Capital v Wage Income in Australia

Discussion in 'Australia, NZ, Pacific' started by Malleeboy, Feb 24, 2017.

  1. Malleeboy

    Malleeboy New Member

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    Between Super and House wealth Australians are earning a greater percentage of there income from Captial Growth over against Wage Income.
    If at some stage, the majority of people are reliant on most of their income from captial growth rather than wage income, will they begin voting and insisting on policies that are preferential to capital growth? For example, in a simplistic sense, driving down wages, increases company profits, which increase divedends and share value.
     
  2. garry17

    garry17 Well-Known Member

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    Simple answer, YES.
     
  3. scarlet witch

    scarlet witch Well-Known Member Past Donor

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  4. LeftRightLeft

    LeftRightLeft Well-Known Member

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    The system is designed for the wealthy to get wealthier and the poor to get poorer, it is the only way capitalism will work now and into the future. That is unless someone knows how to bring wealth into the closed system, there is no other way. Capitalism worked when we could mine freely, harvest forests freely, when we didn't have to worry about the environment and when we could have slave labour. Capitalism requires EVERYONE in the system to make a profit from trading with everyone else within the system.

    The basic capitalist system works like this.

    The workers, make goods, sell goods or provide services.
    They make a small profit, that is they pay rent/mortgage, buy food, clothes, necessities, plus a few bucks to save, by a few beers, save up for a holiday.
    The companies employ the workers and sell the goods, services back to them as consumers. The company makes a profit.
    Wait I hear you say, that can't work, how can a man make a hammer, get paid a little more than what it has cost him to make the hammer, then buy the hammer back for more than the cost plus his wage.
    Of course, people will say it's an oversimplification, but it's not, the hammer is representative of his cost of living.
    Up until about 30 or 40 years ago, it was simple. The timber for the hammer handle was virtually free as was the iron ore, but as the rules were changed, as we needed to compensate for the forests, or we had to grow our own forests, as we had to pay mineral rights etc, as workers rights increased and virtual slave labour was abolished we had to start paying for the wood and iron ore for our hammer and we had to pay a reasonable wage and conditions.

    So in our original system which worked up until the 50's and really I suppose it was WW2 which turned the tide, we had a system where the resources were virtually free so this allowed both the workers and companies to make a profit from the hammer. Up until around the 50's our greatest free resource was agricultural land, most of which at one time or another was given to someone.

    Without something for nothing (or virtually nothing) capitalism cannot work as shown.

    So we needed to find either free resources or free labour. For a while, we managed by importing timber from poor 3rd world nations like New Guinea and Indonesia etc. Then we started to use "slave" labour by sending off shore to get the manufacturing done.

    Then the "natives" got restless, they wanted more than a few pigs for their timber and the rape of their forests, they wanted money and the wanted compensation and they wanted the environment cared for so the timber for the hammer went up. Even countries like India and China now are starting to have to pay workers better so we are losing our latest "slaves" too.

    So now we are nearly paying what the hammer is worth to have it made and sent here, our a lot of our manufacturers have turned into importers and exporters and the government starts pushing us to export just to balance the books or our system will get out of tither.
    By now the top end of town has most of the money, and they just don't want another profit this year, they want an increase in profits, and our now more enlightened workers are wanting more money, but our resources are costing us more, we also have to stop pumping poisons into the water and air and the bloody natives want human rights.

    So where do we get something for nothing? Simple, you're living in it. So we artificially jack house prices up, this now gives us an increase in capital without doing a bloody thing, nothing was created or done, we just got richer by using it. A house is about the only thing that usually is sold for more tan you paid for it. In the 80's I bought a house for 45K and sold it 5 years later for 180K. It wasn't as good when I sold it because it was brand new when I bought it.

    It had done nothing in the 5 years except get older and closer to the day it would have to be repaired or replaced yet its value went up 4 fold. So where does all this extra money come from, I will tell you, smoke and mirrors, it's all make-believe, and this my friends, will spell the end of capitalism as we know it.
     
  5. Deckel

    Deckel Well-Known Member Past Donor

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    You are correct except the majority of people will need more regular and consistent base revenue streams and I am not sure dividends will really supply that in the same way wages do since the average Joe is unlikely to have a large enough portfolio to generate that level of dividends.
     
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  6. garry17

    garry17 Well-Known Member

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    Oversimplified and wrong. Capitalism needs both producers and consumers. Since the premise of your rant is "The system is designed for the wealthy to get wealthier and the poor to get poorer" you miss the entire point of capitalism. Here we see the perfect example of (again dare I say it) the acronym of anti-establishment

    Take your acrostic about your hammer. You suggest that each person can only gain what the hammer is worth but is in fact inflating the cost to earn far above the worth. The point is that by producing MORE than one hammer they can earn enough to live off assuming there are enough people to purchase the hammers. Since you want to try equate that to costs of living, their becomes a need for the poor to gain wealth to continue the cycle of production and consumption which is the basis of capitalism.
    In the one article you post conflicting evidence to your original premise of the basis of how capitalism operates. You point at production costs and sales then suggest that the increases in prices are evidence of the acronym “wealthy to get wealthier and the poor to get poorer” The reason you could sell your house at 4 fold the price (I question the truth) is because there are far more people who have the wealth to pay for the property which would belay your first statement and just about everything you suggest is the problem with capitalism.

    I know you want to blame an economic principle for your distinct lack of moral and ethical standards on how you treat your fellow man but the reality is demonstrated in the principle of what you want to blame. Fact is the only reason capitalism will fail is the corruption of manipulation of wealth by governments and those do good people who constantly complain of not doing enough to support the people who produce NOTHING for the system.

    The market produces checks and balances naturally which oppose your ideals of how capitalism works, for it is the people who work and contribute to the system that also consume from the system. It becomes important to continue to build the wealth of the people who provide and consume to grow their wealth so they can continue to consume and grow their consumption.

    It is the corruption of the system as well as the aspect of expediential growth that is the death of the system, not some ideal that capitalism is a altruistic system that requires some moral or ethical standards to build.

    To put it simply without the detail of pointing out basics you appear to be ignorant of, welfare and the ideal of “to big to fail” is corruption of the system. Both of these artificially bolster the establishment of consumerism and job retention over the capitalistic safe guards which naturally protect the system while raising the wealth of both workers and producers. It is the failure of the system to remove obsolete and corrupt ideals from the system that widen the rich and poor gap NOT the system itself.

    So the failure of capitalism is due entirely to the idealistic belief social welfare is an important ideal which must be accountable to capitalism. Ergo the anti-establishment ideal.

    It would be nice to think, the simplistic view is great, but the fact is you’re just trying to use capitalism to bolster a belief of educated filibustering while (as you clearly demonstrate) you live the ideals with proud abundance…

    Oh by the way, when you say “Even countries like India and China now are starting to have to pay workers better so we are losing our latest "slaves" too.” China??? Really??? You do know China is a communist nation…
     

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