Capitalism is good

Discussion in 'Markets & Economies' started by mmm....shiney!, Jul 21, 2015.

  1. Phransisku

    Phransisku Member

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    I know what you are saying. You don't need to repeat it. I just asked: "How does anything you've just said contradict what I had said and that you quoted?", which was this:
    "Capital itself and economies of scale can produce the same results (sometimes better results) than talent and effort."
    If you want to talk about other things, fine, no problem for me. Just don't quote a sentence that is 100% correct and that you don't even want to challenge. No need to inject capitalist propaganda like that. Make your own post seperated from my sentences or create another topic in the forum and go for it as it pleases you.

    Regarding the flats thing, you haven't answered my question. Inconvenient?
     
  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    http://forums.silverstackers.com/message-954566.html#p954566

    Specifically:

    "As long as the flow of wealth from one person to another is voluntary, then there is no problem with that occurring."

    As far as the rest of your arguments go, I've countered the relevant points you raised, and ignored most of the irrelevant points because they have nothing to do with capitalism.
     
  3. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Haven't got one for Norway, but a Nordic country is included in the stats:

    [​IMG]
     
  4. Phransisku

    Phransisku Member

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    The fact that it's voluntary doesn't make it disappear. It's real, it's happening. Are you able to acknowledge that?
     
  5. Phransisku

    Phransisku Member

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    That has nothing to do with what I asked. That's not about Norway, that's not a statistic representative of inequality distribution of wealth, nor does it show how envy driven a population's country is.
     
  6. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    The rise of Socialism is the greatest threat to humanity and the environment.
     
  7. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Of course it's happening, but that's not an indicator of any fault with the capitalist system, it's primarily a fault of in a socialist system though and is what causes its downfall.

    As I've pointed out before your definition of being productive is faulty. Being productive means creating value ie something for another utilising labour or capital. Your example of a wealthy landlord being non-productive is not accurate, a landlord uses capital to purchase houses, he then rents them to others who for whatever reason people choose to rent them, therefore the landlord is being productive. There is no flow of wealth from the productive to the non-productive.

    The owner of an oven rents it to a baker. The baker values that oven because for whatever reason he chooses to rent it rather than own one himself, the owner of the oven has created value for the baker, therefore the owner is being productive. There is no flow of wealth from the productive to the non-productive.

    A struggling young artist applies for a grant to the Australian government to paint because he cannot sell any of his work, for whatever reason no-one values his work and as a result, no one wishes to purchase any of his pieces. He receives the grant and is able to sell his paintings below cost. The painter is not being productive, there is a flow of wealth from the productive (taxpayer) to the non-productive (artist).

    Taxi licensees receive a levy from the Qld government to subsidise the cost of their business activities because Uber is undercutting the incumbents. For whatever reason customers value Uber drivers over established taxi services. Taxi licensees are able to reduce their losses in the face of competition from other providers because they receive funding from non-users of their services. Taxi licensees are not being productive, there is a flow of wealth from the productive (Uber customers) to the unproductive (Taxi licensees).
     
  8. Phransisku

    Phransisku Member

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    Finally you're admitting it! It took ages to get such an accomplishment.


    Of course it is. Any system that takes from the productive and gives to the non-productive (regardless of the reason) is losing productivity.

    Communists advocate that giving to the poor helps strengthen the economy because the poor will spend it and generate demand for basic products that otherwise wouldn't get sold and it would harm their companies (including both investors and employees). That may be true, but it doesn't invalidate the fact that people are being incentivized not to work. That man that is consuming could also be producing something but he isn't (he doesn't need a salary). Less work, less wealth generation. That is a problem with Communism.

    Capitalists advocate that owners and investors lending capital helps strengthen the economy because businesses and citizens will be able to start projects that would otherwise get delayed until they got the money for them. That may be true, but it doesn't invalidate the fact that people are being incentivized not to work. That owner that is lending his capital could also be producing something but he isn't (he doesn't need a salary). Less work, less wealth generation. That is a problem with Capitalism.

    Note that I'm not saying I agree with the "communist excuse" or the "capitalist excuse", I'm just saying that, although I understand the logic they portray, they are still excuses to allow wealth flowing from the productive to the non-productive. And this introduces inefficiency to the system.


    I agree that being productive means creating value. But the landlord isn't creating any value. His house is being useful to someone, he's not. The house is there. If he dies, the house continues to be there. The value creation doesn't go through him (although he gets a piece of it). When he buys a house, it's already built. When he rents it, it's the very same house in the very same place, nothing's changed. He's not adding any value. Without him, the house would still be there. Yep, he's a non-productive getting something from the productive (someone that is eventually working 8 hours per day, 5 days per week and at the end of the month hands half of what he generated with his talent and effort to someone who didn't do anything all day for the same 30-day period).


    I get the difference you're establishing between both types of situations. But that difference isn't enough for you to claim that in some cases there is no flow of wealth from the productive to the non-productive.
    The owner of the oven hasn't created any value for the baker, only the oven itself did.

