It sounds as if you’re saying “Employers under capitalism don’t care about employees as much as profits, therefore we should expect the employees to suffer”.”
Russ: You are certainly aware of the fact that corporate directors are under a mandate to consider one thing and only one thing: maximizing profits. They have a fiduciary duty to the shareholders to do so, and failure to do so effectively can be grounds for dismissal. The only exception would be if the shareholders met and specifically charged the directors with NOT maximizing profits.
Therefore if we speak accurately, we would expect the interests of the workforce to be disregarded under this system, not necessarily that they suffer. And so we need put features into the system that safeguard the interests of the employees. Because they are people too, and our way of life demands that everyone’s interests be recognized.
It follows then, that there must be more to life than raw capitalism. Even if, for you, it is sufficient.
“Contrary to your theory, it seems that in fact the employees of Walmart do much better than the people under Soviet Communism did. Doesn’t that falsify your “theory”?”
Not in the slightest. If you posit a choice between two mediocre alternatives, that’s not a real choice. Plus, it’s ignorance in the highest degree to equate social concerns with Soviet Communism, which was all about the promulgation of a two-class society.
“…we would expect the interests of the workforce to be disregarded under this system…”
Incorrect. Yet again.
Firstly, there’s no such thing as interests of a workforce. Interests are specific to each human being.
Secondly, any employee’s interests are always considered by any and all parties involved in that employee’s accountability, whether CEO or janitor.
It may take you years, perhaps a lifetime, but I hope that someday you will recognize that groupthink is not think at all.
michael, I think you’re either retarded or very disingenuous. It’s just too easy to see the infantile flaws in your posts. No one can spend this much time here and still be this ignorant. Nothing on this site and nothing anyone says ever makes a difference to you. In one ear and out the other. No intelligent arguments, just senseless baloney. I think you just like to push the hot buttons and don’t really care to discuss intelligently.
There are people on this board who present intelligent counter arguments which make people think. You are not one of them.
He’s only on probation, but I have great plans for him.
About those intelligent counterarguments… can you come up with one? Or are you just blowing smoke my way?
Explain, for example, the mechanism by which unfettered capitalism will add more jobs than it sheds. Be sure to address the fact that an economy can expand no faster than its markets.
Michael,
Why do you assume that if your poor at some point in time you always stay poor? So I guess you assume that if your born rich that you always stay rich? The earth is round and if you take your sail boat out to sea you won’t fall over the edge.
In fact in this country, it’s usually some of the poorest kids who work the hardest and reach the heights. And when they do, they rarely give a crap about all the losers they stepped on on their way up. We are a very class-mobile society.
So no, I don’t fall for either of your poorly devised snares. The problem is that as of this evening’s news, one in seven Americans is currently living in poverty. That represents a 1.8% increase in poverty since a year ago, which happens to be the greatest increase since records have been kept– over the past fifty years.
I don’t feel resentful of the winners… although neither do I respect or admire them. What I find a problem with is a system that gives us so many losers for each winner. I have a more egalitarian spirit than that. I find it offensive, and a misallocation of resources.
“It’s PRODUCTIVITY that supports more employees, Michael.”
Employees have contributed to immense increases in productivity over the past thirty years– yet they have shared in none of the gains. The obvious reason is that in America, labor has no place at the table. It can be used, but not listened to or rewarded.
Then I comment “The reason is that they occupy a space in the expense, rather than the gains, column.” And you respond
“When I pay the guy that paints my house, I place the amount on my expense column as well, Michael. Maybe you would like to reinvent accounting – be my guest.”
Care to go over that again, Mex? You’ve just said precisely the same thing I’ve said. Labor, to the owners of capital, is just an expense, nothing more.
And I love this exchange:
Me: “Why, then, should we suppose that under a capitalism that is, by definition, not beneficent but rather profit-seeking in all its endeavors, either the plight or the numbers of the poor be alleviated?”
And you: “Precisely BECAUSE of profit-seeking. The REAL money is in making the poor LESS poor, not more poor, by producing stuff for THEM.”
I seem to recall recently that everyone here was standing around in a circle beating on me because I said precisely that: that without customers there are no profits. So you didn’t believe it then. Do you believe it now?
If so, it would stand most of your philosophy on its head. It implies labor needs to be paid more, so it can consume more of what it produces. Consumption is the driver of capital markets, not mere production.
So anyway, what is the mechanism by which individual self-serving capitalists might all decide to bestow more money on the workers, while at the same time seeking to minimize labor costs? Welfare?
“Consumption is the driver of capital markets, not mere production.”
“Mere” production? Of the vast array of statements you’ve made attesting to your enormous stupidity, this one here is the shortest, sweetest one available, I’d say.
They’re intertwined concepts. No production, no consumption. One isn’t the driver of the other. They exist in a complementary tandem. One cannot exist without the other. No consumption, no reason for production. No production, nothing to consume. Unbalance one in favor of the other, the entire system fails and collapses. Today’s problem – consumption (subsidity) is given prefence over production (via income taxes, regulation, and other restrictions).
if one employs financial capital , ie money, that would mean two or more people trading.
you can produce without money or trading with your own capital goods??
Trade isn’t just those two things. You can trade your labor for their capital goods, produce a product, and keep a portion of the resultant, returning the rest to the owner of the capital good. This is how modern employment functions.
if one employs financial capital , ie money, that would mean two or more people trading.
but one can produce without trading (consumption by others).
To add to this, production for its own sake is uneconomic and consumption requires production to occur.
how do you produce for it own sake?
“Consumption is the driver of capital markets, not mere production.”
Beefcake: Consumption is the driver, production is the response to it.
Production, in the absence of consumption, is a dead loss. It’s only when you have customers paying for your goods that you post a profit. They didn’t teach you that? You have to find a productive market first, hungry to consume… and then tailor your goods to meet it.
‘nope. What needs to be considered is the net. A trade is productive if and only if both parties get more than they give up. (Remember: Money Is Not Wealth) The same holds for employment. The employer gets more from the employee’s labor than the employer gives out in wages, and the employee gets more in wages than he gives out.
The drive to profit only indirectly means a drive to minimize costs. There are lots of ways increasing expenditure can increase return by a greater amount. This is why businesses can expand and become even more profitable than before.
when they said capital markets did they mean financial capital and not capital goods??
The same holds for employment. The employer gets more from the employee’s labor than the employer gives out in wages, and the employee gets more in wages than he gives out.
maybe they get what they agree on.
michael.
“labor has no place at the table” because there is no free market out there. labor must compete with itself while rent and capital are run as monopolies. a free market would pay people much more and pay capital and rent less once monopolies are removed.
but, you bring up a great point, capital concentration is in itself a conundrum. eventually, there is no one left to purchase the product.
higher productivity [in a true free market] equals either lower prices or higher wages, when neither occur capital concentrates and eventually has no outlet other than service work or specialty production for the capital class. it becomes the noble/serf setup.
“but, you bring up a great point, capital concentration is in itself a conundrum. eventually, there is no one left to purchase the product.”
Gene: would you believe you’re the only one here who has gotten this? The concentration of gains upward leaves less funding at the bottom, where the actual purchases take place. And profits are generated. And what we’ve been seeing in the past three decades is an increasing concentration of funds in the financial markets, well away from the mercantile economy. I believe history has shown that this is an unsustainable model for wealth creation.
2. “higher productivity [in a true free market] equals either lower prices or higher wages, when neither occur capital concentrates and eventually has no outlet other than service work or specialty production for the capital class. it becomes the noble/serf setup.”
Which is what we’ve been seeing. We have certainly had the benefit of low prices. In many instances you can buy goods at the same dollar amount being charged back in 1975. But in achieving such gains in efficiency, companies have ben shedding employees and reducing pay and benefits. Because (paradoxically or conveniently) the more unemployed you create, the less you have to pay your workforce.
I left this one for last: ““labor has no place at the table” because there is no free market out there. labor must compete with itself while rent and capital are run as monopolies. a free market would pay people much more and pay capital and rent less once monopolies are removed.”
