Debate #2: Capitalism

[AVN]

Here are my points I like to argue at the moment (maybe more in the free debate phase, which is less restrictive).

“Capitalism” is a system where the right of ownership, and the disposition of such ownership, to commercial or personal purposes, are the primary guidelines for the civilian relations. This system is powered by drives that encourages the individuals to acquire even more ownership, what creates wealthy from the accumulation of value derived from the commercial exchange, enriching society as a whole. Mere mitigations of the ownership status (such as redistribution by welfare) does not disnature capitalism, for the basic premises remain the same.

(Bolding is mine)
You use a definition of capitalism here which IMO is quite uncommon, because even with heavy redistributions (as in social democratic countries) you still consider the system capitalistic (at least that's the way I interprete this paragraph and other statements you made in this thread).

But that means IMO that the only system we have ever had on earth is the capitalistic system, because people have always strived after becoming as wealthy as possible, to get as much possessions as possible. The people were only limited by the rules of their period.

For example in the feudal system the vassal and the serfs both tried to acquire as much possessions as possible, only the serfs were unfortunately forced to pass a great deal of their acquired possessions to the vassal.

So my conclusion is therefore that with your definition of capitalism, feudalism is a form of capitalism (whereas you consider them two seperate systems).

The best example where capitalism is inefficient do to inelasticity in demand is in health-care. We have agreed as a society not to deny urgent health-care to those in need, irrespective whether they have insurance or not. This means that people with an acute health crisis are treated in usually the most expensive way via emergency rooms. For the uninsured this cost is passed on in higher expenses for those who do have insurance. The care is paid for one way or the another however with the system we use in the U.S. is inefficient.

I believe we agree more or less on the definition of capitalism. In short people can decide themselves what to do with their money and possessions.
However I don't consider above problem a problem with capitalism, IMO there is a redistribution of money, because the people who are insured pay for the people who aren't insured, even if they don't want to do that.

(I'm aware that there are problems with health care in the USA, just as in a lot of other countries, but that's not the issue here).

 

[eyrei]

Moderator Action: I guess that is all for the argument phase. Please move to the Defense phase where you respond to the post(s) made in the argument phase. Eyrei.
Please read the forum rules: http://forums.civfanatics.com/showthread.php?t=422889

 

[Joseph2413]

Government protects the right of people by preventing the have's exploiting the have not's. Various labour laws, minimum wage, allowing unions and all the rest prevent the poor from being trampled. Obviously, there is still an element of this, but going too far the other way would be disasterous IMO. I would like to see a set of similar regulations to prevent rich governments exploiting poor governments by the same method. The international application of capitialism does not run in a way that supports competition.

First of all, there is no such thing as "exploitation". It's a pejorative created by Marx which presupposes objective value. Since objective value doesn't exist, there's no such thing as economic exploitation. Second, minimum wage laws trample the poor, not the other way around. Instead of looking at minimum wage laws as raising a floor, think of it as a high jump bar. Those who lack the skills to compete on the labor market fall short (disemployed). A decree on minimum wage is a price floor. When an arbitrary price floor is set higher than the market value of a good (labor here), the demand for it falls. Hence, some of the supply of that good (workers) become unemployed. But minimum wage laws "sound good" to people so they've become a popular tool for politicians who enjoy taking advantage of the economically ignorant public.

Capitalism isn't a system. A friend of mine i think said it best bout capitalism that it was "...a bogeyman created by marx because he couldn't spell mercantilism". Capitalism is nothing more than private property, and voluntary trade. I think also that alot of people have enormous misconceptions about capitalism/free market. One being that people think that the u.s. is a capitalist country. The U.S. , and every other country, is a mixed economy/hampered-market economy. And people also confuse a free market with state/political capitalism. Which i'd say is what exists in the u.s. (corporations using the government to stifle competition. see also corporate socialism).

 

[Scuffer]

Welcome to the discussion . For future reference, you really have to put your own arguments up in this thread, so that everyone has a chance to take a shot at you back!

First of all, there is no such thing as "exploitation". It's a pejorative created by Marx which presupposes objective value. Since objective value doesn't exist, there's no such thing as economic exploitation.

I'm sorry, but you have to better than a semantic argument about something that Marx said here to convince me. It is a lawyer's or philosopher's argument that actually take into account the human factor. Economic exploitation does exist, for example in sweatshops making £100 shoes for pence in wages. If your argument is that because it occurs (and not objective), it is not explotation, I can find no credence in it.

Second, minimum wage laws trample the poor, not the other way around. Instead of looking at minimum wage laws as raising a floor, think of it as a high jump bar. Those who lack the skills to compete on the labor market fall short (disemployed). A decree on minimum wage is a price floor. When an arbitrary price floor is set higher than the market value of a good (labor here), the demand for it falls. Hence, some of the supply of that good (workers) become unemployed. But minimum wage laws "sound good" to people so they've become a popular tool for politicians who enjoy taking advantage of the economically ignorant public.

