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Poor Should Stop Blaming Inequality On The Rich


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Capitalism provides the greatest benefit for the people: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. [...] Nor is it always the worse for the society [...] By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." (Adam Smith, The Wealth Of Nations)

 

Written in a time when the butcher and baker lived in the communities they served and in which their own interests would co-incide with those of their communities. You can work out for yourself what happens when the capital owning classes no longer come from or live in the communities which depend on them for employment. Those communities become 'resources' to be exploited. They don't need the hospitals since they have private healthcare; they don't need the schools since their offspring are privately educated; they don't need the police since they have their ownsecurity systems, so they don't need to pay their taxes and nor do they. They pay minimum wage, which means we have to pay higher taxes to pay for working tax credits so families can survive, they dodge taxes wherever they can so we have to pay more to make up the shortfall and they are more than happy to devastate communities at the stroke of a pen because they have no connection to those people.

 

Uncontrolled capitalism provides nothing but social and cultural suicide.

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Written in a time when the butcher and baker lived in the communities they served and in which their own interests would co-incide with those of their communities. You can work out for yourself what happens when the capital owning classes no longer come from or live in the communities which depend on them for employment. Those communities become 'resources' to be exploited. They don't need the hospitals since they have private healthcare; they don't need the schools since their offspring are privately educated; they don't need the police since they have their ownsecurity systems, so they don't need to pay their taxes and nor do they. They pay minimum wage, which means we have to pay higher taxes to pay for working tax credits so families can survive, they dodge taxes wherever they can so we have to pay more to make up the shortfall and they are more than happy to devastate communities at the stroke of a pen because they have no connection to those people.

 

Uncontrolled capitalism provides nothing but social and cultural suicide.

 

Trust you to reply! That's a nice piece of spin. I won't oppose it because we'd be here forever, each spinning a narrative to justify our position; a futile enterprise.

 

Smith's theory is beautifully simple and, like Darwin's theory of evolution, describes a general truth. Marx was wrong, failing to understand that Capitalism changes and evolves, which is why his prediction that Capitalist economies would collapse under their own weight has failed to materialise. Capitalism has faced many crises, each time adapting to solve the problems of the previous incarnation. This is how we progress. This is how we solve our problems.

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Trust you to reply! That's a nice piece of spin. I won't oppose it because we'd be here forever, each spinning a narrative to justify our position; a futile enterprise.

 

Smith's theory is beautifully simple and, like Darwin's theory of evolution, describes a general truth. Marx was wrong, failing to understand that Capitalism changes and evolves, which is why his prediction that Capitalist economies would collapse under their own weight has failed to materialise. Capitalism has faced many crises, each time adapting to solve the problems of the previous incarnation. This is how we progress. This is how we solve our problems.

 

Really? I'd be keen to know exactly how Capitalism has changed and evolved and to the solution of which problems this has lead.

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Really? I'd be keen to know exactly how Capitalism has changed and evolved and to the solution of which problems this has lead.

 

The Capitalism of Marx's day is not the Capitalism of today. The whole environment has shifted. Superficially, you have a shift from agricultural and mining to a service-based environment today, along with the globalization of production and markets. More fundamentally, you have the shift from Feudalism, where workers were beholden to their lords and didn't receive a wage; to Mercantilism, which promoted governmental restrictions to increase exports and reduce imports, but which was ultimately unsustainable because economies would become stagnant; to Industrialised Capitalism, where the technological progress opened up Capitalism to more people benefiting more levels of society than ever before -- you didn't have to be part of the Aristocracy to become wealthy; to today, where there are many different forms, from the almost pure American Capitalist model to the mixed Socialist Capitalism of the Scandinavian countries and the almost Communist (or State-controlled) Capitalism in China.

 

I have perhaps stretched the definition of Capitalism but I think it highlights how Capitalism has evolved. The most recent Crash in 2008 led to change, whereby more control was instigated so Bankers can't (or perhaps shouldn't) cause another crash. Another crash will be inevitable, but each time we can tweak the model to deal with it better.

 

I admit I don't have a specific example of how Capitalism has been the solution to a problem to hand, but, in general, Capitalism creates the resources that bring the poor out of poverty, enabled us to fight disease, fund education and fund social services. The whole mechanism creates wealth for those with the gumption to achieve, and the wealth filters down: "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

 

Written out like that it seems quite optimistic, doesn't it? That surprised me: I'm not usually an optimistic person! Again, it's a beautifully simply model; and it works. Perhaps it's through ignorance, but I can't comprehend how a pure socialist model could ever work? It seems so costly and wasteful, not to mention oppressive.

