Krishna writes:
First, i agree with SS7's definition of "exploitation" for the most part.
You do? Here is the argument ss7 says those in his 'Collectivism 101" class came up with --
Quote:
The argument is that that extra capital is produced by the laborers, and thus the capitalist is exploiting them through that mark-up.
In essence, what they call "exploitation" is nothing more than profit. Their argument is that if the person who created the business in the first place actually sees a return on his investment he is guilty of "exploitation". That is not rational thinking.
It is true that the business could not generate profit without the labor of its employees. It is also true it couldn't produce profit without the investment, direction, and planning of the people who set it up and risk their investment on a daily basis. If a blacksmith can make four kegs of nails a day using his own tools and his own iron and charcoal, then sells those nails by himself, he is entitled to all the profit the sale of those nails realizes. But if that same blacksmith instead accepts employment in a foundry and pulls levers and pushes buttons on machinery he never spent a penny on to make four hundred kegs of nails in a day, is it "exploitation" that the owner of that machinery receive some of the profit on the sale of the nails?
any profit-seeking company would obviously employ people in 3rd world countries - because of a lower labour standard, lower wages, less chance of unionisation, less environmental regulation, etc. this is what i mean by exploitation.
"Any" profit-seeking company? Check your premises. Most profit-seeking companies do not in fact employ third-world labor. And many who did at one time no longer do. Setting up shop in a third-world country is no bed of roses. Cheap labor isn't all it's cracked up to be.
And again I fail to see how anyone is being "exploited" here. The workers aren't rounded up at gunpoint then chained to their sewing machines, you know. They are perfectly free to ignore any new foreign-owned business which opens its doors and continue supporting themselves through whichever means they had been using before the foreign business set up shop.
any fortune ammased by playing off the lower standards of human and labour rights in the 3rd world is, in my mind, an illegitimate fortune.
Really? How then are the people in those countries ever to improve their standard of living? You will note that in all third world countries there are indigenous businesses, owned by citizens of the country in question. Are those business owners also guilty of exploiting their fellow citizens?
I've told this story in more detail in past posts (to be found in the PA&L archives) about a Dominican living in my town who is definitely considered wealthy by Dominican standards. Hell, he's wealthy by my standards! Twenty-five years ago he borrowed a friend's Honda 50 motorcycle, scrounged up several empty water jugs, picked wild oranges and mangos and grapefruit and squeezed their juice into those containers and headed off to the beach fifteen kilometers down the road with a package of plastic cups and some small change. He sold the juice to those basking in the sun and gathered up the cups when they were done. That night, he'd carefully wash out the jugs and cups, gas up the motorcycle, and start again.
Today he owns prime real estate in the center of town, several grocery stores, and is the local Coca Cola distributor. His children attend university. He employs maybe fifty Dominicans as workers. He himself is still almost illiterate. It takes him quite some time to painfully read the invoices his business generates. This is no man of privilege.
Who did he exploit? In what way is his fortune illegitimate?
take, for example, monopolization of entire sectors. eg - the energy sector - oil companies have so much sway, both in terms of capital and in terms of political clout, that the sector becomes stagnant.
I ask again, what opportunity has he stolen from you? As a side note, remember that monoplies cannot exist without government intervention -- the very thing Friedman opposes.
Are you saying that because there are existing oil companies your economic opportunities have somehow been limited? Somebody has to run those oil companies. Why not you? How many of the top management positions in those oil companies are held by descendants of the original founder? What is stopping you from becoming the CFO of Shell Oil?
everybody knows that oil is unsustainable - but why isn't there more of a motion towards reneweable energy?
Do you honestly believe the reason few people invest in renewable energy is because some people leave money to their children? The reason few people invest in renewable energy is because today it is difficult to turn much of a profit with it. That won't always be the case.
one reason, in my opinion, is because of the immense social, economic, and political power that accompanies capital.
