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Poverty, Equality, and Capitalism

Discussion in 'Economics & Trade' started by Anders Hoveland, Apr 21, 2012.

  1. Anders Hoveland

    Anders Hoveland Banned

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    I, like many people here, believe working conditions should be better, and incomes higher.
    There are many people who essentially live in poverty, and struggle to afford rent in crowded apartments.
    Things need to change, so that anyone willing to put work and put serious effort into their work, should be able to live a decent life in decent housing, and be able to afford a few basic extra luxuries, such as a vacation once a year, and to eat out a few times every week.

    Now I realise there will always be people less motivated, who do not want to work as much, or are more discriminating about where or how they are willing to work. These people should still be able to live a decent life, but should have to deal with more modest standard of living.

    I just do not think people should have to work so hard, under poor working conditions, for so little.

    We would all like to improve the standard of living, and many of us at least would like to end poverty. But what does this have to do with "equality"? Most of the progressives are trying to promote "economic equality". But this is going far beyond simply ending poverty. Why do we need "equality" to end poverty and improve the standard of living for the poor?

    I think capitalism can provide a decent (though modest) standard of living for everyone, and a good standard of living for most. But only under some conditions. If there are too many poor people, it is going to drive down wages, worsen working conditions, and cause unemployment. This is the "Army of the Unemployed" described by Marx. High birth rates, or high levels of immigration, are simply incompatible with providing decent standards of living under capitalism.

    There are other systems, besides pure capitalism. But these other systems have potential problems, and even dangers. I think it might be preferable if we could essentially keep the structure we already have. I am also not sure that egalitarianism is compatible with ethnic diversity.

    I hope that everyone in the world can someday live without poverty, and that people can generally have a good standard of living.
    (we also need to take serious steps now to prevent overpopulation in the future, overpopulation will be incredible strain on the system of capitalism, because there will not be enough jobs, or housing near the jobs, for everyone)
     
  2. Reiver

    Reiver New Member

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    Poor people creates poverty? That's a new one. The reserve army is about controlling worker militancy. Compliance is ensured because of the fear of becoming one of the mass unemployed
     
  3. Anders Hoveland

    Anders Hoveland Banned

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    This should be obvious.

    Much of the poverty in our developed countries is from taking in so much poverty from the third world.
    Poor desperate people are willing to work for lower wages and put up with worse treatment. Naturally this has a downward pressure on wages, and leads to higher unemployment.
     
  4. Reiver

    Reiver New Member

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    Utter garbage. Take Britain (which has the highest child poverty rate in western europe). Immigrants on average have at least the same education levels as the native born. I'm not interested in your immigration ranting though. You just make an error, completely misrepresenting the reserve army argument

    This is drivel.
     
  5. Not Amused

    Not Amused New Member

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    The average tax payer earns $50,000, the current Federal expenditure is $27,000 per taxpayer. Far more than half that expenditure is entitlements, SSI, Medicare, Medicaid, welfare, food stamps, unemployment, etc.

    The only other significant expenditures are military and interest on the debt.

    Increasing taxes to pay for those in poverty slows the economy according to a paper by Romer and Romer (Yes, one is Christine Romer, from the Obummer administration), that found a tax increase 1% of GDP, reduced GDP by ~2.5%.

    http://www.nber.org/papers/w13264.pdf
     
  6. Taxpayer

    Taxpayer Well-Known Member

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    The problem with this is the things you want to distribute are not provided by serious effort alone. The folks you want to give these things to therefore may not be able to create them. It's even possible we'll reach a point where using the combined efforts of everyone in this nation, we cannot provide them.

    Hard work doesn't guarantee results.

    Those who have succeeded in this economy have done so because they've mixed the serious effort you call for with intelligence, innovation, initiative, creativity, and luck. If you genuinely want folks in this country to improve their lifestyles, they need to offer more of these things. Anyone who wants more should not be asking for a job, they should be exploring problems, coming up with solutions, and in so doing creating their own jobs. As a by product, they'll likely create some jobs for their neighbors as well.

    Anyone who feels "I work 40 hours a week. I am loyal, dependable, and hardworking. I deserve a better lifestyle than folks in China." ... is mistaken. ​

    [​IMG]
     
    hiimjered and (deleted member) like this.
  7. Reiver

    Reiver New Member

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    But there is nothing in your comment about self-employment and therefore the nature of firm creation. It comes across as nothing but an empty whinge about individual preferences
     
  8. haribol

    haribol New Member

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    Today the main barrier is money and money mechanics is a subtle idea and few can understand the complicacy of it. Money is a sheer payment for your sale or product from which the other one can benefit whether it is your intellectual product or manual. But there are fissures in the existing system and that has made some people able to amass huge resources and leaving the rest totally impoverished. If I work for a while in a risk free environment and the job I got through favoritism I will be excessively paid and the other one though sweats and drenches his clothes working in a very endangering or health hazard work condition he is poorly paid. Today technology and political convolution has created a big rift between the rich and the poor. India for instance is developing but the mass or the farmers in many rural parts of India live in dire situations and globalization, GDP has done nothing for them.
     
