1:1 Clashing Perspectives: Keep what you worked for or keep what you need more?

IceAura: In a previous post I stated the following:

To which you replied:

What is not true about the above?

How would you describe the US economy from circa 1750 to 1915? Was it feudalism, socialism, a barter culture? While there was slavery in the South until the Civil War, the South was not an economic power compared to the North, which is why they never had a chance to win that war.

I repeat: How would you describe the US economic system from circa 1750 to circa 1915? It seems to me to be closer to Laizzez Faire capitalism than any other system I am familiir with.

Did not the standard of living of the ordinary worker/farmer not increase dramatically from circa 1750 to circa 1915? Was this due to social legislation, labor unions, a strong central government?

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You probably do not even know that Karl Marx stated that capitalism was necessary to provide the productive base out of which communism would be born? Do you know of his concept of the withering away of the government? He expected communism to evolve after capitalism created a potent economic engine.

Of course, Marx did not recognize that socialism/communism requires a huge coercive bureaucracy (read dictatorship) to administer theft from the best & the brightest in order to subsidized the shirkers.

The USSR was not a perversion of socialist/communist principles as claimed by advocates of such systems: It was the logical consequence of trying to implement such a system.

BTW: The following from your post is absolutely untrue. I am accusing you of ignorance not claiming that you lied.

Vanderbilt's transportation company (railroads & canals) was a stock company prior to the civil war. It is a very reasonable fac simile to a modern corporation.

The concept of Stock companies was initiated prior to 1750. It was a method of financing voyages to India, the Americas, & elsewhere before there were American colonies. Except for companies like the East India company, many of these ventures sold stock to finance a single voyage & were not permanent like modern corporations.

You apparently never took a good course in European/American history.

I bolded a phrase in the above quote. I wonder if you put that because you knew your statement was not valid & wanted an escape clause in case you were called on this issue.

 

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Laissez faire capitalism, as we use the term now, was your assertion. The US was strongly capitalistic, but very little of the capitalism was laissez faire. The US also included a many communist and socialist communities (often centered on a common religious sect) and large percentages of barter, subsistence farming/hunting/gathering, feudal grant and charter operations, and mixtures of all of this. The single largest economic engine through the early 1800s was plantation slavery, which was capitalistic but not laissez faire. The fur trade and timber exploitation industry taken as a whole was also capitalistic but not laissez faire (and the fur trade was significantly based on barter). The closest to laissez faire capitalism I can think of off hand was the whaling and some (not all) of the fishing business, and that rested on significant aspects of the industry taking place beyond the reach of community regulation as well as being exploitative in the extreme (to the point that it was crashing all by itself right about the time you declared government interference to have been taking hold).

Your ignorance, while admittedly well demonstrated, is not an argument.

In the first place, the surge in living standards for many people world wide, including European immigrants to the US and even some of the residents (such as the Northern Cheyenne) began long before 1750 with the Columbian Exchange (the Cheyenne obtained horses, initially by barter and theft). In the second, it did not end with WWI even in the US, let alone the other varied political and economic systems for which 1915 was not a watershed year.

Your very example, the Sears catalog, shows the effects of rapidly spreading government infrastructure at least as strongly as industrialization, and does not necessarily show laissez faire capitalism at all (it was a mail order catalog, for chrissake: literacy, money, the Post Office, roads and railroads, contract enforcement, national currency - - - - hello?)

 

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IceAura: You are an interesting character. You make the following statement.

I point out the following.

In a later post you say the following:

I give up arguing with you. I showed with quotes from your post that you are the one who is ignorant of the history of stock companies & you claim that I am the ignorant one.

You apparently never took a good course in European/American history & have zilch knowledge of the history of corporation financed by the issuing of stock.

BTW: I am also sure you had no knowledge of the attitude of Karl Marx with respect to capitaism as described in one of my posts.

