The Rich and Powerful Who Abuse the System: the contempt topic

[Knight Of Winter]

I find that support for socialism (as a political/economic/both) or some other kind of system with state-owned property is mostly the domain of western academia and intelligentsia who are jaded with capitalism and are looking for better alternatives. On the contrary, you won't find much support for socialism from countries which have actually lived under socialist regimes - and I'm talking primarily about eastern Europe here (I'm not counting people who currently live in socialist countries, for they usually don't have the ability to speak their mind openly).

The thing with capitalism is that it doesn't make any grand promises. It doesn't promise justice nor fairness. It doesn't promise happiness nor fulfillness. It doesn't promise equal opportunities (for all these things you need governmental regulations). And it certainly doesn't promise any kind of utopia. But it does promise one thing and one thing only: raw wealth (however distributed) with economic growth - and here it delivers. And the reason I support capitalism is not because I particularly like it or am personally invested in its success; it's because economic growth is kind of...very important to the overall well-being of a society. Wealthier countries in general have better education and health care. Their citizens report higher rate of happiness and life satisfaction. They have higher degree of human rights. Etc. None of these are, I hope, controversial claims to make.

As I said, I'm not particular fan of capitalism per se. But as long as there's not any good alternatives - I'll grudgingly support it, for I don't have much of an option if my main goal if overall welfare of humans all around the globe.

A point has been made about environmental impact of capitalism and on the surface level: the point is absolutely correct. Capitalism does indeed exploit mercilessly: its workers as well as natural resources. But this is not a unique feature of capitalism. A person arguing for negative environmental impact of capitalism would have to prove that the other, non-capitalist economic systems are somehow better. Are they? Are communist countries more environment-friendly than capitalist ones? Is mercantilism a better solution for our natural surroundings? Would environment fare better under feudalism, of any other kind of pre-capitalist economy system? The way I see it: human history consists either of societies which exploited natural resources without any care for environment, and societies which would have done so, but didn't have the means nor opportunities. Not that I'm advocating that nature exploitation is not destructive - far from it. Many things need to change in order for us to not fuck up our environment any more than we already did. But this problem goes far beyond capitalism. 

[Heartofice]

10 hours ago, Rippounet said:

I genuinely don't know what you mean. I don't believe you have explained the mechanism(s) by which an individual or a country becoming "wealthy" benefits other individuals or other countries, only given approximative examples where this is supposed to be the case. It's not the same thing.

Quite frankly, I didn't think I needed to explain basic economic theory to you. You keep telling us about how much you have read, so I assumed that high school, first day economics would be something you should be aware of.

This will sound patronising, but it's going to be hard not to do that.

Ok so the Zero sum fallacy is the idea that there is a finite pool of wealth in a system and that one person taking some of that wealth, takes it away from someone else.

Imagine there are 2 countries. Country A has an abundance of coconuts and Country B produces millions of Jellybeans. 
Now, if country A took all of country B's jellybeans and left them with nothing, by invading them and burning down their houses, then THAT would be a zero sum interaction.

However, if they both agreed a value of trade between jellybeans and coconuts then they could exchange their products, with both being happy and better off. Coconuts and jellybeans have little value in their respective countries because there is so much, but by exchanging them for products which each country cannot produce, they are creating value and wealth. You can extrapolate these interactions billions of times to see how that might work.

That is why wealth is not zero sum, wealth can be created by the interaction of trade and production. One country specialises in one thing that other countries are not able to do, those other countries pay to gain that product, workers need to be hired to produce more of that product, workers are paid, those workers spend their money on other products, more products are made to cope with extra demand, more workers are hired etc etc. 

That's just basic theory and I previously used the example of Asian prosperity to demonstrate that the pot of wealth has gotten a lot bigger in asia, it hasn't been shared out equally, but those at the bottom have gained as well as those at the top. If it was a zero sum game Asia couldn't have gotten so much wealthier without someone else getting a lot poorer. 

