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Offlinekristofer
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when capital (or a lack thereof) holds you back..
    #7883596 - 01/15/08 02:05 PM (16 years, 16 days ago)

capital happens when the cost of production is less than the value of production.

[just a note here]
if you're a working class citizen, you're only worth whatever the minimum wage for a particular skill is. you'd be known as a laborer which is the lower of the class antagonism. unless you *own* the means to produce, you are not a capitalist.
[note is finished..]

I don't like the idea that because somebody "owns" the company it means they're entitled to a percentage of the value that the collective labor produces.. it's not like the investor on wall street contributes to the production at all.

The people that do the work should be entitled to the profit.. if you're just a capitalist looking to profit from investments instead of putting your thought and effort into real world problems and solutions then you're helping cause our social problems instead of working to solve them.

With capitalism all one needs is land.. once the land is afforded it's possible to generate capital by taking advantage of others. Even if there's no mode of production on property owned by a capitalist, there's still opportunity to profit simply because one *possesses* property (consider the landlord for instance).

Think about this.. if property stays in a family by being passed on and on generation to generation it creates a few land owning families, and a bunch of working class people that work and live off that land.. all the capitalist does is skim off the capital produced buy the people.

I find it ironic when capitalists preach that adam smith bullshit too.. because ultimately capitalism leads to a nation of wage slaves and wealthy capitalists.. even if one believes the middle class is still around, it's obvious that the separation between rich and poor grows and grows.

The capitalist argues that competition drives innovation.. and that the corporation (created by the collected investments of capitalists..) has enabled great people to create great and innovative products for consumers.

Consider yet though, things like the Open Source Software community which is worth billions of dollars even though it's distributed free of charge without restriction. It's certainly an anomaly in the capitalist mode of thinking.

Ultimately though, capital is the oil that keeps this machine running.. as long as capital is constantly being created the flow of goods from producer to consumer will be steady.. as soon as the flow of capital is interrupted we start seeing bad things like recession or even worse, depression.

How do we make sure that capital flows appropriately for economic growth? It's a tough question for even the most advanced economic scholars because it depends largely on how people feel about their economic conditions. If the economy is undergoing rapid growth it's easy to take risks in all the opportunity. But now that the country is so economically divided people aren't willing to risk so much. The opportunities just aren't their like they were before 9/11 and the dotcom bubble and the more recent subprime mortgage fallout.

Now I think it's time to start considering new ideas for economic growth.. instead of letting government or capital regulate and control the means to produce, why not let the workers do it? It distributes the capital produced by their collected efforts equally among those involved with the actual work.

(I could go on and on.. so I'd better some this up..)
By eliminating the capitalist there's no class antagonism between the laborers and the wealthy. Everyone would only be *equally* worth whatever the collected value of the labor is.


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OfflineGnosticWarrior
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #7884485 - 01/15/08 04:54 PM (16 years, 16 days ago)

The owner, is the one who is helping to finance the business operation. The overall finance comes from two groups, the creditors and the owners. The creditors have a defined contract to get paid back and in event of bankrupcy has first dibs over the owners. If there is no money left over the owners lose all the capital they invested. Ask any shareholder who has watched their capital go to zero only to watch the creditors ended up being the new owners of the reorganized bankrupt company. A lot of companies have raised capital be selling pieces of ownership, in exchange for pieces of the profits. The company does not have to worry about paying back the owners.

Workers get paid, regardless if the business operations are profitable or not. They have no vested interest in the company except as a source of employment. They have no obligation to the company except to perform the tasks that they had agreed upon for employment. They can leave at anytime they choose, for whatever reasons.

For all players, Owners, Creditors, and Workers, I don't see anything better than Capitalism. It does vary by country. I hear Japan's system is better for workers than for owners but, also a part of the reason why their economy is hasn't done too well for the past decade or so.

There's also Employee-Owned Companies and stock options that can be granted to workers, in the belief that company will produce better results, if the workers had a vested interest. If a worker does not like working for a company that does not give them a stake in the profits, maybe they should work for one that does?


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InvisibleIcelander
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #7892763 - 01/17/08 12:12 PM (16 years, 14 days ago)

I have a hard time feeling sorry for the "Wage Slave" anymore. IMO they are the ones who follow the consumer trends and don't know how to save or live within their means and then whine when they are broke and in debt and expect a bailout. I think Sheep is a better term for them.


--------------------
"Don't believe everything you think". -Anom.

" All that lives was born to die"-Anom.

With much wisdom comes much sorrow,
The more knowledge, the more grief.
Ecclesiastes circa 350 BC


Edited by Icelander (01/17/08 12:12 PM)


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Offlinekristofer
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Re: when capital (or a lack thereof) holds you back.. [Re: Icelander]
    #8089702 - 03/01/08 12:43 PM (15 years, 10 months ago)

capitalism stifles innovation.

that may seem ridiculous, but consider the auto industry. how many patents to improve gas mileage on vehicles were bought, and then shelved by auto manufactures? also consider that auto manufacturers obviously have investments in the oil industry.. they kind of go hand in hand after all.

or consider the computer software world. microsoft literally monopolizes the the industry despite having an inferior product. but they keep the market share because they give to schools.. and kids grow up using microsoft, so businesses run microsoft.. ad infinitum.