 

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http://en.wikipedia.org/wiki/Cornelius_Vanderbilt

Lessee: As part of your wingnut historical revision, you claimed laissez faire capitalism from 1750 on (and not before? you specifically claimed not afterwards). I pointed out that the claim was hogwash, for various reasons including the fact that laissez faire capitalism as you meant - the modern meaning of the term - was illegal "at the time", and in fact even much modern corporate practice (as far from lf as it is) would have been criminal activity then. By "at the time" I meant from 1750, your chosen date, specified and quoted by me.

You then proposed as a counter example Cornelius Vanderbilt's initial forays into robbery baroning. This would have been more than 75 years after 1750 (the bulk of his career more than half way to 1915) so it doesn't actually counter my claims even if Vanderbilt's "stock companies" had been sufficiently and relevantly similar to those known today, which they were not, and even if all of Vanderbilt's commercial activities had been perfectly legal at the time, which they were not.

But more to the point, even cursory investigation into Vanderbilt's career would have (has?) brought you into frequent and significant contact with such circumstances as "government chartered monopoly" and "watered stock, in violation of State law" and "secret agreement to avoid competition" and "this case first established the principle that States could not regulate interstate commerce" and so forth. These are not the circumstances of laissez faire capitalism, any more than a Sears mail order catalog is an example of industry free from government subsidy, or the acquisition and rail connection of the California gold fields and soon-irrigated agricultural paradise was a matter of free exchange and voluntary trade, or the pioneers taking advantage of the Homestead Act showed the value of private enterprise independent of government policies and contributions, or a century that included the Civil War and the Mexican War and the Emancipation and the Reconstruction could be used by a reasonable person as demonstrating the effects of free enterprise and minimal government.

Continuing with your silly assertions, you also claimed that the dramatic rise in living standards came to an end around 1915 due to the rise in government meddling and taxation - that would be before electricity, modern sewer and water systems, central heating and air conditioning and effective insulation, antibiotics and vaccinations and most anesthesia, the modern doubling in agricultural productivity from fertilizer and tractors and the like, and so forth. It would also be concurrent with the crash of various capitalist exploitation operations, the drop in fertility of the abused private farming land of the original colonies, the end of the easy boom in timber as the huge virgin Eastern forest gave out, the onset of some consequences of pollution and erosion and other accumulating environmental problems, the cumulative and serious aftereffects of a series of stock market and banking problems, and so forth. So both aspects of your claim are nonsense.

Of course I put it in to make a valid statement. Being well aware of the existence of things resembling modern stocks, shares, and investments, at the time, I wanted to foreclose even a very stupid person from trying to use the forerunners and early legal structures of modern finance to pretend an identity simply on the vocabulary. I thought I could force you to make an actual comparison, research the circumstances under which such entities were formed and allowed by the relevant communities to exist, and thereby clarify their significant differences from what we now term laissez faire capitalism.

Meanwhile:

WTF? This again?

Why do these guys do that? - what possesses the exemplars of rightwing foggery to inevitably set out on campaigns of irrelevant personal insult in the first place, and then base these bizarre tangents in such utter and complete ignorance, saying stuff about other people that not only do they not know, but can't possibly know?

 

Serious question?
Serious answer: Because their premises are too few and skinny to hold up their thesis; like a swamp hut on stilts. So, if you can successfully knock out even one of their premises, the whole argument falls into the bog.
His position depended on [modern style; unregulated] corporations as the sole driving force; on ignoring labour (its provenance, disposal and negligible contribution to the 'average' standard of living) and on casting the government as villain. You pointed out the [aggressive] role of government in the expanding US, and matters relating. Therefore it became necessary to shift the meaning of the words and call you ignorant for not using the freshly-minted glossary. And if that doesn't work.... Yer mudder wears army boots!

 

IceAura & Others: It is difficult to know how to approach educating you folks.

I will start with the definition & history of the term Laissez Faire.

It came circa 1700 in France when a government official was interested in aiding entrepreneur types. He was concerned with the economy & asked how he could help. The Merchants replied:

A free translation would be

The term refers to government regulation and/or control of commercial/industrial activity.

The establishment of a government run postal service in not contrary to that point of view, although some purists might claim that a private organization should do that job.

