Re-Framing Capitalism

[bilby]

But note that wealth also dissipates over time because most people have more than one child.

Not in the developed world, they don’t. And if current trends continue, that claim will soon be untrue globally.

The Total Fertility Rate in the USA, for example, is 1.70 children per woman, or 0.85 children per parent.

Most people in the USA, Europe, and Australasia have fewer than one child. In the US, people have 85% of a child, on average.

https://ourworldindata.org/fertility-rate

 

[DBT]

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright

People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

I know that this will make no sense to you since you can not think of people as individuals, only as a member of a class.

Sure, people can and do capitalize their labour. The issue here is that some have virtually no leverage without collective bargaining.

It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

They were not getting fair market share for their input into the business because as individuals because as individuals they were at a disadvantage, they don't have a leg to stand on - ''take it or leave it, there are plenty more willing to work for less'' - until they approach management as a group.

Which doesn't mean they all get equal pay, a cleaner doesn't get the same rate as a supervisor, just that they are able to improve their lot, where before they could not.

 

[DBT]

Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.

True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''

 

[skepticalbip]

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright

People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

I know that this will make no sense to you since you can not think of people as individuals, only as a member of a class.

Sure, people can and do capitalize their labour. The issue here is that some have virtually no leverage without collective bargaining.

It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

They were not getting fair market share for their input into the business because as individuals because as individuals they were at a disadvantage, they don't have a leg to stand on - ''take it or leave it, there are plenty more willing to work for less'' - until they approach management as a group.

Which doesn't mean they all get equal pay, a cleaner doesn't get the same rate as a supervisor, just that they are able to improve their lot, where before they could not.

As I said, you wouldn't understand because you can't think of people as individuals, only as members of a class. I have no idea how you manage to see individuals as competitors when competing for a job but not as individuals when fixing a price for their labor.

As individuals they compete to sell their product just as businesses compete to sell their products so, yes, either can get more for their product if they collude to fix the price rather than compete for the business. The 'fair market price' is set by competition. It is the price that the seller is willing to accept and price that the buyer is willing to pay. Of course the seller would like to get more and the buyer would like to pay less but 'fair market price' is where they agree. When collusion is involved then the price will be set at higher than the 'fair market value' because the seller wants more than 'fair market value'.

 

[skepticalbip]

...

Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.

True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''

As usual, you fail to understand.

The point is that there is nothing holding an individual in a 'class'. There was in the 1800s when Marx set out the basis of your philosophy.

 

[rousseau]

...

Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.

True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''

As usual, you fail to understand.

The point is that there is nothing holding an individual in a 'class'.

DBT you might find Anthony Giddens' The Class Structure of the Advanced Societies a good read. It's a good analysis and is along the lines of what skepticalbip is explaining.

In short, classes don't really exist, but the fundamental schism we do see is usually property ownership vs lack of property ownership. Obviously it's a good bit more complicated than this.

 

[steve_bank]

Punting aside slavery for the moment. The idea of the USA was a meritocracy instad of an aristocracy where birth defined your soical statsus and limited your life. The prime example of aristocracy is the British royals and the British class structure. People have defernce due to the family. People carry a formal title of 'sir'. That is what the founders fought a revolution over in part.

Yes we have an obvious class structure, but we also have upward mobility. One of the founders of Intel was a Hungarian immigrant. Bill and Hilary Clinton had humble beginnings.

The student loan program was about churning society from the bottom up. Stirring the pot.

Russian communism on paper was a classless society. It was a miserable drab existence. Some progressives probably think a classless society equates their image of justice.

You can substitute hierarchical for class. Humans naturally form into hierarchical structures. Leaders and followers.

 

[rousseau]

Yes we have an obvious class structure, but we also have upward mobility. One of the founders of Intel was a Hungarian immigrant. Bill and Hilary Clinton had humble beginnings.

The problem with this idea is that there is no internal coherency or intrinsic relationship between members of so-called 'classes'. Blurry boundaries, which makes the concept a convenient short-hand, but a fallacy for the most part. Every individual has a different combination of capital and market-skills, which is why we see upward and downward mobility.

It's true that any community forms a kind of hierarchy, with more poor people than rich, but that's exactly what you'd expect in any community, at any point in history. Wealth is rare and hard to come by.

 

[Loren Pechtel]

But note that wealth also dissipates over time because most people have more than one child.

Not in the developed world, they don’t. And if current trends continue, that claim will soon be untrue globally.

The Total Fertility Rate in the USA, for example, is 1.70 children per woman, or 0.85 children per parent.

Most people in the USA, Europe, and Australasia have fewer than one child. In the US, people have 85% of a child, on average.

https://ourworldindata.org/fertility-rate

Well, when I took math class 1.70 was greater than 1. Has that changed?

 

[Loren Pechtel]

It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

Extortion works. Duh.