    When you allow yourself to stretch that far the concept of value creation, you're allowing communists to do the same thing and claim that consumers are adding value to businesses so a man not working all day and receiving a subsidy from the state is being productive (when in fact he's not).

    That man is getting from the state, for instance, 1000$ and he spends it all every month. The things he buys are worth the same 1000$. He didn't add any value, just like the landlord. Both are taking from one side and giving to another and both are creating zero wealth. Without the landlord, the house would still be there. Without the man, the 1000$ wouldn't be gone. Capitalists and communists can argue that capital is being better allocated with them, but that for me is just an excuse. That capital allocation does not demand 40 hours of work per week and no talent whatsoever. Just get real, they're not being productive.
     
  9. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Firstly, the title of this thread is "Capitalism is good". You have a differing opinion and that's fine, but you cite the flow of wealth from the productive to the unproductive as if it is evidence that capitalism is bad. This can happen under any form that society is organised, not just capitalism, therefore to cite it as evidence of the failure of capitalism is illogical.

    Secondly, as long as the transfer of wealth is voluntary then no matter how distasteful it may be to you it is entirely the business of the parties involved. To cite the Austrian Economics subredditt:
    The individuals involved make their own decisions about with whom they engage and what they choose to trade according to their own criteria, so move on.

    Thirdly, consumers value goods that meet their needs and are willing to pay for those by either purchasing them or hiring them. Those individuals that use their capital to invest in or make goods that meet the needs of consumers are creating value, whether they are landlords, oven owners, money lenders, earthmoving machinery hire contractors etc, they are providing a service or a product that is both desired and valued. These products or services do not will themselves into existence themselves, they require funding and the capitalist provides that funding and in the process creates a good that is valued.
     
  10. Phransisku

    Phransisku Member

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    You need to read before writing.
    This is not evidence that Capitalism or Communism are bad overall. This is just evidence that they have problems that generate inefficiency.
    Anyone that doesn't see this is blind. Anyone that sees it in one system and pretends he doesn't see in the other system is hypocrite.



    Not any form. The forms you know (Capitalism and Communism). And yes, it's a problem of both systems, not just Capitalism. That's what I've been saying all along. Come on man, breathe, read carefully what I write, re-read it all if you need, and then come up with arguments that really challenge my sentences.



    Finally you are distinguishing the subjects. I would say there are 3 topics we can discuss regarding the transfer of wealth from the productive to the non-productive:
    A - Does it happen under Capitalism and Communism? Yes, it does. This is the most simple and objective topic and I guess by now we both agree with that.
    B - Is it good for the economy? Capitalists would say that remunerating owners is while remunerating the poor isn't and communists would say the opposite. This topic is more complex and thus harder to get consensus. Both systems are incentivizing less productivity and in exchange they hope to get better capital allocation. I have my own opinion about this and I would like to discuss it only if you're willing to be logical and neutral in your reasoning. It was hard enough to get somewhere in topic A (which was a simpler topic).
    C - Is it moral? Again, capitalists and communists would say one situation is while the other isn't. This topic is not just complex but also subjective. I do not hope to get any consensus here. It's next to impossible. I know your opinion (you're just wrote it). I could show you mine. But that's it.




    Again, read before writing.
     
  11. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Phransisku, to summarise your position:

    You don't understand that productivity is creating value. You choose to ignore the function of capital in creating value, believing that only labour can produce something. You think that value can only be created when something new is produced. You seem to believe that capital goods "magic" themselves into existence as they would happen without any injection of capital. You dismiss the significance of the voluntary nature of economic relationships between individuals and instead use it as evidence to back your claim that a capitalist system is bad.

    And despite all of your assertions, you still cannot provide any detail of what would constitute a better alternative to capitalism.

    To summarise my position:

    Productivity occurs when we produce goods that are valued. In order to produce goods we apply both capital in the form of tools, machinery, funds etc and labour in the form of physical, mental application. Capital goods enhance our labour input and help meet consumer demand more efficiently and more effectively. Capital goods are produced when funding (savings) and expertise (entrepreneurial activity) are risked in an attempt to increase profits. Value is subjective, individuals make economic decisions based upon their own knowledge and information available in order to satisfy their needs. Whilst no individual possesses perfect knowledge, they are in the best position to determine what is in their own best interest and are best left to enter their own voluntary economic relationships with others - or not at all.

    Capitalism is the private ownership of the means of production, or to put it another way the private ownership of the means to create value. Proponents of capitalism argue that when individuals own the means to create value, they are in a better position to utilise their capital and labour, rather than when the State owns the means of production. This is because "individuals are in the best position to determine what is in their own best interest", they are the ones that determine what level of risk is acceptable and reap the rewards or suffer the consequences of their actions as a result of those decisions. This is in contrast to detached central planners who have an agenda that centres around meeting their own individual needs or desires utilising capital and labour that does not belong to them.