I could go on and on.. local utilities, cell phone companies, grocery stores, gasoline, borrowing money, etc.. all of them rape their consumers and their employees.

it's brilliant I agree.. and also exploits millions of consumers who don't even understand what I'm talking about. maybe I'm complaining about an awareness thing, but it's still wrong. you don't make a billion dollars without exploiting someone.


--------------------
dewbie dewbie dew


Edited by kristofer (03/01/08 01:22 PM)


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Offlinefireworks_godS
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8094371 - 03/02/08 05:09 PM (15 years, 10 months ago)

Interesting thread. This is a topic that I've been contemplating recently, but I haven't felt my thoughts coalesce enough to create a thread for discussion. It is definitely a topic that needs to be discussed more, especially as we head into a presidental election that has great odds of producing a much more socialized country of the United States.

I think I'd start by pointing out that 10% of the population of the United States essentially owns the country. They own nearly 90% of all privately-held stock, bonds, trust funds, and business equity, and 3/4 of all non-home real estate (1). This is something that just boggles my mind. I was speculating on whether this is simply a natural result of a natural system, but when one looks towards the transfer of energy from the sun to the highest trophic level of animals, it is completely inversed, and I see wealth and energy in much the same way.

Wealth is limited; it cannot be generated infinitely. There is only so much energy available from the Sun, and the Earth's primary productivity (the total amount of plant mass that converts the energy) is limited as well. The wealth that is held by the top 10% results from the economic system of which everyone plays a part in carrying out.

It is clear that, if left unchecked, the holders of wealth will utilize that wealth to accumulate more wealth, and this has an effect of taking money out of the economic system, making it less capable of functioning properly. As someone who has worked in retail for a large corporation, far too often I have seen first-hand a pretty vicious cycle that is played out - sales go down, but the corporation does not want their stock to go down, so they cut the difference out of their business operations, making it less capable of doing business, furthering negative impact on sales. Corporations really act as cash funnels.

As has already been stated, when one has wealth, one has more means of generating more wealth. Government sets the framework within which an economy functions, and, all too often, those with wealth utilize it to change this framework to make it more possible to accumulate more wealth.

In nature, there is a dynamic system of checks and balances, such as with snowshoe hares and lynx populations. If the snowshoe hare population dwindles from overpredation, for example, then the lynx population will begin to plummet as well, since there isn't enough resources for them to consume. If we look at the situation that the American middle class is in today, it would seem that their wealth has been sucked back to the top. For example, the bottom 60% makes only .95 cents per dollar that they made in 1979, as of 2004, the next 20% made 1.03 per dollar that they made in 1979, with the top 5% making $1.53 per 1979 dollar (information from link provided above). Here's a graph (from that link) on the share of earned capital income:







I see government as a check agansit this, and that certainly opens up a wide discussion. :lol: If anyone wonders why we're heading towards a recession, it would seem quite likely that it got sucked right out of the economy's infastructure. :shrug:


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OfflineRedstorm
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8094485 - 03/02/08 05:40 PM (15 years, 10 months ago)

Unless the common laborer has a capital stake in the company he or she is working for , he or she has no right to profits other than what they were promised in wages.

If the laborers assumed some of the risk associated with running a business, then they would have a claim to profits, but most do not.


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Offlinekristofer
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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8094487 - 03/02/08 05:40 PM (15 years, 10 months ago)

Quote:



I see government as a check agansit this, and that certainly opens up a wide discussion. :lol: If anyone wonders why we're heading towards a recession, it would seem quite likely that it got sucked right out of the economy's infastructure.






Indeed, greed in the banking system and government deficit spending are devaluing our dollar and leading us into a recession. Ironically, by enabling the working class to afford a better lifestyle, production would increase and profits would soar.

That's the nature of labor as a commodity though. Just like all other commodities, when there's too much, the value falls, and when there's not enough, the value skyrockets.

We can consider the computer industry again in this case. A computer technician in the 80's was a highly skilled trade, but as  prices for computers fell it enabled the working class to afford personal computers. So now we have a generation of computer nerds from the 90's with all the skill of the highly paid professional technicians of the 80's. Suddenly comtech jobs are part time positions held by college students for $10 an hour. Or they're held by Indians who get paid $3 a day.

It's just the nature of capitalism though. There's no fixing the economy. There's only changing how we think of value.


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Offlinekristofer
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Re: when capital (or a lack thereof) holds you back.. [Re: Redstorm]
    #8094519 - 03/02/08 05:50 PM (15 years, 10 months ago)

what risks are associated with running a business? It's an investment, and at the very least it's going to be worth the value of the property it owns or creates.

but if the business fails the laborer had no stake and gets nothing but a few dollars for some time. he's not entitled to any part of the collective creation or it's liquid value.


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OfflineRedstorm
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8094531 - 03/02/08 05:54 PM (15 years, 10 months ago)

"what risks are associated with running a business? It's an investment, and at the very least it's going to be worth the value of the property it owns or creates."

Along with depreciation on these pieces of property and a lack of buyers for failing companies in today's market, there is a great deal of risk involved with running a business.

My point is that unless the labor collectively funds the company at start-up, they should have no claim over profits other than what they were promised. They take no losses if the company fails, so why should they reap the profits if it excels?