Your remark about the existence of a postal service negating a laissez faire environment is nonsense.​

In view of the above, I stand by my claim that Laissez Faire capitalism was the basic economic system from circa 1750 to 1915 in the United States. Slavery was odious, but it was not part of the industrial/commercial activity normally associated with Laissez Faire capitalism: It was associated with the agricultural economic system of the Southern states. I do not want to defend slavery as an economic activity, but in some sense it is just that. Slaves are a commodity. I will amend my claim to include only the industrial North as practicing Laissez Faire capitalism from circa 1750 to 1915. In that era, the US government did very little regulation of industrial activity.

You made the following claim:

Your above remark refers to the 1750 to 1915 era I mentioned. Vanderbilt had a stock company between 1800 & well prior to the civil war. It was not considered to be a criminal activity.

Furthermore, the basic concept of financing commercial ventures via selling stock was initiated to finance commercial voyages to India & the Americas in the century or so after Columbus sailed to the Carribean Islands. Most of those ventures were for the financing of a single voyage. The East Indian Company was an exception, being an ongoing enterprise rather than selling stock to finance a single voyage.

I have activities with higher priority than SciForums & will delay further posting to this Thread for a while.

BTW: Vanderbilt as well as other so called robber barons probably had a net positive effect on the standard of living of the farmer/factory-worker. It was increases in productivity, not labor unions or government regulation which increased the standard of living of the average farmer/worker between 1800 & 1909. Perhaps more on this issue in future posts. If you do not think that the standard of living increased dramatically in that period, you are the wingnut.

 

If you are an American and you claim that you would be "happier" under a different governmental/economic system then you are misguided. The average American worker is in the global top 2% of income earners. Even at minimum wage you are doing very well for yourself (relatively speaking); you are simply mis-attributing your general unhappiness (aka Grumpiness

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) to an external cause.

 

OK, for a more serious and less inflammatory response, it is my opinion that morals and ethics must be afforded; if I have plenty of food I will give my neighbor some because he is my neighbor. If my family has not yet eaten enough, then my neighbor is on his own. The government should not compel me to do anything in this regard either way.

 

Telling me I never read Marx was a poor first step - claiming the US economy from 1750 until 1915 exemplifies the workings of laissez faire capitalism just takes you out of the running as "educator" completely. The largest single economic engine in the US was slave plantation agriculture, for pity's sake. The biggest pile of collateral backing the British loans to the Southern plantations was their slaves, and those loans were the major capital behind the southern market for northern industrial product. From 1750 into the mid 1800s You don't have much internal market capitalism at all in the US without slavery.

But if you are actually interested in educating me, try dealing with whatever of my posting above has revealed a gap in my education - be specific, informative.

Not like this:

I specified my reference - 1750 on; noted that corporations were heavily regulated and community governed in most of the US for much of that time; that a modern joint stock corporation would have been a criminal enterprise in many communities of the future US then; that Vanderbilt's operations were not the same as modern joint stock companies; and that Vanderbilt's operations were not always legal.

I also noted that Vanderbilt was obviously not operating in a laissez faire economic system - and the continuing economic dominance of plantation slavery during much of his time was not among the several indicative pieces of evidence I used (quotes from Vanderbilt's Wiki biography, mostly) although it is of course obvious.

You address none of those points.

The first step in educating people is to read what they write. I merely pointed out that in a country and at a time when the post office was a socialist entity, using a mail order catalog's efficiencies to argue for the benefits of laissez faire capitalism is confused. If you want to argue for the existence and overwhelming benefits of a laissez faire environment, you need examples of stuff that isn't heavily government subsidized, regulated, "governed".

You seem to think government subsidy and regulation and services, union normalizations and services, and the like, had nothing to do with increases in productivity. Are you really trying to assert that?

The biggest boost in living standards anyone got during that time was by the government emancipating them from capitalistic slavery - millions of people greatly benefited. It was accomplished by having the government put a gun to the head of the capitalist slaveowner and taking his property without compensation. The second was probably from the Homestead Act - although the government subsidy of immigration of famine victims and the like is up there, as might be the sewer systems and public works of the larger port cities, the railroads and canals, the Louisiana Purchase, and so forth and so on. The clearing of the red tribes and opening of new lands would belong in this list, but how one would balance the gain by some (whites, mostly) against the heavy loss by the cleared reds, I don't know.

