Why communism will work, and capitalism won’t.

Economics Economics Questions
441

ok right… peolple need leaders there dought about and these leaders should support the people and make sure the people all have an equal chance of success… communism aims to achieve this so in a communist society you would not have such a massive gap in wealth and so many marginalised people due to poor state intervention…

communism allows the worker to survive and not fear about money and work and would not be able to complain about the ruling class, however yes i will admit there is no true example of this as most communist societs have been forged out of desperation and communism requires and good economy to being with, the problem being this would most probably require capitalism…

so all in all a country that is rich such as most western deomcracys would be prefect communist societies…

442

As we’ve agreed, they are not making “nothing”. They are being paid. It is a start. It is not exploitation because Nike is not forcing people at gun point to make shoes for them. It is preferable for people to work in the factory compared with no work or subsistence farming. And clearly people can sustain a family with the wages, otherwise they would not work in the first place. They would farm. You need to remember that in places like Africa essential goods like food are incredibly cheap compared to the West because most people don’t have a lot of money and there is high demand for them. In this case what you view as insufficient wages is actually very adequate locally. (Take my word for it, I’ve lived in Africa for 20 years).

You need to remember that wages are only one part of the expenses of the business. There are also costs for procuring raw materials, for building the factory, for transporting goods and for paying all the government taxes and tariffs. When there are many, many people who wish to work at the factory then there is no need for the business to offer higher wages in the first place. The people are willing to work for what is offered.

What is needed for increased wages is increased productivity and competition. This will occur when there is competition among lots of different businesses. What is needed is to get as many people as possible hired and working. Then they will develop their skills and increase their productivity. Once this occurs there will be competition among businesses to hire the most skilled and productive people. This will cause the wages to rise as each business offers the experienced worker more money to come work for them.

I disagree that capitalism is the reason for the state of these places, but I agree there has been exploitation of the people and resources in the past due to colonialism which has everything to do with violent government expansion and nothing to do with free exchange and enterprise.

443

Why do people need “need leaders” who steal from them for a living?

State intervention can only decrease wealth and redistribute it. Furthermore all state intervention is negative, how can any state intervention in the classical sense, be positive? Give me an example.

I maintain that communism promotes economic destruction, it cannot price things, it cannot innovate, it cannot allocate resources rationally because with the destruction of the pricing mechanism.

Everyone would not only have to worry about money, but qualities of life would decrease and there would be ridiculous events before the economic collapse.

If you wish to know more about backing to these economic claims, PM me.

Also, how do propose that there will suddenly be no ruling class? Seriously, the ruling class would suddenly be all powerful and massive.

444

you make a good argument my friend however youve made a fatl error, exploitation is not forcing someone at gun point all it involves is the realisation that these people are being paid next to nothing that bairly keeps them alive, nike mite as well be forcing people to work and technically sweatshops do force workers to work, however my point is that capitalism is the reason for this because it creates greed for a larger profit instead of one that would be just enough to keep the company going an supply workers with a good wage that would entitle them to some esentials and freedom, money is freedom and that is where the theories clash

445

are you saying redisterbution of wealth is a negative thing? i strongly believe it is a posative, a man living on minimum wage for life deserves some respect in the sense that the minimum wage could be raised and at the same time the ruling classes (rich) would afford to be taxed that little bit extra to help out marginalised groups and pay for the welfare state to help them.

a see this is where you come to the cliff, the reason you say standards of living would be low is because every communist state has had this problem, every communist state has been created in a desperate attempt to help workers however a communist state needs money to begin with, the ruling class can be easily taxed down to a more moderate level and they would still be the ruling class but only by a small amount of money compared to before (marxist ideology)

446

So we should abolish Nike so that those people shall starve and die? Good solution. [Y]

Impoverished countries must start somewhere. That doesn’t mean people drive around obese with cadillacs like the united states. It takes decades of economic freedom to accumulate enough capital to support a wealthier society. You call them sweat shops because you cannot comprehend their local conditions. Most of those situations aren’t nearly as bad as you claim. Many of those “sweat shops” feed their employee’s, offer places to sleep, all while keeping it voluntary. If we abolish this those individuals will never have a chance to economically grow, they will starve and die. If we allow them to proceed then their savings will pull them out of economic turmoil.

Also you are not the judge of someone elses’s preference of wage rate. You are not god. People decide for themselves what they want to get paid.

447

Without the profit motive why would companies compete, expand and hire more workers? Profit is not negative, it is a sign that there is a high demand for the product being sold. Other businessmen will see this and want to compete, hence why Nike is not the only shoe-maker. As I said before, the low wages are relative to the economic realities of where the factory is located. With lots of unskilled people willing to work for what is already offered wages will stay low. Profit is a signal to competitors to open up their own factories, hire people and sell competing products. When this occurs there will be competition for more experienced and productive workers. The new businesses will be able to offer Nike’s workers more money to come work for them because they know they’re experienced and productive. Thus, wages will rise and more and more people will become employed.

