The Capitalist System Is Decaying Because Of Its Own Contradictions

Development costs are incorporated into the US prices. There is no dispute on that. The ROW gets the medicines last and pays for the production costs without the amortized development costs borne by US consumers.

Let consumers of pharmaceuticals decide on the level of risk they are willing to take. All medicines are poisons which have beneficial effects to some in small doses. There is no controversy about that. And let doctors in conjunction with patients make decisions on what specific medications might offer hope to their seriously ill patients. There would be many more medications available at significantly lower prices with better outcomes for some. Why deny hope to individuals who decide to take risks ??

Unpatentable formulations will result in far less investment in development of break through medications. What corporations will invest ~ $2B to develop a drug if they cannot price the medications to recover their costs.

How does the US taxpayer foot the bill for the development of the phama industry ??

US life expectancy statistics are bogus because of traffic accidents, gun violence, and smoking. You are smart enough to know that.

 

The question is how to get there.

 

If corporations were worker-owned/operated by people who live in the community with family living in the community, they would be damned sure they didn't implement measures that would devastate the community and the nation. The problem, at least significantly if not entirely, is that of very, very rich people who are able to live apart from their damage and pollution behind tall gates guarded by armed guards.

 

Temper tantrums don't help. With socialism we could actually solve some problems that defy resolution today, like poverty and unemployment. Assisting the needy would be much easier too.

 

Easily. Resisting Arrest gave a good one. Here's another: capitalists keep trying to sell us on the idea of capitalism by praising competition as the savior. With free competition we get superior products at the lowest cost, or so they say. And yet, every business that comes into being soon starts working to eliminate competition by a host of different methods from buy-outs to flooding markets hoping to bankrupt competitors. So there it is: praise competition but destroy competition.

 

Do your research. Venezuela is failing because capitalist countries so fear it that they have conspired against it for many years with the final trick being to force the decline of oil prices to bankrupt Venezuela. It's like the capitalist trick of flooding the market with widgets to force down the price of widgets and bankrupt the competitor.

 

Ok so you can't. Got it.

 

Capitalism has worked pretty darn well for me. Would have worked even better without all the government bull that gets in the way.

 

Read the book or do some homework on the web and you will be able to do it as well.

 

The capitalist system is not decaying. It works perfectly well, even if the outcomes are questionable.

Once again, the word "capitalism" is misunderstood. Like barter, it is a medium of exchange in a market-economy. Goods and services are sold/produced for and by means of "money" (or capital), which are produced by industry and labor compensated by "profit" in the first case and "money" in the second.

One may find fault at capitalism as just explained - but we'd just as well blame our "market-economy". Whyzzat?

Because the rules of the market-economy are decided by governments. That is, both income and profits are taxed (both individual and corporate).

And when upper-income taxation is ridiculously low (around 15/20%), then a gross injustice occurs. That of Income Disparity, whereby insufficiently taxed Income becomes Wealth, which (minus Debt) becomes Net Worth. The result of which is this when measured:


Yes, 20% of American families own 89% of Total Net Worth in America.

I call that a rip-off - and especially unfair when nearly 40 million American men, women and children live below the Poverty Threshold ($24K per year of income) in abject penury ...

 

How about instead of stealing my money to give to the havenots. They do what I did and work their ass off plan properly and build their own wealth?

Taxation is theft.

 

The above is the usual trivia that I get as a response.

Your money is not YOUR MONEY until you pay taxes on it, and if I think your taxation is not sufficient then I have every right to mention it in this forum.

And, I do. Taxation of upper-incomes is indeed wholly inadequate with pitifully small flat-rate percentages that apply to the highest income-earners. And what do these earners do with their illegal Wealth?

They invoke the right to "freedom of the press" to employ commercialized political campaigning to convince voters that the "status-quo" is best for the nation. When clearly, given the glaring Income Disparity of the US - one of the richest nations on earth - it is not. Nonetheless, it worked ... to elect the wrong person, an incompetent who is proving his ineptitude daily to the nation.

Moreover, as a democracy (small "d", very small "d") for the sixth time in its existence an archaic Electoral College has misinterpreted the Popular Vote and given the presidency to the Popular-Vote loser.

