Anti-Capitalist Sentiment (with some morality)

[wufwugy]

In a moderate sidetrack but still relevant, a significant part of why people are against capitalism is because they believe that accumulation of wealth is hoarding. I use to believe this as well. The idea is that wealthy people use a smaller percentage of their wealth than non-wealthy people, which decreases the overall cycling of resources through the economy. This would be totally true if the premise of hoarding was true. But it's not. Wealth hubs, even those of *gulp* Paris Hilton, play an integral role in the health of the economy. I can't explain how because this is high level economics, but it basically has to do with savings rates and investment capital and the million things those two affect. "Hoarding" is a hugely popular media item, and virtually everybody believes it's something that happens. But it doesn't happen. Money is virtually never hoarded. It all plays some sort of role in the aggregate

With this in mind, we can address the next tier for the anti-capitalist: hoarders should be taxed (it's free money because hoarded money isn't used for anything!). Again, if the hoarding concept was true, this would be true, but the hoarding assumption is false. A strong tax code doesn't look to extract more from the phantom hoarders, but looks to consumption. The money that "hoarders" get comes from consumption anyways, so consumption taxes aren't leaving them out. With consumption taxes, business owners (who are the main savers and investors) can maximize their efficacy in the economy, but if instead of consumption taxes their "hoarding" was taxed, we would just end up with a less stable business structure that depends more on rampant consumption to keep it running. It's ironic that the really hippie liberal types rail against consumption culture then turn around and promote taxation that would increase the consumption culture. They should be praising the savings culture.

As for how the welfare state fits into this, I don't see how it's a problem to have the majority of tax revenues that pay for welfarism to come from those who reap the benefits of welfarism. Perhaps the tax code has to be moderately progressive to achieve this, but I have a feeling it doesn't. The welfare state applies to almost all income levels, and that dynamic alone may provide the revenues needed to provide for all income levels. Regardless, even most ardent free market capitalists believe in progressiveness of the tax code. Also, income inequality is the wrong way of looking at things. It doesn't really mean anything. If we doubled the amount of millionaires in the US, inequality would increase, but the economy would do far better

So why don't we let the markets be the markets, tax consumption, and make a welfare state that allows people who wanna work harder, work harder?

[Renton]

It seems elitist and naive to assume that anyone isn't assuming any risk.

I've heard an argument that the risks faced by the working class are, in fact, much greater than the "wealthy" business owner. In the event of a failed company, who's more likely to go hungry? Who's more likely to have a difficult time picking up their lives and providing for their families? Who's more likely to face long-term upset to their livelihood?

The dollar amount risked by the business owner may be greater, but the actual physical risk to the health and livelihood of themselves and their families doesn't compare with the risk the working class bears. It's not easily quantified in a dollar amount.

Bah... I don't like these arguments, but still... the notion that the working class assumes no risk seems heartless and short-sighted.

The people at the top are under no guarantee to make money and often have huge chunks of their assets at risk at any given time. The people at the bottom are working under a contract that pays them for their time no matter what. Importantly, they can't actually lose anything except future pay. I'm not trying to marginalize how potentially devastating it can be to lose one's job, but monetarily its a tiny risk, and everyone has some value to provide in the market, it's just a matter of what pay they're willing to accept.

If your argument is that you're entitled to the money because it represents the value you've created in the world, then you are a hypocrite if you do not reward someone who provides you value - by paying them money according to their value.

That isn't my argument. My argument is that no one is entitled to anything but what they voluntarily accept.

When you go to a fruit stand, do you ignore the price tag on an apple and instead pay the dude according to your opinion of the apples value? What if it's a really hot day and you can't imagine anything tastier at this moment than a refreshing apple? Surely in that case it has even greater value to you.

Now it might seem heartless to compare people with fruit, but you have to look objectively at labor, because like it or not, people are commodities, and they don't somehow work differently than soybeans or apples or oil just because they have a pulse. They work exactly the same, and to ignore or deny that when discussing the economy is to be naive.

[MadMojoMonkey]

I'm not trying to marginalize how potentially devastating it can be to lose one's job, but monetarily its a tiny risk

-.-
I am disappoint

everyone has some value to provide in the market, it's just a matter of what pay they're willing to accept.

...so you're saying...
The market gets to "decide" what a person's value is, but a person gets to decide how the profits are apportioned.
?

My argument is that no one is entitled to anything but what they voluntarily accept.

People accept things for different reasons. To a certain extent, letting an idiot be the idiot they want to be is fine, and if that means you profit because they're too stupid or lazy to interfere, then good on ya.

If you pay a mentally disabled busboy less than other busboys because he's not savvy enough to bargain with you, then there's a problem.

If an employer conceals or manipulates information that an employee would need to know to fairly assess the value of their position in relation to the wage offered, then there's a problem.

If someone's choices are
A) Have a job that pays you less than your effort is worth
B) Have a different job that pays you less than your effort is worth
C) more of the same
D) Be unemployed
then there's a problem.

etc.

