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 Arguements for Capitalism

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PostSubject: Arguements for Capitalism   Mon Oct 13, 2008 6:31 pm

Argument: Capitalism is evil because bosses make so much more than workers, and treat them badly (exploits them).

First of all, an ancap world would in no way inhibit income models involving cooperatives, self-employed professionals, farmers, merchants, independent enterprises, or "freelance" workers. I honestly don't know what definition definition you're using that says these are somehow prohibited in a capitalist society. In fact, on these boards, Golbez and I (to say nothing of Keith Preston's articles) have long held that eliminating government would weed out the inefficient business and education models propped up through various subsidies and taxation methods.

But even if it did, this assumes that how a boss treats "his" employees is entirely up to him. In the sense that a boss, being a person, has free will, okay, that's true. But as long as the boss is competing with other companies to satisfy consumers in the most efficient way, he'll have to weigh a number of factors, one being how much to pay the employees. In order to have anyone work for him, he has to provide compensation similar to or better than the competition, or else they'll all go work for the cometition. On the other hand, he can't splurge on worker salaries, or else no one would buy his product (since it's so expensive).

Probably the hardest pill to swallow in the above is the idea that no, they can't go work for the competition, because all bosses work together to keep wages down. That's almost true, in that they'd like it to be that way. But as long as a free market exists, in which - potentially - every other person on earth could enter the field and offer better wages, any such conspiracy would quickly collapse.

It's also true that some such conspiracies persist today, but that is precisely because there is some artificial force (government) keeping people from entering the field.

But there are actually three other possibilities that can explain what keeps wages down and employment opportunities scarce such that it appears the boss has some sort of "dominance" over the employee.

1) Someone is sucking out the salary that would go to the worker. This is what the government does through taxes. No matter what fiction you hide it in, such as "making employers contribute a fair share to the worker's retirement" (social security), if a boss finds it profitable to pay you X to do a job, ANYTHING he must pay as a condition of hiring you comes out of X, decreasing your salary. Otherwise, it would become wasteful to hire you.

2) Boom-bust cycles. Part of the reason people like you roll your eyes when ancaps say "just get another job" is that often times this doesn't seem so easy, meaning the employee has little leverage in getting the boss to up his salary. But have you ever wondered why, at the most fundamental level, these boom-bust cycles occur? That is, why do at some times LOTS of businesses do well and they fight over workers, while at other times, somehow, businesses simultaneously make stupid business decision. The answer is government inflation of the money supply. By making loans artificially cheap, they delay the time it takes businesses to realize they made mistakes have to seriously cut back. This compounds the bust to happen throughout the economy all at once meaning workers are screwed. If not for this, unemployment would remain low, and the leverage of the worker high.

3) The work you're doing might not be worth all that much. This isn't the employer's fault either. If there are people lots and lots of people willing and able to do a job, and variations in skill won't matter much, those people are the reason wages are undercut. Imagine for a moment if employers offered more than the "cheapest" workers were willing to work. Well, then there would be more workers than jobs to fill. Is it really that much better that a few have good jobs, while a bunch don't have any income at all?

Of course, the true picture isn't as simple. Some businesses (the kind you would probably prefer) offer a compensation package MUCH more attractive than is prevailing, but don't hire all applicants. Many times, this gamble pays off like in the case of the software company SAS headed by Jim Goodnight, which we discussed about six months back (I can't find the link to the discussion). Many employers like Goodnight are realizing that they'll save in the longrun by reducing turnover despite the higher labor cost.

But how does one *make* businesses operate that way? You can't. All you can do is hope for a system in which businesses *realize* the tradeoffs involved the easiest. And the only way for this is to have accurate price signals, which means having free markets in everything.

In conclusion:

Yes, today it sucks for a lot or workers. It appears that bosses have some sort of authority and domination over them and ancaps look like kooks by saying "oh, no big deal, get another job". But the natural trend, through competition, is for wages to creep up to the true value of what the worker produces. Any reason it's not happening is traceable to government, not the free market.

Exploitation is a fundamental aspect of capitalism.
(Similar to the above, but I wanted to include all of my posts.)

Actually, the "exploitation" comes from the more fundamental human to desire to get more for less. I'm not claiming (absolutely not claiming) that all humans want more and more and more- I'm claiming that they desire not to be wasteful. If a goal can be achieved by sacrificing X and Y or just X, humans prefer to just sacrifice X.

All the the market does is let people know that, of all the ways the can achieve their goals, one possibility is to just use up an X, and that using up X and Y is wasteful.

Even altruism can't salvage this aspect of socialism. Even if everyone's claim of "need" for a good (call it Q) is taken at face value and never questioned, but proudly fulfilled by the community, only with a market present can people say "hey, I want P more than I want Q, and that's easier to get!"

Are there cases where a boss's cut is obscenely disproportionate compared to the workers' cut despite him not being a good manager? Of course. But in a free market, this kind of "pure profit" is never very stable. Other people will see the big profit margins and realize they can do the same thing for less. They'll hire away the workers for more money and a smaller profit, or offer the same wage and sell it cheaper. Either way, each persons cut will gravitate toward a value indicative of its relative scarcity. That a worker gets so little is due to *other* workers undercutting his wage by offering to do more for less- i.e., produce things more efficiently.

Capitalism is as evil as government because it involves hierarchy.