If this is "democracy" (decided by a "special group"), then so is China a "democratic nation" ...

 

So you are one that believes that no one has a right to their own property. Because everything comes from the state and not your own labor. By your reasoning making smart decisions and taking risk needs to be punished. And doing the opposite needs to be rewarded.

Look. I get it. Ive been poor and I've been middleclass. I did not enjoy it. So I made good decisions and elevated myself. No one has a right to what I have earned.

“To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association.”


This is not a democracy.

 

POOR ME, POOR ME, POOR ME!
AINT GOT NO POSTSECONDARY DEGREE!

Good for you!

But we are discussing here - surprise, surprise! - "economic systems" that we all live within. So, the paint-brush is considerably larger than just one person.

Is that the problem in the US? Everybody is looking out for Number 1?

But, come a real misfortune, like some war off in a distant place, it's the sons and daughters of the poorest who will be risking their skins. And why? Because the armed-forces promises them a postsecondary education if they survive. Which, for most of them, is the only way to better their lives because they cannot afford a postsecondary-level education.

Here (from Pew Research) are the economic outcomes of those with or without postsecondary degrees:


(It is unfortunate that the above does not give the outcomes of those without even a High-School degree, because they are nonetheless 15% of the High-School class every year. And the HS-graduation rate by ethnicity is here.

My thesis is that they are destined to remain all their lives below the Poverty Threshold.)

What a country! Anywhere else in the developed world, namely Europe, that tertiary education would be free, gratis and for nothing - or nearly so. It costs me $1000 plus room 'n board every year to send my kids to university here in France.

You don't have to risk your life to get ahead in Europe ...

 

Surprise surprise. Im one of those guys who barely has a highschool education and served a little more than a decade.

Like I said, Ive been poor. It sucks. But under our economic system the poor can elevate themselves to wealthy if they set out to. Its more difficult with all the hurdles that our government has put in place. But still possible.

 

Your disdain for the poor is showing. Of course, "it sucks" - which is why we should do collectively something about it. Like raising the Minimum Wage. But heads solidly mired in a sense of irrational self-esteem keep bringing up the same tired reasons. Namely, "If your poor, in this great nation of ours, it's because you deserve it!

The Poverty Threshold in America has existed since the origins of the nation. We are finally coming to grips with it by identifying and recording the time-series. So, recently we've been able to put a face on it.

And it looks like this since 1959:


That's more than 43 million men, women and children who spend their lives, some entirely, below the Poverty Threshold. And some studies have proven the link between Poverty and Crime - which is why the US has the highest number per capita of crime-related convicts. See that sad fact here: NationMaster - Crime > Prisoners > Per capita: Countries Compared

Face facts - you do not want to confront the real truth about the link between Poverty & Crime? And, you like it that way ...

 

Notice how the poverty rate was declining before implementation of the War on Poverty ?? How is that possible ??

And implementation and increase of minimum wage laws will result in more people in poverty. How is that in any way net beneficial ??

 

OK, I will repeat the standard economic logic one more time:
*Increase the Minimum Wage to $15 an hour, $31.2K a year, which is only $6K more a year than the present Poverty Threshold rate of $24.3K. (This can be done in stages over a period of 3 years.)
*This gives those previously at the current federal minimum wageof $7.25 per hour about double that amount in Income.
*The extra money-in-the-pocket allows them to spend more, and along with the economic Multiplier Effect, this boosts spending and thus Consumer Demand.
*Consumer Demand enhanced also has a side-effect of expanding production, which benefits those out of work by enhancing hiring - and in this present case those with the lesser qualifications who really need the jobs.
*Yes, those presently earning $15K an hour will want to have their pay-scale realigned upwards. That will happen as well, so the cost of production (goods/services) will have to rise. Which means simply the economy obtains cost-levels prior to the Great Recession (after which they were reduced).
*But, producers will be better able to compensate the added production-costs by raising prices, but since consumer-demand is enhanced they do not lose overall sales-revenues.
*Everyone benefits and the government can back-off programs (like food stamps) that are presently in place to accommodate those below the Poverty Threshold.