No matter the market, whether free, regulated or in between, whenever you have unemployed looking for work, the amount labor can charge gets reduced. Policies that encourage full employment also encourage higher pay and greater benefits. Which is, of course, the reason those policies are so widely detested here.
In the wake of the Black Plague, in a depopulated Europe, labor made its greatest gains ever. Workers were suddenly at a premium. But today? It was scarcely more than a decade ago that we reached the six billion mark. Now we’re knocking on the door of seven billion. That’s a lot of new empty hands, and new mouths to feed.
“That’s a lot of new empty hands, and new mouths to feed.”
Please finish your thought. How is it to be accomplished? What are the possibilities?
It takes little ability to recognize a problem, especially if it is causing you pain. It takes much more effort to find effective means to overcome it. I would like to hear your, or anyone’s, proposals. Well, any Earthling’s, that is, Martians need not respond.
“Please finish your thought. How is it to be accomplished? What are the possibilities?”
Don: That’s the $64 question. How do we expand production to satisfy the needs of an increasing number of residents on Planet Earth. To me the answer is suggested in our new dialog today, over in “Beyond Sustainability?”
The optimal allocation of resources to empty stomachs, and work to empty hands, can be found in the exploration of new technology. We’ll need new answers if the old questions are not to defeat us utterly.
The numbers can be jiggled accordingly, to provide an optimal distribution. I would place as a lesser priority the need for a small number of people to become rich at the expense of the majority. But perhaps a way can be found for these non-team players to get rich too. Who knows, until we try something new, eh?
I was hoping that you would be more specific, perhaps offering some ideas that can be considered by the thoughtful people who frequent this site.
Recognizing the inherent unfairness of the distribution of the things that sustain life is a good first step, and that includes recognizing the enormous variation in the “god given” quality and ability of each person’s life. But borrowing Harry Potter’s magic wand and uttering the word “socialism” as I think you would like to do is not a step at all. Socialism has been discredited both theoretically by the calculation problem and by empirical observations of the repeated failures of the many socialist experiments. Socialism is counter to our survival drive. Socialism as commonly conceived today is antisocial on its face because it requires theft, even if it is ‘only’ theft from other thieves. You are welcome to have as many more experiments in socialism as you please, but you must leave off the coercion part or you will just provide yet another example that the mightiest will prevail.
You are correct in your observation that riches tend to accumulate into the hands of the few. Your opinion seems to be that this is bad. If you belonged to the set of accumulators of riches, your opinion would likely be that it is good. Good, bad or indifferent, it is a fact.
I think you make errors of omission in simplifying the attributes of the accumulators of riches, especially when the attempt is made to segregate the lofty socialist elite from the masses who would aspire to be accumulators. I think it is a common attribute of our human nature, nothing more, and some of us are more successful than others.
I am a simpleton, and in my simple version of a solution, there would be no place for theft. I don’t mean that in the most simple way though. There will always be individuals who choose theft as their personal means of survival, that is in our nature. What I mean is that there can be no conspiracy to use theft, as a tool in achieving a more just distribution of the means to sustain life, in any society that can succeed in doing so. In a sense, when theft is the means, the means will nullify the end. I am not so much of a simpleton as to be unable to see, when it is demonstrated, that socialism while appealing to the simpleminded as a painless way solve a difficult problem is just a diversionary dead end.***
Capitalism, and here I mean the the capitalism of the economists who habituate this site not the street view, should not be thought of as the polar opposite of socialism. Socialism is very much a value biased construct, that is its reason for existence – the improvement of (all members of) our society. The capitalism of the economists is value neutral, and this is well understood by these economists, (the good ones that is). It is a tool to help us understand what actually happens to us, and why, in our real lives here on the planet Earth, not Venus or Mars. Your persistent attempts to convince the Austrian economists to adopt a more socially acceptable perspective are folly (sometimes entertaining). You are in effect trying to bastardize their work by making it into something which it is not and should not become. It is a reference concept, to be used to provide an accurate measure of the effectiveness of any and all real social plans or designs. It is not something that can be “adopted” as such because it is value neutral.
Any real plan must have value as its fundament. The possibilities for alternative, effective social structures are beyond countless. Why not let the economists point out those that are doomed in concept and not waste our precious time recreating what is only going to fail?
Cordially,
Don
*** Any government that uses theft as a means to provide justice is a dead end.
“I was hoping that you would be more specific, perhaps offering some ideas that can be considered by the thoughtful people who frequent this site.”
I doubt I’ll be able to do that, Don. The paradigm around here is that personal excellence, combined with a lack of opposition to their means and ends, is sufficient to create ‘wealth’.
That’s not so. What they employ to accrue their fortunes to themselves is extraction. First, they extract labor from the people they employ. That is, from each of their labors they subtract as sum of the proceeds, so to accrue it to themselves. And second, the wealth is ultimately based on extraction from the earth.
What’s needed is a reformulation of the basic question. Instead of saying how can I, personally, benefit from this sorry situation and leave the others behind, what we ned to do is to start listening more to people who take the overview… and who say “what can we do as a force responsible to mankind, to most efficiently utilize those resources in a manner that brings widespread productive employment and prosperity to the maximum number of participants?”
In such a world there will be even more opportunity for those who absolutely must become rich to get even richer. Because they’ll be the beneficiaries of that rising tide that lifts all ships. They’ll be able to prosper from the exploitation of markets consisting of people with abundant discretionary funds, not an anemic market full of people who can barely make ends meet.
But that’s not what people here are prepared to seriously think about. Theirs is a simple philosophy; and to digest it fully they cannot put anything else on their plates. So they contemplate the beauties of a world with implicit extremes of wealth, one in which the wealthy must spend a proportion of their wealth in protecting their fortunes from the inopportune attentions of the increasingly numerous poor.
I’ve seen that future, in Ecuador. And it works, sort of. It just results in an upper class consisting of less wealthy, more anxious rich folks who have to contemplate dictatorial methods by which to mash down the aspirations of the majority. And who, like our own Republicans, must throw sand in the wheels of government whenever some supposed leftist (meaning one who represents the will of the majority) takes command. It’s antidemocratic and authoritarian. And at bottom it relies on force.
Much more productive to take the view that we’re all the same species and that we’re all in this together. So social policy must give equal attention to the needs of all, and even give the needs of us most in need the greatest priority. To me, simple. To people here, unacceptable. Instead they find a nested set of logical, interdependent proofs existing only as hypothesis so far, to make the more compelling case.
Your position is that if you personally are required to make any sort of contribution to the common fund, that constitutes theft. Fine. Please either form the political majority or obey the will of that majority. Maybe you’d be happier somewhere else.
Re: Michael,
That is one stupid assertion. Were you able to purchase a Plasma TV 30 years ago? Can you now? How were them computers, 30 years ago, Michael? How about now?
Employees share in the gains of higher productivity by having access to more affordable goods. We PRODUCE in order to CONSUME, not the other way around, and the more we PRODUCE, the more we can consume.
Labor is rewarded – it’s called a salary. You see, in the REAL world, Michael, people exchange their labor for money. Then they use this money to exchange it for things people want…
Absoluely – Nothing more, Michael. You see, you think labor has to be something *more* than an exchangeable good, but I do not subscribe to your mysticism.
They were beating you because you were arguing that there were no customers because laborers were not being paid enough. That’s called question-begging argumentation.
Nope. It implies being more PRODUCTIVE, not paying your laborers more.
“Capital markets”? Again, you’re confusing terms.
I don’t understand your preoccupation with giving more money to workers.
Retard. I mean michael.
“Employees have contributed to immense increases in productivity over the past thirty years– yet they have shared in none of the gains. The obvious reason is that in America, labor has no place at the table. It can be used, but not listened to or rewarded.
“They are paid the agreed upon wage. If they don’t like it they can work somewhere else. Oh, wait. The federal government has implemented innumerable laws, rules and regulations which limit their choices, hasn’t it?
“Care to go over that again, Mex? You’ve just said precisely the same thing I’ve said. Labor, to the owners of capital, is just an expense, nothing more.”