Do you have any evidence that laissez faire capitalism was of any significant benefit, during this time? It seems reasonable, but one would need examples of laissez faire capitalism in operation in some (obviously limited) sense, and a demonstration of the benefits gained. Like I said, whaling might be good place to look.

 

Unions have nothing to do with increases in productivity; a consequence of their very nature is to make a market less efficient. Living standards, however, are a completely different subject and we cannot deny that unions have improved the workplace in that regard. Strictly speaking, forced slave labor, child labor, and otherwise "free labor" are very very good for an economy, but that does not necessarily translate to a high standard of living for all. That being said, this business of pointing to the ugly warts of US history and concluding that Capitalism doesn't work is fallacious; our economy continued to grow despite ending slavery, child labor, and the 80-hour work week in sweatshops.

 

That depends. Less efficient than what? You seem to be assuming the prior (pre-union) existence of an ideal free market of labor exchange, as found in the first couple of chapters of an economics text. In the real world, individuals are often negotiating their terms of labor with a "union of capital", an organized entity made up of the coordination of a variety of sources of capital into a large unit with a single representative. This, compared with an individual laborer, is a common and serious market distortion that leads to underpayment for labor and consequent inefficiency. In such cases a union can partly restore some efficiency to a labor market.

That is completely false. The best you can say is that they often establish stable equilibria, local maximums for an economy such that any small or incremental changes damage the economy. There are always higher equilibria available to, say, a slave or child exploitation economy (if for no other reason than because of the market distortion) but they often lie far enough away that the transition would involve serious dislocation (war, revolution, etc).

Who's doing that? Nobody here.

 

That...is an interesting perspective; I'm not sure it holds up to economic theory though. The union provides a monopoly of labor, artificially raising its price; I would be curious to see a counter-example of this. For a "union of capital" to exist you would need an effective collusion of competing employers all agreeing to keep wages low. This couldn't happen in a market where competition drives the need for a better grade of employees. It *could* happen in a market where artificial barriers, such as contracted exclusive territories, exist, but you appear to be attempting to claim that the entire system is guilty of this.

Additionally, even if a "union of capital" did exist (which I do not grant), I reject the idea that this "market distortion" would lead to less efficiency. An efficient market is one which produces more with less; a distortion such as union representation results in less net production for more investment, while a "union of capital" would put pressure in the other direction, striving for maximum production at minimal expense. The equilibrium you seem to be seeking through a power redistribution would not maximize economic output, even in theory. (It would likely increase quality of life for the employees but that is not what we are discussing)

 

IceAura: You insist on posting invalid remarks.

The above was in response to my claim that the US was basically a lassez faire economy from circa 1750 to circa 1915.There was a stock company known as the New York & Harlem founded in 1831. It was a corporation in the modern sense. I do not know who founded it, but think that Vanderbilt owned much of the stock circa 1850 -1870. Vanderbilt had stock corporations in the 1800's.

The concept of stock companies was started in the century after Columbus discovered the New World. It was started to finance voyages to India & the Americas. Most of those stock companies financed a single voyage. The East India Company was an exception which was an ongoing company which financed many voyages via the sale of stock.

As posted prevously, Laissez Faire refers to commercial/industrial enterprises subject to little or no government regulation/control. The US government did hardly any regulation of business until the Sherman anti-trust law (circa 1890-1915), which was used against Rockefeller's Standard Oil Company.

 

Awesome topic. I will contribute more later.

For now:

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The concept of "earning" is actually a human construct. What can you actually "earn" on a planet whose ecosystem's prime driver is supported by the free input of the Sun? If the source of all fuel and energy comes from nature, what real claim can anyone really make on it?

If the exertion of effort is the primary excuse capitalists use to claim ownership of property, they will have to admit they are violators of rights. The animals they eat to support their lives also exerted effort to process the food and generate the muscle tissue we use to fuel our own bodies. By the capitalists' reasoning those animals "earned" what they have too, so we have no right to take it away from them.

