Re-Framing Capitalism

[DBT]

This easygoing indifference to ethics is based in turn on a hyper-capitalist, utilitarian assumption that the "invisible hand" of free market exchange will inevitably produce (literally) the greatest good for the greatest number (Dobson, 1999; Verschoor, 2002). By mere compliance with the market mechanism, self-interest becomes virtue.

It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete.

Nothing that I have said has been anti capitalist. You are mistaking anti excessive concentration of wealth and power in the hands of a small percentage of the worlds population as anti capitalist.

The two are not the same. You could take it as improving capitalism.

No matter how many ways the problems of gross power and economic imbalance is explained, it is taken as anti capitalism, a left wing, socialist attack on capitalism and the free market.

That certainly does get exhausting.

The Disadvantages of Economic Inequality​

Inequality Stifles Growth

A degree of inequality can act as a positive influence on economic growth in the short term.[24] However, some economists find empirical evidence of a negative correlation of about 0.5-0.8 percentage points between long-term growth rates and sustained economic inequality.[25]

A variety of explanations have been proposed to explain how inequality can work to stifle growth. A high level of economic inequality means a higher level of poverty. Poverty is associated with increased crime and poor public health, which places burdens on the economy. In the face of increasing food prices and lower incomes, support for pro-growth government policies declines.[26] Wealthy citizens maintain disproportionate political power compared to poorer citizens,[27] which encourages the development of inefficient tax structures skewed in favor of the wealthy. Unequal income distribution increases political instability, which threatens property rights, increases the risk of state repudiated contracts, and discourages capital accumulation.[28] A widening rich-poor gap tends to increase the rate of rent-seeking and predatory market behaviors that hinder economic growth.[29]

According to one theory, growth is suppressed in economically unequal societies, after a phase of increased growth, by the decreasing availability of investments for human capital. Physical capital becomes increasingly scarce, as fewer individuals have funds to invest in training and education.[30] As a result, demands for human capital are difficult or impossible to meet, and economic growth stalls.[31] As an additional consequence, market demands increase for risky unsecured loans, which increase lenders’ risk exposure to the borrower’s default. More risks in the markets increase market volatility and the possibility of cascading defaults such as the 2008 subprime mortgage crisis.[32]

https://sevenpillarsinstitute.org/consequences-economic-inequality/

 

[Bomb#20]

Nothing that I have said has been anti capitalist.

You said "After all, it’s workers who generate the wealth of a company, not the bosses.". That's anticapitalist. In capitalism the workers and the bosses and the owners and the customers and the suppliers all cooperate and all jointly generate the wealth of a company. The whole process would grind to a halt if any of those parties were left out of the wealth-generation recipe.

 

[DBT]

Nothing that I have said has been anti capitalist.

You said "After all, it’s workers who generate the wealth of a company, not the bosses.". That's anticapitalist. In capitalism the workers and the bosses and the owners and the customers and the suppliers all cooperate and all jointly generate the wealth of a company. The whole process would grind to a halt if any of those parties were left out of the wealth-generation recipe.

Help generate. It's a partnership. Both parties are necessary, management and labour. Organizers and workers.

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

The point, as explained, is that the average individual worker has virtually no negotiating power, which puts them at a disadvantage, open to exploitation, low pay, etc.

Collective bargaining is a means of restoring a bit of balance and securing a better deal for 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

 

[steve_bank]

I am not missing anything. One of many, I was witness and party to the intense competition in technology starting in the 80s.

Intel vs Motorola in the processor competition was legendary in certain communities. A main competitive point was speed driven by competion for market. At my firdt company we were always on the ge of our set waitng for the next speed upgrade. It made us more competive. Going from 8Mhz to 10Mhz in the day was a big deal.

The competion is not just business to business, it is also peer to be, part f the culture.

How free markey competition works.

IBM had a major market share in computers. The Apple II began to see business applications. IBM saw it as a threat and tasked somebody to come up with a PC. Evnetually IBM published the technical specs for the AT bus fostering a market for plug in boards. There was cometion in that market with winners and loosers.

Apple made a marketing blunder, they did not have an open architecture as did IBM. The IBM open architre opened a flood gate of application. Peole no longer needed to build a custom coputer for a system, you just built an interface plugin to the AT bus.

The founder of DELL got the idea of making motherboards and the IBM clone market was born.

Free markt competions infor PCs drove don cost, added functionality, and reduced size. It spured the development of digital displays.

At my first company we built modems for use in our system. Circa 1980 all analog. As demand grew for data communication semiconductor manufactures reduced it to a low cost chip. A chip tjat mat the original Bell 300 1200 bud modem standard.