448

how in anyway did i say abolishing nike would be good? i think you will find that my point was, its not like nike could help the workers more by offering them slightly higher wages to allow them to save money and have a better life, and that is a good thing is it not? however this does not happen BECAUSE companys want to make a bigger profit as possible and couldnt care about the workers, the reaosn wages are low is because there workers can do nothing about it, they are forced to take up horrible jobs to bairly stay alive and that my friend is exploitation.

never said i was the judge and no one is “god” but people can play god in society. anyone can decide what they want to get paid but weather they get it is an intirely diffrent story, i would love to be paid more for the work i do but it doesnt happen becuase buissnes owners want to make as much moeny as possible…

449

"Thus, wages will rise and more and more people will become employed. "

that my dear friend is where you made a mistake, you have given me the theory of why this situation would be good but i could give the sam theory worded diffrently to give an enitirely diffrent picture. other buisneses would open up yes, but only because there is a massive reserve army of labour so they can get away with big profits by exploiting the workers below than can do nothing about it… they work for next to nothing because its that or die, no human being deserves that kind of life and exploitation is the name of the game, stop that, and wages will increase because companys realise there making a good enough profit anyway without dumping on the workers…

450

You are not the judge of what that man’s preference is on wages. If he perfers a higher wage he will change jobs, increase his productivity, or perform so me sort of action to get him there. There is nothing at all keeping him from changing his situation short of himself. If the man chooses to stay at that job it can only be concluded that he is content with the situation. Talk is cheap, if he was truly concerned for the safety of him and his family he would take further action on his own.

Who are you to state that this unproductive man should steal from the capital owner, and his fellow employees from the very company he works on. To support him beyond what he is worth. Such activities squelch economic growth, support expensive and less effecient production. This results in a rise of prices which ultimately harms the entire economy.

If your goal is to increase the purchasing power of each person in the economy you cannot be for subsidizing in-efficiency. Such activities squelch capital and cause price inflation, making everyone poorer.

451

The difference is his theory is logical and follows from countless irrefutable axioms. Your theory would be arbitrary and nonsensical, like communism.

452

No they couldn’t. Because if nike raised their wage rate they would be forced than to hire fewer employees. Placing more of those people on the streets. They would produce fewer shoes, rising the cost of shoes all together as there would be a diminished supply. Your organized labor mentality comes at the expense of nearly everyone in the economy, even yourself yet you don’t realize it.

Raising wage rates beyond what the market asks wastes natural resources and causes the whole economy to be poorer. I’m sorry that you are just now being met with reality, but these are the consequences of a scarce world. Trust me, no one here likes it, but it is in our interest on this forum to show how economic freedom brings the greatest amount of wealth to everyone. Even people in sweatshops.

453

Yes I do, wealth redistribution is forceful, immoral, intensly anti social and distorts the structure of production. It gives funds to those who perform the most little to society, and takes away from those who do the most. Also I challenge any right that you have to tax any individual. How does he “deserve” anything? The answer is that, assuming that we are talking about an actual free market, he is does not “deserve” anything that he is not given by the natural societal order, it is just your preference that those who currently have the lowest income should receive more, the only major difference between your preferences here, and my preferences, when you get right down to it. is that you propose to use force to achieve these ends.

Furthermore what you are proposing would make it more profitable jobs which are naturally less productive which will lead to a more general stagnation and lack of desired goods, as well as an eventual decrease in the prosperity, naturally aligned with human wants, that would have been.

No I don’t, I understand that the Soviet Union, China, and North Korea were all terrible places for communism to arise and that Marx would roll over in his grave if he knew those were the first states to attempt his ideology. Furthermore what you are advocating is socialism, not communism. I no longer understand what your position is. Do you simply support wealth redistribution? Where is the seizing of the means of production by the proletariat?

454

filc my dear boy your jumping a stage, look… lets carry on using nike, they pay workers jack to make expensive shoes thus giving them a huge profit even with loads of workers, lets say the company was making £100 profit (just for figures sense) are you telling me that the company owner who is making loads of money could not afford to only make £60 worth of profit? thus increasing his workers wages but at the same time keeping his high enough to keep him alive and the company going… if these companys where not exploiting these people then what you are saying would be exactly true

but they are exploiting and making huge profit because of it, they can afford to raise wages but they dont because of greed that is unfair on the workers

455

redistrobution of wealth and nationalisation is the name of the game my friend…

Ok for a start i would like to point some statistics, on avredge 80% of wealth is inherited and that my friend meens that those people did work for the money but the people inherting it did not, hense the reason a high inhertence tax is a good thing.to say people deserving nothing is emoral and in human, if it wasnt for these working class people with low paid jobs society would fall apart, if everyone was a rich buisness man then who would work the factoys for low wages and provide people witha profit? the answer is no one so society would colapse, those people do deseve higher wadges because they are the electrical source to our gleeming lights of pure capitalism. the world wouldnt work without them

im not saying make jobs worth more thant they really are, all major compants such as Nike make massive profits because they exploit the working man, its fair to say that the company could afford to raise wages even by a small amount, but they dont because they dont need to because those workers have no choice, its work to survive or die. if they complain the massive reserve army of labour can replace them so the working man has no say.