When you go to a fruit stand, do you ignore the price tag on an apple and instead pay the dude according to your opinion of the apples value? What if it's a really hot day and you can't imagine anything tastier at this moment than a refreshing apple? Surely in that case it has even greater value to you.

see above... is the guy selling apples a retarded person?

Now it might seem heartless to compare people with fruit, but you have to look objectively at labor, because like it or not, people are commodities, and they don't somehow work differently than soybeans or apples or oil just because they have a pulse. They work exactly the same, and to ignore or deny that when discussing the economy is to be naive.

Now you're moving from, "I am an entrepreneur," "I am a gold miner," and into "the economy".

That's not what we started talking about. We're getting off topic.

[Renton]

-.-
I am disappoint

Now I understand your point about the risk of losing one's job, and I agree I was probably somewhat callous in dismissing that risk, but that risk is constant regardless of what an employee is paid. Other risks are mitigated by salary jobs, though.

When you take a salary or hourly job, you're choosing to be paid a guaranteed amount, and you kind of pay a premium for that. There's inherent value to a guaranteed paycheck that makes the money actually more valuable than if it were the same amount, only variable week to week.

For example, what is worth more:

1) 50,000 dollars in payments distributed evenly at 1,000 per week for 50 weeks.
2) Getting paid a random number between negative 1,000 and positive 3,400 every week for 50 weeks (total ev of 60,000).

Unless you are rich, its probably correct to take 1).

People who argue for profit sharing are trying to kind of have their cake and eat it too. You either take the salary and the risk-mitigating benefits that come with it, or you accept the risk of loss and ruin that comes with being a part of a business. You dont get to choose both. Now if an employer decides that profit sharing enhances the productivity of his people such that its a good investment, or if the just is feeling charitable this Chrismas, that's his prerogative.

...so you're saying...
The market gets to "decide" what a person's value is, but a person gets to decide how the profits are apportioned.
?

I guess? It makes no sense for an employer to pay his employees any more than wages they would agree to. It's the same thing as paying 1.50 for a 1 dollar apple at a fruit stand. The employer owes it to his clients or customers to minimize his costs, and labor is one of those costs. This works to everyones benefit as it drives down the prices of everything and helps to spur innovation.

If you pay a mentally disabled busboy less than other busboys because he's not savvy enough to bargain with you, then there's a problem.

If an employer conceals or manipulates information that an employee would need to know to fairly assess the value of their position in relation to the wage offered, then there's a problem.

That's a crass example of the basic problem of incomplete information, but I'll bite anyway.

First of all, this problem is becoming a thing of the past with the information age. It's becoming more and more difficult to rip people off as information about prices becomes more and more easily available.

But even in your example of a mentally disabled busboy, the system is already naturally taking care of him, because the "going rate" for busboys in a geographical area is usually a pretty narrow pair of figures. Put simply, restaurants aren't going to waste time posting a job offer for a stated wage that is completely off the reservation. The information is just too freely available for employers to get away with such shenanigans.

Now theres still the problem of them specifically offering the disabled busboy a lower wage, but that is why mentally disabled people have proxies. Parents, family or (if you're socialistly inclined) social workers are there to fix this complete non-issue.

[pantherhound]

It makes no sense for an employer to pay his employees any more than wages they would agree to. It's the same thing as paying 1.50 for a 1 dollar apple at a fruit stand. The employer owes it to his clients or customers to minimize his costs, and labor is one of those costs. This works to everyones benefit as it drives down the prices of everything and helps to spur innovation.

If the 'price of everything' is driven down, how does it benefit those at the bottom of the pay chain (since wages come down with it) any more than if they were paid a little more and commodity prices in general were proportionally higher?

[Renton]

If the 'price of everything' is driven down, how does it benefit those at the bottom of the pay chain (since wages come down with it) any more than if they were paid a little more and commodity prices in general were proportionally higher?

The prices of produced goods generally decrease over time with free market activity. This is for a bunch of reasons, mainly because innovation, emulation, and economies of scale create conditions whereby goods are produced much more efficiently and are sold competitively.

On the other hand, the prices of labor (i.e. wages) generally increase with free market activity. This reflects the scarcity of human time. Basically there are more things for people to do in the economy than there are people with time to do those things. This is especially the case in post-industrial societies with low birth-rates. Economic growth without accompanying population growth means doing more with less with regard to labor. In industrializing countries of the third world, the prosperity instead comes in the form of a population growth explosion as families finally are beginning to have access to cheap and abundant food and basic medicine. This partly explains why every developing economy seems to go through an extended period of stagnant sweatshop wages before it breaks through to becoming a modern economy; new humans are injected into the economy more quickly than the GDP grows. But it helps to have some perspective here, the GDP growth and population growth are massive in such countries (India, Indonesia, Thailand, etc) and that's a hell of a lot better than these countries were doing before.

[pantherhound]

Basically there are more things for people to do in the economy than there are people with time to do those things. This is especially the case in post-industrial societies with low birth-rates. Economic growth without accompanying population growth means doing more with less with regard to labor.

Huh? Populations are growing in pretty much all countries. Also, how do things like automation and the widespread switch to service-based economies mean more jobs?