Does Capitalism Inevitably Produce Inequalities?

[xchrom]

https://www.commondreams.org/view/2014/07/02-2


Protesters involved with Occupy San Francisco in October of 2011. (Photo: flickr / cc / Glenn Halog)

In a recent New York Times op-ed article, Nobel Prize-winning economist Joseph Stiglitz theorized that capitalism does not inevitably produce inequalities in wealth. Instead, he argued, today’s inequalities result from policy decisions made by politicians on all sorts of matters that affect people’s income: the tax structure that favors the rich, the bailout of the banks during the Great Recession, subsidies for rich farmers, cutting of food stamps, etc. In fact, he concluded, today there are no “truly fundamental laws of capitalism.” Thanks to democracy, people can steer the economy in a variety of directions and no single outcome is inevitable.

In their 2010 book, “Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class,” Yale Professor Jacob Hacker and U.C. Berkeley Professor Paul Pierson would seem to add additional support to Stiglitz’s conclusion. As reported by Bob Herbert in The New York Times, they argued that “the economic struggles of the middle and working classes in the U.S. since the late-1970s were not primarily the result of globalization and technological changes but rather a long series of policy changes in government that overwhelmingly favored the rich.”

Although there is certainly significant substance to Stiglitz’s argument – policy decisions can have profound impacts on economic outcomes – nevertheless capitalism is far more responsible for economic inequality because of its inherent nature and its extended reach in the area of policy decisions than Stiglitz is willing to concede.

To begin with, in capitalist society it is much easier to make money if you already have money, and much more difficult if you are poor. So, for example, a rich person can buy up a number of foreclosed houses and rent them out to desperate tenants at ridiculously high rates. Then, each time rent is paid, the landlord becomes richer and the tenant becomes poorer, and inequalities in wealth grow.

[The Magistrate]

1. Yes, Sir, It Does

[xchrom]

3. stiglitz would disagree -- some what. nt

[Warpy]

151. Marx certainly thought so

However, the brief experiment with ultra regulated capitalism demonstrated that this doesn't necessarily have to be the case. Only when the heavy regulation of the New Deal was lifted did we start down the inexorable path toward concentration of capital away from labor and into the fewest hands.

We have been here before. We know what to do about it. The problem is finding enough courageous people to send to government to do it.

[The Magistrate]

152. I Agree The Matter Could Be Mended, Sir

And by methods short of mob and properly decorated lamp-posts.

It can certainly be regulated, put into a far more equitable equilibrium, and maintained there. This would require something close to a revolution itself, though, in our political system, and in social attitudes. It was possible to lift New Deal regulations only because a large portion of the most prosperous working class in human history sold its birthright for a mess of racist potage and hippie-bashing sprees. The children of the people who did so, with votes for Nixon and G. Wallace and Reagan, in many cases still seem at least grimly content with the exchange.

[Live and Learn]

157. +1 nt

[el_bryanto]

2. It would be impossible to argue other wise

It also creates opportunities, though. In theory.

Bryant

[daleanime]

5. creates opportunities.....

while it reduces the number of people who could take advantage of these 'opportunities'.





Sounds like inequality to me.

[el_bryanto]

8. Well command economies also have inequalities

Party Apparatchiks did very well under Communists - regular folk, not as well.

Bryant

[daleanime]

9. So that makes it OK?

[el_bryanto]

11. I think that any economic system on a scale of the united states will produce inequalities

I think if your goal is to produce equality to the exclusion of other concerns, you need to break the united states up into manageable, sustainable units - and probably do away with most cities.

I like cities. I like progress. Capitalism has it's flaws (which is why I favor a managed capitalism, or a capitalism with socialist elements to blunt the excesses) - but it's better than other systems.

Bryant

[daleanime]

43. Then we agree....

But I have to stress not to be blind to the inherent dangers capitalism possesses.

[socialist_n_TN]

117. RE: your last paragraph.......

More specifically, your last sentence. How do we KNOW it's "...better than other systems"? Is it better than Stalinism? Probably, although even Stalinism did some impressive things in the USSR. In SPITE of Stalin and the bureaucracy, not because of.

The problem with this particular propaganda meme is that nobody really knows what a socialist system that is allowed to develop naturally can do. We know what capitalism can do BECAUSE it was allowed to develop without much interference from the feudal PTBs and the previous system. Capitalism in it's early stages wasn't considered a threat to the "Divine right of Kings" and the other nobility of the time, so it established itself easily and quickly. Socialism, especially of the Marxist variety, was not accorded this luxury.

We don't really know what socialism could accomplish because EVERY attempt at establishing a socialist society was undermined by the capitalists and their toadies in the political system at every turn. It was undermined overtly and covertly, militarily, politically, economically and propagandized against incessantly for decades. All because it preached that all people are equal and should have the basics of life as a right.

Until the capitalists allow a socialist state to manifest and grow naturally, we don't really KNOW if capitalism is "...better than other systems."

As to the first part of your post, we agree. Any economy, short of the Marxian version of communism (From each according to his/her ability, to each according to his/her need), INCLUDING socialism, will have inequalities in compensation. It's an inevitability. The goal of socialism is to LIMIT those inequalities and provide ENOUGH of the basics of life to EVERYBODY until society has reached the point where need is no more. At that point, a society will be able to begin to understand what the ideal of communism actually is and how to get there.

[Raksha]

50. So capitalism creates opportunities in theory

but inequalities in reality? Gotcha.

[Lee-Lee]

4. Of course it does

Anything short of full state socialism/communism does.

And even in those cases they still don't achieve full equality, but they is at least not such a huge disparity. Even in the Soviet Union key party officials and those in higher positions enjoyed a much better lifestyle.

[Nye Bevan]

25. Nope. Like the Scandinavian countries, Iceland is a capitalist country.

It does have higher taxes and more generous social benefits than the USA, but it is still capitalism.

[CanSocDem]

6. Perhaps, by definition...

...it is ALL it produces.

"Capitalism is a way of life, and for that reason it generates its own peculiar culture and world view that envelopes every other social sphere, a culture that includes competition, individualism, materialism in the form of consumerism, operating in one’s self-interest without consideration for the needs of others..."

Some even say '...the free market' is democratic. The USA for example.....