So yes I was steepd in the free market and competion.

It is interestng to not both Apple and HP stated in garages. The oirginal HP, now Agilent, was started by two engneers making electromic instruments in a garage.

There is also rsk reward. The first transistors were not vey good and there was no market. Fzitvhild took a gamble and invested in a small group to develop a mass producible trasistor. A big gamble in the day. The group became what was Fairchild Semiconductor.

As was common in new technology, the government and the military underwrote the initial development. The group was given a govt contract for transistors, commercial companies could not afford them. Despite conservative ranting government played a big role in developing markets. The conservative idea of 'free markets' is a myth.

Government contracts for air mail helped get Boring and others going.


I an well aware of government regulation. I am also aware of what the work environment could be like before OSHA. Electronic is a very dirty manufacturing business. Back in the day a very small phosgene gas leak over time caused cancers at a fab faculty. It is used in making semiconductors and is a nerve agent.

Government regulations limiting hazardous electromagnet radiation for productsdoes increase cost.

Of course republicans want to go back to the day wen you could dump chemical waste down the toilet or into sewers or a river. I spent time in the Idaho Silver Valley and saw the effects of unresticted miming pre regulations. The top soil of Kellog had its top soil scraped because of arsenic contamination from a smelter.

Before car exaust regulations on a clear day in LA visibility might be a few miles.

Those pesky government regulations, yes indeed.

In te 70s if yu wanted to conect a modem to a Bell telephobe network yu had to use Bell equipment. Not well know federal legilation in the 70s siad any thrid paryy euipnt can be connecd to any telco network as long as it met govt safety standards to protect the netwroks. That opened up in the day vast completion to build data equipment.

Part of the role of govt is to prevent market domination that reduces competition. Microsoft is a monster that should be broken up.

Back in the day IBM used EBCIDIC instead of ASCII for its terminals. When a company began producing cheaper options for IBM customers IBM cut the price of their terminals below cost to manufacture to put competitors out of business. Microsoft has always been predatory and bought out competition to destroy it.

Unrestrained markets lead to monopolizes.

 

[Loren Pechtel]

I'm not saying anything about fair, I'm talking about what actually happens. Quit trying to rebut it with talk of fairness.

In theory, trades unions can push wages above the equilibrium wage rate. This rise in real wages can lead to less employment. However, the impact of unions on employment rates is not certain.

1. As seen above – it depends on the employer. If a firm has monopsony power, then the monopsony can restrict labour and lower wages. In this case, a trade union can provide a counter-balance to the monopsony power of an employer. Even if labour markets are competitive – demand may be quite inelastic, meaning higher wages would not cause much decline in employment.
2. Efficiency wage theory. This states higher wages can lead to increased productivity.
3. Productivity deals. A trade union may be able to bargain for higher wages in return for improving working practices and implementing higher productivity

You're still going on and on about the benefits of labor unions, only this last part even tries to address my point and it fails miserably. If unions do not push wages above the equilibrium point they did nothing the worker wouldn't have gotten anyway, they're just a cost. If they do push wages above the equilibrium point they cause unemployment. A lack of adequate real-world measurements doesn't change this basic truth.

It doesn't fail miserably. It doesn't fail at all. It shows that collective bargaining can and does benefit workers, and it can do so without increasing unemployment. Problems arise when either party has too much power. It's a matter of balance.

If excessive power lies in the hands of management, workers are exploited and underpaid, hence the need for government intervention with labour laws, minimum pay and conditions.

If union holds excessive power, that can make it hard for business, who respond by laying off some of their workers

A fine balance needs to be maintained.

It shows no such thing. If wages are pushed up that means people are pushed out of the labor force. Unions do not create pie, they merely redistribute it. The marketplace sets the minimum profit margin, you can't take from the owner's share in the long run. Thus you have to be taking from other workers.

 

[Loren Pechtel]

This easygoing indifference to ethics is based in turn on a hyper-capitalist, utilitarian assumption that the "invisible hand" of free market exchange will inevitably produce (literally) the greatest good for the greatest number (Dobson, 1999; Verschoor, 2002). By mere compliance with the market mechanism, self-interest becomes virtue.

It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete.

This. Leftist economics is always about redistributing the pie. What they refuse to see is that without government-enforced power the only road to becoming super-rich is to grow the pie. Most of the names on the Forbes 25 are people who make pie.

If pie can't be made the leftists are right--but our species is doomed.