So what does that have to do with the price of tea in China? It takes x hours at y price to pay a person to perform an act which contributes to the production of something. Who ever denied that and what difference does it make? Unless you think price calculations should be removed. Well then, all of this is academic and we should form the perfect communist state.
“Me: “Why, then, should we suppose that under a capitalism that is, by definition, not beneficent but rather profit-seeking in all its endeavors, either the plight or the numbers of the poor be alleviated?””
I reject your definition. It is both. It is beneficent because it is profit seeking. For all the reasons stated in all the books and all the articles by all the free market thinkers throughout the centuries which you don’t care to understand.
“If so, it would stand most of your philosophy on its head. It implies labor needs to be paid more, so it can consume more of what it produces. Consumption is the driver of capital markets, not mere production.”
The man who produces what he himself consumes is poor indeed! I much prefer the division of labor and free trade amongst all. I’d rather someone else contributed to the making of my toaster while I could contribute to the making of his sofa. And I don’t care if he lives next door or in China.
“So anyway, what is the mechanism by which individual self-serving capitalists might all decide to bestow more money on the workers, while at the same time seeking to minimize labor costs? Welfare?”
Again, there is an agreed upon wage. One person agrees to do something for another person for payment of some sort. It is fully voluntary. By the way, who are these capitalists you speak of? Are they some sort of separate species? Are they below us humans on the food chain? Can we get rid of them if we re-legalize the use of DDT, like bedbugs?
Other firms want a cut of an existing firm’s profits. A firm can do this by enticing laborers with a higher wage or selling the same good at a lower price. If the initial firm with which the newer firm competes does not follow suit, its workers will flee its labor ranks to the newer firm or no one will buy its goods because they are too expensive. Either way, capitalism and the freedom to engage in competition, whether by raising wages or lowering prices, makes workers’ REAL wealth rise.
Very simple concept. It just requires that you think dynamically.
Stephon: Your formula works only when there is not a labor glut.
We have nearly always had a labor glut. Except for the 14th century, when the Black Death left in its wake a beneficial labor market. Then employers had to hire away scarce laborers from one another by offering higher wages. Now? No. They move plant to where they can find the cheapest labor.
@Michael,
So you have worked at a job a lot of years and you are still making the same amount of compensation? You haven’t worked your way up the latter of success? Come on Michael you have to be living in a closet not to see people becoming more successful and doing better in their lives. If that wasn’t the case we would have had a revolution in this country by now.
I remember in this country when people were poor. First of all they didn’t run to government to try and better their situation. The people that call themselves poor now don’t have a clue what poor is all about. They might think they are poor because they don’t have a 50″ plaza tv but only a 46″ tv. Michael, you are starting to lose it. Pretty soon people are just going to ignore you.
Joe: I’ve mentioned this before on a number of occasions. American wage earners were gaining ground from 1946 through about 1973. Then from that point until now their job security, retirement security and real wages have been eroding. People today are not as rich as their parents were, other than a few big winners.
In fact during the past twelve months. 1.8% of us fell from the ranks of the struggling lower middle class into official poverty… making one in seven Americans now officially poor.
What’s the line they draw? It’s twelve thousand something odd a year, to provide for a family of four. Try to picture yourself there, and tell me whether that’s real poverty. You have no idea.
I agree with Liberterians in almost everything except social issues. There is thousands of reasons to why someone is out in the streets, poor, and terribly unhappily, there reasons imo are validated.
Libertarians are not in favor of poverty. In fact, you could say that we are so against poverty that we oppose all government attempts to make us all equally poor!
“I agree with Liberterians in almost everything except social issues.”
This means, I take it, that you agree on “human” rights issues, but not on “property” rights issues? I hope you will come to the conclusion that I did, that property rights are human rights! If the government has the right to take everything you have anytime it wants, you really have no rights at all.
You can’t agree with only part of it. They’re intertwined. To help the poor in a method that is counter to the libertarian philosophy, you MUST violate the other key tennent of libertarianism, property rights. It’s impossible not to. You can’t just pick and chose parts of the philosophy because to do so would create a philosophical hypocricy.
“There is thousands of reasons to why someone is out in the streets, poor, and terribly unhappily…”
So just ensure you have “thousands” of new government-operated and taxpayer-funded programs, resources, and monies.
And as these “thousands” of reasons multiply, continue to multiply your expropriation schemes.
Day after day.
Odd, isn’t it. This is what exists today.
Look around as you drive down Main Street these days; there you have the result.
Property rights should be respected of course, I never said they shouldn’t be respected.
Re: skpg,
Social issues are invariably used as justification to violate property rights, whether you like it or not.
If you are in favor of wealth “redistribution”, then you are in favor of peoples’ property rights being violated.
Russ: Labor’s efforts are every bit as responsible for the creation of tangible wealth as are the contributions made by capital. Try building something without it.
So in that light, people’s property rights have long been violated under the capitalist system. Capital sequesters all the gains, leaving labor with only the minimum they can get away with. A more equitable arrangement would be for labor to have an equal hand with capital in deciding which gains become whose property.
michael wrote:
“So in that light, people’s property rights have long been violated under the capitalist system. Capital sequesters all the gains, leaving labor with only the minimum they can get away with. A more equitable arrangement would be for labor to have an equal hand with capital in deciding which gains become whose property.”
No, people’ s property rights have not long been violated under capitalism. This Marxian exploitation theory assumes the labor theory of value, which has been discredited since the times of Menger, Jevons and Walras.
The longer you stay here, the worse you get, Michael. Seriously, this one was Economics 101. Your entire brain is apparently one big grayish-pink mishmash of economic fallacies.
We are all free to help those we deem help-worthy. No need to get the State involved and screw things up.
Like Missippi in the 60′s.
“[M]ichael” is clearly a troll planted by mises.org to make the threads less of the annoying exercise in groupthink it all too often devolves into and more of a forum for (albeit uber low-level) debate. No need to insert the additional entity of embarrassing ignorance. Occham’s Razor; QED.
Whose embarrassing ignorance? His? If he were a planted troll with that purpose, he is failing miserably, as people who tend to be utterly ignorant of the school they’re “criticising” tend to reinforce its adherents’ belief in its correctness, not vice-versa… No, he’s just genuinely dishonest and intellectually incurious. I’ve seen many good discussions on here between informed people, usually between Austrians, that advance my knowledge because they proceed from at least understanding what each other is saying. When you have one party who simply refuses to even engage in what he is supposedly “critiquing”, and continues to spew ill-understood left-liberal or conservative propaganda, that is just irritating noise worthy of little more than ridicule. Sorry.
Yes to all you said and to my insistence that this blog, while pretty cool, is moderately low-level most of the time consisting as it does in mere repetition of the MisesHayekRothbard doctrines restated less eloquently. I prefer the forums.
That is worsened if commentators don’t know what those lines are and try to critique them, so yeah. At least on the forum people tend to make the effort of educating themselves first, then debating. But there are some pretty good discussions here too, mostly on the monetary articles and also pointing to additional sources that often build up on the Austrian case. I consider the blog and site to be educational tools, not so much venues for debate anyway, which is more so what the forum is for.
Inquisitor is correct. The comments section on the blog is not the place for lengthy debate or to deepen one’s knowledge on a subject (although it can happen). When I have a question about a topic to enhance my understanding of it, I always post in the forums.
I agree. But it is a comment section after all, and after a long day’s work of producing things other people want I think sometimes it’s just kinda fun to read the back and forth of ignorant (michael) and intelligent comments.
Inky: It’s not just the content of the school I’m criticising; it’s the methodology. You can’t just posit eternal truths because they are self-validating in some idealized world. You have to test them in the real marketplace for them to have any validity.
The thing that distinguishes “Austrian” economics from real economics is that real economists are out there measuring the actual world. They’re not sitting up in their ivory towers writing letters to one another about how things ‘ought to’ be.
I’d like to refer you back to one of your gurus, F. Bastiat. Your theories only make sense when you avoid acknowledging all those “things unseen”. It’s a simplistic theology. All I’m trying to do is to show you those things you avoid looking at.
@Michael,
Be specific and let us all know what is “real economics?” Who is the lead economist in this real economics? We should at least get a chance to response to this real economist.