.

[Gravitycollapse]

10. Capital itself is theft. Inequality is not so much the byproduct as the essential product.

[clarice]

12. Theft is taking money that you haven't earned. Either by....

Stealing or government fiat.

[The Magistrate]

14. Ron Or Rand Paul Could Not Have Said That Better, Ma'am....

[clarice]

16. Perhaps Sir, but am I correct or not? nt

[The Magistrate]

21. What Is 'Earned' And What Is 'Work', Ma'am?

And to be blunt, do you consider taxes theft?

[clarice]

27. Respectfully Sir...

What is "earned" should be in direct correlation with the amount of "work" (effort)
combined with the persons initiative, drive, and the amount of risk capital at stake in the given project.

I am not adverse to a fair and reasonable tax code. Assuming that the tax revenue is used in the
way it was intended to be used.

[The Magistrate]

33. The Text For The Sermon, Ma'am, Is This....

"Work is of two kinds: first, altering the position of matter at or near the earth’s surface relatively to other such matter; second, telling other people to do so. The first kind is unpleasant and ill paid; the second is pleasant and highly paid."

If you key the matter to effort, it is obvious the greatest amount of effort is expended by people doing the first sort of work, and yet they receive the smallest portion of what value their effort creates. Qualities of personality, such as 'initiative' or 'drive' have no relation whatever to the concept of of work and earning; they are contingent traits, and to exercise them in degree to which one is given them is not effort or work, but simply expression of the personality one is blessed or cursed with. One might as well claim the perquisites of noble birth were 'earned' through 'work', which was an error no old noble of the sword would ever have lapsed into; he would have simply said he was better than the rest, and so deserved more than they. I am not adverse to return on investment, but the question of how that capital came to be available for investment must remain open. Nor am I adverse to invention bringing reward to the inventor, or reward for any other creation considered by others to be valuable enough to warrant purchase.

I note you do not really answer the question do you consider taxation theft?

You are free not to do so, of course, but after a while, not doing so will suggest there is some reason for the avoidance.

What do you consider a 'fair and reasonable tax code'?

What do you consider is the way tax revenue is intended to be used?

[clarice]

37. Sir...

I thought I was very clear. No, I do not consider taxation to be theft.

"You are free not to do so, of course, but after a while, not doing so will suggest there is some reason for the avoidance."

I'm not sure what would constitute "avoidance" or what the "penalty" would be for such avoidance.

A fair and reasonable tax code would be a system where ALL people are taxed at a fair flat rate, and an additional fair tax on extraneous expenditures ( see yachts)

Tax revenue should be used for
1. Fixing existing infrastructure
2. To supply a safety net for the infirm, elderly, and people who through no fault of their own
CANNOT work
3. To secure our borders from aggression, whether foreign or domestic.

[The Magistrate]

40. A 'Flat Taxer', Are You, Ma'am?

A flat tax is extremely regressive, impairing the buying power of persons with less income far more than it does that of persons with greater incomes. A family of four with, say, thirty thousand in income yearly, is far more seriously discommoded by paying a tax of six thousands than would a family of four with three hundred thousands yearly be by a tax of sixty thousands.

Nor would a tax on luxury consumption go any distance to remedy that iniquity.

Mr. Smith, in 'Wealth of Nations' considers it quite proper persons with more property should by more in taxes, on the grounds that they derive more benefit from government than the poor, chief among these benefits being the security of their property from the poor, and the arm of the state being at their disposal in enforcement of contracts and collection of debts.

[clarice]

59. No, not a Fat Taxer per se. nt

[The Magistrate]

61. Then What, Ma'am? Because You just Called For A Flat Tax

And described it as fair.

What we are after here is what you consider a fair tax system, and so far, you have suggested as an example of fairness an extremely regressive tax structure.

[HughBeaumont]

72. Well, there is the Neal Boortz-supported sham known as the Fair Tax:

http://rationalwiki.org/wiki/FairTax

The FairTax is a proposed soaking of the poor to give to the rich sweeping reform of the United States federal tax process.[1] It would repeal the 16th Amendment to the U.S. Constitution, eliminate the federal income tax and all other payroll taxes, disband the IRS, and install a national 23% sales tax. It would also deliver "advance rebates" on the tax to households for the purchase of living essentials up to the poverty level. It could be thought of as the Flat Tax, but based on consumption instead of income.

FairTax advocates claim that implementing the plan would greatly simplify the tax code, result in comparable or better revenue for the government than the current tax system, and reduce the lifetime tax burden for most 'murcans.

snip

The FairTax is in part based on the idea that the rich buy the most stuff, so they would pay more taxes. But critics argue that the tax is regressive on income, so that the rich effectively get a sizable tax break while taxes actually increase for the middle class.

One way to think of this is to ask what percentage of income people use to purchase goods. Poor and middle class individuals use almost all of their income, but richer people (though purchasing more) use a far smaller percentage of their income. With the current tax system a person's whole income is taxed but with the FairTax rich people essentially get the majority of their income tax-free, while poor and middle class individuals receive no break.

Even worse off are the people who saved up post-tax dollars through their career and intended to use those savings to retire and live off the declining balance of their savings would be completely hosed, as the purchasing power of a saved dollar saved would immediately fall by 30%. Enjoy that, seniors!

[clarice]

68. Without getting into a tax code debate......

Will you agree with my original premise is correct at, least semantically ?

Taking money that is not yours is theft.

[The Magistrate]

73. It Is Up To You To Support That, Ma'am, In The Fields Under Discussion

First, taxation, and then, in the division of value produced by labor of various sorts.

So far, you have provided no grounds whatever for the proposition that taxation is equivalent to theft, whether by violence or deception, or nor any reason why the fact that workers, by the very nature of our economic structures, receive less value for their work than their work produces, resulting in accumulation of value in the hands of people who receive that difference, should be viewed as having no equivalence to theft, whether by violence or deception.

[quaker bill]

115. I don't think in the way you would define that...

Now if "taking money that is not yours" includes the unfair wage practices where working people are paid consistently by the owners a smaller and smaller share of the value they produce, then we might be heading toward an agreement. But I am pretty sure you don't mean that sort of "theft".

