Capitalism- Good or Bad?

If another system came along that didn't capitalise on the lower and middle classes, would you support it?

If you mean by "capitalise" that free enterprise hurts the lower and middle class the question is moot as it doesn't.

Marxist's main targets are always the bourgeoise and petite bourgeoise.

The best economy is a free economy. An economy were individuals are free to trade property and labour as they wish without using violent force or the threat of violent force to control that trade.

StartToday said:

By capitalise I mean the lower and middle classes generally hold positions which require much more physical labor or concentration on mundane tasks, and they should be paid more than they are. The man who owns the machines at the factory deserves money, sure. But does he deserve so much that the people who use his machines are many times poorer than he? Does he deserve to indulge in excess while they have no extra money or energy for leisure?

One might argue that those in control capitalise on labor because if they were to pay their employees a more just wage, those people might start a business that would compete with their former bosses.

And by the way, I am not a Marxist, if that's what you think.

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And who decides a just wage?

StartToday said:

A just wage would be one where the people making the product to be sold are not being factored in as part of the costs of production. If they are, they must be paid a small wage so that the retail price (which is a multiple of the total cost of production) will make a profit for the owner. If they are factored in as profiters along with the owner, they make substantially more. I came up with this one day when I was talking about politics and economics with a friend, but I'm sure that somebody must have thought of it before.

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How does that determine their wage?

Lets say I do yard work, mulching, weeding, window washing, trash hauling, gardening, edging, painting, etc for a number of clients.

I've put in the effort to market myself, invested capital into the equipment necessary and taken a risk on my currently held values to create new future value.

I'm booked solid, didn't even get to the other neighborhoods I was planning to hit and need to hire others if I want to expand my business further.

After I pay them their wages, I am netting about $20-$25/hr for cumulative efforts. So what is a just wage for my employees?

$5/hr, $10/hr, $15/hr, $20/hr?

Let's say I am willing to offer $10/hr, I am not forcing anyone to take the job. If no one feels that $10/hr is just then they don't have to work for me, and they can start their own lawn business. Ah, but of course that takes much more effort than simply taking already created work.

So if a just wage is not determined by those involved in the agreement of value-to-value transactions then what is a just wage determined by?

Some emperor/committee/dictator of value?

StartToday said:

A just wage would be one where the people making the product to be sold are not being factored in as part of the costs of production. If they are, they must be paid a small wage so that the retail price (which is a multiple of the total cost of production) will make a profit for the owner. If they are factored in as profiters along with the owner, they make substantially more. I came up with this one day when I was talking about politics and economics with a friend, but I'm sure that somebody must have thought of it before.

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IIRC, at least 40% of businesses have employee profit sharing plans (that number sticks in my head, but I won't swear to it.) In many public companies, employees receive it as discounted shares, which, in effect makes them partial owners of the company. Employees can also buy discounted shares to fund their retirement plans. It works fine if the company is stable and well-managed. But then something like Enron comes along where management is cooking the books to inflate profits. Then when the stock price tanks, all of the employees who've been receiving shares as profit sharing, or in their retirement accounts lose everything.

My personal opinion re compensation is that, ideally, people should be paid according to their degree of responsibility. Management derserves more, because they are responsible to all of the employees. If they run the business into the ground, everyone loses. They really do have more responsibility than the rank and file worker actually making the product or performing the service. A physician deserves more compensation than a nurse because he's the main decision maker who's ultimately accountable for the patient's outcome. Same
with an attorney versus a para-legal. In my ideal world, cops, firemen, and teachers deserve good incomes because they take on heavy responsibilities that affect us all.

But in the real world, you're generally paid based on your ability to generate revenue. Unskilled manual labor, by itself, just doesn't generate much money. But entertainers, and professional athletes can generate enormous revenue, so they are paid accordingly.

Capitalism is the only ethical system of economics that exists.

