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  • Capitalism is Opposed to Human Happiness Debate, Volume 2

    A Debate with
    the community of PoliticsForum.org

    Part #12

    Posts #056-#060

    By Oemebamo
    Image: By Oemebamo, CC BY-NC 2.0

    Post #56

    Date: Fri 23 Jul 2010

    CatoLives wrote:
    I think you are on to something here Radical. What we need is extreme decentralization. I propose we divide society up into units - we will call them individuals - and give each individual autonomous control over their bodies and the property they own. Allow them to interact with each other, to trade, to make deals, if it suits both parties. See, this is even better than your proposal, because it goes further. Since the problem is centralization and individuals with too much power and control over each other, we need to totally remove the power and control man can weild over man, and allow only voluntary interactions. Every individual would be autonomous, self governing, and ACTUALLY free instead of enslaved to some idiot council.

    I agree in principle, if you didn't over look one thing: Control of resources means control over others, so to truly prevent "individuals with too much power and control over each other", you also need to prevent individuals with too much ownership over basic resources.

    Post #57

    Punkerslut (using the alias CNT-FAI Radical)...
    Date: Sat 24 Jul 2010

    lucky wrote:
    Your solution - socialism, at least one standard implementation of it - is to create one big national "corporation" and make every citizen a "shareholder". But now you have an actual monopoly and that makes the "bargaining power" problem only worse. You seem to think that making the decision process democratic (or however it happens in your version of socialism) makes the problem disappear - no, it makes it worse, since you now have an unbreakable monopoly.

    There is only one employer to choose from, so a worker has very little bargaining power. He can't switch to a competitor. Whether the worker also happens to be a shareholder doesn't matter. I'm also a shareholder of my employer, that doesn't give me any special treatment regarding my employment. Employment is based on business efficiency, not on who's a shareholder and who isn't. I rely on competition between employers.

    You're hoping that by making ownership public and putting everybody on equal footing, you solve the problem. No, you create a situation where basically everybody exploits everybody and everybody ends up poor, since labor is globally mis-priced and mis-allocated, since there is no competition at all.

    You make some very valid points there. However, I would like to clarify: I did not advocate a national corporation or anything resembling "state socialism" (whether in a representative state or a dictatorship). Instead, I gave something far more ambiguous. I only stated that there was an inequality of bargaining power, that it was based on possession of the means of production by a few, and that a harmonious, egalitarian society is possible by equalizing bargaining power.

    You are right, about two things. First, you are absolutely right about the increased bargaining power of a monopoly or oligopoly (whether it calls itself the aristocracy, the capitalist class, the feudal barons, or "the one-party, communist state"). Second, you are right about the lack of alternatives presented when there is simply "one big firm."

    In response, my solution is decentralization. Every industry is owned by the workers who labor there, and they can choose to be in mutual cooperative or mutual competition with each other. In this context, there are going to be some very good moments where cooperating is the best, and others where competing is the best. Far from a "national corporation," such a society would more likely resemble a variety of federations and confederations; those united by similar industrial and commercial interests as well as those united by social and cultural desires.

    Why should people be willing to come together and cooperate mutually? They have a mutual, economic footing, since everyone can produce wealth independently of others; but others are required for its trade. All of this is driven by self-interest, as a hundred workers must face a hundred starving families if they cannot work with others -- compared to the Capitalist, who must only sit idle with enough capital to feed their offspring infinitely. It is natural that such a cooperation would occur, as we know that there was cooperation with the railroads of Europe....

    Railways were constructed piece by piece, the pieces were joined together, and the hundred divers companies, to whom these pieces belonged, came to an understanding concerning the arrival and departure of their trains, and the running of carriages on their rails, from all countries, without unloading merchandise as it passes from one network to another.

    All this was done by free agreement, by exchange of letters and proposals, by congresses at which delegates met to discuss certain special subjects, but not to make laws; after the congress, the delegates returned to their companies, not with a law, but with the draft of a contract to be accepted or rejected. ("The Conquest of Bread," 1892, chapter 11, part I.)