[clarice]

116. I would call that lousy business practices. nt

[socialist_n_TN]

118. Why is that "lousy business practices"? Taking as much money in profit......

as possible IS THE ESSENCE OF CAPITALISM. Capitalism HAS no moral or ethical values. Only profit. Which is why it never can be "regulated" over the long term into working for the masses.

[clarice]

129. Who ARE the masses? And who would be considered "NOT" the masses. nt

[socialist_n_TN]

133. Everybody but the owners of the means of production.....

are the masses.

[clarice]

134. Who would be the "owners of production" Individuals? Government?......

Btw, I am not trying to cause an argument. Too many people here do that sort of thing.
I'm just curious about the "socialist system" and why anyone would adhere to it. It seems totally unethical to me.

[clarice]

139. socialist_n_TN ?

[socialist_n_TN]

147. Yes?...

nm

[socialist_n_TN]

143. Who sits on the boards of corporations?.....

If the government owns the means of production that could be good or could be bad. It depends on how it's set up. Basically the workers should own the means of production, not the ones who don't work, merely own stock in the company. If it's an industrial sector that is involved with public welfare, including, but not limited to food, clothing, shelter, health, interstate transportation, education, the workers should own them and the public should have a say in production decisions.

That's all for now. I'm not going to try and lay out a working socialist system in an internet post. ESPECIALLY since I would only have one vote in the implementation of said system.

[clarice]

146. Thank you, have a GREAT weekend. nt

[quaker bill]

122. But very survivable

nothing about "market forces" puts a stop to it. In fact, observed reality suggests that "market forces" promote this, and the less regulation the more this sort of thing is promoted.

The question is whether that money is justly "theirs", and if it is not, how taking it back can be considered "theft".

[clarice]

127. The word "theft" in that particular example does not apply. nt

[The Magistrate]

130. Why Not, Ma'am?

Mr. Smith in 'Wealth of Nations' states quite frankly that employers tend to depress wages to the level of subsistence, to that amount which simply enables the worker to live and to reproduce, with everything the employee produces above this minimum being left in the hands of the employer. It is built in to the system that a great deal of the value a worker produces ends up in the pockets of the employer. That this condition is maintained by violence has been made clear on numerous occasions when workers have struck for higher pay, and been met by violence from agents of the state ( police or soldiers ) or violence by agents of the employer ( Pinkertons or other private armed bodies, to whose violence the state turns a blind eye ), with the result that strike was broken and the wage rate remained as the employer wished. So it is certainly a supportable argument to state that much of what a worker produces is stolen by the employer, and further, is stolen by violence. The situation is analogous to, say, a robber who, after taking a man's wallet at gun-point, rifles through it and hand him back his identification and ten-spot so he can at least get a meal or two still, before departing with the rest of his week's pay....

[nolabels]

144. Maybe through collective thought and effort we can erect a system that is good for about 99% of us

Whatever the hell they feel it needed to be called could just seem kind of an afterthought

[socialist_n_TN]

148. There's no sense reinventing the wheel......

There's been a system that's good for the 99% for over a century, PROVIDED it's allowed to develop without interference from the 1%.

Agree that it doesn't matter what it's called.

[nolabels]

149. If it worked then what has happened to it, where is it and how do we indentfy it?

That history of the 1% that has been playing a game of charades with us since time began is often hidden. The 1% get to decide what history is even taught in school and will always tell you everything is alright and good as long as you believe them. From what i can tell, noting how we got here and what turns in the road civilization took to control what was in front of them i would say we are at the starting point only. In the US and mostly the world as a whole, we have this system in front of us that is build up with patchworks of stopgaps that are set up just to keep things going and not much more.

The US civil war mostly wasn't fought to free slaves, it was engaged to keep territories from splintering. The British didn't stop fighting with the Colonials because they thought they may or may not lose, but to them more a reason they could lose larger if others perceived them not be that great power they proclaimed

What some state documents say and what are the actualities of how things really work are two different things, from at least from what i can see.

[Maedhros]

48. This cannot be repeated enough, when "risk capital" is brought up:

the question of how that capital came to be available for investment must remain open.

[Gravitycollapse]

15. Capital is the theft of labor.

As it is given directory to the bourgeoisie and a proportion is "gifted" back to the laborer. It is inherently a form of theft as the worker is not in possession of the full value of his labor.

[clarice]

18. Following that line.....

Who decides what the laborer's efforts are worth, and by what standard would
they be "gifted" by ?

[Nye Bevan]

34. How about folks who enjoy their jobs and feel that they are fairly compensated?

Are they victims of theft, too?

[Gravitycollapse]

41. Absolutely. The theft is inherent to the system.

Gaining enjoyment from your job says nothing about the nature of capital.

[Maedhros]

49. Some inmates are "institutionalized", and come to love their prison.

Indeed, like Red in "Shawshank Redemption", they cannot survive outside it.

ON EDIT: Or like Corporal King in "King Rat."

[Nye Bevan]

56. So when JK Rowling is rewarded with billions of pounds for writing the Harry Potter books,

she is also somehow being stolen from?

[Gravitycollapse]

58. No, JK Rowling is part of the Bourgeoisie

She receives the stolen capital.

[Nye Bevan]

62. Ah. So there is some income level below which you are being stolen from,

and above which you are part of the "Bourgeoisie".

Or is there an intermediate income range where neither of these applies?

How about someone who is busting their ass to build up a business and hires people and pays them fairly? Is he a member of the Bourgeoisie automatically, or only when his business starts to succeed and becomes profitable?

[Gravitycollapse]

65. The small business owner is petit bourgeoisie

Similar to lower and some middle management. He or she retains some aspects of the worker, still being exploited by the bourgeoisie, while benefiting from capitalist theft. Once the small business owner gains enough capital, he or she becomes a full fledged member of the bourgeoisie.

Income level is an indicator of method of income. The higher you go, the more you exploit.

[clarice]

67. Curious, and not being snarky,

How in the world did you ever buy into this outdated malarkey ?

[Gravitycollapse]

70. I didn't buy into it. I was made conscious of the system...

Through personal experience and through interpreting this experience in critical economic, political and social theory.