456

If they subtract from their profits they may loose their intensive on producing the shoes in the first place. They may decide to close up shop and leave. As such your workers in 3rd world countries would again be out of the job and starving again. You also cannot be the judge of how much profit is appropriate profit. Only the individual can decide how much profit is worth it to him to give him the incentive to continue his current activities. If the capitalist/entrepreneur feel that the profits involved do not justify work/stress/risk they may just as easily choose not to. And nothing is more devastating to an economy than producers who loose the desire to produce.

Look you can continue asking me these very trivial questions or you can follow your own questions to their logical ends, knowing what we know about very basic economics.

457

the state is soverighn, the state is in charge, the state does not need a gross overblown profit it needs people to have jobs, to so the economy runs smoothly, over bloated pay checks are what cause recesions and are the reason we are in one at this moment in time (united kingdom) so when it comes down to it these people could do without it and workers could do with it

458

Gregoravich,

If you could please answer my posts, if you don’t want to ok, but I can tell that underlying issues need to boil to the surface or else it’s a moral arbitrary issue that will go on all day and night. I think I was getting to some pivotal disagreements that can be possibly waved off so we understand each other more clearly.

459

if your goal is massive starvation and digression of economic prosperity than yes.

2 things, 67% of all statistics are made up on the spot (Humor emphasis)

Second, wealth is created Greg. Where and how else do you think wealth comes into existence? :slight_smile: Cars are not inherited, cooking utensils are not generally inherited. Homes are not always inherited. I’m not sure how your measuring wealth but nearly all objects we use in this country to improve our wellbeing are produced, and then traded for on the market.

Also inhereted wealth was just new wealth that was created elsewhere.

Please read Dr. Block’s points on the topic in chapter 16 of Defending the undefendable.

No thats exactly what you are saying. The truth is people who work in those sweat shops probably have some of the best wages in their region. People line up at the door to work there. You want to toss them back on the street. You also have this grandiose notion that wealth is not created. What you need to realize is wealth comes with the accumulation of capital, over several generations of hard work. It does not just spawn into existence. New capitalist countries have to start at the bottom and work up.

Yes you have asserted this. But you fail to prove it. As I have shown, those people work voluntarily, they do so because their economic wellbeing is greater, and they generally have a better working/living condition than other domestic jobs.

By very definition there is no exploitation at all. They are actually living as wealthy as they ever have!

No its not fair at all. If the profit is diminished the entrepreneurs and capitalists will leave the industry. What that means is no more sweatshop. No more good paying job for the laborer, back to living on the street or tilling in the harsh soil to grow crops.

They had a job sitting in AC all day, but you’d rather them back in the fields working in harsh conditions. Why are you against economic prosperity?

So you telling me here that workers would rather work in the comfort and wellbeing of the sweatshop than starving on the street or tilling in the soil? How are they being exploited again? Sounds like a bonus to me. If I lived there in that situation I’d probably go the same route.

Well if your a pessimest than you probably think life sucks. I am optimistic and enjoy it.

So if there is a surplus of labor we should allow the economic activity of the area to move freely. New entrepreneurs will move into an area where labor is cheap, providing more jobs. As the supply for labor diminishes and capital accumulation begins wage rates will rise naturally on their own at a healthy sustainable rate. In less then 50 years under such free conditions those people can be obese driving cadillacs like us to! (Humor intended)

460

This is the seen and the unseen. What you see is profit and people earning a relatively low wage and you espouse this to greed. What you are not seeing is the amount of capital investment, and the risk of making the capital investment, that led to people being employed and profits arising in the first place.

Using your example, the company is making 100 in profit. Let’s say that the sales they generated was 500. Thus, there are 400 in expenses. Let’s say these expenses will include 50 for labour, 150 for taxes/tariffs, 100 for factory upkeep and 100 for the raw goods. BUT- in order to build the factory in the first place (let’s say this is 300), buy the raw goods and hire the people before even one product was sold the businessmen had to invest 550.

Thus, you see 100 in profits, but the businessmen are still only at -450 based on the initial costs of starting the business. They are still making a net loss and are, therefor, actually poorer than the people they employ. Now, there is a risk that the raw goods cost could increase from 100 to 200. The business, then, would not be making a profit. If this persists then the business will fail. Yes, the workers will lose their jobs but they have been paid already. The businessmen would be -450 and would have to take that loss. That is the risk of investing their capital.

Therefore, as you can see, it is in the long-term interests of the workers AND the businessmen that the enterprise generates a profit. The workers want their wages and their skills to become more productive and competitive on the market. The businessmen need the profits to pay for all the current expenses of the business AS WELL AS the initial investments they made at a risk.

Once these initial expenses are paid for all the additional profits of the business can be put into building a new factory and employing more people, or raising the wages of the workers they have already so that they do not go to work for the competition.