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The Capitalism of Marx's day is not the Capitalism of today. The whole environment has shifted. Superficially, you have a shift from agricultural and mining to a service-based environment today, along with the globalization of production and markets. More fundamentally, you have the shift from Feudalism, where workers were beholden to their lords and didn't receive a wage; to Mercantilism, which promoted governmental restrictions to increase exports and reduce imports, but which was ultimately unsustainable because economies would become stagnant; to Industrialised Capitalism, where the technological progress opened up Capitalism to more people benefiting more levels of society than ever before -- you didn't have to be part of the Aristocracy to become wealthy; to today, where there are many different forms, from the almost pure American Capitalist model to the mixed Socialist Capitalism of the Scandinavian countries and the almost Communist (or State-controlled) Capitalism in China.

 

I have perhaps stretched the definition of Capitalism but I think it highlights how Capitalism has evolved. The most recent Crash in 2008 led to change, whereby more control was instigated so Bankers can't (or perhaps shouldn't) cause another crash. Another crash will be inevitable, but each time we can tweak the model to deal with it better.

 

I admit I don't have a specific example of how Capitalism has been the solution to a problem to hand, but, in general, Capitalism creates the resources that bring the poor out of poverty, enabled us to fight disease, fund education and fund social services. The whole mechanism creates wealth for those with the gumption to achieve, and the wealth filters down: "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

 

Written out like that it seems quite optimistic, doesn't it? That surprised me: I'm not usually an optimistic person! Again, it's a beautifully simply model; and it works. Perhaps it's through ignorance, but I can't comprehend how a pure socialist model could ever work? It seems so costly and wasteful, not to mention oppressive.

 

 

Capitalism is the pusuit of capital by private individuals. That doesn't ever change and never will. What you've described in the first paragraph are changes to social structure and market economies and ways in which the state has attempted to constrain capitalism for its own purposes. You have not described changes to capitalism.

 

In your 2nd paragraph you manage to completely contradict yourself and destroy your own argument within the space of 10 words. I'm not sure it that's a record, but it's certainly an achievement. Capitalism has learned from the crash of 2008 so Bankers can't cause another crash - but another crash is inevitable?

I think you need to work on that a bit more.

 

Any changes that have been brought about to control bankers (changes brought about by the EU, btw, not the bankers buddies in westminster) have been brought baout by the state in order to try to control capitalism; not as some form of capitalist evolution.

 

In your 3rd paragraph you admit to not having any examples of how Capitalism has solved any problems; quite at odd with your bold claim of the previous post.

Capitalism does not create either resources or anything else; it exploits them and does so for its own benefit, not for the greater good.

Take the NHS. Under public ownership the NHS was the most economically efficient health care system in the world. The NHS in England is becoming more and more privatised and less and less efficient. American health care spends twice as much as we do for a far less efficient system.

 

As for capitalism helping those with the gumption to achieve; Are you aware that the least socially mobile countries in the developed world are the UK and the US - those places where capitalism is practiced most freely - and the countries with the greatest social mobility are Denmark, Norway and Finland - societies where capitalism is most heavily controlled, where taxation is high and so is the national happiness index? All of the Scandanavian countries rank higher in OECD quality of life surveys than either the US or UK.

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Capitalism is the pusuit of capital by private individuals. That doesn't ever change and never will. What you've described in the first paragraph are changes to social structure and market economies and ways in which the state has attempted to constrain capitalism for its own purposes. You have not described changes to capitalism.

 

In your 2nd paragraph you manage to completely contradict yourself and destroy your own argument within the space of 10 words. I'm not sure it that's a record, but it's certainly an achievement. Capitalism has learned from the crash of 2008 so Bankers can't cause another crash - but another crash is inevitable? I think you need to work on that a bit more.

 

Any changes that have been brought about to control bankers (changes brought about by the EU, btw, not the bankers buddies in westminster) have been brought baout by the state in order to try to control capitalism; not as some form of capitalist evolution.

 

In your 3rd paragraph you admit to not having any examples of how Capitalism has solved any problems; quite at odd with your bold claim of the previous post.

Capitalism does not create either resources or anything else; it exploits them and does so for its own benefit, not for the greater good.

Take the NHS. Under public ownership the NHS was the most economically efficient health care system in the world. The NHS in England is becoming more and more privatised and less and less efficient. American health care spends twice as much as we do for a far less efficient system.