There is no ringleader in “real” economics. But there is a body of observation upon which most economists agree. It’s nonsectarian in nature.
That would be a breach of my exclusive contract with michael. I wouldn’t look too kindly on that.
“If we observe our presumably poorest citizens on our public transportation systems we see that they have cell phones, adequate clothing, personal audio devices, and are generally clean and free of disease and deformities. They also have the comfort of using a heated and air-conditioned transportation car that has carpet and flat-panel televisions for their amusement (paid for primarily by the wealthy, of course).”
- I know not when was written this text. But, many americans that previously had lived in apartment with air-conditioned, today live in huts or sleep in cars.
“I know not when was written this text. But, many americans that previously had lived in apartment with air-conditioned, today live in huts or sleep in cars.”
Source(s) please.
Richie, here in Venture, where luxury homes are popular with surfers, many former neighbors are sleeping in cars parked in front of driveways at night. Many live in tends.
Leave your computer for a time and watch the pratical life.
“…here in Venture, where luxury homes are popular with surfers, many former neighbors are sleeping in cars parked in front of driveways at night. Many live in tends.”
Surfers? Tells me all I need to know. I guess that is the “pratical” life. And what are “tends”?
And just so you know, I was unemployed for 16 months, so I know all about the “pratical” life. Don’t proceed to lecture me about how the world is or works. I actually work for a living. I don’t live in “Venture” and surf my life away. I save much of what I earn and I make the right choices in life, rather than own a surfboard and end up in a “tend.”
Ventura (not Venture, was error of digitation) is a small city on the Pacific coast, about an hour’s drive north of Los Angeles. Ventura is storybook California. Here, luxury homes with a view of the ocean dot the hillsides, and the beaches are popular with surfers. Now, many former neighbors that previously lived in apartment with air-conditioned, today are sleepping in cars within city limits.
Some do. Some don’t.
What is your point?
I have to ask the same thing, what is your point? You think “unfettered capitalism” is to blame for this like michael? Or is it that you think the current crony system hurts people and feel the need to make that point to the choir here?
extremely dissappointing after Nel’s last article on the stock market, which was so good.
this one is right out of the “apologists” playbook. and in typical apologist fashion leaving out the most important factor in a discussion like this, whether you are referring to “Capitalism as it is”, which in itself is fundamentally socialism for the rich, or a real free market.
90% of the poor own refridgerators? what percentage of the homeless own refridgerators? you got your data from the census? uh, well, i guess that would mean the homeless don’t count as poor then, since the homeless don’t have homes that the census can be mailed to or have a couple evil government workers ring the door and make sure they complete the inquisition. So, apparently from the data this article used, the homeless aren’t poor.
by the way, the US and the euros are basically the noble class of the capital system anyway. we have capitalism all over the world now in case you haven’t noticed. what the heck is a “non-capitalistic country”?
So, I think to talk about “capitalism as it is” and the “poor” you pretty much have to take into account that much poverty in the world outside of europe and the US is not because they haven’t experienced capitalism, but because they have, just the other end of the stick.
I also don’t think the author has been on a bus lately.
Street sweepers and factory workers are poor? what? another apologists dream that all those who do manual labor are poor.
of course, to complete the capital as it is apology, one has to degrade socalled “subsistence” farming, etc. the problem with farming and primitive exchange has to do with socialist appropriation of land that has been used forever by state’s in order to put it to more “economic” uses [most often for foreign corporations but also for local elites]. no land, no farm.
you think africa has always been poor? read some of the early explorer accounts.
i doubt if I will ever understand supposed “free market” advocates who feel the need to make excuses for a system that has little to do with a free market.
the poor are out there in every pocket of the globe including the elite nations, “capitalism as it is” is running the show the world over through the work of the multinational corporations, face up to the realities of the situation and get on with it.
Re: Gene,
What percentage of the dead own refrigerators? See? Capitalism is evil!
Gene, I’m not sure I fully follow many of your sentences, but I think I get your overall point. Keep in mind that this articles is a block of text they pulled straight from my book. You don’t have there all the definitions and detailed descriptions of the various terms and political systems which I lay out in the book–I think you are misunderstanding a lot of what I’m saying. I believe that all of your concerns are clarified in the book.
Dear Kel Kelly.
When was written your book?
Because today is possible watch easily in pratical life that the number of homeless is increasing and that this standard of living of middle class, all these consumer goods, was achieved on the basis of indebtedness.
WWW, I agree. This is due to recent economic policy. That does not change the fact that in our current state in our quasi-capitalist economy, most of the poor live better than any of the poor throughout history. As I state in the book, if we had a real capitalist society, the current poor would not exist, except those who chose to be poor.
“As I state in the book, if we had a real capitalist society, the current poor would not exist, except those who chose to be poor.”
Kel, forgive me. I know the answer is probably in the book. But I’m curious. It’s a plain fact that most people are not intellectually or temperamentally suited to entrepreneurship. They require jobs, employment through someone else, for their economic justification.
What happens when no one’s hiring? When all the jobs the entrepreneurs require have been filled, and we still have people left over?
Kel,
that would make more sense, as the way I interperted the article just didn’t line up with what I read in your previous article on the stock market and monetary inflation, which I thought was exceptional. i will have to check out your book.
also keep in mind I was commenting quite a bit on previous comments rather than the article itself. I think a lot of people interpret an article that might state “a free market can only help the poor” with “everythings cool with whats out there now”. obviously, definitions come into play.
No, I definitely don’t think that myself. I think the point of posting this article without context is to alleviate the concerns people have about the need for more government intervention.
Unfortunately, you aren’t wrong to say that some might take it to mean we need more of the same.
I don’t think it’ll be taken that way in the current climate of huge amounts of recent non-working intervention though.
I think Gene is right. I naturally took it for what you meant since I found the article here and assumed that you would not defend the status quo. However, taken out of context it could certainly seem that you are. I found myself thinking exactly as Gene many times throughout the article. We all own refrigerators-is that the result of private property or the result of the hampered economy? Personally, I tend to think that we would have moved way beyond the present state of affairs in a truly free market.
Very few people regular to this site would make that error. Either way, I think the author’s purpose is to challenge socialist contentions on poverty and like I said earlier, provide some perspective on the issue on just how easy it is to manufacture poverty both by statistics and government fiat.
In the context of having the rest of the book, the article is really saying that even in our current highly hampered market economy, the poor are better off than they have ever been. In other words, the mere partial capitalism that our rulers have allowed have sufficiently solved most of the traditional problems of the poor. If we had full capitalism, they would have virtually none of their current problems.
Excellent article. One point to note. In most parts of the world, the rich are overweight and the poor are underweight for the obvious reason that rich people can afford to indulge their appetites while the poor cannot. In the US it is possible to see rich people who are underweight and the poor are overweight especially when it comes to women. Because rich people go on diet and expensive fitness programs to maintain their figure while poor people go to munch at McDonalds. Hurrah for capitalism that keeps the stomach of the poor full while the rich chooses near starvation.
Dear Kel Kelly.
You had not examined that this standard of living of american middle class was artificial, i.e., had been driven by rising household debt what caused this crisis?
He’s explained above that this article is kind of outside the context of his book, which explains a lot of that. It’s available on this site, you can find out if he examines it there
is it artificial? if the standard of living exists it doesnt soud artificial? would a lower standard of living have been the case with a less debt-laden society??
It is a sin problem, not a money problem. The purpose of money is to establish the food chain. The people on top psychologically eat the people below them. “I may not be rich but I am better than the welfare slugs because I can have stuff that they can’t have.”
That may be what you think it is, and it may be what it is becoming, but the real purpose of real money is to serve as a medium of voluntary exchange between two consenting parties.
can you save a medium? why not just breathe on what you exchanage and let the life force of the air be the medium of exchange?