    Your oven and landlord analogies were good, they are examples of capital investment, but the conclusions you drew from them were faulty. Without capitalists there would be no ovens or houses to rent because you need capital to produce them, and you only have capital when you abstain from current consumption and save. And you only do that when the means of production are privately owned, for if you don't get to own what you work and save for then there is no incentive to save.
     
  12. SteveS

    SteveS New Member

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    I check in to this thread from time to time, just to see if it still consists entirely of 'word wallpaper'.

    Yup.

    Does anybody here have a high enough threshold for boredom to actually read this stuff?

    :D
     
  13. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Value is subjective.
     
  14. Phransisku

    Phransisku Member

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    It's funny how you're constantly pivoting the conversation. When I finally corner your logic and you can't proceed without admitting you're wrong, you just "teleport" yourself into other topics (where you're not cornered yet). Be honest (if not to me, at lest to yourself). Stop pivoting, follow our arguing and challenge my sentences with valid arguments. When I say "valid arguments" I mean arguments that can't be instantly destroyed either by simple logic or worse by other sentences I've already presented in the very same post you're quoting.
    If you have no arguments, just say it. Admit you care more about ideas / beliefs than logic. You won't be the only one in the world. There are millions of religious people, for instance. Just don't pretend communists are like that and you aren't.



    Wrong. See what I said in post #130: "I agree that being productive means creating value."



    Wrong. See what I said in post #130:
    "But the landlord isn't creating any value. His house is being useful to someone, he's not."
    "The owner of the oven hasn't created any value for the baker, only the oven itself did."



    No. I believe that services are also wealth, not just goods.



    Wrong. Show me one sentence where I claimed such thing.



    Wrong. Show me one sentence where I claimed such thing.



    I can, although I haven't. There's no point in presenting the solution when you haven't seen the problem yet.



    That would definitely be a better world. Entering in topic B ("Is it good for the economy?"), I would say that people renting property is disastrous for the economy. I believe that such owners not only aren't adding any value, they are in fact removing value. They are getting paid to do a disservice. It's like for example the State paying me to wreck public property.

    In the world we live in, some people take 30/40/50 years to pay their house. Others don't even try that and just pay a rent to live in a house that will never be theirs. This is clearly a dystopia.

    Without house credit and rents, houses would be much cheaper (they would cost something like a year's salary, as it already happened in a distant past). People would only offer an amount they own. Houses would be sold for such prices or not at all. Moreover, if there were no rents, "investors" wouldn't be there to inflate the price (as it happens nowadays). Houses would be like cars, clothes, food, vacations, sports equipment, appliances, etc. People would buy them easily and own them thenceforth. There would be no housing bubbles (like there are no food bubbles), there would be no landlords taking from the productive while not working all day (like there are no "clotheslords"), no buildings stopped at the middle of construction (like there are no appliances stopped at the middle of manufacturing), etc.

    But you tell me. Would you rather live in a world where consumer credit and rents are forbidden and thus everything is at reasonable prices and everybody owns everything they use, or would you rather live in a world where you pay a rent for everything you use (because things are so expensive that only billionairs are able to buy them) and nothing is yours? You would pay a rent for the house, a rent for the clothes, a rent for the food, a rent for the appliances, etc. And, as long as you had a salary, you could live. The moment you'd stop working (because you got fired or your company got bankrupt, etc.) you would have nothing. No place to go, no food, not even clothes. You tell me which scenario you'd prefer.

    I would much rather have the first one. Then second one is so bad that I would rather live in Communism. At least in Communism I would own some things.



    But you would always own everything you work for (and just that). The difference is that what you own wouldn't get bigger by itself, only by you working more. You would have incentive to save (for protection, for getting enough to some big purchase, etc.). You just wouldn't have a multiplicative incentive to save.
     
  15. Phransisku

    Phransisku Member

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    Yes. People that like forums. People that like to think, debate, learn and share, rather than just eat up propaganda and post sound bites.
     
  16. Bargain Hunter

    Bargain Hunter Member

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    I do not see the point of this debate. Although I believe in Capitalism, there is no real capitalist country in the world today. Every country is some sort of mix (to varying degrees) between capitalism and socialism. I just cannot see a genuine capitalist system emerging in our lifetime due to the power of the vested interests and the ignorance of the general populace, so it is a moot debate to have.
     
  17. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    So the exchange of ideas have no value to you because you can't foresee a time in the near future when entirely capitalist principles are able to be put into practice?

    Value is subjective.
     
  18. radiobirdman

    radiobirdman Active Member Silver Stacker

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    A future built entirely on capitalist principles, sounds great what are we going to do with all the Socialist scum
     
  19. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    @Phransisku, I'll address your other points later.

    For now, I just want to dispel the myth that only capital goods provide value, not capitalists:

    Capital goods enhance our productivity.
    Capital goods require capitalists to fund them for without capitalists there would be no capital goods,
    Therefore, capitalists enhance our productivity because they fund the acquisition and supply of capital goods.
     
  20. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Educate them by exchanging ideas.

    If they won't be educated and threaten your person or property, then take appropriate action to protect yourself and your property.
     

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