[Rippounet]

9 hours ago, Tywin et al. said:

Don't let the average person off the hook. We're where we are in large part because everyday people simply don't give a fucking shit and/or won't do anything about it.

7 hours ago, SeanF said:

Why would I wish to give up my house and business to the government?

@Tywin et al. You're obviously not wrong.

Sorry, that was easy.

1 hour ago, Knight Of Winter said:

The thing with capitalism is that it doesn't make any grand promises. It doesn't promise justice nor fairness. It doesn't promise happiness nor fulfillness. It doesn't promise equal opportunities (for all these things you need governmental regulations). And it certainly doesn't promise any kind of utopia.

Capitalism does promise all these things though, through advertisement and lots of other forms of propaganda (billionaires buying all the media to spread falsehoods).

In fact, you can see in this very thread that many people do believe in some of capitalism's grand promises, and will spend a lot of energy to defend it.

1 hour ago, Knight Of Winter said:

A person arguing for negative environmental impact of capitalism would have to prove that the other, non-capitalist economic systems are somehow better.

No. They would only have to be able to make suggestions for further regulations.

In fact, a person criticizing the negative environmental impact of capitalism is under no obligation to even propose a different economic system. They are perfectly entitled to simply suggest ways to improve the one we have.

 

15 minutes ago, Heartofice said:

This will sound patronising, but it's going to be hard not to do that.

Ok so the Zero sum fallacy is the idea that there is a finite pool of wealth in a system and that one person taking some of that wealth, takes it away from someone else.

That is why wealth is not zero sum, wealth can be created by the interaction of trade and production. One country specialises in one thing that other countries are not able to do, those other countries pay to gain that product, workers need to be hired to produce more of that product, workers are paid, those workers spend their money on other products, more products are made to cope with extra demand, more workers are hired etc etc.

I'm actually kinda touched you took the time to type all this, but I alluded to why Ricardo's comparative advantage almost never works in practice a couple of pages back: when mercantilism ended, it wasn't countries producing A on the one hand and countries producing B on the other. You already had countries producing A, B, C, D... all the way to P or something, and then others who mostly produced Y and Z. What happened was that countries producing only Y and Z ended up "trapped" in their "comparative advantage" and did not develop, instead ending up as mere suppliers of the countries who were already ahead - whose development accelerated.
To put it differently, it seems well-established that in the 19th century, all countries were careful to develop key economic sectors before engaging in liberalism. Those that didn't -or couldn"t-  got screwed big time.

I mean, it's pretty much the economic basis of what we define as "neo-colonialism" or "economic imperialism."

Still:

15 minutes ago, Heartofice said:

That's just basic theory and I previously used the example of Asian prosperity to demonstrate that the pot of wealth has gotten a lot bigger in asia, it hasn't been shared out equally, but those at the bottom have gained as well as those at the top. If it was a zero sum game Asia couldn't have gotten so much wealthier without someone else getting a lot poorer. 

Asia is interesting, but as far as I'm concerned, economist Ha-Joon Chang (among others) demonstrated/explained in numerous articles and books why Asia developed thanks to protectionist policies. It's the main reason I asked you why "mercantilist theories" had failed, because I knew protectionism or "neo-mercantilism" is widely credited with economic success in Asia.
Of course it wasn't enough, and Chang also described the importance of targeted subventions... Which brings me to Galbraith and the creation of value, to try and figure out what happened exactly.
I'll confess my readings on Asia are a bit old, but I remember that almost every single Asian success ended up proving economic liberalism wrong. In fact, it's not just Asia: the US is one of the least liberal countries in the world when it comes to international trade, consistently using protectionism and subventions to maintain its economy ahead.

It's all stories man. I was taught the same when I was an undergrad, and then, after graduating, I slowly discovered (in part thanks to more advanced classes) that it was all wrong. There is no system that magically "lifts all boats," that's a story that is always told to defend a particular system, be it capitalism or another.
Hence why I became interested in finding out what the sliver of magic at the heart of capitalism is (for there is something there, undeniably). Unfortunately, even that one is now being exposed as an illusion, and I'm kinda scared of what it means for the near future - it could mean an economic crisis so bad that the GFC would turn out to have been a mere warning in comparison.