Hi
The “poor” are caused by price tags being on survival goods/necessities… and price tags (and ownership) were invented by capitalism, a man-made-up thing… a servitude-infested pyramid scheme. No other living things on the planet are seen using economies/ownership. The pyramid scehme symbol is right there on the back of the USA dollar… and its almost for sure a Columbian Freemason thing, as the USA gov is in a District of Columbia… and not part of the USA proper. We ALL know about pyramiding form the myriad of failed childhood versions of it. While the upper 1/3 are heads-in-the-clouds, the kids on the bottom are crushed by having the weight of the world’s knees in/on their backs. Unfortunately, monetary discrimination is legal in the USA, and so is the “join the competer’s church or starve” extortion and forced religion that’s done to USA 18 yr olds. Sad.
I hope the capitalists like hauling bricks and building pyramids, because, between civilizations, that’s what pyramid lovers (capitalists) get to do. Yet one more pyramid in the world sandbox… a symbol of the subject of study for the NEXT “learn not to pyramid” class that passes through.
Larry “Wingnut” Wendlandt
MaStars – Mothers Against Stuff That Ain’t Right
(anti-capitalism-ists)
Bessemer MI USA
“The “poor” are caused by price tags being on survival goods/necessities… and price tags”
Thanks, I’ll stop reading now.
Even better said.
Amazing, though, isn’t it. These kinds of folks… they’re out there.
Wingnut, when writing poetry, metaphorical or allegorical narrative, satire, one must be precise and clear. It is just as important as when writing analytical essays.
Symbolism and imagery can be powerful tools when creatively yet logically organized. This foundation in no way diminishes the art, whether free-flowing or conventional, from Pink Floyd’s marvelous swipes at conformism to Jonathan Swift’s piercing genius.
This suffers from the “all-over-the-place” syndrome, like one of my private outbursts of frustration when my swinging hammer misses the nail only to smash my own thumb. Hell, I’m not sure if you’re saying that nasty Starbucks caused Central American farmers to join the cocaine industry, or the Fed is a front for Warren Buffet….
Geez Franklin, the whole comment is about pyramiding and a childhood example of it… is given. I truly hope you don’t need even MORE hand-holding just to learn about get-a-leg-up pyramiding and similar greenpaper false-idol-worshipping, rat-racing systems. Its easy to see American society doing JOIN OR ELSE, OR STARVE, OR DIE to the 18 year olds and offering them ONLY a competer’s religion (capitalism) and not a drop of cooperator’s religion. You can also easily see the amount of servitude (working FOR instead of WITH) going on in capitalism, and its also easy to see “pay up or lose your wellbeing” in the flavor of Chicago mobs pre-Elliot Ness… happening rampant in capitalism.
I hope you don’t need blatantly-happening-in-front-of-your-face pyramid ops further explained or diagrammed. Its not THAT complicated. Read it twice if you have to. Most don’t need to, though. Its an obvious thing. ANYTIME you do “or starve”, “or die” and/or “or else”, that’s called extortion, and its a felony.
Study the iron gate of opportunity blocking called “affording” and see how its related to monetary discrimination. This is EASY, my friend. I wrote it for 3 year old mentality, so even capitalism lovers and similar enjoyment/empowerment junkies can understand it. C’mon. Pyramiding. Standing on the backs of others… in (new world-) “order” to get “high”. Simple, and disgusting. Any parent in their right mind… kyboshes pyramiding in the playgrounds as its exploitive to the kids conned/forced-into slaving on the bottom… while kids on the top get addicted to “high-ness”. C’mon, you can fig this.
Wingnut
Or he is just satirizing a state worshipper in general.
Many thanks to all who have contributed their civil and thoughtful comments, notably “michael” and “J. Murray.” And again, best wishes to Kel for success with his book.
Wingnut wrote:
“ANYTIME you do “or starve”, “or die” and/or “or else”, that’s called extortion…”
Well, two out of three ain’t bad. No, actually “or starve” isn’t necessarily extortion, because not feeding someone isn’t the same as extorting them. If you threaten to kill or beat someone, you are threatening to violate their rights, which is extortion. If you threaten to not give them food, or money for food, you are not violating their rights, because others don’t have a right to your food or your money. (If you threaten to take away the food they already own, of course, that is a rights violation.)
“Study the iron gate of opportunity blocking called “affording” and see how its related to monetary discrimination.”
So people should be handed whatever they want, whether they can afford it or not? In other words, society should not expect that people have to earn something before they can get it? And society should not expect that people should leave other peoples’ property alone? Wow. You are a moral retard, sir.
Wingnut wrote: price tags (and ownership) were invented by capitalism, a man-made-up thing… a servitude-infested pyramid scheme. No other living things on the planet are seen using economies/ownership.
Umm, what part of that… didn’t you understand? Ownership is the ‘device’ by which people rat-race/compete/tug-o-war. And just like ANY child tug-o-war, if it isn’t stopped, someTHING or someONE gets hurt. What does a good parent do? Take the tugged-over item away from BOTH, correct? Take ownership away from capitalism (including the self-lie about being able to own money), and there’s no more rat-racing. Look at society within members of the US military. NO money needed… only requisition forms… handed out freely. Its for necessities, not luxuries. You can’t GET luxuries with requisition forms. Now, how much FEAR FOR SURVIVAL from lack of basic survival supplies… seen amongst members of the USA military? ZERO! Now look at the civilian side. RAMPANT FEAR, ALL OVER HELL! Now back to the military. Luxuries are put into repositories such as ‘recreational services’ and ANY rank can check these luxuries out of the repository, and they become the CUSTODIAN of that item. Custodianship is different than ownership, and since ALL of the ‘things’ created on the planet… are made of Earth creator-made materials, and since the owners of THAT were never consulted as to IF those materials COULD be owned or sold, then by our very ‘owned’ ownership laws, ALL ownership is null and void. With me? Ownership is a man-made-up thing… and not a single other Earth creature does it. Sure, some animals try to defend lands and pee on things, but the insects and birds cross those pee-borders without a second thought, as should folks be able to cross USA borders no matter what.
The military is a commune. A Socialism. A TEAM! Members tend to take care of each other, and robbery amongst members is pretty low. Happiness levels are pretty high. You don’t ‘own’ the vehicle. Its checked-out of motorpool, a vehicle repository. You don’t ‘own’ the shovel, it comes out of central supply tool crib… and you’re its custodian for as long as you need it, and your checked-out, un-owned garage might even be that shovel’s forward supply point indefinitely… especially if you’re a shovel care/repair master.
New America. All work is voluntary, and almost always enjoyable. We concentrate a whole lot less on toys and luxuries, and a whole lot more on necessities… especially feeding the world. We wear uniforms with color ribbons all over them, signifying which Team World projects you’ve been involved-with. You become high-ranking because of your experience, just like Native American tribal elders, and NOT because you could out-gouge others in busyness and green coupons. Treehouse teaming. Study it. Folks WANT to ‘commune-up’ and build the treehouse. No bosses, no wages, no billing, no orders (of ANY kind), no pyramids/hierarchies, and everyone celebrates a job well done, afterwards. People WANT to help and WANT to adopt things and others. Doing us-vs-them wars across borders, yards, religions, buyer-seller.. does nothing but make blood-boil. Competition is NOT healthy and never was. Only cooperation works, and we’re NOT talking about cooperating with the competer’s religion called capitalism.
There are lovers and there are fighters, and right now, the fighters have taken-over as far as social structures. Just keep in mind that meek little 4 year old Susie is laying in the mud over here… because a bunch of friggin’ brutes chasing ‘the ball’ with abandon… have run her down without remorse. Fighters will ALWAYS beat lovers… at the game of rat-racing. How’s the fighters doing at the game of love? The meek shall inherit the Earth. Are the fighters ready for the reign of the lovers? Separation of church and state, you say? Don’t count on it. We’re draggin’ the church right out into busyness world, and on a Monday morning to boot. The capitalism pyramid is collapsing, and we Christian socialists are giggling in glee. You could see it getting more and more top-heavy by the minute… too funny. Ky-BOOM! Toadjaso.
@ Wingnut
Excellent satire… very enjoyable.
And in the off chance that you are not being satirical, best of luck with your New America. I am not sure what you will do when you realize that commune living is incapable of supporting 99% of the human beings on the planet, but I doubt you will get far enough for that to matter.