Social? How does being rich give one "social power", whatever that might be? As for political power, you will again note that Friedman favors government relinquishing its power over economic transactions. If there is a separation of economy and state, there is no longer such a thing as political power for the wealthy. If government has no hand in economic matters, what good does a capitalist's wealth do him in the context of having laws passed to favor his business? Why would he care which politician is in power?
I don't think that anybody would argue that McDonalds provides a better product - either by taste, by nutrition, by environmental externalities, by treatment of workers, etc.
So what? For the record, MacDonald's is not my favorite fast food burger. But their fries are my favorite fast food fries. But who cares if their product sucks? The fact that it does suck is the reason MacDonald's has so many competitors. Ever heard of Burger King? Wendy's? In and Out Burger? Dairy Queen? A&W? Harvey's? And that's just for burgers. What about Taco Bell, Subway, Kentucky Fried Chicken, Arby's and all the rest?
As a final note, Roy Kroc didn't start out as a rich kid. He bought a couple of restaurants from established burger makers.
Microsoft is a perfect example of this - anybody working in IT will agree (and if they don't, well I'll take back my statement, but I will say that I don't understand their point of view at all) - M$ is not only not the best product available, but is actually one of the worst!
It is undeniable that Windows is a goatfuck of an operating system. Again, so what? I've been using personal computers since 1983 and I've never owned a Windows machine. I'm not alone in this, by the way. Entire businesses -- some extremely large businesses -- have run for two decades at least on non-Windows machines.
Let's add another example of a crappy product doing well. In the video tape recorder market the Sony BetaMax was certainly superior to VHS. Anyone who has ever compared the two will back me up on this. Yet Beta died and VHS boomed. Whose inheritance was the impetus for this? If people weren't allowed to leave money to their children, would Beta be the format of choice today for videotape? Who was "exploited" in this case?
But, due to marketing, buying out the competition, purchasing all innovation, and monopolizing control over markets - they are able to generate HUGE sums of capital, that they then use in turn to generate HUGE sums of capital.
Microsoft does in fact generate huge sums of capital. So does Apple Computer. Neither company was started with inherited wealth. Neither company is run by descendants of the founders. Neither company "exploits" its workers.
Imagine you and I are playing a game of monopoly. Fair enough, yeah? Determined by the roll of the dice - our relative luck/skill in investing - etc. However, what if one of us starts the game owning 75% of the properties already, and with hotels on half of them. Would you say that this is "fair" - that both players have an equal opportunity to suceed?
Faulty analogy. In the game of Monopoly there is a finite playing field. In the real world new products are dreamed up every day. The creation of wealth is not a zero sum game. Monopoly is.
Sure, it can't be compared to physical, "actual" slavery in terms of barbarity - but the result is the same. A ruling class, and a ruled class.
No, the result is nowhere near the same. Those who work for wages in free countries are not only not "slaves", they aren't "ruled" either. Assembly line workers in America own houses, summer cottages, cars, boats, big screen TVs and take vacations in Vegas and Aruba. This you compare to slavery?
The inescapable fact of human life is that it is sustained through human effort. The only question left to settle is whose effort supports whose existence. Friedman's view is that the beneficiary of human effort is rightfully the human expending that effort. It is his effort which allows him to acquire the things he values -- that which he needs and desires. He gained them through honest effort and they are his.
Whether we reward the slaves with food, water, and a bed (as in the case of "actual" slavery), or we reward them with (in comparison to that of the capital-holders) meager pay, as few benefits as possible, and minimal control over their own work-environment - it is philosophically the same, in my book.
It is philosophically not even close to the same. There is a fundamental difference -- the 800 pound gorilla in the room you ignore -- that difference being that a slave cannot do other than what his master forces him to do. A worker can change jobs, work two jobs, start his own business, become a busker or a beggar or marry a wealthy person or invent and sell something as silly as a "pet rock" or as useful as a stapler or write a book or sell a movie script or write a new computer program....
The fact that you are free to attempt to support yourself by exchanging your labor for goods no more makes you a slave than the fact that I am free to attempt to support myself by hiring you to assist me in my business makes me a slave owner.
pinky
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