[Mr. Chatywin et al.]

9 hours ago, SeanF said:

A system where almost everything is State-owned seems a lot worse than the current system, to me, and one that could only be maintained by extreme coercion.

Why would I wish to give up my house and business to the government?

Your house and business is probably owned by the banks already and they deeply influence governments.

It always amazes me when people talk about authoritarian socialist regimes and believe that's what socialism in general looks like, but then give capitalism a pass for the same, if not worse, behavior because they think it provides this illusion of freedom. The reality is >95% of us are getting fucked over regardless of the political and/or economic system we live under, so sign me up for the one that at least cares a bit about the average person instead of the one that pretends it does.

[Ran]

25 minutes ago, Tywin et al. said:

Your house and business is probably owned by the banks already and they deeply influence governments

If they just lent you money to finance it, and you can do with it as you please so long as you repay them according to agreed upon terms? Then you own it. There's no question that it is your property. Your name is on the deed, yours are all the legal responsibilities and benefits.

 

[SeanF]

34 minutes ago, Tywin et al. said:

Your house and business is probably owned by the banks already and they deeply influence governments.

It always amazes me when people talk about authoritarian socialist regimes and believe that's what socialism in general looks like, but then give capitalism a pass for the same, if not worse, behavior because they think it provides this illusion of freedom. The reality is >95% of us are getting fucked over regardless of the political and/or economic system we live under, so sign me up for the one that at least cares a bit about the average person instead of the one that pretends it does.

My mortgage is paid, and my business has a small overdraft.

I'm quite content with that.  

[baxus]

37 minutes ago, Tywin et al. said:

Your house and business is probably owned by the banks already and they deeply influence governments.

What Ran said, and on top of that you at least have the freedom to buy the house you want (within the range you can afford, obviously) and can actually run your own business (which can succeed or fail, depending on your ability, among other things).

Within socialist/communist systems that were in place in Eastern Europe, those things weren't a given.

[Mr. Chatywin et al.]

9 minutes ago, Ran said:

If they just lent you money to finance it, and you can do with it as you please so long as you repay them according to agreed upon terms? Then you own it. There's no question that it is your property. Your name is on the deed, yours are all the legal responsibilities and benefits.

 

And when you miss a few payments you'll find out who really owns it. They really appreciate the renovations you've made btw. 

You own something when you don't owe anyone for it so they can't take it away. 

10 minutes ago, SeanF said:

My mortgage is paid, and my business has a small overdraft.

I'm quite content with that.  

So yes, you own your house. Good for you.  Businesses are always a bit more fluid OTOH. 

[Mr. Chatywin et al.]

1 minute ago, baxus said:

Within socialist/communist systems that were in place in Eastern Europe, those things weren't a given.

They're not a given in Western countries either and we're backsliding. 

And again, Eastern European socialism is not the universal definition. It's basically like saying socialism in Venezuela failed badly so the entire spectrum of socialism should be discarded. 

[Ran]

11 minutes ago, Tywin et al. said:

And when you miss a few payments you'll find out who really owns it.

That's an agreement you made. No one makes you do it. 

11 minutes ago, Tywin et al. said:

You own something when you don't owe anyone for it so they can't take it away. 

Okay. Give me all of your assets, and I promise to pay you $1 a month  for it in perpetuity. If I default, you get it all back.

Good deal, no? You own all the assets, after all, and as soon as I default my license to use them is done, and you'll gain the assets, plus any improvements and returns I made on them, and those juicy George Washingtons.

Of course, maybe I end up giving away all the assets, because you can't stop me, but... well.... you own it, right? You're agreeing that I can do that.

Edited September 19, 2023 by Ran

[SeanF]

5 minutes ago, Tywin et al. said:

They're not a given in Western countries either and we're backsliding. 

And again, Eastern European socialism is not the universal definition. It's basically like saying socialism in Venezuela failed badly so the entire spectrum of socialism should be discarded. 