(I really do think you are being satirical, the comment was for random visitors who might not)
Reading some of the newer comments it probably is though he/she/it has been very argumentative in the post, so it could just as well be a sufferer of delusions (I have met some leftists who are just this insane) as it could be a satirist.
Massa Wingnut Bossman,
Be ok if me and my friends and family keep us our private property rights in your New World Order?
Hi again!
Oh man, I don’t know if you short-commenters should be addressed at all, but here we go just the same. First, there’s not a drop of satire here. Inquisitor might be right when he mentions delusion. But just how much difference is there between a delusion… and a hope/dream that… according to my fairly-thorough research… MUST come true? The pyramiders MUST give up pyramiding, as ALL pyramids only go just so far. They then get too top-heavy and fall… from too many folks trying to get-a-leg-up on others and the dreaded mankind-invented cost of living. Competing is NOT the correct direction. Cooperation is. Its inevitable. ALL pyramids (economy chasings) collapse, and ALL pyramids suffer from classes or layers. These layers isolate themselves from each other, and thus the top doesn’t know what’s happening on the bottom, and vice-versa. All but the bottom-most layers (smashmouth-) compete with each other… to try to attain slots on the layers above (getting a leg up/rat-racing) (labeled as ‘seeking success’ by caps). The fighting is much like football, a land-gobbling smashmouth competition that is America’s #1 sport. But hockey is still more blood-sporty, and it, too, has borders and my my my territories drawn on the ice… promoting ownershipism. This bloodsport runs videos of home-team players doing injury-causing body-checking to opposing teams… on video display boards pre-game, and the adults and kids applaud each bone-crushing slam seen in the video… one after another… yay home team. That’s disgusting. Bare knuckle boxing on TV these days? Yikes. Might as well do cock-fights, too, and open up betting on them. What else are we going to approve as “ok” and “normal”? Anything goes, these days. NIMBY! Not In My Back Yard! Capitalism is the same. Caps are going to get their disgusting pyramid off of the planet one way or the other. I will be personally seeing to it. its self-destructing anyway… I don’t need to lift a finger.
Now, Art… lets dissect your ridiculous sentence here.
“Be ok if me and my friends and family keep us our private property rights in your New World Order?”
First word in question… “my”. This is an ownership thing, and people use that word all over the place…. especially those addicted to the embossing-gun/engraving-pen empowerment of owning things (writing their name on things). When one officially OWNS something, the police guns are there to back them up, and that’s an empowerment… control of something… one of the most addicted-to substances/phenomena ever seen on the planet. MANY are currently laying face-down in empowerment cocaine, and these same folk define THEIR version of the word/phenomena “success” as attaining a “respectable” layer on the socio-economic pyramid. THEIR success is materialism and class… and other measurement criteria such as love, logic, caring, sharing, flexibility, etc… are not measured. They are not considered as criteria in the measuring of the phenomena labeled “success”, for many.
To get to the point, ownership junkies use “my” all over hell, and its an indicator of their alignment with capitalism and materialism. “my husband, my kids, my car, my lunch break, my cigarette, my doughnut, my coffee, my doctor, my lawyer, my life, my dreams, my job, my yard, my house”. Every single one of those ‘my’ could be replaced by ‘a’ or ‘the’. Needless to say, its easy to HEAR someone who is addicted to owning. But if you MUST use “my”, then using it for “my friends” is one of the least ownership and most “adopting” uses of any. I think “my friends” will stay active even after we abolish ownership for custodianship. “My people” is much more dangerous, as it CAN indicate a hierarchy and thus an “order” and the issuing of “orders”. Orders are illegal in MY delusion of a fair’n'flat New America commune.
Now, “us our”. Do I even NEED to tell you how “us” CAN suck you back into smashmouth football-like us-vs-them warring? As long as your use of “us” means everyone on the planet, you’re safe and sound. Faction away with your “owned” team, and you’re in trouble and about to do us-them warring somehow. Common law IS hard work and will need egalitarian voting and waivers and adjusting nearly constantly… but we must not faction-off into teams that COULD compete with one another (such as dividing the world into separate nations). Only cooperative sub-teaming is wise… and although it might not be an official law, I’m sure it will be a law-of-the-land or a well-accepted social more, seeing “we” have all investigated pyramiding and competing by then, and have found all its wrongness. We would, by then, “know better”. The word “our” has the same baggage as “us”. Watch out for tendencies to faction into competitive teams. “Us” tends to be the opposite of “they”, and “our” tends to be the opposite of “their”.
“Private property rights”. Alright. Were they EVER your PRIVATE “right”, or did some idiot just make-up the phenomena of “private” ANYTHING? The only thing private is your body… and even THAT is made of Earth-creator-created materials. Every THING on the planet is made of Earth-creator-made materials. What makes you think that you have a “right” to a private ANY THING? Just because you SAY SO? Because some idiot managed to get a police-gun-backed law passed that says private ownership CAN exist? That’s it? Even though ALL Earth creator-made materials never had (en)titles of ownership or FOR SALE signs on ANY OF IT when mankind arrived on Earth, YOU think you can OWN (and thus control) Earth materials? Boy, I think you have reached for the moon. Again, not a single other creature carries wallets or store receipts or entitles of ownership. Its strictly a man-made thing. Still think you’ve subscribed to a “good” OR “right” way of doing things, owner-guy? Rethink, and hurry.
Next… “your”. My dream… abolishes ownership. So, in beloved non-pyramiding systems (flat fairness-laws system, all people treated the same no matter what)… there is no “your”. I did not invent non-pyramid total-equality no-competing social systems. Churches did, as used in their playgrounds and in vacation Bible schools. At least that’s the first time I’d ever seen one. EVERYONE gets a sloppy joe, no matter HOW hard you play or work or sit around. EVERYONE gets fed, clothed, healthcared, loved, taught, corrected, bedded, you name it. Extremely strict fairness laws were in-place and well-(but lovingly)-enforced. If a big bully came along and grabbed the whole platter of sloppy joes, and ran off into the woods, where he would make little Susie “service” him to get a bite of food… that crap would be SEVERELY corrected. That’s what you’ve got with the pyramid scheme called capitalism. Rich people, dangling cheap trinkets from the balconies of city skyskrapers and other high-pyramid places, giggling while watching the desperate-to-survive lemmings below… gouge and elbow each other… trying to get a leg up. Truly sick stuff.
Lastly, “New World Order”? C’mon, I’ve been trying to get you/the competer’s to say goodbye to “orders” for HOW MANY words now? Yet many of you will likely go to a fast food restaurant today, and issue an “order”. You’ll wave your greenstamps in the air, and say “make me a hamburger and fries” and the servant behind the counter is under a “do it or else” anvil that could drop in a flash, so your “order” is carried out. You got the coupons, you can boss around servants. Its the American Way (AmWay). Ain’t empowerment great? Dive face-down into it, and don’t look back. Those screams from the bottom of the pyramid scheme are just the powerful exhaust sounds of the free marketeers Earth-mowing machine… with its triple-edged blade, slicing what little stubble was allowed to grow… off the planet… to sell to each other. Mow mow mow… rat-racers. She’s gonna blow. Self-feeding machines always do. But to sum up, its called New America and its NOT an “order”… not in ANY way.
Typed fast, mistakes likely, sorry. Thanks for the responses.
Love
Wingy
I think I’ve been screwing up the threading hierarchy. Sorry gang. I should pay more attention. Admin, feel free to force-embed my noisemaking into any hierarchy you see fit… if that can be done. Take care.
Hi again. This thread has predominantly died, but, I want to drop a last note here… on the off chance that whomever wrote the article synopsis at the top of this thread… is nearby. Let’s look at it…
“The author of The Case for Legalizing Capitalism describes the topic of poverty as a key battleground in the war of socialism versus capitalism. He examines how much poverty exists in the United States, and how we can truly eliminate it. FULL ARTICLE by Kel Kelly”
Okay, in MY opinion, there is some crossed wires happening in that statement. “battleground in the war of socialism versus capitalism”? Huh?