I am very pro-capitalism. It provides the greatest growth and most upward mobility. However, capitalism only works when it's players are ethical. As we saw in Enron and Tyco we can't rely upon business leaders to be ethical. There is nothing capitalistic about cooking the books in order to deceive stock holders. For this reason I am a proponent of regulated capitalism. I am strong proponent of SOX compliance which is a federal standard all publicly traded companies must meet.

kermit said:

I am very pro-capitalism. It provides the greatest growth and most upward mobility. However, capitalism only works when it's players are ethical. As we saw in Enron and Tyco we can't rely upon business leaders to be ethical. There is nothing capitalistic about cooking the books in order to deceive stock holders. For this reason I am a proponent of regulated capitalism. I am strong proponent of SOX compliance which is a federal standard all publicly traded companies must meet.

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Good post, Kermit, I agree.

kermit said:

For this reason I am a proponent of regulated capitalism. I am strong proponent of SOX compliance which is a federal standard all publicly traded companies must meet.

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Gives George Soros a nice loophole. Quantum fund is located in a off shore tax haven. Why is it that liberals,who are so eager to regulate every ascept of American business.have no problem taking tens of millions of dollars from a person whose finances are not transparent? Why do we hear about Halliburton, which is under the eye of the NYSE, the SEC, the IRS and every law enforcement agency in America (and many overseas) but nothing about how the Quantum Fund receives its money? Think it is OK for Soros and his "investors" (some of whom are nothing more than Swiss and Italian bank account numbers) to have such influence in the American political scene? Shouldn't we at least know how they make their money?

The free market is by far the best form of economy.

By capitalise I mean the lower and middle classes generally hold positions which require much more physical labor or concentration on mundane tasks, and they should be paid more than they are. The man who owns the machines at the factory deserves money, sure. But does he deserve so much that the people who use his machines are many times poorer than he? Does he deserve to indulge in excess while they have no extra money or energy for leisure?

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It's his machines, he has the right ot pay a insanely bad wage or an insanely good one or a moderate one. The people are free to go work for someone else or themselves. These aren't serfs. The situation can even be reversed such as having to pay out the nose for highly specialized contract labor and other workers vital to the comapny with hard to come by skills.

One might argue that those in control capitalise on labor because if they were to pay their employees a more just wage, those people might start a business that would compete with their former bosses.

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uhh... not paying a just wage is going to make them more likely to go over to the compettion. And it's nuts to think a just wage for an employee is one that's enough to start a business of the kind he is working for.

And businesses tend to capitalize on the sale of a product or service. If your primary business strategy is "bleed the employees white" your business is probably not going to last long.

Capitalism is great if you have money, terrible if you have none.

It's certainly not a fair system. In my opinion it is not the best either, though I cannot propose a better one as a better one doesn't exist at present.

Voegelin said:

Gives George Soros a nice loophole. Quantum fund is located in a off shore tax haven. Why is it that liberals,who are so eager to regulate every ascept of American business.have no problem taking tens of millions of dollars from a person whose finances are not transparent? Why do we hear about Halliburton, which is under the eye of the NYSE, the SEC, the IRS and every law enforcement agency in America (and many overseas) but nothing about how the Quantum Fund receives its money? Think it is OK for Soros and his "investors" (some of whom are nothing more than Swiss and Italian bank account numbers) to have such influence in the American political scene? Shouldn't we at least know how they make their money?

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This is not a discussion about Soros or Halliburiton. This is not a liberal or a conservative issue. This is a discussion of the merits of capitalism. If you want to discuss Soros then start a thread about it!!

SOX compliance was passed by a Republican congress. It was a direct response to Enron and Tyco and the blow to investor confidence that those scandals caused. It is a standard that ensures that a company's financial statement is accurate and confirmed by outside auditors. It was intended to increase investor confidence. Do you think investors being confident in their investments is good or bad for our economy?

My company is currently becoming SOX compliant so that we can debut on the stock market in 2008. This process has exposed to us a number of areas where our financials could be falsified. Overall it is making us a stronger more disciplined company; this has been the overall sentiment amongst SOX compliant companies.

Btw, I'm not sure that SOX compliance is federally required to be traded, but I know that no US stock exchange will allow a non-SOX company to be traded

kermit said:

I am very pro-capitalism. It provides the greatest growth and most upward mobility. However, capitalism only works when it's players are ethical. As we saw in Enron and Tyco we can't rely upon business leaders to be ethical. There is nothing capitalistic about cooking the books in order to deceive stock holders. For this reason I am a proponent of regulated capitalism. I am strong proponent of SOX compliance which is a federal standard all publicly traded companies must meet.