[clarice]

71. Thank you for your honest, reasoned response. (not sarcasm) Peace Out. nt

[clarice]

66. Nye,

I'm afraid that most of the responses you're going to get will sound
like they came from an Ivory Towered pseudo-socialist economics professor.



"How about someone who is busting their ass to build up a business and hires people and pays them fairly? Is he a member of the Bourgeoisie automatically, or only when his business starts to succeed and becomes profitable"

They must be penalized.

[daleanime]

75. Why is the minority....

Always used to provide cover for the majority?



Do you really believe that the system we have right now treats workers fairly?

[clarice]

78. Compared to the rest of the world? absolutely .nt

[Gravitycollapse]

89. You don't have a very good understanding of "the rest of the world."

[daleanime]

102. Also doesn't understand 'fairly'....

[daleanime]

103. Didn't ask about the rest of the world....

but don't worry about it, I understand you well enough now to answer my own question.

[clarice]

105. Ooooops...sorry....did I express an independent opinion??? My bad. nt

[daleanime]

106. Bad? Yes.....

Independent? No.




Very, very, very dependent. But as long as your happy, I'm happy for you. Although I don't understand happiness build on the suffering of others, if it works for you go for it hoss. Just don't expect it to sway me.

[clarice]

107. Actually....

1. Independent...in every way
2. Yes I am very happy (most of the time)
3. Happiness built on the suffering of others? Rude and untrue
4. Is Hoss a derogatory term for women?
5. I would never be as presumptuous to assume that I could sway your opinion,
after all, this is a forum for free thought...isn't it?

[daleanime]

108. "Derogatory term for women?"

Google is your friend. Don't afraid of learning new things.






Blessed be the 1%, may they protect and keep you.

[clarice]

109. I try to keep personal attacks to a minimum....

And as to the rest of my points? nt

[daleanime]

111. Like I said...

Google it, as for the rest. They don't look like points to me.


We may be having the worst income inequality in our history, if you can't recognize that I don't see any way to continue the conversation.

[clarice]

112. I never said that there wasn't income disparity in The US..

I simply pointed out that the situation/system under which we operate here,
is far Superior to what exists in (most) other Countries. If we cannot agree on that,
then yes you are right, no further discussion between us is possible. I hope that
is not the case, because I value other's opinions.

[The Magistrate]

69. You Are Trying To Take Matter Sideways, Sir

Compensation an artist or other creative person receives for artifacts they create has nothing to do with the structures producing value and sharing it among all parties to its production in an industrial economy. Ms. Rowling is self-employed, in effect, though she requires the agency of others ( publishers, distributors, movie studios, etc. ) to receive the fullest portion of the value she produces. Costs of publishing and distribution and movie production are something she pays out of the total value she creates. She has certainly gained enough there would be scant ground for claiming these costs were an unfair burden, though this is not always the case with creative products ( the sorry tale of DC and the originators of 'Superman' comes to mind as an example ). But there is plenty of room to question whether the employees of the publisher and the distributor and studio receive a fair portion of the value Ms. Rowling pays these entities to work on her behalf.

[socialist_n_TN]

96. One of the major victories of capitalism is propagandizing the idea.........

that EVERYBODY'S a "capitalist", even if they're involved in some sort of artistic and/or artisan work.

If an artisan makes a widget that costs him/her $5 to make (raw materials) and an hour of time and he/she SELLS that widget for $20, that extra $15 is NOT "profit". That is what his/her labor is worth on the market. Now if the artisan begins to get popular and HIRE people to make those widgets paying an hourly rate, THEN he becomes, either petit bourgeois or bourgeois and can rightly be called a "capitalist".

[The Magistrate]

98. Indeed, Sir

When a man says he loves his wife, he loves his daughter, and he loves a good hamburger, he had better mean different things in each instance, and the fact that some confusion could arise over a single word serving so many meanings indicates a degree of discomfort with some elements of meaning that word conveys.

A similar thing occurs with the word property. It is used to mean everything from the books on my shelves to a tradesman's tools to ten thousand acres of land and a piece of paper entitling the person who holds it to the money value created by the work of a thousand laborers in a year. Clearly all these are very different things, but by blurring the difference between them, by using the same word to denote the most meager suit of personal effects with a controlling share in a great industrial enterprise, people are tricked into imagining they share an interest with the magnate, and are as threatened as he by measures that would curb his rapacity and greed.

[hunter]

19. It's We the People's money at best, the oligarch's or empire's money at worst, not yours.

If you want to do without dollars, go ahead...

Anyways, didn't Jesus say something about that?

Then the Pharisees went out and laid plans to trap him in his words. They sent their disciples to him along with the Herodians. “Teacher,” they said, “we know that you are a man of integrity and that you teach the way of God in accordance with the truth. You aren’t swayed by others, because you pay no attention to who they are. Tell us then, what is your opinion? Is it right to pay the imperial tax to Caesar or not?”

But Jesus, knowing their evil intent, said, “You hypocrites, why are you trying to trap me? Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose image is this? And whose inscription?”

“Caesar’s,” they replied.

Then he said to them, “So give back to Caesar what is Caesar’s, and to God what is God’s.”

When they heard this, they were amazed. So they left him and went away.

Matthew 22:17

[clarice]

22. Respectfully.....

To your first point: "It's We the People's money at best, the oligarch's or empire's money at worst, not yours."

Does that mean that some of the money in your pocket right now, belongs to me?

Second point : Not being a particularly religious person, I don't feel qualified
to offer a rebuttal.

[hunter]

44. I have $2.66 in my pocket right now.

If I bother to go out today I'll probably hand it over to some homeless person.

My wife and I have a net worth below zero. Our "credit rating" is in the toilet. We got wiped out by major medical problems and recently the debt we took on sending our kids to college. My wife's work has a certain value to the oligarchy (much more than my own so-called work) and thus we get to keep a fairly large house, eat good food, own old cars that generally work, and enjoy medical insurance that's not entirely crappy.

I'd advise any kid in the U.S.A., if they have the opportunity, to move to a true first world nation

But I've got some fight in me. Maybe we can build a first world nation here in the U.S.A.. But it's been a long hard road and even now, as Ronald Reagan rots in hell, he is still the dancing puppet of the oligarchs.

