A bizarre critique of Capitalism ... ideas?

Economics Political Theory
61

To be fair, you have indicated that you blame the state for the existence of corporations and capitalist-boss-worker hierarchies, and that you are an anarchist

For the size of corporations yes. I’m not so sure I blame the state, rather than the system, for capitalist heirarchies tho. And I wouldn’t really call that blame, more like recognition that it was much easier when capitalism started, to have such heirarchies.

However, what if we were to abolish government, and people still continued to voluntarily organize themselves in corporate structures and income spreads remained wide, would you accept that as a legitimate market verdict and the expression of the will of the uncoerced people?

Well, to be honest I don’t find the state to be the only coercive structure. It institutionalizes coercive structures. I think many religions are intellectually coercive (believe or burn in hell!), and many owner/worker relations can be quite coercive, tho not so much here in the states; mostly in the 3rd world.

But yes, after the state falls, I will still be trying to break up other unnecessary power structures. But I do my politicing through debate and education, and non-violent resistance. My revolution preferably wouldn’t involve warfare. If people don’t accept it, that’s fine. I don’t claim to be omniscient. I just see the spread of power and wealth as healthy and productive. It’s what both capitalism and democarcy did, compared to fuedal monarchies, and it seemed to work out great. So why not take it a step further?

62

If you believe such business arrangements are so beneficial, and yet infrequent, do you have any particular theory of why companies utilizing them have been unable to outcompete alternative business structures?

I don’t think it was economically feasible prior to the rise of computers, the internet, and globalization. But, it is proving to be more and more feasible as the years go bye. The number of workers w pension plans and stock options is getting more popular, as well as worker self-management.

63

What it means is that:

  1. Capitalists (entrepreneurs and investors) make too much money.
  2. Laborers ought to make more money.
  3. Laborers ought to elect the managers that head their workplace.

Why it’s wrong:

  1. Investors are needed to properly allocate resources among competing demands. Investors will reallocate resources to the most profitable business venture. The more profitable a business venture is in a free market, the more beneficial it is to society. Entrepreneurs are needed because they are the visionaries who create new products to satisfy consumers and create new methods to provide products at a more affordable price.
  2. Laborers make the amount of money they deserve, according to the laws of supply and demand. If they wish to make more money, they ought to retrain to a higher-paid profession. If “Labor” made more money at the expense of “Capitalists” (if such a broad constructs could even be made), then that would mean that there would be an inefficient allocation of resources: there would be too much labor and not enough capitalists. Thus, the advancement of society would inevitably stagnate.
  3. Entrepreneurs take the risk of profit/loss and pay laborers a wage or salary. The laborers accept this wage/salary because they are not willing to accept the risk of taking a loss. Moreover, if laborers are willing to risk taking a loss, they can easily create a worker co-op in a free society.
64

Collectivism is not compatible with individual liberty…

This is a dodge. You make moral claims, and then when asked about the basis for your moral claims, you retreat behind “it’s just my opinion” instead of substantiating them.

This is an example

Care to respond?

65

This analysis is entirely mistaken:

First, profit is not the result of exploitation and wages aren’t determined by decree. Both wages and profit are real economic factors that are independent of bargaining power (determined by the marginal productivity of labor and time preference respectively). Additionally, what’s fair and what’s unfair is entirely determined by free-market activity, i.e., what the service is worth, at the margin, to billions of individuals with entirely unique and subjective value scales. The painter may say that his poverty is “unfair” because no one “understands” his work. But society is telling him that his time would be better spent if it were devoted to other economic/productive endeavors that are actually valuable. In other words, the will of the consumer trumps the arbitrary whims of a clueless leftist.

Next, laborers can own the means of production in a capitalist economic system. They merely need to accept risk, save, and start their own firm. But entrepreneurship is a very risky endeavor and laborers tend to be, as a rule, risk averse. In other words, risk is a cost in itself and individual’s will accept additional risk only if they’re compensated for it. The amount of compensation required in order to turn a risk-averse laborer into an entrepreneur is torrential (beyond the expected rate of return determined by market conditions). Simply put, the expected rate of return on investment, plus all the risks associated with entrepreneurship, is worth less to the risk-averse individual than the fixed periodic payments (wages) that he/she is promised when working for someone else.