    We know that a mutual cooperation holds with all possessors of capital. The only thing, then, is to make each and all a possessor of capital, with each business being regarded as "a self-governing commune of producers and consumers." (In the words of the All-Russian Trade Union Convention, 1918.) One may even wonder whether a government would be beneficial at all within this social organization.

    lucky wrote:
    If you believe the labor market in a given country is not competitive enough, you should be going the opposite way - making sure it is more competitive. Open international borders for employers, reduce restrictions for people starting new businesses, etc.

    This has been tried for millenia. It has had no effect on reducing or abolishing poverty. As long as there are unequal bargaining positions, there will always be unequal outcomes. Competition will not have any positive effect.

    lucky wrote:
    I was replying to the OP and speaking of socialism in general, i.e. public ownership of all means of production, which is what the OP recommended as a solution. That in effect creates one big monopoly corporation owned by the public that owns all means of production, with the addition that the monopoly is enforced by law (no competing means of production allowed).

    "public ownership of all means of production" -- how is "In effect" one big monopoly corporation? In Spain in 1936, the CNT-FAI collectivized land and abolished government, throughout Asturias, Catalonia, Valencia, etc.. There have been similar collectivizations in Paris, 1871 and 1968; in the "Free Territory" of the Ukraine in 1919 to 1921; and in the Shinmin Territory of Korea. But, these are more radical versions of non-governmental socialism. There are also worker cooperatives, where tools are directly owned by the workers.

    Hello, CatoLives,

    In the real world, increased "efficiency" among workers actually drives wages down unless wages are tied directly to productivity - that is, unless the workers own the company outright.

    CatoLives wrote:
    Citation needed.

    Wage rates under capitalism are directly tied to productity, I agree absolutely.

    This is incorrect. Mexico, Russia, Brazil, India, China -- measure their Gross-Domestic-Product per Capita, and compare it with the GDP per Capita of the United States, Canada, or Europe.

    For instance, in Mexico, the GDP per capita is $10,000, but in the US, it is $47,000. The US GDP per capita is almost five times as high. The average American person earns $42,000, though, while the averace Mexican person earns $6,143. (worldsalaries.org) Taken as a complete average, the American laborer earns 90% of the GDP per capita, while the Mexican laborer earns 60%. Say, hey, where did that 30% go? Naturally, this is leaving out more important factors: the higher productive outcome per person of industrializing nations, the number of easy jobs in the US compared to those in Mexico, and the amount of population below the medium income (22% in Mexico, the highest in the world -- nationmaster.com). With these factors taken together as the measurement, one will find that Capitalists and the wealthy have their income count as "wages." If we were really to separate it all out -- total produce and total wages, measuring production and wage-workers -- it's probable that Mexican laborers earn far, far less than 60% of the GDP per capita.

    "...the principal effects of the inventions just commented upon [the stocking frame] were those of impoverishing the handloom weaver, bringing sizable royalties to the inventors, Arkwright and Peel, and greatly increasing industry profits." ("Labor Economics: Third Edition," by Chester A. Morgan, page 239.) And "... in an industry where product demand is highly inelastic, relatively few laid-off workers, if any, will be reemployed; but the extra consumer dollars released from this industry by the machine-induced decline in price will be spent elsewhere, assuming no change in the consumption function." (Page 240.) (I would also like to recommend "Manufacturing Consent" by Michael Burawoy as an intensive, microeconomic analysis of lost wages caused by technological advance. As well as Simonde de Sismondi's "Political Economy," which treats the stocking-frame situation very well.)

    CatoLives wrote:
    This not a controversial statement, speaking with regards to the field of economics, and the reason for this was explained in this thread, that is employers bid up the prices of worker's labour if they are being paid less than their marginal producitivty.

    Yes, this is reasoning, but it does not fit any of the real world evidence available to us.