They were not getting fair market share for their input into the business because as individuals because as individuals they were at a disadvantage, they don't have a leg to stand on - ''take it or leave it, there are plenty more willing to work for less'' - until they approach management as a group.

Which doesn't mean they all get equal pay, a cleaner doesn't get the same rate as a supervisor, just that they are able to improve their lot, where before they could not.

Except the market as a whole does move wages. Don't pay enough, lose your workers to the competition.

 

[bilby]

But note that wealth also dissipates over time because most people have more than one child.

Not in the developed world, they don’t. And if current trends continue, that claim will soon be untrue globally.

The Total Fertility Rate in the USA, for example, is 1.70 children per woman, or 0.85 children per parent.

Most people in the USA, Europe, and Australasia have fewer than one child. In the US, people have 85% of a child, on average.

https://ourworldindata.org/fertility-rate

Well, when I took math class 1.70 was greater than 1. Has that changed?

No. But 1.70 is nevertheless less than 2.

When I took a biology class, 2.0 was the expected number of parents per child. Has that changed?

 

[steve_bank]

Yes we have an obvious class structure, but we also have upward mobility. One of the founders of Intel was a Hungarian immigrant. Bill and Hilary Clinton had humble beginnings.

The problem with this idea is that there is no internal coherency or intrinsic relationship between members of so-called 'classes'. Blurry boundaries, which makes the concept a convenient short-hand, but a fallacy for the most part. Every individual has a different combination of capital and market-skills, which is why we see upward and downward mobility.

It's true that any community forms a kind of hierarchy, with more poor people than rich, but that's exactly what you'd expect in any community, at any point in history. Wealth is rare and hard to come by.

Wealthy school districts with high property taxes have better schools than poor areas. That is a fact. If not class distinctions based on money we can invent a new term.

I can tell you when Hugh Hefner was alive I was not likely to get invited to the Playboy Bunny Ranch. Athletes and Hollowed actors were.

I dare say an average Brit is not going to hang out with te royals.

Over here there are no hard boundaries like the British royals, but the boundaries are there.


You might pay $20 for a meal at a regular restaurant. A more exclusive restaurant might charge $200 to keep out the social
undesirables'. Exclusive golf clubs.

For a long time in the USA loans to start a small business have been available to regular people. Upward mobility.

I'd say capitalism in the west has been reframed.

 

[DBT]

Nothing of the sort. DBT doesn't ''want to control anything.'' I merely point out the obvious.

Notably, you failed to respond to my point.

Did you make a point?

Inequality is a vicious cycle
“The rich get richer, the poor get poorer” is not just a cliche. The concept behind it is a theoretical process called “wealth concentration.” Under certain conditions, newly created wealth is concentrated in the possession of already-wealthy individuals [5]. The reason is simple: People who already hold wealth have the resources to invest or to leverage the accumulation of wealth, which creates new wealth. The process of wealth concentration arguably makes economic inequality a vicious cycle.

Of course--the same factors that made one rich and another poor remain in effect.

There are many factors, and a principle factor in keeping wage cost down is leverage. That individual workers lack - unless certain skills are in short supply - the leverage to negotiate a better deal based on market share of the wealth they help to create, rather than poor leverage, therefore poor wages.

 

[Bomb#20]

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright

People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

Such collusion was destroying competition when there were three businesses in a market and they all acted as one; it wasn't destroying competition when there were thirty businesses in a market and three of them acted as one. It isn't collusion that destroys competition; it's saturation of the market.

For that matter, when a hundred investors all contribute their money to finance a management team that buys labor from a hundred workers to do some tasks, those investors aren't competing with one another, offering individual workers higher pay to get them to do what each investor wants, or cutting personal deals with workers to make goods for this investor instead of that one. The investors all put up a united front in their negotiations with workers, with each investor agreeing in advance to accept a given percentage of the common profit. We don't call that anticompetitive collusion; we call that a joint stock company. A corporation is just a labor buyers' union. So if labor sellers do the same thing from the other side of the negotiating table, what's the difference? Buying and selling are the same thing: swapping mine for thine. English happens to have a special word "sell" that means "buy" but that we only use when the commodity being bought is money; changing the name doesn't change what's going on.

So I think Wright had it right. A trade union is capitalism in action. There's a reason capitalist countries all have independent trade unions and socialist countries never do. The last time a socialist country tried tolerating a real trade union it brought down the Soviet empire.

 

[rousseau]

Yes we have an obvious class structure, but we also have upward mobility. One of the founders of Intel was a Hungarian immigrant. Bill and Hilary Clinton had humble beginnings.

The problem with this idea is that there is no internal coherency or intrinsic relationship between members of so-called 'classes'. Blurry boundaries, which makes the concept a convenient short-hand, but a fallacy for the most part. Every individual has a different combination of capital and market-skills, which is why we see upward and downward mobility.