The only way to get around hierarchy is if everybody agrees. (i.e., coercing someone that disagrees into going along with an idea is a hierarchy of its own) If that were the case, there would be no need for any political philosophy, be it ancap, ansoc, conservatism, etc. Political philosophy is the topic of "who gets what" when there's DISAGREEMENT over who gets what.

It's not that humans aren't "built" to agree. It's the fact that the entire field of political philosophy is the topic of what do, given a disagreement. If your theory assumes the possibility of (eventual) complete agreement, it's not a political philosophy at all!

However you answer the more fundamental question of "what should people do when they disagree about how some scarce, apppropriable resource should be used?" you are going to create a hierarchy. If the more needing person should get the resource, that's a hiearchy. If the resource is used however the majority decides, that's a hiearchy.

Well, even if we have to have hierarchies, it's better for workers to vote than for one rich bastard to call the shots.

The rich bastard takes into account the *entire public's* desires in "dictating" his policies, not just the workers, which automatically makes it more "democratic". By buying the products, at those prices, given the policies of the boss, the public is showing that they prefer that method of production. I'm not claiming it's "love it or leave it"- I'm not claiming that by buying a product you endorse every method used in its production- I'm claiming that, given all factors influencing your purchase, the one you bought best satisfies it.

So don't blame the boss. Blame the fact that:

a) Their labor the workers are selling is extremely abundant.
b) People don't want to be wasteful, and therefore try to save money.
c) Given current conditions (and probably free market conditions), this business model is the most efficient.

If people, say, didn't place such a high priority on eliminating waste (which manifests itself though is not unique to the concept of saving money - waste can exist whether or not there is a monetary system), then other business models that are more "democratic" would pop up. You could buy from companies that advertised having more equitable pay distributions.

In fact, places like Whole Foods do exactly that. Shop there! Buy their more expensive foods, no one's stopping you!

A "dictator boss" is more democratic in that the ENTIRE populace influences his decision through price signals.

Okay, but how do you know capitalism is more efficient. And don't use any fancy captialist-economics shenanigans!

Let's start from the basics. When acting, people inevitably attempt to substitute a more for a less satisfactory state of affairs. In so doing, they make choices regarding how to use up certain resources in pursuance of goals, offering more effort for the goals ranked higher. Given the fact of scarcity (limited means and infinite wants) and the differences between people, at certain times, people will have resources that are ranked differently on their goals lists. I may have a good Y, and you a good Z. If my goals list has Z then Y, and yours has Y then Z, then we will likely trade the goods, making each of us better off in the process.

Simple enough. Not "capitalist" yet, I'm sure? The claim is that socialism is less efficient. Keeping that in mind, let us proceed.

Rarely is it the case that two people as above, both a) have reverse-ordered value scales and b) have what the other values more highly. Thus, people are in a position that they need to trade for intermediate goods that they value less, to get final goods that they value more. What is most convenient is if there is some intermediate good that everyone could find a use for, which could be traded for anything. This would allow people to gauge how difficult it is to get what they want through trade. If something costs more interemediate-useful-goods than another, they know to look for other ways of satisfying their desires. This higher "cost" shows that it is more scarce and encourages them to act more efficiently by using things less in demand. (BTW, this intermediate-useful-good is also known as "money".)

Perhaps I've - heavens to Betsy - started using the "capitalist market structure" as a guide at this point. But my having a socialist economy, you don't escape the fact of scarcity. By not having the pricing mechanism above, people don't have a way to gauge *how* scarce the goods are. With no barrier to taking the most scarce goods, people will simply try to get those without concern for, or knowledge of, the other possible good they could be getting.

I have to emphasize: this is not an altruism issue. Even if people were totally honest about what they "need," and let others have the better goods, they can't see the opportunities forgone unless they can see the prices of them show up. As an example, everyone knows it would be stupid to build a bridge out of gold, or have veteran surgeons lay bricks. But most decisions people make in attempting to achieve their goals aren't this simple. Since the socialist economy can't tell (due to the lacking price mechanism) "how much they're missing" by not employing resources in certain ways, they will be systematically misallocated. A market economy on the other hand, with private property, can see that "oh, we'd be _making so much money_ if we just used this plot of land for farming, and this plot for living space". That _making so much money_ corresponds to _using resources more efficiently_.

You can still have a market without capitalism.

Not without coercion. If, in a capitalism meta-context, you would like to set up a community specifically to avoid living amongst things that have capitalist characteristics, no one's going to stop you. Ever.

However, there are unbelievably strong incentives for people to do the things you consider capitalist: take out loans for capital, rent, interest, etc.

Assume a mutualist organization with some sort of labor-credit, some kind of money/credit compensation for labor to keep track of who's consuming what (or rather, how much), then you would have to coerce people to stop capitalism from forming.

Say that officially, on a commune, labor credits can be traded for goods. However, they could also be traded on the "black market" directly between producers. Would you stop this? If no, then eventually the entire commune would be on a black market, and markets in loans for consumption and capital would soon form- which I believe you agree is capitalism.

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PostSubject: Re: Arguements for Capitalism   Mon Oct 13, 2008 6:33 pm

I see few problems with this ideology and I don't understand if people are begging for free market that they don't go for mutualism and they try to argue corporations won't join to form a state or a certain amount of government because it's not profitable but I would expect corporatiosn to get together and figure out ways how to rule(LIKE THEY DO NOW) and true there won't be multi-national corporations but not everyone goes for money...but other than that he makes few good arguements

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