    CatoLives wrote:
    Union or non union it does not matter, since workers joining each other's for beers every second tuesday does not change basic economic fact. To a small degree union shops will benefit, in the sense that they are able to cartelize their industry, and of course with government help this cartelization can cement itself in (without state intereference there is a strong tendancy away from cartelization) but any gains here are taken directly away from the most marginalized sectors of society, the extremely poor and the unemployed, idiots and disabled people etc. so if you can really conscionably attack the very weakest in our society, those in most dire need of our help and smile contentedly while you go off to sleep then I can only fear sorrowfully for your soul.

    I argued for an equality of bargaining positions so that no person would ever be exploited by another person. Somehow, you're translating that to meaning that some receive gains over "the very weakest in our society." That makes no sense, since it is possible to increase the wages of every worker, without significantly hurting prices -- but this is impossible to do with profits. In the words of Adam Smith, from "The Wealth of Nations..."

    That part of the price of the commodity which resolved itself into wages would, through all the different stages of the manufacture, rise only in arithmetical proportion to this rise of wages. But if the profits of all the different employers of those working people should be raised five per cent, that part of the price of the commodity which resolved itself into profit would, through all the different stages of the manufacture, rise in geometrical proportion to this rise of profit....They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people. ("Wealth of Nations," Book 1, Chapter X.)

    We can provide what people need by increasing the wages of everyone, but this can only be done if we throw the bosses of our back. It's kind-of funny... The common, poor, hungry worker, who has -1.5% in savings (in debt), and can even be arrested in the United States for "soliciting for work." This is the person who doesn't care about the homeless, the hungry, the poor -- the poor themselves! But the rich, wealthy capitalists, who enjoy their yachts and mansions, they have the poor deep within their heart, thinking about their tiny, little miserable existence every second. The more I imagine this picture that you have painted, the more I see that it is an illusion.

    In the words of Kropotkin...

    Be it ours to see, from the first day of the Revolution to the last, in all the provinces fighting for freedom, that there is not a single man who lacks bread, not a single woman compelled to stand with the weariful crowd outside the bake-house-door, that haply a coarse loaf may be thrown to her in charity, not a single child pining for want of food. ("The Conquest of Bread," 1892, chapter 5, part I.)

    Post #058

    Date: Sat 24 Jul 2010

    CNT-FAI Radical wrote:
    my solution is decentralization. Every industry is owned by the workers who labor there

    It's a very bad idea. Even the standard socialism where the state owns everything makes more sense.

    Suppose I have a one-person shop that's quite profitable. Just to hire somebody to help me sell more stuff, I would have to give up 50% ownership, which often would not be beneficial for me to do if my business is very profitable, or has a lot of inventory, or is otherwise worth a lot. I'd rather make 100% of the profit than 50% of a somewhat bigger profit. The price of labor wouldn't depend on the supply and demand for labor, but on the employer profitability and inventory. This would destroy the labor market.

    Suppose I own a house (I'm not sure how you think about house ownership in your system, but houses are really investments like any other). If I want to hire somebody to periodically clean the house, I can't, unless I share 50% of the house ownership with them? Or a lower percentage - and who decides that? In any case, I'd probably rather clean myself, especially if the house is expensive. It doesn't make sense for payment for labor to depend so completely on *where* the person is working.

    Suppose Google wants to hire a new employee. In your system they can't unless they share 1/20000 of Google stock with him. That's currently worth about $7.5 million in the market. Pretty steep "minimum wage". It simply wouldn't make sense to hire new people.

    Basically, you want to set an arbitrary price on labor rather than base it on supply and demand. That's not a good idea, just like any other price floor.

    Post #059

    Punkerslut (using the alias CNT-FAI Radical)...
    Date: Tue 27 Jul 2010

    Hello, CatoLives,

    CatoLives wrote:
    That's not any kind of science, sir, that is speculative journalism. Tell me, do you always turn to the new york times for matters concerning economics?

    At any rate, tHose newspapers really prove my point, wHicH is tHat wage rates are determined by productivity. None of tHose newspaper articles disagree witH my assertion.