And finally, co-ops are inefficient relative to corporations. The laborers in a co-op are the managers, and the landowners, and the capitalists. They don’t earn wages (they earn income) and managerial decisions are usually made by majority rule. Ownership is entirely exclusive which means that they cannot issue securities (bonds/stocks) in financial markets. This is very important:

  1. They lack access to capital
  2. They cannot achieve economies of scale which puts them at a significant disadvantage (co-ops are cost inefficient).
  3. The lack of access to capital will mean that laborers that work for corporations will have wages that exceed the income of those that work for co-ops, because capital accumulation increases the productivity of labor (at the margin) and therefore real wages. In other words, co-ops are entirely self-defeating.

And, believe it or not, managers are very important. There is a hierarchy of managers that delegate various tasks in order to coordinate production (in many cases they do this at a global level). They attempt to forecast future market conditions and act accordingly; they attempt to motive employees in order to elevate productivity levels; they try to figure out new and more efficient ways to serve the needs of the consumer (etc, etc). Rule by majority, on the other hand, is the most inefficient form of organization. Just think of congress; every firm would be as efficient as congress.

66

Collectivism is not compatible with individual liberty…

We define collectivism differently. Ive had this discussion with someone before. If you mean that the collective interest supersedes individual interest, then no, Im not a collectivist. Im a collectivist in the sense that I think people working together is usually better than people working alone.

This is a dodge. You make moral claims, and then when asked about the basis for your moral claims, you retreat behind “it’s just my opinion” instead of substantiating them.

Morals are subjective. How can I give you an objective basis for my subjective ethics? What do you want, me to go authoritarian and try to force you to accept my view? Sorry, that’s not my style.

Care to respond?

If I wanted to I would have. I have resolved myself to simply not recognize it when you misrepresent my position (meaning I never said it was bad, injust, nor immoral. Just that it creates an advantage. Genetics creates an advantage, do I now think genetics are bad? Of course not.)

67

I see that Epicurus has managed to hijack another thread with his ignorance.

68

My calculations were made assuming maximum reinvestment.

Good for him. Now all we need to do is run the numbers for someone working 40hrs a week at a minimum wage to see how much they need to save to be able to retire.

Or the masses could just get paid up front and free ride of increases in wages brought about by competition and innovation. I don’t think people shouldn’t invest, but your proposal to have everyone get paid corporate dividends or in corporate stock is a little strange… I don’t see the advantage.

69

It’s just much easier that way. To invest it themselves they will most likely have to get a broker, and now you’re talking about even more costs, and a need to have a large up front deposit. Doing it through their workplace allows them to spread the cost in order to maximize the net profit.

It’s not so much my idea, it’s just an expansion of what is going on in the market right now. More and more companies offer pensions and stocks as part of payment to more and more employees.

Also, taking my ideal as a whole; necessary personal costs would be next to nil, so the need for the up front wage would be as well.

70

Then people are just invested in a random corporation (the one the work for). Most corporations go out of business right? A single corporation is not a good stock of value for 20 years, unless its like Exxon or something.

I’m sure these are in more upper and middle class jobs. Poor people can’t afford the uncertainty. They need at least X/month…

Mass voluntary charity? I think eventually charity would cover everything - there’s a charitable class, and a class that gets really wealthy (or maybe everyone gets really wealthy) so as long as some charitable people are getting richer all the time, it will eventually be enough to cover mass social services. Untill then, I don’t think we should operate under the assumption that voluntary charity can or will cover all the things you want it to.

71

It’s not so much my idea, it’s just an expansion of what is going on in the market right now. More and more companies offer pensions and stocks as part of payment to more and more employees.

You are right this is a trend in the market place. But it is the market responding to government. All these snazzy ways that people get paid today is so that they make less income outright so they lower their tax burden. But they make up for the difference with all of this with stocks, 401k’s, insurance, etc… Absent the government how people get paid would be a straight up wage. The only thing gained by paying people in ownership is less choice, they would have a portion of their income spent on investing in thier company. If that is what they wanted they could do it easily and cheaply.

I trust people to do what is best for themselves.

72

Then people are just invested in a random corporation (the one the work for). Most corporations go out of business right? A single corporation is not a good stock of value for 20 years, unless its like Exxon or something.

