Did Bush lie? It doesn't matter any more.

POSTED BY: Geezer
UPDATED: Tuesday, July 11, 2023 18:35
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RUE

Saturday, August 21, 2004 2:40 AM

Africa is the other face of capitalism.

Your standard of living is good because people are starving elsewhere. Many countries appear to do well because, having gotten an early start (the industrial revolution in Europe and the US), they've managed to exploit the rest of the world.

(The Adam Smith theory had a theoretical flaw in that it didn't model what would happen if a business got so large it dominated its environment.)

There are many models one could use to try to represent how capitalism actually functions. The one I favor is what I call the 'Ponzi scheme' model: since profit is the difference between costs (ultimately, wages) and selling price, the guy who makes the Mercedes can't afford to buy it, he buys a Hyundai. The guy who makes the Hyundai buys a motorcycle, the guy who makes the motorcycle buys a bicycle, the guy who makes the bicycle buys shoes, the guy who makes the shoes goes barefoot, and the guy not in the loop starves.

The US has managed (for now) to export its poverty - with exceptions.

If you look at barrios, slums, ghettos, and other concentrations of poverty in the US, you would see the functional equivalent of colonies just like the other capitalist, western nations used to have.

GEEZER

Saturday, August 21, 2004 3:41 PM

Quote:
Originally posted by SignyM:
I think it depends on "for whom and where". Also, you have to look at what might be a "sound business decision" in light of the overall world context.

We in the United States have a wonderful standard of living because we were protected from the ravages of WWII by oceans. At the end, we were literally the only industrialized nation left standing. (My husband, who grew up in post-war Hungary, likes to remind me that at the end of WWII there was only one bridge left and a few running trucks.) This gave us a significant edge to our technology, military, and currency. I don't think we can attribute that to capitalism per se but more to geographic fortune. I also happen to think that we are about to run out of our historical capital, but be that as it may....

Most of Africa, South and Central America, and Russia are capitalist basket cases. They have private/ coporate ownership-the hallmark of capitalism- but they are neither democratic nor properous. When capitalism was instituted in Russia, Poland, Argentina, Chile, and Nicaragua, the standard of living plummetted for most people while a few became fabulously wealthy. India, which is becoming "more" capitalist, is seeing a growing middle class- but also a growing POORER class.

But most of western europe, and Japan, were definitely ravaged by WWII. They rebuilt and they are right up there on the standard of living scale. South Korea was pretty well torn up by the Korean conflict, and it's doing well. After these wars the countries that had, or were given, democratic capitalist governments managed to recover and thrive while the authoritarian socialist countries didn't.

Africa, South and Central America, Russia and Eastern Europe pretty much confirm that capitalism needs to work hand in hand with democracy. People aren't going to invest the time and capital ncessary if they think the government will nationalize it or can't provide enough security to make it go.

"Keep the Shiny side up"

GEEZER

Saturday, August 21, 2004 4:10 PM

Quote:
Originally posted by rue:
Africa is the other face of capitalism.

Your standard of living is good because people are starving elsewhere. Many countries appear to do well because, having gotten an early start (the industrial revolution in Europe and the US), they've managed to exploit the rest of the world.

(The Adam Smith theory had a theoretical flaw in that it didn't model what would happen if a business got so large it dominated its environment.)

There are many models one could use to try to represent how capitalism actually functions. The one I favor is what I call the 'Ponzi scheme' model: since profit is the difference between costs (ultimately, wages) and selling price, the guy who makes the Mercedes can't afford to buy it, he buys a Hyundai. The guy who makes the Hyundai buys a motorcycle, the guy who makes the motorcycle buys a bicycle, the guy who makes the bicycle buys shoes, the guy who makes the shoes goes barefoot, and the guy not in the loop starves.

The US has managed (for now) to export its poverty - with exceptions.