    If economic statistics do not support the economic trend you are pointing to, then that is they disagree with your assertion.

    Furthermore, twenty years of the steel industry is not sufficient for judging the whole economy. Besides, the study you point to disproves your assertion: see Figure 2. The real wage rate, over 1963 to 1988, is what is known in the graph world as a straight line. Likewise, productivity rose or fall regardless, except at the last few years, where productivity significantly rose as wages slightly fell.

    Honestly, I'm going to have to go with Red Barn's analysis on this and call it "a single obscure article about the decline of the steel industry." It's so obscure, you didn't even read it. See page 91: labor productivity rises, real wages fall. I have no idea how this proves your point that productivity is directly related to wages; rather, I see it disproving it.

    CatoLives wrote:
    I don't care how many new york times articles you hot link, you are making a statement that runs contrary to a great body of economic work. Now I myself am in disagreement with much of what passes for economics, so I certainly do not consider the work of technocrats a sacred cow, but if you are going to make an economic contention, surely it would not be defended with the callow observations of the news media?

    There are three type of lies my friend, and I suspect you tell them all.

    Stalinists say the same thing about all forms of journalism, whether Anarchist or Liberal. No offense... but a critical mind requires more than just saying "Oh, that's the propaganda of the other side. Ignore that."

    Also, "a great body of economic work"? Yeah, and I provided a bigger body of economic work on how inequality of bargaining power leads to inequality of bargaining positions. The difference is that I presented my great body of work. Where is yours?

    CatoLives wrote:
    It is clear to me you are not as well read as you think you are! Only the last concept is really explored at any length by the Austrians.

    I quoted an Austrian economist explaining those topics entirely. Who am I supposed to agree with? Some guy on the internet who thinks he knows about the Austrian School of Economics, or an economist from the Austrian School of Economics?

    Amazingly, you have no citation or reference to prove your point. (Gasp!) Dear sir, have the gods whispered in your the absolute truth, and have told you to come to earth to spread knowledge, and to tell people that they must accept it by faith, even if there is no evidence?

    Yeah, I don't believe what someone says just because they say it anymore. I have passed the age of six long ago, friend, and I demand stronger evidence than "because I say so."

    CatoLives wrote:
    Statistics are great for fooling idiots, but it is only through understanding human action that we can understand how the economy works, after all, the economy is based entirely on the decisions and choices that people make.

    How do you know that? You know, that statistics can fool people? "Because we have evidence available of it." So, then, you can use available evidence and statistics to make judgments? "No, you can't, because Praxeology is opposed to that." But then how do you know that Praxeology is right? "Because, from our past with experiments and statistics, we have learned from the evidence that you cannot use statistics." But, you're using evidence and statistics to prove that? "Yeah, well... you just have to believe based on faith." Mmmhmmm, Epistemology, and how!

    CNT-FAI Radical wrote:
    If the worker rejects the wage offer of some Capitalist, then they will starve to death,

    CatoLives wrote:
    citation needed

    Ability to read the original post needed.

    I provided ample citations of this, such as that gigantic list of economists' quotes. But whatever... I've read Adam Smith, it's about time you have, too:

    "The lowest class being not only overstocked with its own workmen, but with the overflowings of all the other classes, the competition for employment would be so great in it, as to reduce the wages of labour to the most miserable and scanty subsistence of the labourer. Many would not be able to find employment even upon these hard terms, but would either starve, or be driven to seek a subsistence either by begging, or by the perpetration perhaps of the greatest enormities. Want, famine, and mortality would immediately prevail in that class, and from thence extend themselves to all the superior classes, till the number of inhabitants in the country was reduced to what could easily be maintained by the revenue and stock which remained in it, and which had escaped either the tyranny or calamity which had destroyed the rest." ("Wealth of Nations," Book 1, Chapter 8.)

    Hello, DanDaMan,

    DanDaMan wrote:
    That's hilarious!
    Try Cato, Heritage or Mises.