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Would Enron have been an issue if it had not received so much/many subsidies from the government?

If it were up to me, money would be abolished and we would live in a society with systems based slightly on socialism - everyone would be entitled to the same food, health care and services, and the value of a trained, intelligent human being would return. There was a time before money, and it was a good time, trading goods and services for goods and services rather than imaginary numbers written on paper.

If money is the root of all evil, capitalism is it's evil man eating venus flytrap.

If it were up to me, money would be abolished and we would live in a society with systems based slightly on socialism -

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Hah, Good luck. The only way to get rid of money is take away everyone's property.

everyone would be entitled to the same food, health care and services, and the value of a trained, intelligent human being would return.

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How? There's no reason to be trained in your system. Intelligent people aren't stupid, and theydon't necessarily work hard for it's own sake. Why work hard being trained at something when you don't have to?

Your system won't work at all outside of maybe like tropical island with very low populations where you can just eat off the trees and need almost no effort to survie.

The Halcyon Days when paper money stood for something? Or of the Paleolithic when people were too poor to bother with much commerce? said:

There was a time before money, and it was a good time, trading goods and services for goods and services rather than imaginary numbers written on paper.

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So , you want to go back to the gold standard or something? I agree, money should stand for something. But the money we have to day is not money as it's always been.
Did you know for a period in Colonial America they were using recipts for stores of tobabcco as paper money?

If money is the root of all evil, capitalism is it's evil man eating venus flytrap.

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Well Comrade, money isn't the root of all evil.

Bulldog said:

Would Enron have been an issue if it had not received so much/many subsidies from the government?

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I believe so. Enron falsified their financial statements with the express purpose of raising investment money to bail them out. This type of tactic is not only anti-capitalistic it is dangerous to the foundation of our economy.

Blackguard_ said:

Hah, Good luck. The only way to get rid of money is take away everyone's property.

How? There's no reason to be trained in your system. Intelligent people aren't stupid, and theydon't necessarily work hard for it's own sake. Why work hard being trained at something when you don't have to?

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I should clarify.. I did say if I had it my way. It's far too idealistic a society though - people are, for the most part, extremely greedy. Even if they don't admit to it, the silent goal many people have is to have is to amass alot of money.

And for the second bit - that's the thing in my system. As I said.. from a time when services and good were worth something. Being in a trade would make them valuable, as well as assist the society around them. At very least.. I don't think things like cancer research in modern society should need to be paid for at all - simply done for the greater good. It's a very idealistic system, and would never work for one simple reason - humans enjoy amassing things and being better than the next man. Socialism and Communism are great systems in theory - but in practice terrible because of human nature.

The intelligence comment was mostly because I'm finding more and more that we, as a western society (US, Canada, Britain etc) are not putting so much value on individual intelligence but rather simply as working sheep. And people are unfortunately content with this.

Money has lost it's value - it stemmed from originally a beadmaker would trade beads for goods, a farmer would trade in food. Nations traded exclusively in what they needed.. spices, lumber etc. They created the original system of coinage/ gold as a standard of worth so that each trade would become exactly fair, things would have a set worth. Then inflation occurred - people decided that things should cost more, more money was created out of nowhere. And so it's worth was fractioned.

What has happened over all this time is, as you said.. money is worthless now - it's become an invisible number hanging over all of our heads. We work jobs for an allowance, we are slaves to our wages.

As you may see - I'm a huge idealist. I believe that if humanity puts aside it's differences and obsession with above mentioned number we can work towards a golden age where we can find truth, beauty, equality and work legitimately for it. Your mention of this only working on a small island is perfect here - say a group of people were shipwrecked on an island. They would work each day for survival, and they would all need to work together to ensure that they had everything they needed, selfishness in any member would be the fall of the group. As in my ideal world - their greatest reward is that they benefited their group, and worked towards a more stable, happy mini-society.

Actually, could I ask you a question back, you seem like a very intelligent person - What is America in debt to? I hear of this great 'national debt' all of the time.. but a debt to whom exactly? And.. how can they keep paying for anything at all if they are in such an amazingly high debt. Doesn't the fact that the country is continually paying for things they cant actually afford proof of the non-existence or worthlessness of money?