If you look at barrios, slums, ghettos, and other concentrations of poverty in the US, you would see the functional equivalent of colonies just like the other capitalist, western nations used to have.

What I'm hearing from you and SignyM is either past history which can't be changed, or how bad everything is due to capitalist democracies, but no alternative proposals. When I look at your "Ponzi scheme" (another mis-definition, BTW) I see 7 out of 8 putting food on the table and improving their lives. And if there's that much money floating around, even the guy at the bottom could probably find a job providing services, if he wanted to. Without someone risking the capital to build the Mercedes factory, they'd all be on the dole.

And the reason that the family of the guy in Africa where they get the bauxite for the engine block is starving isn't because they don't pay enough for it, it's because his government nationalized the mine, set his wages below a living wage, and jail or kill him if he protests.

"Keep the Shiny side up"

RUE

Sunday, August 22, 2004 3:39 AM

I see a major disconnect.

Quote:
What I'm hearing from you and SignyM is either past history which can't be changed, or how bad everything is due to capitalist democracies, but no alternative proposals.

Trust me, you wouldn't want to hear mine.

Quote:
When I look at your "Ponzi scheme" (another mis-definition, BTW)

How so?

Quote:
I see 7 out of 8 putting food on the table and improving their lives.

People have been putting food on the table and improving their lives long before capitalism, and will continue to do so should it disappear. The difference is, in other schemes (not every other scheme, but other ones) they keep 100% of the fruits of their efforts, not merely a portion.

Quote:
And if there's that much money floating around, even the guy at the bottom could probably find a job providing services, if he wanted to.

You truly subscribe to the trickle-down theory I take it. Check out the history of the Great Depression to prove that lots of money in the hands of a few people does not equate to jobs.

Quote:
Without someone risking the capital to build the Mercedes factory, they'd all be on the dole.

See above. It does not require capitalists, or capitalism, or government, for people to be able to get water, food and shelter.

Quote:
And the reason that the family of the guy in Africa where they get the bauxite for the engine block is starving isn't because they don't pay enough for it, it's because his government nationalized the mine, set his wages below a living wage, and jail or kill him if he protests.

I have not enough time right now to prove to you all the ways you are seriously wrong. But one thing you said IS true: government and business often act in concert to the detriment of nearly everyone.

SIGNYM

Sunday, August 22, 2004 5:36 PM

Quote:
Various US governments at various times have been on both sides of the labor-management issue. Britain in the '70s just about ran their auto industry into the ground by catering to labour at the expense of sound business decisions.

Yes and no. Laws provide the context of labor-owner negotiations. British monarchs granted charters for "Crown Corporations" but there was certainly no equivalent for "Crown Labor Associations" and that has been pretty much the approach ever since.

Laws form the basis for "corporations" which are synthetic persons (hence the term "incorporate"- to make a body). These laws create, recognize, and grant rights to these synthetic persons, and these synthetic persons are treated very favorably in tax, liability, and criminal law. (Two examples: It's generally a misdemeanor to steal less than X amount from a person, but ALWAYS a felony to steal from a corporation. There is no corporate equivalent to the death penalty.)

In addition to these laws, the history has been to either actively crush labor associations whenever they occur or to neglect their formation. This doesn't mean just in the distant past of the Haymarket Rebellion and the Wobblies but as recently as NAFTA and the GATT agreements, which (like laws governing corporations) make no provision for labor unions. To point to a few instances where government then nationalized a specific service or sector in the larger pro-coporate matrix just points to the exceptions rather than the rule.

Also, a "sound business decision" may not be a sound economic decision. Business doing what business does (accumulating profits) leads to economic catastrophe like the Great Depression. I'll get to that later.

Since you would like to hear specific antidotes, I suggest that we look very closely at international and national laws governing corporations. I for one would like to be taxed like a corporation (able to deduct expenses, depreciate capital goods, taxed only on my "profits"), held only to the standard of fiduciary responsibility to my stockholders (myself), escape liability for any incidental deaths that I might have caused on my way to grabbing more money, blighting my neighborhood if it doesn't suit my bottom line to do otherwise.