[clarice]

60. I am so sorry to hear of your plight. I have very much "been there" Is there anything that I can do?

[hunter]

77. We're actually quite well, but thank you.

Modern medicine works but it's very expensive here in the U.S.A., as is education. One thing I learned -- never pay medical bills with credit cards and be very aggressive with both medical insurance companies and medical providers. (Difficult to do when you are as sick as my wife was...)

When my wife's COBRA timed out we were both uninsurable... My wife had applied for our state's high risk insurance pool before that, she was still very ill, but there was a big gap before they started paying some of our bills. (I hope Obamacare has put an end to that nightmare.)

Because of late payments our credit card interest shot up past 20%, and then we were in a place where prescriptions were costing over a thousand dollars a month. One has to pay for those or risk death, and then the credit card interest compounds, and then they cancel all your credit and eventually settle.

I never expected to be in this weird place where the money flies in one window and out the other as if it's not our own, with occasional late mortgage payments a mortgage servicer is only too happy to carry because their late fees are so egregious.

My wife has her health again, and I think maybe we will get ahead, but damn, it would have been nice to live in a nation with some kind of national health plan. Random major illnesses and accidents can happen to anyone.

Even today I maybe don't see my doctor as often as I should because I owe him money and feel bad about it. He's been my doctor a long time however, so maybe he puts up with that. But he and I shouldn't have to fight insurance companies who make as much money denying appropriate medical care as they do inappropriate medical care.

The problem with health insurance companies in the U.S.A. is that their business isn't about appropriate health care; it's all about the size of the money stream they control.

[clarice]

79. Curious....have you considered debt resolution or personal bancruptcey?....

and no, I'm not a lawyer.

[leftstreet]

28. Good God. www.marxists.org

You're welcome

[clarice]

29. Please respect my opinion in not advocating a system....

that is responsible for the misery of so many people. And please, no attacks.

[leftstreet]

31. You've given no opinion

But please proceed

[clarice]

32. Respectfully,

It is obvious to me that our individual world views are diametrically opposed.
Continued debate between us might prove to be harsh and contentious. That is not
my intention....but since you politely asked for my opinion I will offer one.

My belief, and history has proven that Marxist tenants lead to an unbalanced power structure
and at many times, has to be enforced at the end of a gun.

[leftstreet]

36. You are certainly entitled to your 'beliefs'

Studying the history of large industrialized countries that operated under Marxist tenants is a huge undertak.....oh wait. There haven't been any

Oh well

[clarice]

39. Peace Out. nt

[quaker bill]

126. Might one consider Central America

a place where Capitalist tennets "had to be enforced at the end of a gun"?

Or what was all that death squad / contra war stuff anyway?....

(if you are into history, this was only the last chapter, check out where the "Halls of Montezuma" comes from.)

BTW, I believe we were enforcing capitalist tennets at the end of an ICBM for a number of decades, a little thing called the cold war.

[clarice]

128. Yes you are quite right......

but compared to the millions who were killed or starved to death under Communist/Marxist principles,
those examples that you mentioned pale in comparison.IMHO

[BlindTiresias]

131. BS

Millions of people starve to death every year under capitalist systems, not to mention the death toll from colonial activities which was also done by capitalist systems. In British India alone save for the solitary relief effort in 1873-1874 by Richard Temple the death toll easily reaches fifty million from 1769-1944. Even in the case where the government prevented the famine Richard Temple was viciously criticized by British society for distorting the free market and he failed to act during the Great Famine of 1876, which killed at least 5.5 million people.

[clarice]

132. Interesting link...

[link:http://en.wikipedia.org/wiki/The_Black_Book_of_Communism|

[BlindTiresias]

135. Questionable methodology

But let us be charitable and assume the 94 million figure is correct, Communism of even the most violent sort and in truly desperate times(Russian and Chinese) doesn't even stack up to the standard death tolls Capitalism runs just as a natural course of its business.

[clarice]

136. I'm not sure of those figures either...as to the rest...we can respectfully disagree. ...

Have a great 4th.

[BlindTiresias]

137. Which figures?

The Indian famines under British rule are well documented and not controversial.

[clarice]

138. sorry, I meant the wikipedia figures. nt

[quaker bill]

150. when and where do you start counting?

First, we don't count the dead that well if at all, but you would need to consider the tally from all the free market client dictators we have backed, guys like Pinochet, Marcos, Batista, Saddam Hussein, the Shah of Iran and so many more, going back 100 years or more all over the planet. Then add in the clearing of the native population of this continent.

How many times have we installed dictators in each of the banana republics? Think they killed / disappeared people a bit?

VietNam, Cambodia, Laos.....

I think a fair accounting makes it a pretty close contest.

Command economies had inherent problems 100 years ago. People were doing the organizing on paper (double entry ledgers). "Just in time" inventory systems had not been invented. Wal-Mart is now larger than many economies and runs +/- fine with a command system. I have never been to one that was out of toilet paper....

Nothing happens in a vacuum. What you call communism failed in the context of a much larger economy spending itself to near insolvency to force it to happen.

[BillZBubb]

153. That's funny!

Have you bothered to look at the history of capitalism? It's defining feature has been its enforcement at the end of a gun.

[tenderfoot]

63. LOL

[clarice]

64. Love it !!! Using as a screen saver. Thanks. nt

[tenderfoot]

81. You should use it as your avatar - it fits you too a tee.

[clarice]

83. Thanks...is it because we are both so cute? nt

[tenderfoot]

86. Absolutely, in an OBVIOUS TROLLY kind of way!

[clarice]

87. You are certainly taking liberties with someone whom you don't know. nt

[pintobean]

95. It's what she does. /nt

[clarice]

104. Pinto, is she the crazy lady who keeps getting thrown off of DU? nt

[pintobean]

113. No. She did a voluntary start over

last year, with the okay of admin. I think that sucks for the people who don't know and would want her on their blacklists. She's been around since 2002.

