The compatibility of capitalism

well then practice what you preach. for all intents and purposes you are more of a capitalist than i am. if that is even what you are talking about, it is hard to tell. you can go count your money or give it to the poor, the choice is yours Billy.

 

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I favor well regulated capitalism, with perhaps a little state ownership and control of the essential infrastructure - as China seems to be developing.

Certainly some form of progressive taxation (or significant death taxes) is necessary to counter act the tendency of wealth to concentrate via compounding interest. (The richer you are, the more that enriches you. - Continued long enough, without some form of redistribution, all the wealth would be owned by one family. - the defacto Royal family. Most revolutions have their fundamental cause in the compounding effect of interest. Or as they say: the rich get richer and the poor get poorer (until they revolt). It is simple math: Without some form of redistribution, society is unstable. Modest inflation is also a great means to redistribute as the rich can lose more wealth to it than the poor, who typically are in debt to the rich.)

You posted before I had fully edited and expanded my post. - You were / are not alone in thinking (falsely) that pure capitalism is better than well regulated capitalism (if I understand your point of view.)

BTW, Brazil has excessive concentration of wealth so the inflation goal of 4.5% is a very useful stablizing effect (but many rich compensate by cheating on their taxes). I think for the very first time the lowest two (of the five) economic classes have improved their lot economically during Lula's years as president. More on this, especially the Bolsa Familia grants, a few months ago in the "BRIC news" thread.

 

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China can export a crapload of goods, not much else. Japan's economy is still stronger than China's and much safer.

The issue is that China has a tiny upper class and a massive lower class, no well defined middle class.

It is the middle class that drives the economy.

Because the lower class has too little money to spend, and there are too few upper classmen to make a difference.
In all reality, China can be considered by some to be a third world country, it still does not have a middle class and it is not the driving force behind it's own economy.

 

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To fedr808:

China has a rapidly growing, both in numbers and in individual wealth, middle class. It all depends on how that is defined of course - they do not have anything like the individual wealth the US middle class has (or at least had) so if absolute incomes are the definition of "middle class" then you are correct.*

I think much more important is the response to the election question: "Are you better off than you were four years ago?" Most American would now say "No" and ~99% of the Chinese would say Yes.

For example domestic purchases were up 18.8% for 2007 on 2006 and 22% for 2008 on 2007. The price of pork has about tripled as production has not been able to keep up with the surging consumption as living standards improved. Etc.

Because they have come in only three decades for abject poverty to considerable affluence (more cars were sold last month in China than in the US) there is little likelihood that 20 million out of work will topple the CCP - most, even those without jobs are very much better off than they were a decade ago. China's relatively larger economic stimulus (in GDP terms) will greatly improve the domestic economy. Chinese workers still save 40% of their incomes (do not know what a credit cards is and have no debt, usually) This high saving rate is mainly due to historical reasons, but also due to lack of adequate social services such as pensions, health clinics, etc. but that is rapidly changing.

The CCP wants the people to save less and spend more because the CCP understands that the export oriented economy must change as the US and EU grow poorer and buy less. They are now focused on boosting the domestic consumption providing the social security net that the people have lacked. In only a few years, with US GDP still going down and China still growing by at least 6, if not the promised 8% and the population saving less, the Chinese middle class will have greater purchasing power than the US middle class does. (Not individually - there will be more of them than ALL Americans - probably about 450 million, but again it depends on how you define "middle class.")

SUMMARY: You need to both check your facts and look at what is happening now, not the conditions of a decade ago.
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*There have been several studies that show relative worth is much more important than absolute wealth. One, often repeated and quite amazing, is that if a sum of money is to be divided by "A" between himself and "B" and "A" wants to keep 60% or more, "B" will often exercise his right to prevent the division and gift of any to either, despite that costing him 40% of the sum!

 

1.) China is expanding too fast, too many people, too little money, theyve actually put laws on child birth from what i have heard. And yes, that was what i was talking about.

2.) Well yah the Chinese are doing better, but when you think about it, that quality of life still stinks in comparison.

3.) The American economy is 13 trillion to China's 4. Of course China's would be more effective because it has to account for one third of what the US one must.

4.) China has a tiny middle class, if they really had a major middle class like you imply, than why do you think they are facing a crisis of the EU and US not buying as much? They did save a significant amount of money, but that money will only last so long.

 

When a nation buys more cars than the US does in one month, (Feb and or March 2009) it is not very plausible to say they "have a tiny middle class."

Yes, the Chinese have a problem, but I would not call it a crisis, with GDP growth of at least 6% and quite probably 8% in 2009. (If that is a "crisis," what do you call the US NEGATIVE growth of about -3% in 2009?)