 

As for capitalism helping those with the gumption to achieve; Are you aware that the least socially mobile countries in the developed world are the UK and the US - those places where capitalism is practiced most freely - and the countries with the greatest social mobility are Denmark, Norway and Finland - societies where capitalism is most heavily controlled, where taxation is high and so is the national happiness index? All of the Scandanavian countries rank higher in OECD quality of life surveys than either the US or UK.

 

I don't think he contradicts himself at all. Even if another crash is inevitable it wont necessarily be bankers who cause it. Bankers were largely to blame for the 2008 crash and regulation has increased since, making it more difficult for the banking industry to be responsible for the next crash. But he doesn't say the banking industry would be responsible for the next crash, therefore it isn't contradictory.

 

I'm enjoying you two sparring though :D

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Capitalism is the pusuit of capital by private individuals. That doesn't ever change and never will. What you've described in the first paragraph are changes to social structure and market economies and ways in which the state has attempted to constrain capitalism for its own purposes. You have not described changes to capitalism.

 

That's a very narrow definition which completely omits the free market. I did explain that I had 'stretched' my definition. Capitalism is inextricably linked to its environment, so any change in that environment alters what it takes to thrive. There is no single model of Capitalism, therefore it changes.

 

Going with your narrow definition for a moment, feudalism and mercantilism are capitalist in the sense that individuals pursued capital through their private ownership; they are prerequisites that included key principles of Capitalism.

 

In your 2nd paragraph you manage to completely contradict yourself and destroy your own argument within the space of 10 words. I'm not sure it that's a record, but it's certainly an achievement. Capitalism has learned from the crash of 2008 so Bankers can't cause another crash - but another crash is inevitable?

I think you need to work on that a bit more.

 

Yes, certainly an achievement. I did say that it 'shouldn't' happen, but I meant that we are better prepared to deal with it. I also think I was right in the sense that there won't be a crash based on the same mistakes, but something else. The regulations change the system. (Craig got it!)

 

In your 3rd paragraph you admit to not having any examples of how Capitalism has solved any problems; quite at odd with your bold claim of the previous post.

Capitalism does not create either resources or anything else; it exploits them and does so for its own benefit, not for the greater good.

Take the NHS. Under public ownership the NHS was the most economically efficient health care system in the world. The NHS in England is becoming more and more privatised and less and less efficient. American health care spends twice as much as we do for a far less efficient system.

 

True, I'll not make a claim without evidence. However, I didn't think I needed to. I described it generally. If you don't agree with it, fine; it's still an answer. Resources was the wrong word. Capitalism creates wealth, but to do so it needs to produce 'things' that are needed. It does indeed do so for its own good -- I never claimed otherwise -- but the by-product is providing a need; "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

 

Labour oversaw the privitisation of 6% of the NHS, but it was becoming wholly inefficient and wasteful before that. The NHS is fragmented. In my view you can get the 'basic' services efficiently and easily, but the more niche services are wasteful and inefficient. The NHS needs to concentrate on the 'basic' service for everyone, but then privitise the niche services.

 

As for capitalism helping those with the gumption to achieve; Are you aware that the least socially mobile countries in the developed world are the UK and the US - those places where capitalism is practiced most freely - and the countries with the greatest social mobility are Denmark, Norway and Finland - societies where capitalism is most heavily controlled, where taxation is high and so is the national happiness index? All of the Scandanavian countries rank higher in OECD quality of life surveys than either the US or UK.

 

Yes, the Scaninavian model is called Welfare capitalism. It's a very successful form of Capitalism.

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That's a very narrow definition which completely omits the free market. I did explain that I had 'stretched' my definition. Capitalism is inextricably linked to its environment, so any change in that environment alters what it takes to thrive. There is no single model of Capitalism, therefore it changes.

 

Capitalism is entirely independent of its environment. It can and does exist quite happily outside a free market - in fact it prefers the market to be rigged, thereby ensuring more profit.

 

You've stretched your definition so much that if it was a rubber baloon it would now look like a bloody giraffe.

 

Going with your narrow definition for a moment, feudalism and mercantilism are capitalist in the sense that individuals pursued capital through their private ownership; they are prerequisites that included key principles of Capitalism.

 

And here is the nub of your problem. The failure to differentiate between capitalism and the many other forms of economic activity. Feudalism and mercantilism really are not forms of capitalism; you are confusing 'capital' with 'wealth'. Feudal lords would be just as happy with 40 cows as 300 gold soverigns whereas a capitalist would immediately sell the cows to get the soverigns.

 

Yes, certainly an achievement. I did say that it 'shouldn't' happen, but I meant that we are better prepared to deal with it. I also think I was right in the sense that there won't be a crash based on the same mistakes, but something else. The regulations change the system. (Craig got it!)