Well, Im sure they wouldnt want to put all their eggs in one basket. I would prefer an employee have a share in his own company. But its up to them ultimately.

I’m sure these are in more upper and middle class jobs. Poor people can’t afford the uncertainty. They need at least X/month…

For the most part. But as the market progresses, this will become more feasible, as it has been in recent decades.

Untill then, I don’t think we should operate under the assumption that voluntary charity can or will cover all the things you want it to

I think it can. But even if not, we can try

Most people like to be charitable. If they can be convinced to spread less paper around, and more wealth, I think we will start to have rapid progress.

73

All these snazzy ways that people get paid today is so that they make less income outright so they lower their tax burden. But they make up for the difference with all of this with stocks, 401k’s, insurance, etc… Absent the government how people get paid would be a straight up wage.

Yes but think of how much more money companies will have without the tax burden. I dont think that would really change anything. If anything I think it would make it even more feasible.

74

That’s not collectivism. That is market anarchism. Collectivism has a very specific meaning, particularly as Mises and Rand would have used it.

Another dodge. I never claimed morals are not subjective. Whether something is subjective or not, doesn’t mean it cannot be criticized and analyzed. Again, you make moral claims, and then you refuse to explain what is morally wrong about the issue you present. Either you believe it is morally wrong (and one would hope you could articulate it) or not.

In other words, if you don’t take your own claims seriously, why should any of us?

I didn’t misrepresent your position. I asked you for clarification. Now you’re trying to dodge behind claims I am strawmanning you.

You did claim that “good” people should care about their families. Obviously, inheritance is a means for parents to provide for their children. And yet you oppose inheritance because you feel it creates an advantage, an “unfair” condition. Is this correct? I believe it is.

You still haven’t explained what could possibly be wrong with inheritance. Why?

You want parents to care for children, but you don’t want parents to provide children any advantage through care. This is cognitive dissonance, is it not?

75

The implication here is that cash is not wealth but stock is. Well, since cash can be more readily converted into wealth of whatever form the worker subjectively desires (including stock, if they so choose), from the worker’s perspective cash is wealth moreso than stock in-kind. You seem to imply that the worker is being stupid by not investing all his surplus cash back into his own company, which would purportedly vastly increase his company’s efficiency by improving the incentive structure, and should be given a further (institutional? or maybe you’re just trying to convince them to voluntarily do so) incentive to do so. Seems like you’re asking poor laborers to gamble with their pay when they’re the ones who can least afford to do so.

76

That’s not collectivism. That is market anarchism. Collectivism has a very specific meaning, particularly as Mises and Rand would have used it.

Granted. I still would not fear you calling me one. As long as that first paragraph in the mises article doesn’t involve the use of force, I do not disagree with it per se. I do find that the interests of all individuals, when taken as a whole, does have a life of its own outside the interests of the individual. The interests of some individuals was slavery, and for many others it was ending slavery. Ending it won out in the end.

Another dodge. I never claimed morals are not subjective. Whether something is subjective or not, doesn’t mean it cannot be criticized and analyzed. Again, you make moral claims, and then you refuse to explain what is morally wrong about the issue you present. Either you believe it is morally wrong (and one would hope you could articulate it) or not.

If you want some diatribe on why my ethics are the best ethics, you’re not going to find it. I would not be presumptious enough to make such a claim.

It is my opinion that people should best live up to their potential. I find it to be much easier for those with a stable existence to do so. So, I would like to give everyone a stable existence, at least as far as can be according to the laws of scarcity. I would have thought that was clear by every post I have ever posted here.

I mean, are you saying that I am making a moral claim by saying people should keep their interests in capital rather than money?

I didn’t misrepresent your position. I asked you for clarification. Now you’re trying to dodge behind claims I am strawmanning you.

meaning I never said it was bad, injust, nor immoral. Just that it creates an advantage. Genetics creates an advantage, do I now think genetics are bad? Of course not

I never said anything was wrong with inheritance. I want to give my children an inheritance. it’s not a problem. It just creates a distinct advantage that I think can be overcome with universal subsistence, education, and healthcare, and business models that reward people with capital rather than money alone.

Nothing says the one who did the investing was the original producer and saver. That was my whole point.