I'm going to discuss what Rue brought up but from a slightly different angle about the difference between economic and business decisions. Looking at the macroeconomic scale, let's say that starting today we track production and consumption. By the end of the week (Saturday) we total up all produced goods- everything from locally-produced fish-paste to supercomputers. Now these businesses have to cover their expenses: utilities, labor, raw materials, finance charges, rent, taxes and so forth. Then add what they think they can get away as "profit" to generate a final price. In sum, the value of goods produced is (say) a trillion dollars and the amount of money paid to labor is 900 million. No matter how you slice and dice the data, the amount paid to "labor" is ALWAYS less than the value of goods produced on a global scale. And each time that cyle turns over, the difference gets bigger and bigger.

The issue is- What becomes of those unsold goods? Or conversely, what happens to that "excess" money (profit)? Is there are mechanism by which it re-enters the "food chain" and can be used to consume those "excess goods"?

There are a few mechanisms for the money to re-enter the consumption cycle (profit goes to pay shareholders and financial insitutions which partly represent pension plans and individual investors) but by and large they money goes to a few wealthy individuals and corporations. And again, each cycle cumulalatively adds to the pile.

Since there are only so many yachts that one can buy and servants that one can hire, wealthy individuals don't create the demand that average people do. They speculate in fine art, land, precious metals, currencies, and gems which is a pretty localized cycle. They also invest in stocks, bonds, and other financial instruments- leadin

GEEZER

Sunday, August 22, 2004 9:46 PM

Quote:
Originally posted by rue:
Trust me, you wouldn't want to hear mine.

Actually, I would. Provide me with a better solution.

Quote:

"When I look at your "Ponzi scheme" (another mis-definition, BTW)" How so?

Definitions of a Ponzi Scheme abound. They usually involve bilking investors by using the take from later investors to pay off the first ones, making the scheme look profitable. Another version of the pyramid scheme. http://www.sec.gov/answers/ponzi.htm

Quote:
People have been putting food on the table and improving their lives long before capitalism, and will continue to do so should it disappear. The difference is, in other schemes (not every other scheme, but other ones) they keep 100% of the fruits of their efforts, not merely a portion.

Nope. Even if they're just subsistance farming, they have to use some of the fruits of their efforts to by new implements to farm with.

Quote:
You truly subscribe to the trickle-down theory I take it. Check out the history of the Great Depression to prove that lots of money in the hands of a few people does not equate to jobs.

When did I say that? The Depression was more a cautionary tale about the problems with speculation than with capitalism.

Quote:
See above. It does not require capitalists, or capitalism, or government, for people to be able to get water, food and shelter.

Maybe if the world population was half a billion or less. The current population requires massive investments in infrastructure to survive at all. Without capitalism, where does this come from?

Quote:
I have not enough time right now to prove to you all the ways you are seriously wrong. But one thing you said IS true: government and business often act in concert to the detriment of nearly everyone.

You keep making these statements of your opinion as though they were fact. Prove them.

"Keep the Shiny side up"

GEEZER

Sunday, August 22, 2004 10:08 PM

Quote:
Originally posted by SignyM:
I'm going to discuss what Rue brought up but from a slightly different angle about the difference between economic and business decisions. Looking at the macroeconomic scale, let's say that starting today we track production and consumption. By the end of the week (Saturday) we total up all produced goods- everything from locally-produced fish-paste to supercomputers. Now these businesses have to cover their expenses: utilities, labor, raw materials, finance charges, rent, taxes and so forth. Then add what they think they can get away as "profit" to generate a final price. In sum, the value of goods produced is (say) a trillion dollars and the amount of money paid to labor is 900 million. No matter how you slice and dice the data, the amount paid to "labor" is ALWAYS less than the value of goods produced on a global scale. And each time that cyle turns over, the difference gets bigger and bigger.