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Offlinekristofer
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Re: when capital (or a lack thereof) holds you back.. [Re: Redstorm]
    #8094553 - 03/02/08 06:00 PM (15 years, 10 months ago)

labor does collectively fund the process. there would be no capital at all without labor. capital is created by labor. how many other ways can I put this? if there was no labor, there would be no product. a laborer, regardless of financial contribution, has an effort in the overall production, and should be entitled to an equal share of that profit.


--------------------
dewbie dewbie dew


Edited by kristofer (03/02/08 06:01 PM)


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Offlinefireworks_godS
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8094642 - 03/02/08 06:24 PM (15 years, 10 months ago)

Quote:

kristofer said:
It's just the nature of capitalism though. There's no fixing the economy. There's only changing how we think of value.




Stiffen the tax on the top 10% to prevent wealth from concentrating up there. That's how the problem happened, and that is what needs to change.


--------------------
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If I should die this very moment
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Like being here
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Offlinekristofer
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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8095059 - 03/02/08 07:58 PM (15 years, 10 months ago)

Quote:

Stiffen the tax on the top 10% to prevent wealth from concentrating up there. That's how the problem happened, and that is what needs to change.




The wealthy don't have a lot of money per se. They have a lot of assets that create wealth though. The Google guys have a $45k a year salary, yet they're worth billions in stocks. Effectively the wealthy have systems in place that generate profit. It's not ideal to tax the systems the wealthy create either. When taxes are too high corporations pack up and go to developing nations where labor and taxes (and environmental regulations) are cheaper. That's even worse for our economy..

And taxing the top ten percent doesn't fix the distribution of wealth.


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OfflineRedstorm
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8096425 - 03/03/08 05:04 AM (15 years, 10 months ago)

Quote:

kristofer said:
labor does collectively fund the process. there would be no capital at all without labor. capital is created by labor. how many other ways can I put this? if there was no labor, there would be no product. a laborer, regardless of financial contribution, has an effort in the overall production, and should be entitled to an equal share of that profit.




However, it could also be argued that without the initial capital investment, there would be no opportunity for labor.


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OfflineRedstorm
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8096446 - 03/03/08 05:44 AM (15 years, 10 months ago)

Quote:

kristofer said:
labor does collectively fund the process. there would be no capital at all without labor. capital is created by labor. how many other ways can I put this? if there was no labor, there would be no product. a laborer, regardless of financial contribution, has an effort in the overall production, and should be entitled to an equal share of that profit.




However, it could also be argued that without the initial capital investment, there would be no opportunity for labor.


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Offlinefireworks_godS
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8096504 - 03/03/08 06:49 AM (15 years, 10 months ago)

Quote:

kristofer said:
The wealthy don't have a lot of money per se. They have a lot of assets that create wealth though. The Google guys have a $45k a year salary, yet they're worth billions in stocks. Effectively the wealthy have systems in place that generate profit. It's not ideal to tax the systems the wealthy create either. When taxes are too high corporations pack up and go to developing nations where labor and taxes (and environmental regulations) are cheaper. That's even worse for our economy..

And taxing the top ten percent doesn't fix the distribution of wealth.




Sure, don't tax the systems in place, but one can certainly tax the capital gains and dividends that result, or, at the very least, roll back the tax cuts on capital gains and dividends. The wealthy are disproportionately benefiting from those tax cuts.





http://www.cbpp.org/1-30-06tax2.htm

Of course those taxes affect the distribution of wealth. Let me refer you to a quote from the link I provided in the first post, and I'll couple it with the same chart again:



Quote:


A key factor behind the high concentration of income, and the likely reason that the concentration has been increasing, can be seen by examining the distribution of what is called "capital income": income from capital gains, dividends, interest, and rents. In 2003, just 1% of all households -- those with after-tax incomes averaging $701,500 -- received 57.5% of all capital income, up from 40% in the early 1990s. On the other hand, the bottom 80% received only 12.6% of capital income, down by nearly half since 1983, when the bottom 80% received 23.5%. Figure 5 and Table 7 provide the details.









So, there is the share of capital income steadily increasing for the top 1%, and then you have the government giving greater and greater amounts of tax cuts on capital gains and corporate dividends. I think that goes a long way towards affecting wealth distribution... the top 10% holds 90% of all publically-held stock. Also, although I haven't found more information regarding this study, this was referred to at the first website I linked to in this thread:


Quote:


This point is seen most dramatically in a recent simulation study which suggests that the income distribution would have stayed the same over the past 50 years -- not become much more concentrated, as it did -- if Democratic patterns of income growth had been followed during that whole period. On the other hand, the inequality of the income distribution would have increased almost 80% faster if Republican income growth patterns had been in place during that same period (Bartels, 2003; Jacobs & Skocpol, 2005). That's a huge difference for Americans in general, even though wealth still would have been highly concentrated in the top 1% -- the corporate rich/social upper class -- under either set of policies. For example, the top 1% had 31.1% in 1968, at a time when Republicans had held the presidency for only eight of the previous 36 years, and the Congress for a mere four of those years, whereas the top 1% had 38.1% in 1998.