    This reminds me of the last time I tried to debate a Marxist. They said, "Oh, yeah? Just read Mao." Thanks, but I was hoping you'd be able to come up with an intelligent thought on your own.

    Hello, Suska,

    Suska wrote:
    There's a number of reasonable ways to explain the rising productivity. For one thing women work much more often now (because they have to), for another many people are taking second and third jobs (because they have to), another NAFTA equates to what is basically slavery (when it doesn't equate to mass murder and systemic rape of Mexican nationals), for another industry has seen fit to automate quite a bit at the same time reducing and discarding benefits, often leading to retired people working (because they have to), there's also the matter of prison industries (basically white-collar work camps). So as the value of the dollar is being squeezed with a vice and the price of living rises at the same time benefits vanish and capital has gone global and destroyed labor. All the while the war on drugs is systematically imprisoning numbers of poor people (paid for by tax moneys) that put the soviet union's "prison nation" to shame by reducing public defender fund at the same time funneling profits from police efforts back into more police efforts... jeez I'm out of breath... Ok so I want to ask, is this capitalism? A lot of people on that side call it that while filling their pockets with public funds.

    It is Capitalism in every age and every continent where it has been practised (to borrow the observation from Adam Smith, Wealth of Nations, Book 1, Chapter 8). This is the only form of Capitalism that has ever existed for the past two to three thousand years. Or, as Thomas More plainly put it...

    "Therefore I must say that, as I hope for mercy, I can have no other notion of all the other governments that I see or know, than that they are a conspiracy of the rich, who on pretence of managing the public only pursue their private ends, and devise all the ways and arts they can find out; first, that they may, without danger, preserve all that they have so ill acquired, and then that they may engage the poor to toil and labor for them at as low rates as possible, and oppress them as much as they please." (Thomas More, 1516, "Utopia," Book 2, Section: Of the Religions of the Utopians.)

    Hello, lucky,

    lucky wrote:
    So first you said there are no wages in socialism only sharing profits, now you're saying that dividends and profit sharing are wages. You are confused, I don't think even Marx would confuse terminology like that.

    I can break this down. Anything you receive in exchange for doing labor is a wage. Anything you receive by the possession of property is a profit.

    lucky wrote:
    The next statement in the same article says "compensation based on individual merit or the amount of labour one contributes to society" which is by definition a "wage".

    Did you look up the wikipedia article on Wage? Let me break it down for you: "a compensation, usually financial, received by workers in exchange for their labor."


    lucky wrote:
    Here are a few sentences about socialism that you seem to believe:
    1. Workers get compensated for labor performed.
    2. They receive no wages.
    3. They share profits equally.
    4. They receive no dividends.
    5. Profit sharing is wages.

    1 and 2 contradict by definition of "wage", 3 and 4 contradict by definition of "dividend". 5 directly contradicts 3 and 2.

    I have been intently studying economics, almost daily, for at least a decade. And I have no idea what you're talking about. I don't normally "pull rank" like that, but seriously... I have no idea what you're talking about.

    Why don't you just let people explain their own ideas for themselves? They seem to be doing that fairly well so far.

    lucky wrote:
    If you just take the first sentence as a definition, that's pretty much the standard definition. If you're working for the socialist state (or the "society" or however you call that entity), and you get compensated in return, then you are selling your capacity to work as a commodity.

    Correct. But I have said nothing about the Socialist state, and I have no idea why you're bringing it up as an argument. Have you noticed the Anarchist flag as my avatar? Perhaps not, but I certainly have not advocated the state in any form or method. I have simply argued for every worker to be the possessor of the tools that they work, and for there to be no class among society that lives off of the labor of others just by holding a deed. As you can see, this is quite a different analysis than any system where a few hold all of the land -- whether it calls itself State Socialism or Capitalism.

    Post #60

    Date: Tue 27 Jul 2010
    Well answered, the Sir Thomas More quote is a nice touch.

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