The NET BENEFIT is exactly the opposite of what you suggest; that is, more people are employed due to the increased Demand rising from the lower-end Consumers who are better able to spend money ...

 

Great theory but exactly the opposite happens in the real world.

 

Prove it.

What I have explained otoh is in any economic text-book.

 

David Neumark and William Wascher have done so in their book "Minimum Wages" - MIT Press - 2008.

 

You're sure? How many of those were killed because they took up guns against the socialists?

Socialists don't kill people for nothing.

 

How many has the capitalist system killed over the same period of time you reference?
Consider the Eisenhower / Dullus years of covert military activities, fostering coups and civil wars going to Vietnam extremes.



Moi


r > g

​

 

Oh, it's decaying alright.

I seem to find that whenever a person tries to defend capitalism, they drag out idealized textbook theories on "how it works". What's missed is that nothing stands still and time can't run to the past.

Capitalism evolves. This is inescapable. And this evolution has been kept from us by neglect, so there is no way to make this short. I can't explain this in 2 or 3 sentences.

As soon as it was established and fully in place, capitalism began to change. At first it changed to the good. There were improvements and increasing advantages and benefits.

Eventually it led to a few becoming enormously rich and they immediately began using their influence and power to enhance their position and to entrench themselves. They became more and more ruthless and exploitative. It got so bad that around 1900 there were labor unions and they were met by Pinkerton armed thugs who went to work for the rich and killed strikers.

Things got very bad with the "Robber Barons" and laws were needed to maintain control. But finally FDR showed up. And he was able to moderate the excesses of capitalism with The New Deal. Later he boasted that he "saved capitalism". The New Deal was the first case of socialist-type reforms of a capitalist system in the USA and it made possible a much more comfortable life for the new middle class which it made possible.

But capitalism kept evolving. And it's evolution starting from this point is very relevant to our situation today as it reveals how our situation developed and where it is likely going.

From the 1940s to the 1970s things generally improved because there was much that capitalism could contribute to society. New products that made life easier were developed. New technology appeared to our benefit. Growth and advancement fueled the economic success and many immigrants came to enjoy the prosperity. They provided important demand that also fueled the capitalist system. Grow, expand, advance, gain, achieve. Up up up.

But in the 1970s-80s the growth, expansion, and advancements slowed because so many of our needs and wants had been met in the prior expansion. To make things worse, the top capitalists had grown very, very rich and equally powerful, and their top tax brackets were slashed starting with Reagan. Those brackets eventually dropped from 91% and 70% down to 39% and the capitalists began taking more of the gains as income because of the low taxes. Previously they looked for ways to cut taxes on the gains by creating write-offs and business expenses, like expansion of business and hiring more workers to advance their business while shifting tax cost to business cost. But now, that expansion slowed because taxation of their income was more favorable. Besides, demand was dropping.

Unemployment increases threatened. Businesses suffered. And government stepped in with the help of banking to boost demand and benefit business. They began pushing the credit card. People didn't have as much discretionary income as it would take to consume all that businesses could produce, but they could still buy on credit. So credit, which formerly was a bit of a "dirty word" now became honorable and was even made desirable. Heck, buy a house with a mortgage and you could get government to help pay for the loan by writing it off as a deduction from taxes.

But then the crash of 2008 came and debt was a big problem. Unemployment caught many with debt they couldn't afford, and some loan sharks had devised "sub prime loans" with variable payments that were hidden from the borrower, and foreclosures skyrocketed.

Bailouts benefitted the banks and big corporations but not the little guy or the middle class. There was no way to benefit the middle class because the bailouts didn't produce goods or jobs or wage increases for the middle class. It helped the big corporations though because they were threatening a bigger crash. They took us hostage for the ransom of the bailouts.

The big corporations were not satisfied. They "needed" more profit and bigger incomes for the top owners. So they utilized various tricks to increase or free up cash. They merged, eliminating the need for redundancy of headquarters, accounting staff, payroll staff, etc. etc. They closed facilities and we see the big stores in malls, like Sears and Macy's closing in various locations. And manufacturing moved overseas for cheap labor leaving our middle class with shrinking incomes. But that plus QE1, QE2, etc. produced one of the great stock market bull markets ever, which is essential to the inflated incomes of big CEOs and Directors.