--------------------
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Offlinefireworks_godS
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8096513 - 03/03/08 07:03 AM (15 years, 10 months ago)

Quote:

kristofer said:
labor does collectively fund the process. there would be no capital at all without labor. capital is created by labor. how many other ways can I put this? if there was no labor, there would be no product. a laborer, regardless of financial contribution, has an effort in the overall production, and should be entitled to an equal share of that profit.




Perhaps, but I don't think its possible to make such a change through the corporations themselves, since it seems practically impossible for government to step into the operations of corporations and dictate how much of their profit goes towards the employees who made it all possible. As someone who worked in management at Wal*Mart for awhile, I would have simply been happier if some of that profit was not taken out of business operations, although I certainly wouldn't have refused a bigger paycheck. :smirk: It really is disappointing to see a fraction of the work that needs to occur within a store occur because people drawing budgets levels up drew a line here instead of there to hide a loss from investors. It really does hurt business, but corporations find incentive in making that stock price go up. If they'd simply show a loss when it happens and not take the money out of operations, they'd be more capable of doing better business by not creating for themselves so many missed opportunities.

It can only be done through taxes, and the capital gains and corporate dividends tax is the way to go. If there isn't a check in place that dampens the amount of profit one can gain from investing in corporations, then that profit is going to be funneled out of corporations and away from laborers, the middle class. Wealth is going to accumulate in the top 10% but especially the top 1%. The middle class will be further squeezed out and the economy with it.


--------------------
:redpanda:
If I should die this very moment
I wouldn't fear
For I've never known completeness
Like being here
Wrapped in the warmth of you
Loving every breath of you

:heartpump: :bunnyhug: :yinyang:

:yinyang: :levitate: :earth: :levitate: :yinyang:


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Offlinefireworks_godS
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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8096522 - 03/03/08 07:11 AM (15 years, 10 months ago)

I thought I would post this here since it pretty relevant:

Quote:

http://www.swamppolitics.com/news/politics/blog/2007/09/obama_proposes_tax_cuts_for_lo.html

Democratic presidential candidate Barack Obama is to deliver a speech today proposing tax cuts for low- and middle-income families worth about $80 billion to $85 billion, according to his campaign.

An advance look at the tax cut proposal provided by his campaign describes a would tax credit that would give low- and middle-income wage-earners up to $500 off their income taxes. The benefit would phase out for people making "about $150,000 to $200,000," according to a campaign official who briefed reporters on the plan but declined to be identified.

Moreover, the tax credit would be refundable for people who earn wages, which essentially would expand the Earned Income Tax Credit that provides government payments to very low-income workers.

The contours of the tax cut repesent the very opposite approach to that used by the Bush Administration in its tax cuts. Since the Bush Administration cut tax rates, most of the benefit went to higher-income people. And the Obama campaign already has announced it would reverse the Bush Administration tax cuts for families earning more than $250,000 per year.

The campaign says it would offset the cost of the tax cut by eliminating corporate tax loopholes including tax breaks given to the oil and gas industry, curtailing the use of tax shelters and raising the tax on capital gains and dividends to as high as 28 percent.

The proposal also includes a "universal mortage credit" of 10 percent of mortgage interest paid to home-owners who do not itemize their taxes. Most of the benefit would go to families who earn less than $50,000 per year, the campaign says.

Most people with more expensive homes itemize their taxes since the combined value of deductions for mortgage interest and property taxes typically exceeds the standard deduction that people who do not itemize their taxes are allowed. The Obama plan would not affect the existing home mortgage interest deduction.

Other features include an exemption for senior citizens on the first $50,000 of income per year.





--------------------
:redpanda:
If I should die this very moment
I wouldn't fear
For I've never known completeness
Like being here
Wrapped in the warmth of you
Loving every breath of you

:heartpump: :bunnyhug: :yinyang:

:yinyang: :levitate: :earth: :levitate: :yinyang:


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Invisiblebradmassive
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8096964 - 03/03/08 10:44 AM (15 years, 10 months ago)

Quote:

kristofer said:
capitalism stifles innovation.

that may seem ridiculous, but consider the auto industry. how many patents to improve gas mileage on vehicles were bought, and then shelved by auto manufactures? also consider that auto manufacturers obviously have investments in the oil industry.. they kind of go hand in hand after all.

or consider the computer software world. microsoft literally monopolizes the the industry despite having an inferior product. but they keep the market share because they give to schools.. and kids grow up using microsoft, so businesses run microsoft.. ad infinitum.

I could go on and on.. local utilities, cell phone companies, grocery stores, gasoline, borrowing money, etc.. all of them rape their consumers and their employees.

it's brilliant I agree.. and also exploits millions of consumers who don't even understand what I'm talking about. maybe I'm complaining about an awareness thing, but it's still wrong. you don't make a billion dollars without exploiting someone.





You need to read up on 'free markets'.

"A free market is a market in which prices of goods and services are arranged completely by the mutual consent of sellers and buyers. By definition, in a free market environment buyers and sellers do not coerce or mislead each other nor are they coerced by a third party.[1] In the aggregate, the effect of these decisions en masse is described by the natural law of supply and demand. Free markets contrast sharply with controlled markets, in which governments directly or indirectly regulate prices or supplies, distorting market signals.[2] In the marketplace the price of a good or service helps to quantify its value to consumers and thus balance it against other goods and services. In a free market, this relationship between price and value is more clear than in a controlled market. Through competition between vendors for the provision of products and services, prices tend to decrease, and quality tends to increase." - Wiki

Capitalism produces innovation by virtue of free markets. In a true capitalism Monopolies would find it difficult to develop as the quality of the product defines the value of the goods. It is not 'capitalism' that is to blame for stifling innovation but the government controlled markets of so called 'corporate capitalism' that are to blame. That is where the exploitation festers.