It's true that any community forms a kind of hierarchy, with more poor people than rich, but that's exactly what you'd expect in any community, at any point in history. Wealth is rare and hard to come by.

Wealthy school districts with high property taxes have better schools than poor areas. That is a fact. If not class distinctions based on money we can invent a new term.

I can tell you when Hugh Hefner was alive I was not likely to get invited to the Playboy Bunny Ranch. Athletes and Hollowed actors were.

I dare say an average Brit is not going to hang out with te royals.

Over here there are no hard boundaries like the British royals, but the boundaries are there.


You might pay $20 for a meal at a regular restaurant. A more exclusive restaurant might charge $200 to keep out the social
undesirables'. Exclusive golf clubs.

For a long time in the USA loans to start a small business have been available to regular people. Upward mobility.

I'd say capitalism in the west has been reframed.

People with like characteristics will group together, but when you try to nail down the concept of class into a hard, scientific definition it's not that simple. It's fine to invoke the term if you want to signify a group based on relative wealth, but as a scientific indicator of how societies actually work and evolve it's quite a bit more complicated.

Anthony Giddens, one of the most renowned sociologists in the world today, wrote an entire book about it. I haven't read the whole thing but from what I can gather the main differentiator tends to be land ownership.

Using myself as an example, economically I'd likely be upper-middle class. But a pair of my in-laws are multi-millionaires, one of my best friends is dirt poor, and a few of my other friends are wealthy doctors. So what 'class' am I in exactly? Relative to other people in my community I have a certain amount of wealth, but that doesn't really tell you a whole lot beyond who I'm most likely to form friends with.

 

[DBT]

...

Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.

True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''

As usual, you fail to understand.

The point is that there is nothing holding an individual in a 'class'. There was in the 1800s when Marx set out the basis of your philosophy.

I made no mention of class in the sense you refer to. There are poorly paid jobs that are poorly paid because individual workers have little or no leverage.

Isn't it clear by now that talking about the power imbalance between management and individual workers?

I explained what I meant. I supported what I said....yet you bring up 'class!!'

 

[DBT]

...

Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.

True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''

As usual, you fail to understand.

The point is that there is nothing holding an individual in a 'class'.

DBT you might find Anthony Giddens' The Class Structure of the Advanced Societies a good read. It's a good analysis and is along the lines of what skepticalbip is explaining.

In short, classes don't really exist, but the fundamental schism we do see is usually property ownership vs lack of property ownership. Obviously it's a good bit more complicated than this.

Nor did I mention class in that sense. It's a Red Herring.

 

[DBT]

It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

Extortion works. Duh.

Leverage.

Leverage works both ways. If management can capitalize on their leverage, so can workers.

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright

As power is more likely to be balanced in favour of management, collective bargaining creates better balance.

That's all. A fairer outcome for the underdog.

 

[steve_bank]

Unions went from bargaining for safe working conditions, pay rates, and benefits to wanting to control business decisions.

Auto unions over tine negotiated essentially unsustainable cradle to grave pensions from car manufacturers. Lifetime medical support.

It is always a dynamic tension in a free market system. All parties try to maximize their situation. Pro athlete unions are a prime example.

 

[skepticalbip]

...

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright

People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

Such collusion was destroying competition when there were three businesses in a market and they all acted as one; it wasn't destroying competition when there were thirty businesses in a market and three of them acted as one. It isn't collusion that destroys competition; it's saturation of the market.

For that matter, when a hundred investors all contribute their money to finance a management team that buys labor from a hundred workers to do some tasks, those investors aren't competing with one another, offering individual workers higher pay to get them to do what each investor wants, or cutting personal deals with workers to make goods for this investor instead of that one. The investors all put up a united front in their negotiations with workers, with each investor agreeing in advance to accept a given percentage of the common profit. We don't call that anticompetitive collusion; we call that a joint stock company. A corporation is just a labor buyers' union. So if labor sellers do the same thing from the other side of the negotiating table, what's the difference? Buying and selling are the same thing: swapping mine for thine. English happens to have a special word "sell" that means "buy" but that we only use when the commodity being bought is money; changing the name doesn't change what's going on.

So I think Wright had it right. A trade union is capitalism in action. There's a reason capitalist countries all have independent trade unions and socialist countries never do. The last time a socialist country tried tolerating a real trade union it brought down the Soviet empire.

You are right that a trade union is a group of individuals that unite to sell their time and skills - essentially forming a business that sells that product. There is no problems with that. The anti-capitalist problem is if they do not allow other individuals that are not in their union to compete with them. Historically, this has been done through extortion of the business to not hire anyone not in the union, and/or threats and intimidation of anyone who would dare to compete with them.

If the trade union competed with other trade unions or other individuals to sell their product then that would be free market capitalism. Otherwise the trade union would be a monopoly.