This Chinese problem is because of two factors mainly: (1)The Chinese cannot adapt their export oriented economy as quickly as US economy can collapse its ability to import. AND (2) possible more serious, is the slow rate of changing attitudes of any population. The Chinese (and several other Asians) have been great savers and very willing to defer consumption. For generations, one's wealth, power and general status in the community was strongly correlated with the quantity of rice they had saved (Or gold if very rich). It will be very hard and take more than a generation, I think, to get the Chinese to go into debt as the American's (I want it now- will pay later) do. China's wealth is not in the number of US dollars or treasury bonds it hold, but in its industrious and now well educated people. China has many problems still, especially in water and air pollution and even with the Gobi dessert which is moving Eastward, but they are addressing them all with diligence and intelligence and with speed never before seen on Earth - not even possible in a western style democracy with its public hearings etc. before building new dams, power plants, ports, airports, rail lines, mines etc.

I believe, as I have posted for years, that China wanted to amass large holdings of dollar bonds etc. to offset US's vastly greater military power (except in a conventional ground war - like the Korean War). Initially this was to permit the re-unification of Taiwan, by force if necessary, but that is being accomplished peacefully.

Now those dollars keep US from doing anything (except object with protests) To China's expansion and domination of the South China Sea's resources. (Two international oil companies have backed out of earlier signed deals with others claiming this oil when China insisted. - Defacto recognition that China owns it and can enforce the claim.) Bloomberg today has article on this. See:
http://www.bloomberg.com/apps/news?pid=20601109&sid=an19wYmJX91w&refer=home
Where for example you can read:

“China’s flash of maritime muscle earlier this month against a U.S. Navy ship has put its neighbors and America on watch against a bolder push to exert sovereignty in regional waters. … China’s move reflects its increasing international political and economic clout, which may lend it confidence in challenging the U.S. -- and complicate America’s response. President Barack Obama needs China’s support in dealing with North Korea and Iran’s nuclear programs, not to mention its financial help in the form of continued purchases of U.S. government debt to support stimulus plans.”

And

“China dispatched a 4,450-ton fisheries patrol boat to protect its interests in the South China Sea, which include the disputed -- and potentially oil-rich -- Spratly Islands. More vessels may be added to the mission, the state-run China Daily newspaper reported. … In the past few weeks, the Philippines and Malaysia have restated conflicting claims to the Spratlys, where, in 1995, the Philippines and China came to the brink of open conflict over alleged Chinese military installations on Mischief Reef. Filipino lawmakers reportedly called the fisheries patrol- boat deployment “gunboat diplomacy” and said the U.S. needs to clarify what position it might take in the dispute.”

Don’t hold your breath until the US does “clarify its position.” Hell, Sec. Of State, Clinton did not even to dare mention repression in Tibet etc. when visiting to beg China to keep buying Treasury bonds. China has a huge economic gun they can fire at the US, but probably will not for several years still – not until they complete their transformation from exporter to US and EU to the domestic market production (and meeting the obligations of the long term contracts they have been signing for supplies of energy, food stocks and minerals all over the third world). Eventually they will fire that gun, even with a little self injury as the price they pay for all those imports under the long term contracts will be greatly reduced when US and EU are in deep depression and not buying much oil etc.

 

China only has a small middle class if you compared it with the number of poor chinese people there are (that is, as a percentage of the total population). However, as a nominal value, China's middle class is larger then the US.


I believe China now has enough resurces to sustain itself. All they need to do is keep all (or most) the jobs home.

 

The "social contract" argument assumes we consensually agreed to such a contract and that we were offered a choice. Because the government monopolizes infrastructure and force, we can't decline this "contract" even if we wanted to! It also assumes that somehow, "society" has the right to kick you out, when in fact it does not if not a single individual does.

If one person doesn't have the right to force you to be his slave (I will assign a value of 0 to this, then), why would 100,000 have this right?

100,000*0=0



Regardless, copernicus hit the nail on the head. Asguard, the problem is that under a government, nothing is consensual.

Under capitalism, everything is consensual. If you, Asguard, really want to assist the poor, under capitalism you have that freedom. And you don't have to force others too.

There can still be charities; it's just voluntary, and that is how it must be to be truly free.

This is why capitalism is "compatible" with every lifestyle; those that wish for their "sharing" community are free to purchase and develop their own land for that and people can voluntary choose to come or leave

To take a quote from Bioshock, which expresses a laissez-faire theme, "the artist does not fear the censor, the great are not constrained by the small, and the scientist is not bound by petty morality"

Absolute freedom, without chaos due to property.