[clarice]

114. Me too. peace. nt

[BillZBubb]

154. I think you spotted one! nt

[unblock]

13. true capitalism requires vigorous competition, which requires oversight and regulation

in order to have true capitalism:

there must be vigorous competition, so that suppliers compete to offer the best products at the lowest prices (allowing for a modest profit). to the extent that there is limited effective competition, suppliers can reap unfair profits, which distorts the markets and leads to further inequality.

externalities must be internalized (companies and/or their customers must either not pollute or must pay the cost of their pollution -- no fair making third parties suffer without compensation). to the extent that companies are in a position to reap benefits at the expense of the commons or their neighbors, again, they can reap unfair profits, which distorts the markets and leads to further inequality.


more generally, all negotiation reflects the power relationship between buyer and seller as well as the buyer's power among other buyers and the seller's power among other sellers. walmart is in a strong position as a buyer and can screw its suppliers with impunity. consumers generally are in weak positions as buyers and generally get screwed by big companies.


all this requires the government to step in as referees in order to make what actually happens more closely resemble true capitalism, as opposed to economic anarchy (which is what republicans actually preach). the government is normally in a position to do this effectively, but over the last 35 years or so, inequality became sufficient to corrupt government out of its necessary role in overseeing true capitalism, and the forces of economic anarchy have all but won. consequently, the powerful are free to increase inequality to dangerous levels.

[Deny and Shred]

47. I like what you describe, but might it be more

accurately described as The Best Outcomes Capitalism Can Have instead of True. Vigorous competition ensuring that companies are continually offering the consumer and worker a better deal with strong, impartial government oversight to keep it that way. The US from the Roosevelts to Reagan are a close approximation.

True capitalism (if there is such a thing) has a competition initially. Firms compete to crush their competitors, and many are successful. This ends that industy's competition and creates a monopoly. It is an inevitable result in most industries, and leads to high degrees of inequality.

True capitalism believes in the 'invisible hand of the market' more than any government referee. Oversight just creates 'distortions' in the markets.

Yes, 30 years of deregulation and emasculating the government enforcement agencies through lower budgets and corporate-friendly appointments has us headed toward the Robber Barons. 2008-9 screamed out for a Teddy the Trustbuster. Maybe next time.

[unblock]

55. adam smith was anti-monopoly and originally, competition *was* the "invisible hand".

once you have monopolies, you no longer have vigorous competition, and you no longer have the invisible hand working properly, and the monopolists can extract excess profits by depressing supply and keeping prices high. in smith's view, oversight and regulation leads to distortion when genuine competition exists, but he supported anti-monopoly laws and enforcement because there wasn't real competition without it.


once you have monopolies, this is no longer true capitalism in the economic sense, it is economic anarchy (whatever happens in the absence of regulation and oversight, whether or not there is genuine competition).

many people (especially politicians, particularly those on the right) continue to insist on describing economic anarchy as "capitalism", leading to much confusion. but to adam smith and most economists, it isn't really capitalism without functioning competition.

[Deny and Shred]

76. Semantics really.

I agree, that is how it functions best. A chicken and egg kind of thing.

I was referring to the tendency for dominant firms to emerge and for them to engage in profit maximization (most economists have been taught to calculate the profit box, high prices be damned), to erect barriers of entry, to expand economies of scale, to try to crush all competition fairly and unfairly, to handsomely endorse candidates to lower their taxes and leagalize their dirtiest and sleaziest practices, among many other activities that are anathema to Adam Smith's view. Once successful, we can owe the result to capitalism, whatever we call it - monopoly, oligarchy, corpotocracy, etc.

US doctrine yearns to equate capitalism and meritocracy: the rich have earned it and you haven't.

Corporate gains through consolidation and increased productivity (which exploded as the net improved a myriad of business systems) have gone to the very top, not to be shared with regular employees. Enormous concentrations of wealth today, and it is looking for the best return. TPP/TISA is the logical extension.

[Starry Messenger]

17. It's pretty much designed to.

Does Prof. Stiglitz not notice who is making the policy decisions and who is paying them to make them? It's short line to the capitalists.

[truebrit71]

20. Yes. Pretty much by definition.

It creates haves, and have nots.

[winter is coming]

23. Inevitably? Since I left my stash of infinite universes in my other purse, I can't tell you that.

Often enough that we need strong regulatory legislation? Hell, yeah.

[HooptieWagon]

24. Not inevitably, but usually.

As long as there are numerous buyers and sellers, wealth should be distributed fairly equitably. If some factor(s) influence and change the number of buyers or sellers, then wealth can be distributed inequitably.
Generally, the overall trend is towards inequality... as the OP notes the rich tend to get richer and the poor poorer. Notably, capital (wealth) is much more mobile than labor is. It is usually far easier for a capitalist to locate ( or relocate) a factory in a site with lower labor costs, than for a factory's labor force to locate to a better paying site. This mobility of capital (which has been increasing with globalization) adds to the value of capital, and the lack of mobility undervalues labor. This can and should be corrected by government to maintain a stable economy, except isn't when govt is controlled by wealthy interests.

[Nye Bevan]

26. Are there any systems that do not produce inequalities? (nt)

[TBF]

52. ....

[leftstreet]

53. You should start an OP asking that question

That would be fascinating

This thread is specifically related to the question: Do The Rich Shit Enough Skittles For Us to Share?

[Warren Stupidity]

85. probably not. However we have operated under a post world war II assumption that

capitalism reaches a state of equilibrium with relatively low levels of inequality, and is essentially a meritocracy that produces a comfortable living status for all who participate, with wealth and power largely based on an individuals skill and effort and luck. Those assumptions are false. Wealth accumulation through inheritance is beginning to dominate global capitalism, rather than merit, and that is altering both inequality and power, concentrating both in the hands of a very small number of families, sovereign funds, and institutions, producing as a consequence an oligarchy.

[abelenkpe]

30. Unregulated capitalism? Yep.

Regulated with strong worker unions....not so bad. Still not perfect though.

Any system that promotes taking advantage of another in order to gain is pretty crappy. But I've been told its the best we can do.

Now I'm in a bad mood and need some cat pictures to counter such thoughts. Anyone have some links?

[hunter]

35. Hell Yes! Capitalism Does Inevitably Produce Inequalities.

We live in a centrally planned, oligarchic economy just as the Soviet Union did. We simply have different sorts of crooks doing the planning.