  9. Anders Hoveland

    Anders Hoveland Banned

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    I believe that the structural elements of the economy may be preventing workers from maximizing their efficiency. It takes land and natural resources to work. Perhaps many people are stuck doing relatively unproductive economic activities because they are unable to have access to land or natural raw materials that would allow them to carry out more productive activities. Then there is also the problem of capital. Some moderate taxation of the owners of capital could go a long way to raising economic productivity, because all those masses of poor do not have access to capital. We can, of course, debate the ethics such policies, but it would likely increase economic productivity. Note that I am only referring to low levels of taxation (as obviously high levels of taxation could potentially be a disincentive).

    I have no doubt that, if hypothetically half the people in our country suddenly died, we would find that the wages for lower levels jobs would drastically increase.
    And similarly, if the number of people suddenly doubled, the peoples incomes would suddenly decrease drastically. Wages are more about supply and demand, than what the actual productivity of labor is.
     
  10. Taxpayer

    Taxpayer Well-Known Member

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    Relative productivity. Flood the market with folks equally productive ... or pull from the resource pool folks equally productive -- the results are predictable.

    As far as forcing people to invest capital in folks who cannot even operate their personal expenses without a deficit... that seems a recipe for disaster. Not everyone is capable of effective capital management and assuming they are is dangerous. As demonstrated by the sub-prime mortgage fiasco.​
     
  11. unrealist42

    unrealist42 New Member

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    Ha ha, most people in the developed nations manage their personal expenses at a deficit. That is what mortgages and car loans, school loans and credit card debt is, psersonal deficit spending. It seems that quite a few are willing to invest large amounts of capital in these personal deficit spenders, more than they invest in government deficits.

    People are, for the most part, very effective capital managers at a personal level. You paint with the wrong brush with your insinuations about sub-prime borrowers since it was the lenders who were the more irresponsible party in that fiasco, hoodwinking both borrowers and investors.

    Given the trend towards greater automation in the future there will be less and less need for workers but no corresponding decline in the need for income. There are a few ways to resolve this problem, increase welfare, make work projects, war, genocide, pandemics etc. but none of these are really satisfactory resolutions to the real problem, which is income in a capitalist market economy with not enough real jobs.

    One answer would be to move from an employment income economy to an investment income economy. The consumer as investor as opposed to the consumer as worker. This, of course, would require a vast redistribution of capital shares, something which could be accomplished without undue disruption by a long term program of share purchases of corporate stock by the government. There would be no need for the government to gain a majority stake unless compelled by national interest or management malfeasance.

    The people/shareholders would receive a share of the dividends as income.
     
  12. Taxpayer

    Taxpayer Well-Known Member

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    There is a difference between deficit and debt. Incurring a mortgage or car loan debt is not unreasonable, provided you don't continuously operate at a deficit. If you do... you go bankrupt.​
     
  13. Anders Hoveland

    Anders Hoveland Banned

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    The people do not actually have to be given this capital (the type that is not a product of human nature). Calculations can be made, and payments could be given out to compensate them for the land and natural resources they are not allowed to have access to. It is called geolibertarianism.

    Perhaps you should try to attack his theories more directly, besides just claiming that they are outdated.
     
  14. Taxpayer

    Taxpayer Well-Known Member

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    It's called welfare.​
     
  15. Anders Hoveland

    Anders Hoveland Banned

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    Okay, so I admit a society would probably also have to institute some form of eugenics policy before it could just hand out free money.
    (cannot let the incompetent and unfit just breed and multiply without any limitations)
     
  16. Reiver

    Reiver New Member

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    The bubble blowers that flock to Long Dead George's banner are just looking for a new cult. There is no understanding of modern economics. No attempt to understand the firm. No attempt to understand labour market phenomena. There is only cretinous reference to land tax, even though Long Dead George's single tax ideas became irrelevant yonks ago. Georgism isn't even a marginal school of thought. Instead its something of minor use in very specific analysis (such as environmental economics)
     
  17. Anders Hoveland

    Anders Hoveland Banned

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    Even if a land value tax is not the complete economic solution, what is wrong with it?
    Geolibertarianism might not be an all-encompassing economic theory, but it does make valid points. What I am saying is that one can support land value taxation and still hold to some other economic school of thought. Much like Shinto and Buddhism in Japan, they are not mutually exclusive.
     
  18. Reiver

    Reiver New Member

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    A land tax is valid, but its just one of numerous taxes used. Georgists are irrelevant as they have no way of understanding economic rents in modern economic relations. They're therefore nothing more than whingers
     
  19. politicalcenter

    politicalcenter Well-Known Member

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    I am not an economics major and the only economy I am worried about is my own....but here is the way I see it.

    1. It is far too difficult to open any small business due to inspections, permits, zonning and other regulation.

    2. Why improve land if you are only going to have to pay more for owning it?...You never really own land do you.

    3. It is too great of a risk for me to borrow money on an untried venture...especially market surveys and such.

    4. If I invest my money in corporations, what is to keep them from reducing my dividend and absorbing my investment in stock giveaways, buybacks and large payment packages for executives..

    5. Why save my money when it is worth less every day?

    6. Why support reduction of regulation for large business when they have laws and regulations passed to eliminate the little guy?

    I am truely between a rock and a hard place.
     
  20. Anders Hoveland

    Anders Hoveland Banned

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    Taxing the land reduces the market value of the land. So you might be taxed for owning land, but the land will be cheaper to buy the first place.

    And ideally I would not want people to be subject to land value taxation if they owned less than a certain value of land. So you could still own some land and not have to pay taxes on it. But wealthy people who own much land, and banks that hold a large number of mortgages on land would be taxed.
     

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