I think it's a real problem that there are groups, in the UK, and USA, whose counterparts were enjoying a middle class lifestyle, not too long ago, and who cannot afford that now.

My own view is that in both countries, the burden of taxation needs to be switched more on to capital, and less on income. 

[baxus]

8 minutes ago, Tywin et al. said:

They're not a given in Western countries either and we're backsliding. 

I'm going to go out on the limb here and say that you haven't experienced what it's like when it's not a given.

Do you have to wait until the state awards you with a flat, and even than you don't own it but have the right to reside in it while you live. When you pass away, your spouse and kids have to go through this whole bureaucratic horror so that they can remain in it. You obviously can't sell it, or rent it out or move etc.

And the fact that there are so many family owned businesses in Western countries is proof enough that starting your business is a realistic option.

18 minutes ago, Tywin et al. said:

And again, Eastern European socialism is not the universal definition. It's basically like saying socialism in Venezuela failed badly so the entire spectrum of socialism should be discarded.

Ok, what are we then using as the universal definition of socialism? Scandinavia?

[Mr. Chatywin et al.]

17 minutes ago, Ran said:

That's an agreement you made. No one makes you do it. 

Sure, just like no one makes you have to own a car, but many jobs (at least here in the US) require you to have one and a cellphone too even if your job doesn't directly require you to use either of them.

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Okay. Give me all of your assets, and I promise to pay you $1 a month  for it in perpetuity. If I default, you get it all back.

Good deal, no? You own all the assets, after all, and as soon as I default my license to use them is done, and you'll gain the assets, plus any improvements and returns I made on them, and those juicy George Washingtons.

Of course, maybe I end up giving away all the assets, because you can't stop me, but... well.... you own it, right? You're agreeing that I can do that.

The entire premise of this is skewed. Please try again with a real world example.

21 minutes ago, SeanF said:

I think it's a real problem that there are groups, in the UK, and USA, whose counterparts were enjoying a middle class lifestyle, not too long ago, and who cannot afford that now.

I can't comment on the UK, but from what I've read the same problems living in or around big cities exist there as they do here. Everything is becoming unaffordable, even for well educated people with good jobs. I saw an article a few years ago that said if you make less than $100k and live in San Francisco you're close to being poor. That's insane. We're basically at the point where two generations are struggling to get by when their parents and grandparents could buy homes and have nice middle class lifestyles on basically the same amount of money when you account for inflation. 

Something has gone horribly wrong and it's capitalism, not socialism, that's the driver, at least here. 

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My own view is that in both countries, the burden of taxation needs to be switched more on to capital, and less on income. 

Yep. That's why Bezos pays himself less than $100k annually. It's a disgusting tax dodge. Shit like this should never be allowed.

15 minutes ago, baxus said:

I'm going to go out on the limb here and say that you haven't experienced what it's like when it's not a given.

Do you have to wait until the state awards you with a flat, and even than you don't own it but have the right to reside in it while you live. When you pass away, your spouse and kids have to go through this whole bureaucratic horror so that they can remain in it. You obviously can't sell it, or rent it out or move etc.

My guess is there's just too much of a difference in systems for me to really comment on this. The one thing I can say though at least in the US more people are being forced to rent as opposed to buying homes so they're kind of in a similar trap you're desribing.

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And the fact that there are so many family owned businesses in Western countries is proof enough that starting your business is a realistic option.

Feels like that was truer before we were born. I wouldn't be surprised if in 20 years everything was owned by a few major corporations that have more power than most states. 

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Ok, what are we then using as the universal definition of socialism? Scandinavia?

There isn't one. Again, just look at the US. The three most popular programs are Medicare, Medicaid and Social Security. All three philosophically are socialist programs, yet so many people who receive benefits from them loudly express how they hate socialism. 

There's also not a universal definition of capitalism. Both systems have their pros and cons which is why I said previously that we should try to marry the best parts of each. That will probably give us the best result we can hope for, but nothing is going to be perfect.

[Martell Spy]

If all boats will be lifted, why stifle it with regulation? The increased prosperity will cancel out ill effects.