The issue is- What becomes of those unsold goods? Or conversely, what happens to that "excess" money (profit)? Is there are mechanism by which it re-enters the "food chain" and can be used to consume those "excess goods"?

What happens the the "Excess" profit? It goes as dividends to the people who were willing to risk their money by investing it in the fish-paste or supercomputer factories. If they weren't willing to risk the capital to develop or improve those industries, we might be able to make our own fishpaste, but we'd never have much in the way of manufactured goods, from blenders to supercomputers.

The folks who are lucky enough to invest in a profitable entity take the money they derive from it and spend it, save it, or re-invest it. If they spend it, part of it ends up as wages for the folks who work at the places they buy from. If they save or invest it, pretty much the same thing happens at another remove.

I have asked again and again of both you and Rue; show me an example of a better system anywhere in the world. All I get from you are criticism and questions, but no answers. It's easy to poke holes in any system, but much harder to actually come up with a better solution. Tell me, what will work better?

I think that both of you are afraid to posit any other system because you aren't sure if it is defensible. You have had your inning griping about the ills of capitalist democracies, so why not put up your alternative and let me take the offense for a while?

"Keep the Shiny side up"

SIGNYM

Monday, August 23, 2004 3:22 AM

Quote:
spend it, save it, or re-invest it. If they spend it, part of it ends up as wages for the folks who work at the places they buy from. If they save or invest it, pretty much the same thing happens at another remove.

Except that savings and re-investment exacerbate the imbalance. Once the imbalance grow large enough, you wind up with an economic depression.

SIGMANUNKI

Monday, August 23, 2004 5:06 AM

Quote:
Originally posted by Geezer:
That's right. It's no longer a matter of any significance. The fanatics on both sides are never going to change their minds, and us folk in the middle are so tired of seeing that poor dead horse get beat that we don't care much anymore. Maybe somewhere down the road there'll be an impeachment or and exoneration, and we'll read about it in the paper.

So you pro and anti guys go ahead and prepare for the crucifiction, or canonization, or whatever, and the rest of us will worry about stuff that can actually be resolved.

"Keep the Shiny side up"

Forgive me for showing up late and not having time to read the thread. I know I'm risking repeating what may have been said over and over.

Yes it still does matter. If people just went "Who cares, it doesn't matter anymore" then there is presidence for people doing this sort of thing again and again because people don't care. If people don't care then there will be no impeachment, no reprocussions what-so-ever.

If you actually want to fix things then people are going to have to listen to eachother. And since both sides aren't doing that everything by default has become unsolvable.

This is the issue that must be resolved before anything else will get done, and the perfect place to do that is the next election. I just hope you guys down there make sure that that crazy guy doesn't get back in. Whether you like him or not you can't deny the fact that he has damaged the country and it's international relations greatly with no sign of stopping. That alone, whether you like him or not, makes him unworthy of continuing his unholy reign.

----
"Canada being mad at you is like Mr. Rogers throwing a brick through your window." -Jon Stewart, The Daily Show

GEEZER

Monday, August 23, 2004 11:10 AM

Quote:
Originally posted by SignyM:
Quote:
spend it, save it, or re-invest it. If they spend it, part of it ends up as wages for the folks who work at the places they buy from. If they save or invest it, pretty much the same thing happens at another remove.

Except that savings and re-investment exacerbate the imbalance. Once the imbalance grow large enough, you wind up with an economic depression.

Leaving aside that I obviously have a different opinion about this, I keep asking for you to propose something better, and don't hear anything. Why should I give up a system that, while admittedly not perfect, provides more people with better lives than any other, when no alternative that is better, or even as good, is shown to me?

I don't think you can do it. I don't think that you can show me a better real-world system of government and economics than a capitalist democracy. If you could, you would have done so by now, instead of all this sniping.

"Keep the Shiny side up"

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