Furthermore, if indeed you can theoretically "earn" everything you have, does that give someone who has "earned" possession to all the world's fresh water systems the right to deny water to those who have not "earned" it? So social Darwinistic capitalism eventually breaks down.

The fact is, our investigation of the natural world is pointing more and more to a "take only what you need" (unless there is an over abundance of a resource) philosophy as being the better suited and most sustainable living model for sustaining an ecosystem as well as group cohesiveness and harmony.

Recent studies in evolutionary group selection make this very apparent. There really is no debate here with anyone who is educated on the subject. The more cooperative the group is over resources, the more efficient and stronger it grows. Solitary species that are always competing over basic resources within their own species are too busy fighting amongst themselves to dominate the other species and the planet.

 

You're over thinking things. "Earning" something is a social construct but that doesn't invalidate it. A hunter may or may not "earn" his food, but we all generally agree that you earn your wages at work. And it isn't about the justification of earning anything; it's a pragmatic issue. If no one gets to keep what they earn, regardless of how we define the term, then the incentive to do so is lessed (if not removed completely) and the entire economy suffers. Socialism is a 20th century failed experiment with only a few intellectual holdouts clinging to the dream.

 

It doesn't invalidate it but how resources are distributed within a group can be quite arbitrary and there is no reason to believe capitalism got it anymore correct than socialism. Especially when there have been egalitarian societies throughout history with far more equitable distribution of resources than exist in modern living models.

Capitalism is no more than a remnant of an ancient competative behavior over resources. It is the behavior of the solitary species, not the group evolved to a specialized degree of cooperation. The solitary hunter says "I should get to keep what I killed because I killed it." and there is no further group interaction. The group hunter says "I will share what I killed today with the group because tomorrow I may not be so lucky and may need somebody else to share."

Capitalism is like trying to use individual economics in a group situation. Any solitary species is precisely solitary because its members can't cooperate or share resources. If everything you "earn" is yours and taking what others have "earned" is wrong, what do you need a group for?

 

I don't disagree with you in theory, but we are humans; we cannot choose to alter what motivates us, we can only design the system to best utilize our capabilities. I'll give my brother or friend a loan, a place to stay (temporarily), etc. I will not do this for some random Jack off the street. That being said, if I were handing out loans of any amount to anyone who asked for it...what do you think the result would be? Do you think that people would take "just enough" to provide for their families?

 

You will be happy to know you don't have to do any of that...you already are sharing with your other group members through the taxation system.

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Some folks here view capitalism as a sum-zero game like poker. Id est: What I get subtracts from everybody else & vice versa. Actually, an entrepreneur provides jobs & goods/services to his customers. The customers generally get items they could not make for themselves. In some instances the customer gets an item he could make, but considering the price & the time required for the customer to make the item, it is more economical to buy it. The pay earned by workers allows purchase of goods not efficiently made by the worker. Try making your own automobile, computer, or table ware

Feudalism is more of a sum zero game than capitalism: What the lord of the manor gets leaves less for the serfs.

The standard of living of a typical worker dramatically increased between 1750-1820 & 1890-1915. There were very few unions & little or no government regulation of the economy in that period. The increase was due to increased productivity.

Many people give unions far more credit that they deserve for better wages & working conditions. Unions become effective when an industry is profitable. It is interesting to note that one of the first successful strikes was prior to 1800 in Philidelphia. The printing industry there was very profitable & the entrepreneurs would sooner pay higher wages than lose business to competitors.

Consider the productivity of a man using a hammer & an open die. Also consider the working conditions. He stands in front of a small furnace-like device & uses brute strength to hammer red hot metal into shape using an open die (Think of the man making horse shoes in a cowboy movie). The modern method uses either an upset forging machine or a machine which uses a 2-piece closed die. The modern method is almost totally automatic & the man running the machine can produce more than one item per minute. Do you think that unions & government regulation are the reason the modern worker has a much higher standard of living? Just maybe most of the increase is due to increased productivity & modern manufactutuing methods.