The rules about starving, maiming, and killing serfs and peasants are somewhat more "just" (sarcasm), and the illusion of personal freedom is somewhat greater for anyone accepted into the work force here in the U.S.A. than they ever were in the Soviet Union, but "democracy" and "liberty" are largely an illusion, and absolutely an illusion for anyone wasting away in our huge prison system on false charges or non-violent crimes.

Until we get rid of money and "capital" (the entire concept is getting rather stale a stinky) for some sort of Star Trek earth economy, then a strongly regulated socialist economy, a good mix of democratic government and corporate management (the distinction blurs in the U.S.A.) seems to work best. Some nations have actually managed to implement such economies and we would do well to follow their example.

To put it in archaic terms, the adult citizens of the U.S.A. each ought to have a single share and a single vote in the management of the entire U.S.A. economy., and all should enjoy the fruits of that economy with an expectation of full literacy, good food, safe shelter, and appropriate medical care for all.

[Xolodno]

38. Yes.

True capitalism requires a buyer with perfect knowledge (i.e. know where they can get it cheaper, like and equal quality, etc.).

It also requires sellers on equal footing, for example, a seller finds a more efficient way to produce and drops his price...eventually all the other sellers find out about it and do the same. Giving the efficient seller a small time boost in sales and temporary increase in profits.

But....like Communism, it sounds good on paper...but in practice is a myth and an impossibility.

Buyers don't have perfect knowledge an sellers don't have equal footing. Markets are not perfect by far, thus inequalities will and have to occur. Even Adam Smith acknowledged this. And of course, left unchecked, results in Monopolies and/or Oligopolies.

[PowerToThePeople]

42. Of course it does. n/t

[FiveGoodMen]

45. That's what it's for!

A system whereby those who have are automatically entitled to all the profits from future ventures (and from the labor of the have-nots) is a custom-designed inequality generator.

It never had any other purpose.

[Warren Stupidity]

46. Piketty argues that without explicit policies to address inequality

capitalism results in increasing inequality, and has done so historically, and that we have been deluded by the great destruction of wealth from the world wars of the 20th century into believing that this is not the case. He has lots of data to back that up.

[BootinUp]

57. Makes sense to me intuitively. nt

[TBF]

51. Of course - the system is designed to reward only

a few at the top. The inherent inequity is that not all can be at the top. It is a very flawed system in which only a few benefit off scamming others.

[Skidmore]

54. It starts with inequality at its inception and only broadens the gap if

not regulated within reasonable parameters.

[MisterP]

74. which then ironically undermines any circulation, leading to vapor lock nt

[DirkGently]

80. It does the way we do it.

Last edited Wed Jul 2, 2014, 03:30 PM - Edit history (1)

But I don't think most of the socio-economic evils of present-day America are the result of "capitalism" generally, or could be cured by, say, having the state own all the land or means of production.

The problem comes when wealth accumulates and translates directly into political power, which is wielded to game the system. That "incredibly complex" tax code "from Washington" for example, that is so complex precisely because loopholes and exceptions and special treatment have been lobbied in.

Endless orporate collusion and consolidation. The elimination of common-sense regulation like separating savings banks from investment companies.

The evisceration of already-weak campaign finance laws.

All this cheating and power-mongering is trumpeted and defended as being "capitalism," but it's really more like capitalistic anarchy. You could have a socialist anarchy, or a communist oligarchy (like the ones we've seen) and get the same or worse inequities.

We can encourage entrepeneurship and investment and all of that without gutting organized labor or the environment, or making every election and every piece of legislation about who can pay the most.

We've done it before. Post-WWII America saw corporations paying more taxes than individuals, strong organized labor, and banks that somehow didn't run amuk every couple of years.

We need to stop calling crony capitalism and collusion and senseless de-regulation "capitalism," and letting others claim that any kind of reasonable reforms or restrictions or social programs are Communist / Satanism.

A "capitalist" country with strong labor protection, great public education, universal healthcare, environmental protections, and real banking and campaign finance reform still seems like a better bet than anything else out there.

[ancianita]

82. Of course it does. Workers who provide ROI have no say in profit distributions, which are

usually upward to management as much as outward to shareholders.

On a personal level it takes great discipline to go from the renter class -- food, clothing, shelter subsistence -- to the rentier class. Too many working class people remember cycles of capitalism's instable cycles that produced enforced debt, recessions, unemployment, bandruptcy, foreclosures, rigged credit and finance. They see that central banks are central planners of all the projects and 'externalities' that produce massive resource scarcity and human suffering for the enrichment of the relative few, even if they're in the millions.

Mistakes made by a largely unmonitored government have left inequalities. Unbeknownst to the general public over past decades, administrations have erred in allowing the privatizing of public's assets -- public services, utilities, military operations, technology development, public schools and state universities -- to privateers who've wasted more money, degraded more of the earth and discarded more American workers, such that public has come to see voting as a rigged corporate boardroom vote.

Americans have become so inured to inequality that they call regaining it "progressivism"!!

[ancianita]

84. Inequity is inherent in capitalism due to its system of profit it causes by disadvantaging another

whether that 'other' are contracted workers, or 'first to market' dibs on earth's resources, or stealing, bribing or enslaving another.

Inequality of persons' life circumstances is a reality. Inequality of persons's lives doesn't lead to inequity, necessarily; but inequity of capitalist systems makes personal inequalities of circumstance even worse (the rich get richer... 'them that has gets,' etc.).

BUT. There are no inherent or insurmountable barriers to a democratic economy running efficiently, equitably, and environmentally responsibly WITHOUT capitalists. Good government programs run at minimal cost and maximum efficiencies are just the first example.

[LittleBlue]

88. Every system produces inequalities

Capitalism is an economy in its natural state, ie based on supply and demand.

Alternatives have been tried to disastrous results. Every single successful economy in the world is capitalist. Its competitors died out due to poverty and inefficiency.

You can be more equal under communism: equally poor.

[Gravitycollapse]

90. Ah, yes, the usual Randian venture capitalist talking points.

There is no such thing as a natural economic state.

[LittleBlue]

93. You need to study economics before attempting a serious discussion on this

Argue all you want, you know that I'm right. That is why every communist-based system is dead and every successful economy is capitalist. Whether that is more laissez-faire capitalism or socialist models, all, and that includes every single successful economy, is capitalist.