It’s not a refutation of rich people so theres no spite or envy involved. Its an explanation for why, in capitalist societies, the rich far outstrip the poor.

Not all capitalists have really produced anything other than investments. Inheritance does exist you know? I’m all for inheritance, I just don’t follow you (and it seems to take a certain dissonance to) that this does not create a distinct advantage in one’s ability to further prosper

How many times must I repeat myself?

77

The implication here is that cash is not wealth but stock is. Well, since cash can be more readily converted into wealth of whatever form the worker subjectively desires (including stock, if they so choose), from the worker’s perspective cash is wealth moreso than stock in-kind.

People with pensions and stock options still get paid in cash. The idea is to pay ones’ self first. And you cant really pay yourself in cash, the FED tries it, it doesn’t work (its like my friend used to front himself his own weed… wtf?!). Taken as a whole people would have a stable existence, their need for a cash wage would not be so great. It will be much easier for them to gamble with their money. And like I tell my poor uncle all the time, if he invested half hte money he spends on the lottery, he would be a much wealthier man right now.

You seem to imply that the worker is being stupid by not investing all his surplus cash back into his own company, which would purportedly vastly increase his company’s efficiency by improving the incentive structure, and should be given a further (institutional? or maybe you’re just trying to convince them to voluntarily do so) incentive to do so.

Well, I knd of am calling them stupid. Much in the same way it is stupid to forcibly confiscate wealth from peaceful people. Or in the same way I would call the FED stupid for manipulating the money supply.

78

Yes but think of how much more money companies will have without the tax burden. I don’t think that would really change anything. If anything I think it would make it even more feasible.

In a free market it is likely that corporations would make less money. Once you remove the direct subsidies, regulatory support, etc many corporations would outright fail and many others would not be nearly as profitable. But that is beside the point. How much money the corporations make is irrelevant.

The reason people get paid in ways other than a wage is because of government. Remove that influence and pay structures would revert to a simple wage, and people would provide for their own retirements, insurance, etc. Also keep in mind that the tax structure, welfare, unemployment are huge factors in keeping the poor… well poor.

The poor don’t stay poor necessarily because they are paid in low wages. Its that their opportunities to gain experience and learn skills to earn a higher wage in the future have been removed. Once these government traps are removed, I believe that you would see much more social mobility and your concerns that the poor stay poor because of the wage system are unfounded.

This might be wandering a little off the subject.

79

The reason people get paid in ways other than a wage is because of government. Remove that influence and pay structures would revert to a simple wage, and people would provide for their own retirements, insurance, etc.

I think this is arguing in a vacuum. Look at the outcry there is when people lose their pensions. I think they have gotten used ot the way things are, and it would take catastrophic collapse of society to regress it.

Also keep in mind that the tax structure, welfare, unemployment are huge factors in keeping the poor… well poor.

Taxes, ya. But I dont really buy the incentive problem of social welfare, I base this off personal experience. I think it holds true for some, but I don’t think it is, as you would say, “a priori” true (obviously this is taking the current coercive tax system out of the equation and looking at them as social programs; arguing in a vacuum as well. Within our current system they indirectly harm the poor by stifling economic progress. But that’s only because of the tax code, not the progams themselves.)

The poor don’t stay poor necessarily because they are paid in low wages. Its that their opportunities to gain experience and learn skills to earn a higher wage in the future have been removed. Once these government traps are removed, I believe that you would see much more social mobility

I agree. I think that is obvious. Teachers love to teach, I know because half my family are teachers, and universal education would be a great boon to social mobility. (I know that’s not what you meant lol).

your concerns that the poor stay poor because of the wage system are unfounded.

It’s not so much the wage system per se, as it is the wage systems ability to sustain long term growth of wealth; which is not very good. Money, by itself, is merely a facilitator of personal consumption. What I am proposing is people being given an easier oppurtunity to start having their money make money.

80

I also want people to ride on unicorns and have infinite food. So what.

god, Epicurus, you bait and switch so damn much. Stick with one claim and prove it. If it’s apriori true that the poor would be better off receiving in shares and capital than in money, then prove it. Stop making socialist-esque assertions and running away with “thats just what I wanted to happen, I’m not saying people should make it happen, or that it would happen, or anything…”

Indeed, you’re not saying anything at all, just wishy-washy aesthetics.