 

Ah, so when you said that capitalism learns and evolves you meant that it learns at the rate of a backward child? It doesn't learn not to crash economies, it just learns not to crash economies with the same people at the wheel?

 

True, I'll not make a claim without evidence. However, I didn't think I needed to. I described it generally. If you don't agree with it, fine; it's still an answer.

 

I don't think you're getting this. You can't simply make a claim based on nothing but fantasy and then expect it to be taken as valid just because you made it. In order to be taken seriously, you have to back up these claims with evidence. You haven't.

 

Resources was the wrong word. Capitalism creates wealth, but to do so it needs to produce 'things' that are needed. It does indeed do so for its own good -- I never claimed otherwise -- but the by-product is providing a need; "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

 

Capitalism creates nothing other than imaginary money and debt. People create wealth; workers, artists, teachers, plumbers, shop assistants, airline pilots create wealth; capitalism only reduces that wealth.

 

Labour oversaw the privitisation of 6% of the NHS, but it was becoming wholly inefficient and wasteful before that. The NHS is fragmented. In my view you can get the 'basic' services efficiently and easily, but the more niche services are wasteful and inefficient. The NHS needs to concentrate on the 'basic' service for everyone, but then privitise the niche services.

 

Utter and absolute nonsense. I thought you were going to stop making absurd claims without evidence? So let's have the evidence that shows the NHS to have been 'wholly inefficient and wasteful ' prior to the beginning of privatisiation in England. Then I'll show you the evidence which proves it was and still is amongst the best and most efficient health care systems on earth.

You'll notice that I say in England, since the NHS in Scotland is a very different animal to that in the south and has a much more favourable public approval rate than its English counterpart; but then that's only to be expected since NHS Scotland has been run by the SNP for the benefit of the patients rather than the benefit of private companies for the past 8 years.

 

 

 

Yes, the Scaninavian model is called Welfare capitalism. It's a very successful form of Capitalism.

 

It's really not. Welfare capitalism refers to the situation whereby large companies take over some of the functions that otherwise would be provided by the state. The best examples of this would be Japanese companies who traditonally paid for employees families health care and education amongst other things.

 

The Scandanavian model you're refering to is one whereby the State gets involved to ensure that companies contribute their fair share to society; in other words, the State acts as a brake on the excesses of capitalism which are encouraged in the Anglo-Saxon world. Free market activity is positively encouraged in those countries (Ikea? Nokia anyone?) but the companies are forced by the State to behave as socially responsible citizens.

 

Maybe the following will help you define your terms better:

 

You have two cows....

 

Socialism: You have 2 cows. You give one to your neighbour.

 

Communism: You have 2 cows. The state takes both and gives you some milk.

 

Fascism: You have 2 cows. The state takes both and sells you some milk.

 

Nazism: You have 2 cows. The state takes both and shoots you.

 

Bureaucratism: You have 2 cows. The state takes both, shoots one, milks the other and then throws the milk away.

 

Traditional Capitalism: You have 2 cows. You sell one and buy a bull. Your herd multiples and the economy grows. You sell them and retire on the income.

 

American Capitalism: You have 2 cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyse why the cow has dropped dead.

 

Enron Venture Capitalism: You have 2 cows. You sell 3 of them to your publicly listed company using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving you with nine cows. No balance sheet provided with the release. The public then buys your bull.

 

French Capitalism: You have 2 cows. You go on strike, organise a riot and block the roads because you want 3 cows.

 

Japanese Capitalism: You have 2 cows. You redesign them so they are 1/10 the size of an ordinary cows and produce twenty times the milk. You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.

 

German Capitalism: You have 2 cows. You re-engineer them so they live for 100 years, eat once a month and milk themselves.

 

Italian Capitalism: You have 2 cows, but you don’t know where they are. You decide to have lunch.

 

Russian Capitalism: You have 2 cows. You count them and learn that you have 5 cows. You count again and learn you have 42 cows. You count again and learn you have 2 cows. You open another bottle of vodka.

 

Swiss Capitalism: You have 5000 cows. None of them belong to you. You charge the owners for storing them and keep quiet about any milk they produce.

 

Chinese Capitalism: You have 2 cows. You have 300 people milking them. You claim that you have a full employment and and high bovine productivity. You arrest the journalist who reports otherwise.

 

Indian Capitalism: You have 2 cows. You worship them.

 

British Capitalism: You have 2 cows. Both are mad.

 

Iraqi Capitalism: Everyone thinks you have many cows. You tell them you have none but they don’t believe you and bomb the shit out of your farm. You still have no cows, but at least you are part of a democracy.

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