 

[Loren Pechtel]

It isn't that all things must be left to the free market but a recognition that a competitive market provides goods and services to meet the demands of the population cheaper, more effectively, more reliably, greater choice, and with higher quality than a centrally planned economy.

And understand that any time you mess with the market forces you are lowering the average standard of living. Only do so if you're sure that what you're doing is worth it. If you pretend there's no cost you are almost certainly supporting a bad idea.

 

[Loren Pechtel]

The Disadvantages of Economic Inequality​

Inequality Stifles Growth

A degree of inequality can act as a positive influence on economic growth in the short term.[24] However, some economists find empirical evidence of a negative correlation of about 0.5-0.8 percentage points between long-term growth rates and sustained economic inequality.[25]

"Some economists"--in other words, a minority opinion.

 

[Loren Pechtel]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

 

[DBT]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

The market doesn't 'consider' anything. The employer discovers that they cannot get people with the required skills, they then raise their rate in the hope that a higher rate of pay will attract applicants. Other companies may join in and there is competition on who offers the best deal.

That is a power imbalance in favour of employees with the right skills. They may even get more than the market value of their input.

More commonly, the power lies with the employer, who can draw from a base of job seekers without consideration of offering anything but minimum rate.

If not for protection in law or equalizing the power balance through collective bargaining, the minimum tends become slave wges, working long hours, two or more jobs just to make ends meet. Peanuts for workers while the company enjoys higher profits.

Human nature 101.

How anyone can try to defend economic disparity on such a scale is astonishing.

 

[bilby]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

Because the ‘market’ for managers is comprised entirely of managers.

That they might mistakenly overvalue managers is hardly surprising.

If welders were in sole charge of deciding how much welders should be paid - if they were the only people who ever decided whether or when to hire or fire more welders, and were the only people who decided what pay and benefits to offer those welders, we would be wondering why welders are so overpaid - and you would be wondering how that could be possible, given that the market should find a way to exploit this situation.

Managers are uniquely able to rig the system in favour of managers. Who’s going to stop them?

 

[Swammerdami]

This easygoing indifference to ethics is based in turn on a hyper-capitalist, utilitarian assumption that the "invisible hand" of free market exchange will inevitably produce (literally) the greatest good for the greatest number (Dobson, 1999; Verschoor, 2002). By mere compliance with the market mechanism, self-interest becomes virtue.

It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete.

Mahatma Gandhi, Nelson Mandela, America's Founding Fathers, and the French revolutionaries — these were all throw-backs to the Early Stone Age who couldn't wrap their minds around the idea that it was unethical to object to inherited wealth.

 

[steve_bank]

It can be difficult to grasp the economy as a whole Like the blind men and the elephant. One grabs a leg and thinks it is a tree. Another frbs the trunk and thinks it is a snake.

Part of it is s as wages go go up creating more demand for goods and services more jobs are created. To support that the population has to grow, which is why immigraion has always ben important. When wages go up faster than inflation the economy is growing.

.

 

[Loren Pechtel]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

The market doesn't 'consider' anything. The employer discovers that they cannot get people with the required skills, they then raise their rate in the hope that a higher rate of pay will attract applicants. Other companies may join in and there is competition on who offers the best deal.

A non-answer. Obviously, management skills are in short supply.

And while you are technically correct in saying the "market" doesn't consider that's only because it isn't a discrete entity but rather the combined decisions of a large number of actors. Actors that find themselves making inefficient decisions lose their place. Actors that find ways of improving upon the status quo often make large sums. Thus it is a process that strongly favors making good decisions.

That is a power imbalance in favour of employees with the right skills. They may even get more than the market value of their input.

More commonly, the power lies with the employer, who can draw from a base of job seekers without consideration of offering anything but minimum rate.

If not for protection in law or equalizing the power balance through collective bargaining, the minimum tends become slave wges, working long hours, two or more jobs just to make ends meet. Peanuts for workers while the company enjoys higher profits.

Human nature 101.

How anyone can try to defend economic disparity on such a scale is astonishing.

You keep pleading morality in an economic argument. That says you know your economic position doesn't work.

 

[steve_bank]

In ENgineerg most that were good at it never wANted to beNAnagers, As A result we often got bad mangers.

 

[Bomb#20]

This easygoing indifference to ethics is based in turn on a hyper-capitalist, utilitarian assumption that the "invisible hand" of free market exchange will inevitably produce (literally) the greatest good for the greatest number (Dobson, 1999; Verschoor, 2002). By mere compliance with the market mechanism, self-interest becomes virtue.

It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete.