[Kalbear]

Just to make sure folks don't go down the wrong route too much - the economic democracy model idea does have private ownership of personal property. The goal is to shift ownership of corporate holdings to democratically-run groups and collectives. It is not to abolish any personal property. I was not advocating the notion of abolishing all private property. 

This gets into a good point about what capitalism is - and a big part of it is that private people own capital property (IE, the things that make stuff to sell).

2 hours ago, Tywin et al. said:

There's also not a universal definition of capitalism. Both systems have their pros and cons which is why I said previously that we should try to marry the best parts of each. That will probably give us the best result we can hope for, but nothing is going to be perfect.

There really is one that's very basic that is pretty well understood:

• The means of production are owned primarily and mostly by private individuals or groups
• Most people make their income from wages, save the capitalists who earn their income from using their capital products
• The market is the primary way goods and services are exchanged 

That's really it. 

[Kalbear]

13 hours ago, SeanF said:

A system where almost everything is State-owned seems a lot worse than the current system, to me, and one that could only be maintained by extreme coercion.

Why would I wish to give up my house and business to the government?

And, it’s not a system that people would vote for, in large numbers.  Radical socialist parties (as opposed to social democratic parties) rarely break through 10%.

Again, see the link I posted and the clarification I made - the idea is that the state owns most capital things. It does not own private property or abolish it. 

And in that case, you wouldn't have to give up your house. You might have to give up your business depending on the size of it, and you'll definitely have to have it be more heavily regulated than you probably do now in the US. 

[maarsen]

2 minutes ago, Kalnak the Magnificent said:

Just to make sure folks don't go down the wrong route too much - the economic democracy model idea does have private ownership of personal property. The goal is to shift ownership of corporate holdings to democratically-run groups and collectives. It is not to abolish any personal property. I was not advocating the notion of abolishing all private property. 

This gets into a good point about what capitalism is - and a big part of it is that private people own capital property (IE, the things that make stuff to sell).

There really is one that's very basic that is pretty well understood:

• The means of production are owned primarily and mostly by private individuals or groups
• Most people make their income from wages, save the capitalists who earn their income from using their capital products
• The market is the primary way goods and services are exchanged 

That's really it. 

Any system that treats one group in society differently than another group will have issues. When the owner of capital gets to treat workers as serfs rather than equals, the system will fail.

[Kalbear]

6 minutes ago, maarsen said:

Any system that treats one group in society differently than another group will have issues. When the owner of capital gets to treat workers as serfs rather than equals, the system will fail.

That'd be one of the major issues with capitalism at its core, yep! That's probably the biggest goal of that economic democracy model - to make the capital worker-controlled while also being state-regulated. Because you don't want just the state to own and regulate things - there's no check on that power. You don't want the private owner to just own and regulate things either. But you absolutely need to enforce that private owners can't own the capital to any major degree, or you'll eventually get into the situation where the amount of wealth will be used to stop regulation.

[Mr. Chatywin et al.]

57 minutes ago, Kalnak the Magnificent said:

There really is one that's very basic that is pretty well understood:

• The means of production are owned primarily and mostly by private individuals or groups
• Most people make their income from wages, save the capitalists who earn their income from using their capital products
• The market is the primary way goods and services are exchanged 

That's really it. 

Sure, but that is a basic definition. There are sub-genres. It's really no different from how socialism various in Venezuela, Scandinavia and Eastern Europe. Capitalism isn't any different. 

[Kalbear]

18 minutes ago, Tywin et al. said:

Sure, but that is a basic definition. There are sub-genres. It's really no different from how socialism various in Venezuela, Scandinavia and Eastern Europe. Capitalism isn't any different. 

That's not what you said though. You said that there isn't an agreed to definition of capitalism. And...there is. There are different flavors and degrees, but those three core tenets are always there. That they also are the core problems is the important thing; no matter if you're doing laissez-faire capitalism or state-sponsored capitalism or highly regulated capitalism, they all have the same issues at their base.