--------------------
"In the beginning, I had no name. i was a shape, a snarling shadow of the Old World which slipped into this existence" - Steven Erikson

"Our progress as a species rests squarely on the shoulders of that tenth person. The nine are satisfied with things they are told are valuable. Person 10 determines for himself what has value." - My good friend Za -


Edited by bradmassive (03/03/08 12:14 PM)


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Offlinephi1618
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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8097234 - 03/03/08 11:56 AM (15 years, 10 months ago)

How do you decide what to make?

Somebody has to decide whether to build a paper mill or a solar cell factory, and somebody needs to decide when it's time to close that paper mill because nobody reads the paper anymore anyway.

In a capitalist system, anybody can make that decision to build a factory - all you need to do is find the capital. If you build a solar cell factory, and next year everybody finds that the solar cells you build provide a secure and inexpensive power source, you get rich and have more capital to deploy for future projects - you made a good decision, and are rewarded. If you build a paper mill, and can't sell your product, the factory closes and you're bankrupt - you made a poor decision and don't get to screw up any more because you're out of money.

No matter what system is used, somebody needs to decide how to deploy resources. If a Central Committee decides that the paper mill workers are good, hard workers and deserve to keep their jobs and the mill keeps running even though nobody wants the paper, society will eventually become poor because the workers are not creating value that anybody wants.

In any case, some regulations and taxes are needed, though keeping the interests of government officials aligned with those of the people is a tough problem. But, the basic idea that people are responsible for the capital they deploy (and suffer the consequences of any poor decisions they make) is really the only way to make sure that the right job is being done.


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Re: when capital (or a lack thereof) holds you back.. [Re: phi1618]
    #8097337 - 03/03/08 12:24 PM (15 years, 10 months ago)

Good post. :thumbup:


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Re: when capital (or a lack thereof) holds you back.. [Re: Redstorm]
    #8097729 - 03/03/08 01:46 PM (15 years, 10 months ago)

I disagree. In the beginning there wasn't capitalism. There was no investor with wealth to build bigger systems. Capitalism developed as a system through class struggles and social revolutions.

Prior to capitalism there were other systems that were unfair and exploited people. The people don't like being controlled by the opposing class, so they revolt. It's a timeless tale told over and over throughout history.

It's easy for a bunch of people to agree to maintain a farm without any capital investment. It's also easy for a group of people to start up a software development company without much capital.

There are countless other ways to enter the economy without selling your time or getting venture capital. Capital investment is simply a rich man's greed.


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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8097744 - 03/03/08 01:51 PM (15 years, 10 months ago)

Quote:


So, there is the share of capital income steadily increasing for the top 1%, and then you have the government giving greater and greater amounts of tax cuts on capital gains and corporate dividends





I totally agree here. But I explained above that it's impossible to take this profit from the wealthy. If we tax the wealthy they take the jobs to developing nations.

It's a double edged sword here though. By cutting the working class out of high paying jobs they're also cutting out a potential consumer of other investments.


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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8097763 - 03/03/08 01:55 PM (15 years, 10 months ago)

A capitalist economy thrives because they don't tax the wealthy as much. At least in theory. Ideally speaking, by allowing the rich more tax breaks.. there is a supposed "trickle down" theory. If the rich get richer, everyone gets richer. In practice though, it's eliminating the middle class.

I totally agree with your last statement other than the taxation thing:

Quote:


It can only be done through taxes, and the capital gains and corporate dividends tax is the way to go. If there isn't a check in place that dampens the amount of profit one can gain from investing in corporations, then that profit is going to be funneled out of corporations and away from laborers, the middle class. Wealth is going to accumulate in the top 10% but especially the top 1%. The middle class will be further squeezed out and the economy with it.





I don't think fine tuning the "free market" is going to help in this case at all. Fine tuning free markets has a long history of social control, greed, and corruption.


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Re: when capital (or a lack thereof) holds you back.. [Re: bradmassive]
    #8097808 - 03/03/08 02:09 PM (15 years, 10 months ago)

Fortunately for this argument, we don't live in a "free market" society.

I read nearly all of Adam Smith's work in college. I suggest you read about Historical Materialism though.

I understand how capitalism works.. Unfortunately there are problems with true free markets and they must be "maintained" because some businesses require a local monopoly (like natural gas and electric services), and others have made enough capital to maintain their market share by locking consumers in (like Microsoft, AT&T, Big Oil, etc.)

In practice, capitalism does a lot for a developing country. It helps create a stable means of production. There is a balance though because eventually capitalism stifles progress because there is too much capital, and it all pools near the wealthy end of the spectrum.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8098151 - 03/03/08 03:41 PM (15 years, 10 months ago)

Quote:

kristofer said:
I totally agree here. But I explained above that it's impossible to take this profit from the wealthy. If we tax the wealthy they take the jobs to developing nations.