Mahatma Gandhi, Nelson Mandela, America's Founding Fathers, and the French revolutionaries — these were all throw-backs to the Early Stone Age who couldn't wrap their minds around the idea that it was unethical to object to inherited wealth.

Well, in the first place, DBT wasn't talking specifically about inherited wealth, but about inequality, profit and self-interest in general. And in the second place, what's your point? If you're offering an argument from authority, you might want to reconsider whether the founder of a noncombatant-murdering guerilla organization, a passel of slave-owners and the instigators of the Reign of Terror really qualify as any sort of moral authorities. Yes, most of those people appear to have been throwbacks to the paleolithic era.

 

[steve_bank]

Ghandi's symbol was the spinning wheel. He promoted local entrepreneurship and 'cottage industry' as a means to financial independence and dependence on the Brits.

Gandhi and Mandela were faced with extreme wealth disparity and racism. Gandhi was contending with a strict cast system.

We are supposed to be a meritocracy but that does not apply to offspring following wealth. Trump was a millionaire before he was 18. He squandeedr it.

The questiona bout inheritance is more about social stability than ethics or fairness. I do not see it is an ethical issue, more as a social issue. Should eich kids of the wealthy get to go to Harvard without any financial burden while a poor kid graduates in debt?

 

[Bomb#20]

Ghandi's symbol was the spinning wheel. He promoted local entrepreneurship and 'cottage industry' as a means to financial independence and dependence on the Brits.

Funny story about that. From Wikipedia...

The basic spinning of yarn involves taking a clump of fibres and teasing a bit of them out, then twisting it into a basic string shape.[3] You continue pulling and twisting to make it longer and longer, and to control the thickness. Thousands of years ago, people began doing this onto a stick, called a spindle, which was a very lengthy process. The actual wheel part of a spinning wheel doesn't take place of the spindle, instead it automates the twisting process, allowing you to "twist" the thread without having to constantly do so manually ...

The spinning wheel increased the productivity of thread making by a factor of greater than 10. ...

Gandhi said, “Machinery in the past has made us dependent on England, and the only way we can rid ourselves of the dependence is to boycott all goods made by machinery. This is why we have made it the patriotic duty of every Indian to spin his own cotton and weave his own cloth. ...​

Threads spun on a spinning wheel are goods made by machinery. Gandhi had some nutty economic ideas. But at least he wasn't nutty enough to take his own argument seriously and spin cotton with just a stick.

 

[DBT]

A partnership where one side holds greater power, unless of course management need skills that are in short supply.

It should be obvious that the market considers those skills to be in short supply. If the market were wrong at this why hasn't someone figured out how to exploit the situation?

The market doesn't 'consider' anything. The employer discovers that they cannot get people with the required skills, they then raise their rate in the hope that a higher rate of pay will attract applicants. Other companies may join in and there is competition on who offers the best deal.

A non-answer. Obviously, management skills are in short supply.

And while you are technically correct in saying the "market" doesn't consider that's only because it isn't a discrete entity but rather the combined decisions of a large number of actors. Actors that find themselves making inefficient decisions lose their place. Actors that find ways of improving upon the status quo often make large sums. Thus it is a process that strongly favors making good decisions.

You are not willing consider the answer objectively. No matter how valid the argument for the negatives of power imbalance and excessive wealth concentration, you dismiss whatever is said because it doesn't suit your defend the profits of the super rich narrative.

That is a power imbalance in favour of employees with the right skills. They may even get more than the market value of their input.

More commonly, the power lies with the employer, who can draw from a base of job seekers without consideration of offering anything but minimum rate.

If not for protection in law or equalizing the power balance through collective bargaining, the minimum tends become slave wges, working long hours, two or more jobs just to make ends meet. Peanuts for workers while the company enjoys higher profits.

Human nature 101.

How anyone can try to defend economic disparity on such a scale is astonishing.

You keep pleading morality in an economic argument. That says you know your economic position doesn't work.

I don't plead anything. I just point out the economic and ethical issues associated with excessive wealth and power in the hands of a small percentage of the worlds population, and of course in the workplace. Which has been described and supported time and again...only to be casually dismissed or ignored.

 

[steve_bank]

I read a biography of Gandhi. He had a few quirks. However he was an educated lawyer of the day passing the bar in England. His actions were based in political calculation.

Over time ideas and views evolve. Our modern political ideologues have become fossilized. Our media will go back decades to point out and criticize a politician for changing views.

One thing the Brits did as a conial power was buy raw or minmaly processed materials from colonies, do the manufacturng back home craeting jobs and waelth, and mandating colonies buy finished goods form the Brits.