The irony in all this is the reason you oppose capitalism is due to the inequality it creates. And inequality is bad because some end up poor. Yet you defend a system where virtually everyone ends up poor. A system that caused food shortages. A system that is invariably used by tyrants to oppress.

Tbh it's shocking that anyone still defends that system, though it is almost nonexistent nowadays due to communism's total collapse.

[Gravitycollapse]

94. Which "system" specifically do you think I'm defending?

Since I've never actually defended one to you, I'm confused as to why you think you know which economic system I support.

[socialist_n_TN]

121. By "study economics", you mean the neo-liberal, Freidmanist bullshit..........

that economics departments have hawked for the last 40 years?

To quote Maggie Thatcher in a different (this) context, to study economics today, "There is no alternative" to the neo-liberal line. No thanks.

[socialist_n_TN]

124. You mean every Stalinist based communist system.......

A true socialist system has never been tried mostly because the capitalists and their toadies have undermined it at every turn. See post #117 for further explanation.

And Marxists don't really have to defend anything. Capitalism makes our arguments FOR us. All we have to do is let the system play out the way it is and just point it out.

[Hippo_Tron]

120. What system would you say France operates under?

Roughly 50% of their GDP is public sector. They also have the 5th largest GDP in the world.

[YarnAddict]

91. I read somewhere

that Capitalism is the only system that allows people to rise above the class they were born into. Unfortunately, it also allows some to sink to lower levels . . .

[Silent3]

92. People inevitably produce inequalities

Capitalism, left unregulated, is just particularly efficient at it.

Of those who would fault capitalism for "inevitably" producing inequality I would ask which human institutions don't require eternal vigilance to stay in line, and when have we ever managed to be consistently good at that vigilance no matter what form of economics or government we've had?

We're at a high point in the abuse of capitalism, and might not get out of it without a nasty crash (though I hope that can be avoided), with no guarantee that what follows will be better, be it better regulated capitalism or something else.

I can guarantee with great certainty, however, that if all the people who would wish capitalism away got their wish, whatever would follow would either start out badly or eventually turn out badly, possibly then turning around and getting better, or also being replaced.

[YoungDemCA]

97. The answer is yes-unless corrected by democratic institutions and public services

that serve the common good. And even then, history has shown that that has only temporarily reduced inequality and poverty, not eliminated it.

Sadly, the vast majority of the capitalist class and their supporters sneer at the very concept of "the common good." Maybe it's time for a new system outright that serves all the people and overturns the fundamentally corrupt, anti-human, unjust system that we have today.

-My $0.02.

[Tetris_Iguana]

99. Reality and anything in it produces inequality.

The issue is how to provide a reliable path for individuals to succeed with the cards they are dealt by an apathetic and unequal reality.


Just my 2 pennies.

[freshwest]

100. Yes. It's built on inequality. Been saying this for years. *So sue me!*

*Said Barack Obama to John Boehner.* The rest is mine.

[BlindTiresias]

101. Yes, of course

People were deluded into thinking it didn't during the times of plenty, but that age is over and those with eyes to see are realizing there is nothing intrinsic to capitalism that benefits the general welfare. If anything, the efforts of anti-capitalists were the moderating effect on first world capitalism. If you care to see what happens when the measures people fought and died for are non-existent look to the third world who are just as capitalist as us.

[Marrah_G]

110. I think every system eventually corrupts itself

Human greed is a powerful thing.

The system needs to be overhauled and heavily regulated, but even that, over time, would become corrupted. I don't have any idea what would fix this, it happens over and over through history.

[rug]

119. That's like asking if beans inevitably produce farts.

[pampango]

123. It certainly does, although the countries with the least inequality are also capitalist economies.

Real-world experience would indicate that a balance of capitalism and socialism works best for prosperity balanced with equality.

[jwirr]

125. Yes.

[Tierra_y_Libertad]

140. “The comfort of the rich depends upon an abundant supply of the poor.” ― Voltaire

[bemildred]

141. Always, it is founded on inequality, the owners and the owned. nt

[Yavin4]

142. Without massive govt interference, yes!

Government is the only tool that can harness the best things that capitalism offers while keeping things legitimate and fair.

Capitalism without govt is like a boxing match without a ref in the ring. Without that ref, it would descend into barbarism.

[Ed Suspicious]

145. Absolutely.

[Rex]

155. It does if you don't have any rules to protect the middle and lower class

from the predatory elite. It is an inherent trait of the beast. Must be rules and laws that govern capitalism and they must be strict and enforced.

Otherwise you live in a plutocracy while the M$M uses daily propaganda to convince you it is still about "the American Dream".

[BillZBubb]

156. By definition capitalism creates inequalities. Why is there any question about this?

Societies can put rules and regulations in place to limit the inequalities, but those will eventually be circumvented or removed by the wealthy. Their massive amounts of money allow them to shape opinion and/or if necessary simply buy politicians.

[Lady Freedom Returns]

158. When left unchecked, as it has been of late, yes. n/t

[Shankapotomus]

159. Capitalism is by its own admission

competitive so what do we expect the result of competition to be? An even split of resources? I don't think so. Just as in competitive sports, there are winners and losers in competitive economics.

[quaker bill]

160. A better question would have been "does capitalism inevitably produce injustice"

No economic system that has so far been implemented at scale has produced equality. I do not think that strict equality is even desirable.

Among the groups that initially gathered to form Quakerism was a group called Levellers. They believed in equality of outcome. Quakers on the other hand united around integrity and social justice. Early Friends were not paragons of virtue in this regard and we are still learning what this commitment means today. In the past it meant Abolition of Slavery, Woman's Sufferage, and the Civil Rights movement, what it means now is always an open question, but it has never meant economic levelling.

Friends have long been good with the notion of an honest and reasonable profit. If one happens to become wealthy while treating workers fairly, being a good environmental steward, and doing good business at an honest and reasonable profit, Friends would have no concern. Injustice and exploitation of people or the environment would be a major concern.

So a better question to discuss would perhaps be "at what level does inequality become injustice?", and "does capitalism inevitably produce injustice?"

For the record, I think unfettered capitalism generally does produce injustice.