Equate the socialists to the LOVERS in a nearby post of mine, and equate capitalists as the fighters. TRUE/REAL socialists DON’T FIGHT/COMPETE! They instead, cooperate (but not with capitalism). So, if you see a war between SO-CALLED socialists… and capitalists, you are NOT seeing any socialists, and you are mistaken about the definition of socialism. TRUE socialists are hippies, lovers, Christians… make love not war, ya know? Kids, dogs, sitars, parks, incense, mod clothing, you know… love love love… Christianity at its finest. Socialists don’t compete, fight, bill/invoice, do us-them (buyer/seller) border wars, none of that head-butting crap. They hate ownership and economies… and a REAL socialism is NOT an “economic system”. TRUE socialism uses no money or ownership (the things that get fought-over). In a REAL socialist (communal) system, the delineation between necessity and luxury is well-defined, just like it is for members of the USA military (those using THAT wise supply/survival system). Potentially-addictive luxuries and decadencies are well-understood, shared fairly in moderation, and since people have all adopted one another and every person is also a police officer and people-helper/storyteller… we see addictions-to-luxuries quite easily. We all know the signs and are able to bud-nip that stuff. Addicted to laziness is also watched-for, and taught-against. Anything “good” or “wonderful” has addictive tendencies, and a wise and loving socialism knows all the signs and has facilities to lovingly deal with enjoyment/empowerment addictions. Socialism is the act of NOT using economies and ownership (instead – sharing and custodianship)… and socialists do NOT “battle”. They/We do (tough) LOVE… cuz… we’re Christians.
Please think twice before you flavor a line like that again, eh? Please quit assuming that socialists do battles. We’re actually quite against such things. We “convince” with logic and heart… but we don’t seek “winning” or ANY competing. Would you prefer to label us as communalists? You ownership lovers are into labeling… as you’ve been trying to write your names on every single thing on the planet since the beginning of private ownership laws/polices that no other living thing on the planet… does. Now you can re-label me, and re-label socialism, and relabel yet another US or THEM in your warring-infested brain. Shake it off, people.
Wingnut
Anti-cap
ME: “I was hoping that you would be more specific, perhaps offering some ideas that can be considered by the thoughtful people who frequent this site.”
MICHAEL: I doubt I’ll be able to do that, Don.
ME: I, on the other hand have no doubt that you are indeed capable of doing so, you are a very intelligent man. I issue a challenge to you to do exactly that, using materials at hand (that is, not requiring a trip to Project Venus), and present it here on this blog in one month. Extra points for you if you can do so without using force in your plan. Outlines, sketches or broad strokes are acceptable.
MICHAEL: The paradigm around here is that personal excellence, combined with a lack of opposition to their means and ends, is sufficient to create ‘wealth’.
ME: Please explain how that paradigm, or any paradigm, is an obstacle to you in devising a (much needed) plan to improve our society.
MICHAEL: What’s needed is a reformulation of the basic question. Instead of saying how can I, personally, benefit from this sorry situation and leave the others behind, what we ned (sic) to do is to start listening more to people who take the overview… and who say “what can we do as a force responsible to mankind, to most efficiently utilize those resources in a manner that brings widespread productive employment and prosperity to the maximum number of participants?” (emphasis added)
ME: I like that quote Michael. To whom should it be attributed? You perhaps? I do have a tiny quibble, though,with the statement in its entirety. I realize that it is only an artifact of your positional bias, but you make an unfounded assumption when you say that the essence of the quote is a reformulation of the goal of many of the participants here. From my perspective, and I am aware that it is also a biased one, I think that view is one and the same as that held here long before you arrived on the scene, and in no measure is it a re-formulation of any intention to leave anyone behind. That rhetorical trick may have served you well in the school yard, but I think you will need to be a bit more forthright in your argumentation at this site.
MICHAEL: But that’s not what people here are prepared to seriously think about. Theirs is a simple philosophy; and to digest it fully they cannot put anything else on their plates. So they contemplate the beauties of a world with implicit extremes of wealth, one in which the wealthy must spend a proportion of their wealth in protecting their fortunes from the inopportune attentions of the increasingly numerous poor. (emphasis added)
ME: If you are seriously meaning that it is a simple philosophy, this may be the source of your failure to grasp it, as shown by your description of an alleged goal of leaving others behind.
MICHAEL: I’ve seen that future, in Ecuador. And it works, sort of. It just results in an upper class consisting of less wealthy, more anxious rich folks who have to contemplate dictatorial methods by which to mash down the aspirations of the majority. … And at bottom it relies on force. (emphasis added)
ME: Allow me to make a rather broad generalization at this point, please. When you observe any society, Michael, either real and in action or imagined, and you can state that if it relies on force, you can rest assured that that society does not qualify as an example of the ideal. It maybe the case that you either cannot or will not conceive the possibility of the existence of any non-coercive social structure. If so, you can certainly understand that others may indeed have that ability, just as a color blind person can understand that others may not be likewise limited.
MICHAEL: Much more productive to take the view that we’re all the same species and that we’re all in this together. So social policy must give equal attention to the needs of all, and even give the needs of us most in need the greatest priority. To me, simple.
ME: This is actually a great start, Michael, on your challenge, the task of designing a better alternative for a social structure for the next millennium. I know you have it in you.
MICHAEL: Your position is that if you personally are required to make any sort of contribution to the common fund, that constitutes theft. Fine. Please either form the political majority or obey the will of that majority. Maybe you’d be happier somewhere else.
ME: I too, am quite effective at ignoring certain comments.
Cordially,
Don
P.S. I suggest you consider some of the possibilities that the virtual nature of money open up when you design for a more just society.
You don’t give me much to chew on, Don. I can see it’s some sort of challenge. But I think I’ve been putting out a fair volume of food for thought as things stand.
For example:
MICHAEL: The paradigm around here is that personal excellence, combined with a lack of opposition to their means and ends, is sufficient to create ‘wealth’.
[DON]: Please explain how that paradigm, or any paradigm, is an obstacle to you in devising a (much needed) plan to improve our society.
You don’t understand. The paradigm is that all one needs is (a) correct thoughts and (b) a sum of money to be invested. And presto! instant wealth. (Plus, of course, a lack of gubmit interference.)
Isn’t there something else you also need?
2. “what can we do as a force responsible to mankind, to most efficiently utilize those resources in a manner that brings widespread productive employment and prosperity to the maximum number of participants?”
And you reply “From my perspective, and I am aware that it is also a biased one, I think that view is one and the same as that held here long before you arrived on the scene…”
Odd. I’d have anticipated that everyone would link it to “From each according to his abilities, to each according to his needs”. My guess, and I doubt it’s very far off base, is that people here would be strongly in favor of whatever led to “wealth creation” and indifferent to widespread productive employment. Isn’t it every man for himself here?
3. In my Ecuadorian example, I describe a societal power vacuum, where the State at all levels is barely able to enforce its writ. Therefore in its absence a private, for-profit power structure has arisen. Power is still a requirement, in order that society be kept stable. Only the government provides no more than a minimum. And private operators sell you the balance of the protection you require at a price.
Do you not understand that? I mean really! You feel that men in their free, ungoverned state will not just shoot you and take your stuff?
4. “P.S. I suggest you consider some of the possibilities that the virtual nature of money open up when you design for a more just society.”
I don’t know what you mean by its “virtual nature”. But it’s true that money is just an arbitrary and artificial construct, created for our convenience when engaging in trade.
The balance I’d hope to strike is not dissimilar to that hoped for by various people at the Fed. Put enough money out on the street for everyone to have enough to stimulate buying… but not so much that merchants are inclined to raise their prices. It’s a balancing act you’d want to master. The problem with the Fed’s approach is they extend their funds in the form of loans to major banks. I’d put the money in at the bottom level, possibly in the form of income supports (a ‘negative income tax’ for all filers able to show a minimum of actual income, say $3,000).
I agree you have indeed been “putting out a fair volume” but, if I may nudge the metaphor a bit, it’s the same meal repackaged and the leftovers are even less palatable than the original as presented by Karl Marx and Fredrick Engels.