No they don't; that only happens if you tax corporations themselves.


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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8098357 - 03/03/08 04:29 PM (15 years, 10 months ago)

where will you impose this "wealthy tax"?

I ask because the wealth generally stays within the corporation. Money doesn't ever get passed back to the investors. The stock value increases, increasing the overall wealth of the investor. If the corporation cuts a check to the investors, the stock value would remain relatively constant and that money could be taxed as income, but usually corporations just create new corporations with the capital.

So is it a stock tax? If a stock has a certain value point does the tax rate go up? What if stock splits and the value halves (or the number of shares a stockholder has doubles..) ? Where does that leave investments in abstract markets like hedge funds or mutual funds?

My point is that it's not possible to know how much money a wealthy person makes. It's only possible to know the value of one's assets.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8098530 - 03/03/08 05:10 PM (15 years, 10 months ago)

Great points, but I think the obvious tax would be individual capital gains. It used to be higher. I readily admit that I'm not too understanding of this subject, so would restoring a higher tax on capital gains hurt corporations directly?


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8098701 - 03/03/08 05:36 PM (15 years, 10 months ago)

Explain to me how you would start a farm or a software company without an initial capital investment.


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Re: when capital (or a lack thereof) holds you back.. [Re: GnosticWarrior]
    #8098706 - 03/03/08 05:37 PM (15 years, 10 months ago)

GW

Quote:


Workers get paid, regardless if the business operations are profitable or not. They have no vested interest in the company except as a source of employment. They have no obligation to the company except to perform the tasks that they had agreed upon for employment. They can leave at anytime they choose, for whatever reasons.





You're thinking in terms of a particular business. I'm speaking generally about the capitalist vs the laborer. The laborer may have no vested interest in a particular company, but he is still indebted to the capitalist in all aspects of his life.

For example, the same group of people that employ laborers also own the property the employee rents to live on. They're also the people that lend money to the laboring class expecting a return via usury. They also own the stores that the employee shops at. They have investments in public services like electricity and natural gas, and even in necessary commodities like transportation and communication.

A workers contribution to the process should entitle him to a share of the profit, not just an agreed upon livable wage.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8098832 - 03/03/08 06:03 PM (15 years, 10 months ago)

Quote:

A workers contribution to the process should entitle him to a share of the profit, not just an agreed upon livable wage.




The wage is his share of the profits.

Anyways, why should they receive this? Just because you say so?


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Re: when capital (or a lack thereof) holds you back.. [Re: Redstorm]
    #8098906 - 03/03/08 06:19 PM (15 years, 10 months ago)

Quote:


The wage is his share of the profits.

Anyways, why should they receive this? Just because you say so?





I think you misunderstand the difference between a wage and a share.

The wage is the value of his labor, not his share of the profit. His share of the profit would be larger than his wage. Profit is generated because the value of a product is worth more than the cost to produce it.

Labor is a commodity and the value of a commodity is driven down by competition.

The laborer should receive an equal share because of his contribution to the production process.

In my personal experience though, the employees I've hired work harder and develop better products more efficiently when I offer them an equal share to the profits at the end of the year.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8098927 - 03/03/08 06:23 PM (15 years, 10 months ago)

If laborers trade their labor for wages, why should they receive anything in excess of their agreed upon trade?


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Re: when capital (or a lack thereof) holds you back.. [Re: Redstorm]
    #8099220 - 03/03/08 07:29 PM (15 years, 10 months ago)

because they are the profit generating system. the people generate the wealth, and that's why they should be entitled to it.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8099232 - 03/03/08 07:31 PM (15 years, 10 months ago)

Not until they have a stake in the failure or success of the business, they don't.


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Re: when capital (or a lack thereof) holds you back.. [Re: Redstorm]
    #8099326 - 03/03/08 07:58 PM (15 years, 10 months ago)

the workers have the largest stake in the success or failure of any company. without them the company wouldn't produce anything.

the worker loses more than just his time.. he loses his benefits, his retirement, and basically the future that he was working for..

not only that, but the worker loses his income.. which means he can't pay his landlord or feed his children.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8100575 - 03/04/08 05:58 AM (15 years, 10 months ago)

I do believe that a lot of corporations do have profit sharing programs for laborers. Whether or not they are getting a big enough cut is another question, but I've got $250 coming to me on Thursday that is my cut of profit for the store (I up until recently worked at) reaching goals in sales, profit, inventory turn, etc for the previous quarter. The company also has a general profit sharing plan that is coupled with 401(k) (well, they are actually two seperate accounts, about equal in size).

Anyways, I haven't found enough information on the individual capital gains tax to satisfy my interest regarding your last post on the matter, so can you help me understand how taxing individual capital gains contributes to corporations taking jobs overseas?


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Re: when capital (or a lack thereof) holds you back.. [Re: fireworks_god]
    #8100833 - 03/04/08 08:38 AM (15 years, 10 months ago)

when you say capital gain I think of buying assets with the intention of selling it when it appreciates in value.

http://en.wikipedia.org/wiki/Capital_gain

There are some restrictions on how you can buy and sell capital assets, and how they're taxed.

Looks like up until one makes $15000 a year in capital gains they're not even subject to paying tax on it. At that tax floor the rate is 5% and it goes up to 15% the more one profits.