So recapping, for a time after the 1940 genuine growth and advancement and immigration fueled prosperity. After the 1970s prosperity was fueled by artificially increasing demand with the help of credit cards and debt. And after 2008 when that had reached its end, increasing profits and markets were shored up by consolidating and moving for cheaper labor.

What's left now? What will be available now to shore up profits? How will the capitalist keep up the growth of profits? They can't go for level, sustainable business levels. That would kill capitalism. So what do they do?

See, we have reached the point in the evolution of capitalism where it is really becoming a problem. It is starting to eat itself and us alive by causing societal problems and economic problems that defy resolution. What can we do when government is now "owned" by the biggest 1,000 corporations and those corporations give government its marching orders? Who is going to make the corporations downsize?

We have reached the end of the capitalist story folks. A new system that is sustainable is needed.

 

I do not dislike the poor. Like I said. Ive ben there. But the answer to elevating people in poverty is not to make things easier on them. When you are comfortable you are more likely to remain there. When its easier to remain somewhat comfortable than it is to build yourself up, most people will choose to remain where they are. Its human nature.

Raising minimum wage will do nothing to help them out. The price of goods and services will simply find equalibrium with the new minimum wage and those minimum wage earners will have the same buying power as before. The only thing that will have changed is the poverty line will be at 35k a year instead of 25k.

Look at it this way.

Before I had to lay off my building maintenance staff (janitors) I paid them 16 an hour. I actually overpaid them by about 4 bucks an hour. But required a lot more out of them than the typical employer would. But anyway.

Say your typical unskilled worker sees a minimum wage increase to 15 an hour. Either suddenly or gradually. Those building mainteance folks likely wouldnt continue to work as hard as I required of them for a buck more an hour. So I would need to give them a raise to keep the same quality of labor. Or higher lower quality folks.

Say I bump their pay accordingly. Then my warehouse staff, who work a hell of a lot harder than my janitors did, wouldnt be satisfied and would require a raise. And then my mechanics and then my fabricators. Then my machinists and electricians and millwrights. And so on and so forth until everyone under my employ has recieved a raise.

A lot of the left at this point say "wonderful give em that money!" But wait. It doesnt stop there. The money has to come from somewhere. But where? My pocket because I'm the big bad business owner? Dont think so. Im the one that took all the risk starting this company. Im the one that pulls hundred plus hour weeks nearly every week.

My wife did the math for you already. If I were to take the money to pay for these raises out of our pockets it would cost me in excess of half a million a year. Bringing my takehome to a negative. So thats not gonna happen.

Maybe I could pull from reserves and stop investing in my company. I could stop trying to branch off and build and creating more jobs. Well any company that isnt growing will fail. So I can't do that. Since I cant stop growing I could do so without hiring new people. Just force more overtime and have the workers I already have do more for me. But that will eventually burn them out and the quality of their labor will suffer.

So the only viable option would be to raise the cost of what we produce. Which would in turn cause the companies that I make stuff for to raise their prices even more (cause remember they will be facing the same wage issue I would be facing). So that fifteen bucks an hour ends up buying the same stuff seven and a quarter used to. The burger flipper ends up no better off than before.

How about instead if forcing an increase with the minimum wage we instead encourage folks to better themselves and learn the skills they need to get that job that pays thirty bucks an hour? Believe me, unless government gets in the way I will be needing more machinists.

I reckon some of ya are wondering why Mister bad business owner had to lay off those janitors. Well it got too expensive to keep them. They didnt want to take a pay or benefit cut. So with all the new regulation for healthcoverage they got laid off and now I get a much lower quality janitorial staff from a temp agency at a fraction of the cost. Good job. Yall calling for more government cost them their jobs.

This is going to sound even more coldhearted. But its the truth. Remember, Ive lived in actual poverty. But yeah. The average poor person now a days is morbidly obese, has a home to live in with heat and airconditioning, internet and a computer or tablet or modern gaming console. As well as a vehicle that runs with gas to drive it (less so in large cities cause there isnt as much need). The poor here today in this nation are the world's 1%

Want more wealth? Build it yourself. I did. And I was no better off than any other "poor person" in this country.