The challenge:
I am seeking new ideas, from you Michael, or from anyone. But you in particular. I’m not talking about hair styles or music, or anything other than ideas about how to structure a society in such a fashion as “to most efficiently utilize those resources in a manner that brings widespread productive employment and prosperity to the maximum number of participants”. Or something to that effect.
Socialism, “From each according to his abilities, to each according to his needs”, fails. It is based on a simple-minded interpretation of the problem, and the solution it offers fails to account for our human nature. I grant that it could be the ideal solution on a world that we do not now inhabit, and more importantly, we never will. In our world it requires the systematic use of force to take from some in order to “give” to others. The scare quotes are there for a reason, you cannot give that which is not yours. Theft is theft, no matter by whom or for what purpose. You cannot expect to arrive at the goal of forming a just society by employing unjust means. I am challenging you to put your god given intelligence to the task of creating a better framework for society, for your grandchildren. From what I have seen so far, all they will have to remember you by can be summed up thusly, “He understood there was a big problem, and all he did was complain.” No need to feel bad about that though, you are in the company of countless others.
Pure free market capitalism, as presented on this site, will also fail as a social system, should it ever be implemented. This will shock you, and it will be met with a good and healthy measure of derision from many here. But free market capitalism will not fail for any reason having to do with faulty economic theory.
It will fail for at least two reasons. First, it is value neutral, and that alone is enough to disqualify it. To put it bluntly, humans will not implement any value neutral social system, even if it is rationally understood to be the best possible means of achieving the goal of attaining continual improvement in the welfare of everyone, and doing so in a fair and just way. It is not our human nature to stand idly by when the system can turn the lives of our neighbors upside down in an eye blink. One would know that it could as easily be himself whose life was trashed. For example, in this free market capitalism any job loss is to be deemed a “good” thing because it will ultimately result in maximal gain by all participants in the system. This is the same thing we deem abhorrent in socialism or communism, some of us must be sacrificed “for the greater good”, but on auto pilot this time, not under control of some privileged person or group. Capitalism, the pure, free market kind, should perhaps be considered in a somewhat different manner than as a system for social organization. Rather, it should be appreciated as a reference standard by which the performance of any actual social structure may be measured. The goal of achieving maximal efficiency may best be set aside, for the time being.
The second reason is a bit different in nature altogether and I don’t want to belabor it here, as I consider it to be a virtual problem. The tenets of “property” and “ownership” need to be re-conceptualized, starting from the ground up, and going on up to the intangible. But that is a topic for another time and place.
The challenge, re-itterated:
Produce something, Michael, an idea, an outline, or only a list of criteria, by using words that describe how to solve, or approach solving, our pressing social problems in a fair and effective way. Take into full account our human nature and our incomplete knowledge. That is, do not rely on anyone either singly or as a group, to know what is the best action to take, or that he would choose to do so, if he even could.
You are free, of course, to decline. And continue as you are doing. I will not think less of you. It is not possible to do anything like what I have challenged you to do without painful reconsideration of one’s most deeply held beliefs. I understand.
Cordially,
Don
P.S. The understanding of the virtual nature of money is presently limited to a select few people on the face of the earth. Consider the set of people who are the most powerful and then consider the other set of people with little or no power. Ask yourself which set has the greater knowledge concerning the creation of money. Then ask yourself if there may be a correlation, or perhaps even a cause and effect relationship here. Ask how is money created. Ask by whom is it created. Question where the benefits flow in the creation of money. Question why money is created this way. Question if this is the only way money can be created. Question if there is not some way the creation of money can be harnessed to establish a more fair and just society. Formulate your questions in fourteen ways, each. Then ponder.
Don: One of the best and simplest approaches is to give employees an interest in the company they work in– possibly in exchange for those things (like pension plans) that have been taken away from them. Once they are vested their gains become the same as the company’s gains.
In the few instances where this has happened, companies suddenly find a greater degree of clarity in their purpose. Instead of being beguiled by a hotshot CEO whose strategy is to hollow out the company in return for forcing short-term profits, and who is rewarded inordinately for such performance, employee-directed companies make intelligent long-range plans. And they integrate the needs of each stakeholder in the community.
They come to recognize the needs of the greater community. And those of labor, of course. But also the needs of management and the need to maintain a healthy bottom line. By coming to understand the needs of the shareholders and the creditors, they educate themselves to the point where they know the company won’t last long until they learn the art of the compromise. So they learn to become responsible guardians of the workplace.
It’s also a useful strategy for company heads who are at their wits’ end to find solutions that keep the company from failing. Hand it to the employees. See what they can do with it. Nothing lost, particularly when labor problems are part of the mix.
Absent such a unified management structure, the only thing chief officers know is that they can tear a company apart to post handsome profits for a few quarters, bail just before the whole shooting match explodes and sail away on their golden parachutes. It’s happened too many times to count.
Investors (not the only people on the planet whose needs count) should be wiser now. But sadly, they don’t seem to learn from experience.
Michael,
I experienced a pleasant moment while reading your reply, and I thank you for it. Then, I thought to myself, OK where is he hiding the trap?
It is all too easy to fall into what I call “rut” thinking in trying times. Fear, anger and desperation promote thinking the same thoughts over and over to the point where the neural networks involved may change to make it happen almost unconsciously, somewhat akin to an obsessive/compulsive disorder, and a rut is formed in the track. Perhaps you intend to force companies to convert to “employee owned” for the greater good. Or force the employees to become “owners” against their will. But no, you have not said that, so I will not assume it.
List of Positive ideas:
#1. Work to increase implementation of employee ownership of companies.
a. voluntary for both parties.
b. fosters improvements in cooperation between management and employees, for the benefit of both parties.
c. promotes improvements in customer satisfaction as a result of decreasing competition and increasing cooperation between management and employees.
e. can be accomplished without the need to resort to force or any significant changes in the existing structure, in most countries.
f. may not be implemented in a large enough scale to have much of an impact. (But a litter is more than none.)
From the perspective of the free market, benefits flow to those who work to make it happen, the managers and the employees, which is as it should be. Benefit also flows to the customers in the form of, among other things, more and better choices are made available to them, and a more responsive company. That is a “side effect” of more cooperation between the owners, managers and employees. That is exactly what is to be expected in any self respecting free market transaction.
I will not presume to pass judgment on your ideas, but Michael, I think this one is a keeper.
You do inject a bit of a complaint, about the hotshot CEO. But I am not going to complain about that, really. In fact, I think you have made a valid observation/generalization, for the most part. The point I would like to make though is that a complaint is just a complaint. Its nothing of positive value, and by repeating the same complaint it sets up the conditions for rut thinking, again. Beware of the structural changes that may occur in the brain when that type of activity is repetitively engaged.
As a foil to prevent these unproductive neurologic changes, I suggest the simple process of constructing questions about the object of any complaint. For example, in the case of the hotshot CEO, I would pose questions something like these. Is the goal of the CEO coincident with (any of) the owners (stockholders), other management personnel, the companies employees, the customers? How was the CEO hired? Are there CEOs of other companies on the board of directors of this company? Is this CEO on the board of any other companies? Who are the owners? Why are they the owners? Do they know or care about what the CEO is up to? Why are there so many mutual funds holding stock in the company? Who are these funds investors, and why are they even bothering to invest through the fund? Why do these school teachers want to expose themselves to this much risk? Is the disconnect in goals related to absent owners? Do those owners even know how risky it is? Is this an isolated case or a general problem? What changes would have to occur for this problem to be gone for good? Can the changes be made without an act of congress? You get the idea, I’m sure.
Through questions, in can become more clear that what at first seemed like a straightforward real problem can be shown to be a virtual problem. By virtual problem, I mean a thing that looks like a typical problem yet cannot be resolved by any direct action. If you are able to identify the real problem, and resolve that, then the virtual problem simply vanishes. The hotshot CEO is just a human, with all his human traits and tendencies. If you could magically insert anyone into a position similar to that of the CEO’s, I wager that you would soon be seeing yet another “hotshot”. If you persist in asking question after question, you may be able to untangle the most twisted and convoluted problems, or not. But at the least, you would be less at risk of forming more of those deep ruts in your brain.
Persist and persevere.
Cordially,
Don
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