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8101521 - 03/04/08 01:07 PM (15 years, 10 months ago)

If your total income is under $15k, you have a lower rate on capital gains. Most people will pay 15% on their long term capital gains, because most people have jobs that pay more than $15k/yr.

Many companies have profit sharing or stock option programs for their employees. Many Americans own some stock, making them capitalists. If you're smart, you'll save a little money and become a capitalist, too.

You've still not offered any answer to the question of how resources get distributed to the activities that need to be performed. If I want to open up a solar cell factory, where's the (very expensive) plant going to come from?

Where's the incentive to take the risk of working 80 hrs. a week to start a business for possibly no benefit at all?

Some businesses, e.g. software, are not very capital-intensive but are very labor-intensive. That's great, but most businesses aren't that way. I don't see that you have any argument here at all other than "workers create value and should be entitled to all of the fruits of their labor."

How would this work for new businesses? How would this work for old businesses where the right thing to do is fire all the workers and sell the assets of the company because there is not enough demand for the products being made and the capital used could be more profitably deployed elsewhere?

In theory, and frequently in practice, investors add significant value by directing resources where they will be needed in the near future, greatly increasing the overall productivity and wealth in society. If you claim that practice frequently breaks down because people rip each other off through various means, I'll agree and we can talk about it - but you're claiming instead that ownership of capital should play no role in the economy (based on fairness?) - and I just don't see, from theory or observation, how this could work better than what we have.


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Re: when capital (or a lack thereof) holds you back.. [Re: phi1618]
    #8103235 - 03/04/08 08:29 PM (15 years, 10 months ago)

Quote:

If your total income is under $15k, you have a lower rate on capital gains. Most people will pay 15% on their long term capital gains, because most people have jobs that pay more than $15k/yr.




Read the article again.. it's conditional, and not just on income. If you're flipping cars it'll cost you 25% in tax. If you're flipping collectibles it'll cost you 28% to tax. In some cases an individual can collect up to $250,000 in capital gains without being taxed at all.

Quote:


Many companies have profit sharing or stock option programs for their employees. Many Americans own some stock, making them capitalists. If you're smart, you'll save a little money and become a capitalist, too.




I don't need to be told how to live within capitalism. Clearly I understand it well enough to criticize it and see the benefits of progression.

To live in this society you must at least engage in some sort of capitalism. At the very least, trading time for wages. Ideally, everyone would want more. Therein lies the problem. Everyone wants more, but we can't all have more. "If you're smart.." you'll tell your friends that it's time to change the world.

Quote:

You've still not offered any answer to the question of how resources get distributed to the activities that need to be performed. If I want to open up a solar cell factory, where's the (very expensive) plant going to come from?




Ideally, anything significant that would involve the people and their well being would be supported by them financially and otherwise. It's not about if you want to build a solar plant. It's whether or not the people want to build solar plant.

Quote:

Where's the incentive to take the risk of working 80 hrs. a week to start a business for possibly no benefit at all?




The incentive is to do something better.. for everyone including yourself. Profit is a destructive incentive because it drives down the value of a man's time.

Quote:

Some businesses, e.g. software, are not very capital-intensive but are very labor-intensive. That's great, but most businesses aren't that way. I don't see that you have any argument here at all other than "workers create value and should be entitled to all of the fruits of their labor."




No, all businesses are all labor. Labor creates wealth. That startup capital kind of jump-starts the process, but ultimately only labor generates profit. The startup capital was also generated by wage labor. We can go in circles here.. but think about it, there's a small percentage of the population at the top and the distribution of wealth trickles down [poorly] from there.

Quote:

How would this work for new businesses? How would this work for old businesses where the right thing to do is fire all the workers and sell the assets of the company because there is not enough demand for the products being made and the capital used could be more profitably deployed elsewhere?




Those decisions should be up to the workers.

Quote:

In theory, and frequently in practice, investors add significant value by directing resources where they will be needed in the near future, greatly increasing the overall productivity and wealth in society.




What? That's not true at all. Productivity is only limited by the flow of capital. The great rich and poor divide is widening because of our capitalist structures. Look at some of the images and links from fireworks_god posted earlier for that evidence.

Quote:

If you claim that practice frequently breaks down because people rip each other off through various means, I'll agree and we can talk about it - but you're claiming instead that ownership of capital should play no role in the economy (based on fairness?) - and I just don't see, from theory or observation, how this could work better than what we have.




It's not about ripping each other off. The wage laborer agrees to his role in the machine. I am saying that ownership of profit generating systems should be shared by people. Equally. Because people are the ones that generate that profit.. not wealthy people.. working class people.

You don't make a billion dollars with exploiting [working class] people.


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Edited by kristofer (03/04/08 08:35 PM)


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Re: when capital (or a lack thereof) holds you back.. [Re: kristofer]
    #8103926 - 03/04/08 10:58 PM (15 years, 10 months ago)

Quote:


Read the article again.. it's conditional, and not just on income. If you're flipping cars it'll cost you 25% in tax. If you're flipping collectibles it'll cost you 28% to tax. In some cases an individual can collect up to $250,000 in capital gains without being taxed at all.