 

Unless held prisoner, you have a choice. By remaining in the society, you agree to the social contract.

 

No you DON'T; there is no social contract to begin with. It's private property.

 

I don't think so.

Businesses are constantly trying to fool me into thinking their products are better than they are. I no more consent to be fooled by a business doing bait and switch than I consent to hand my money over to some big guy with a knife or consent to the IRS demanding taxes.

I am smart and strong but the businesses do get over on me from time to time and I did have to give my wallet to a guy with a knife to my throat once.

Also being forced to tolerate other people's pollution is not consensual.

It also is not consensual for the landless to honor the property rights of land owners. The landless poor are coerced into honoring the property rights of land owners. You and I probably approve of coercing the landless poor to not trespass on the properties of land owners but let's not pretend that this respect for land ownership is accomplished without the coercive threat of violence and imprisonment.

 

That's advertising, which is simply spreading the message. Businesses don't force you to buy their products.

For any of you interested in a good video about market anarchism, this guy gives a pretty good explanation and refutes the nonsensical arguments against it.

http://www.youtube.com/watch?v=-mrDxNHc2M8

He also talks about how capitalism allows for "social communes" to be constructed if that is desired and people can voluntarily choose to live in one without need for coercion

 

There is no such thing as private property without the social contract. The social contract is what created the right for private property to exist.

 

Define "social contract" first so that we are on the same page.

 

If I want a product; and the business says here is the product that does what you wanted; and I believe the business and buy the product under the belief that it is the product that I was looking for, but the product does not work the way the business pretended that it would then I have unwillingly given my money after the fact.

The government does not force you to pay taxes, they just persuade you to pay taxes based on your fears of what they will do to you. You have an option to be beggar and live outside. The government won't ask for taxes if you are a homeless beggar.

 

The business does not do anything to you if you refuse to buy their product; the government does if you refuse to pay taxes.

There is the critical difference: choice vs coercion.

 

To me the social contract means: The more wealthy and powerful make sure that life is OK for the poorer people and the weaker people and in exchange the poorer and the weaker agree to honor the wealthier people's private property and tolerate the wealthier people's relatively greater control over everything including the government, the media, and the means of production and the world's natural resources.

 

The wealthier you are, it certainly is nice to aid the poor; however you are making the mistake of assuming there is some sort of obligation to do so, which there isn't.

 

When you are conned it was not choice.

Suppose you bought a stock based on lies the CEO was telling. There are lawsuits over this kind of behavior but most of the time you can't prove the CEO knew he was lying so you are out of luck. I got burned by Calpine. I am arrogant enough to think I should have known better and just chalk it up as a lesson but the old management at Calpine did get away with a crime that enriched them.

The tax collecting government, the tough guy thief, and the con man are all taking advantage of our weaknesses to extract money out of us. Why do we blame ourselves when the con man cons us but we blame the tough guy and the government when they intimidate us into giving them money?

I bought a clothing rack with a one year warranty for $40 last week. It fell apart immediately. It is not worth my time to try to get my money back. They got me.

Being conned is not consensual.

 

I don't think there is an obligation to help the poor. You are making the mistake of assuming there is some sort of obligation of anybody to allow anybody else to keep their private property. That is why we talk about a social contract. The "have nots" sign on to not taking the "haves" property in exchange for the "haves" signing onto helping the "have nots" to become "have somethings". How to share the wealth is open to constant negotiation.

Constant negotiation and coercion is tiresome and the lack of freedom is feels unfair but we can't put 6 billion people in a little room and tell them to be free and without rules and expect that conflicts will not spring up.

We can't say screw the poor and expect the poor not to say screw the rich.

If we make sure that everybody has something to lose then we don't have to worry about the behavior of people who have nothing to lose. But the wealthy who understand that helping the poor helps the wealthy don't want to pay the bill for the wealthy that don't understand that not helping the poor will hurt the wealthy. The French and Russian revolutions scared the crap out of the wealthy but divided the wealthy into to camps: those that wanted to buy off the poor and those that wanted a bigger more loyal more ruthless military to keep the poor under control.

The poor will always get poorer because being poor increases the likely of buying high and selling low while being wealthy enables buying low and selling high.

Publicly funded education, which you probably oppose, has greatly increased the world's wealth because science is what creates improved productivity and improved productivity is what creates growth in per capita wealth. The progress of science is directly proportional to the pool of potential scientists and education expands that pool. At minimum I think the wealthy should be forced to pay for education for all. But education would probably be more efficient if every school was a private school and no money was wasted on education bureaucracies.