I didn't read the article at all - I'm sure there's lots of complexity to it. Fact is, though - most people pay long term capital gains of 15% and short term at their marginal tax rate (say, 28%) on stocks.

I don't think you understood my point about ripping people off. Think stock scams, think subprime mortgage securitization, think agriculture subsidies and prisons. These are all failures in our current system that could be addressed through proper (in some cases, less) regulation.

As for the rest of your arguments...
There is utility in specialization. Working class people don't generally have the time or inclination to identify trends and predict future needs, and will frequently have the interest to protect their lives from change even when it's not in "the people's" overall interest.

Generally, people make decisions - "the People" are not able to make decisions without some sort of social structure - rules, contracts, conventions, traditions - that enable them to cooperate.

I won't argue about uneven distribution of wealth - it certainly exists, and is a problem. But the idea of having the "working class" make all decisions about how capital will flow - I don't even understand it as a coherent idea. Will companies have managers and CEOs? How will decisions actually be made - that is, how do you decide to expand a factory and buy a new machine from some other company, or when do you just fix the old one you already have and make do? What about credit and money - what are you proposing to do about that?

And what about freeloaders - if the fruits are evenly distributed, I might be a cynic but I think most people will take it easy.

Have you really thought this through - do you have anything to say that hasn't been suggested and tried in the past?

Look into the history of China - Mao was a great military leader but basically a pretty simple man in other ways, and screwed up so badly it cost millions of lives. China has only begun to recover some hint of it's former greatness now that market economies are encouraged, and social and individual incentives are beginning to be aligned.

Fairness is an innate human feeling, but shit - you're not cold or hungry, are you?


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Re: when capital (or a lack thereof) holds you back.. [Re: phi1618]
    #8105847 - 03/05/08 11:58 AM (15 years, 10 months ago)

Quote:


I don't think you understood my point about ripping people off. Think stock scams, think subprime mortgage securitization, think agriculture subsidies and prisons. These are all failures in our current system that could be addressed through proper (in some cases, less) regulation.





Yes those are all legal methods of exploitation. It's not like working class people have a choice really. We all have to get mortgages eventually, or continue to live on rental property.

Quote:


There is utility in specialization. Working class people don't generally have the time or inclination to identify trends and predict future needs, and will frequently have the interest to protect their lives from change even when it's not in "the people's" overall interest.





Time is time regardless of intellectual, skilled or physical superiority. Why couldn't the "specialized" person just be another working class citizen playing that particular role? Why does that role have to be more valuable?

Quote:


Generally, people make decisions - "the People" are not able to make decisions without some sort of social structure - rules, contracts, conventions, traditions - that enable them to cooperate.





Indeed, I propose a true democracy instead of a delegate system. I believe people should be personally responsible for their communities instead of paying taxes and letting government handle it for them.

Quote:


I won't argue about uneven distribution of wealth - it certainly exists, and is a problem. But the idea of having the "working class" make all decisions about how capital will flow - I don't even understand it as a coherent idea. Will companies have managers and CEOs? How will decisions actually be made - that is, how do you decide to expand a factory and buy a new machine from some other company, or when do you just fix the old one you already have and make do? What about credit and money - what are you proposing to do about that?





You underestimate people a lot here. Do you honestly believe working class people don't understand supply and demand? Yes there will be managers and CEO's, put in democratically by the workers. They'll want to manage money well because the overall wealth of the labor union would be at stake. The company is the communities vested interest because it will provide one part of the process to some other industry, or perhaps deliver the finished product to the consumer. Those decisions aren't complicated when they're broken down into their various parts. Capitalists call it micro management. The concept functions the same, just even the pay scale.

Why would the people borrow money? Ideally there are no capital interests for investors in this society and there would be nothing to borrow. If one particular factory needs a new machine to meet demand they call the people that make machines and ask for one.

The means of production already exists.. in theory, the entire country could still have it's high standard of living without currency at all if everyone just did what they do normally everyday.

Quote:


And what about freeloaders - if the fruits are evenly distributed, I might be a cynic but I think most people will take it easy.





You're already supporting freeloaders. It's called welfare. At least in a society without money they would be enabled to find a way to contribute.

Here's a wikipedia article about motivation, because that seems to be a major hang-up. It's certainly not inspired by money.

Quote:


Have you really thought this through - do you have anything to say that hasn't been suggested and tried in the past?





A scripture from Ecclesiastes should answer that, 1:9 - "What has been will be again, what has been done will be done again; there is nothing new under the sun."

Quote:


Look into the history of China - Mao was a great military leader but basically a pretty simple man in other ways, and screwed up so badly it cost millions of lives. China has only begun to recover some hint of it's former greatness now that market economies are encouraged, and social and individual incentives are beginning to be aligned.





First of all, money and the usury behind it is more of an unfortunate side effect to capitalism than it is an incentive. It's a way for the wealthy and poor to remain in their respective roles for generations.

Secondly, capitalism is necessary to establish a solid means of production. Marx addressed that in his writings quite frequently. I don't know much about Mao's revolution or why it concerns this thread. But it's time to move on. Capitalism is holding back production. It's also known as recession. It's going to get worse.

Quote:


Fairness is an innate human feeling, but shit - you're not cold or hungry, are you?





Do I have to be cold and hungry to care?


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