Price controls are futile, I agree. If minimum wage is a high-jump, its relevance depends on how high you set it. I agree that setting it too high is counter-productive, but not ensuring a minimum wage means that the lowest paid jobs will go unfulfilled anyway. Government intereferes with business to prevent monopolies and price fixing of products, and a minimum wage essentially does the same thing. A perfect capitialist system would result in the powerful being able to bully (exploit, if you excuse my Marxist language ) the less powerful, which brings me to your next point...

Capitalism isn't a system. A friend of mine i think said it best bout capitalism that it was "...a bogeyman created by marx because he couldn't spell mercantilism". Capitalism is nothing more than private property, and voluntary trade. I think also that alot of people have enormous misconceptions about capitalism/free market. One being that people think that the u.s. is a capitalist country. The U.S. , and every other country, is a mixed economy/hampered-market economy. And people also confuse a free market with state/political capitalism. Which i'd say is what exists in the u.s. (corporations using the government to stifle competition. see also corporate socialism).

I agree with a lot of that, farm budgets being just one example. Pure capitalism precludes government entirely. Not very sure what you mean by corperate socialism however.

In any case, I argue that any pure solution is impossible when you have the confounding factor of humanity in the mix, and a sensible balance needs to be maintained.

 

[Joseph2413]

Economic exploitation does exist, for example in sweatshops making £100 shoes for pence in wages. If your argument is that because it occurs (and not objective), it is not explotation, I can find no credence in it.

No, exploitation doesn't exist because it's based upon the Labory theory of value. By this theory, any surplus value b/w the labor that went into production of a good, and the market value of the good is "exploitation". People that believe in Marxist nonsense have absolutely nothing other than pejorativesfor their arguments, e.g. slave wage, exploitation, sweatshops. The clear fact is that those people are voluntarily selling their labor at that rate, however low it may be. It's done so of their own volition. If you want to call that "exploitation" you're just inserting a subjective value judgement. And the "solution" of minimum wage laws won't help those poor sweat shop workers. It'll just kick some of them to the streets. Wealth has to be produced, it can't be decreed.

Price controls are futile, I agree. If minimum wage is a high-jump, its relevance depends on how high you set it. I agree that setting it too high is counter-productive, but not ensuring a minimum wage means that the lowest paid jobs will go unfulfilled anyway. Government intereferes with business to prevent monopolies and price fixing of products, and a minimum wage essentially does the same thing.

No, it's relevance depends upon it's existence. Look, minimum wage does absolutely nothing but prevent those who would be willing to work below the minimum wage from becoming employed, and disemploying those who are no longer profitable to employee at the new minimum wage. If the marginal value of a worker's labor is worth 3$ an hour to me, and now i'm forced to pay him $4/hr then I'm not going to employ him b/c I'm losing a dollar for every hour worth of work.

As for preventing monopolies, was that a joke? The government 'creates' monopolies/oligopolies, not the other way around.

 

[eyrei]

Moderator Action: Joseph2413, please post your own answers to the 'points' of the debate found in the first post. One of the reasons for this structure are to avoid people 'attacking' the arguments of others without putting their own up for scrutiny. Eyrei.
Please read the forum rules: http://forums.civfanatics.com/showthread.php?t=422889

 

[FredLC]

You use a definition of capitalism here which IMO is quite uncommon, because even with heavy redistributions (as in social democratic countries) you still consider the system capitalistic (at least that's the way I interprete this paragraph and other statements you made in this thread).

But that means IMO that the only system we have ever had on earth is the capitalistic system, because people have always strived after becoming as wealthy as possible, to get as much possessions as possible. The people were only limited by the rules of their period.

For example in the feudal system the vassal and the serfs both tried to acquire as much possessions as possible, only the serfs were unfortunately forced to pass a great deal of their acquired possessions to the vassal.

So my conclusion is therefore that with your definition of capitalism, feudalism is a form of capitalism (whereas you consider them two seperate systems).

Sorry for taking too long to reply. I'm in a very busy place of life right now, and while I did intend to answer ASAP, only now I managed to get proper time to do it.

I can see why you needed clarifications on this, so here we go:

My definition of capitalism, undeniably, is somewhat broad; nevertheless, still, there are defining traits that I follow for this, and I'll line my guidelines below.

Before anything, let me assure you this: damn straigth I consider "social democracies" to be capitalistic - at least, in their primary setting - for still, the "heavy distribution" is yet to disnature the primary guidelines of my classification.

Let's have a look:

First of all, all economical system have common caractheristics - at least one common caractheristic, there is - they aim to produce. Certainly, some are more effective at that than others, but still, if we use only this as the criteria, communism and capitalism are the same - both aim to produce, regardless of how effective they manage to be at that.

This said, we have to agree that feudalism also have this caractheristic; it aims to guarantee the capacity of society to produce, being indistinguisheable from either of the above mentioned under this guideline only.

But there are other caractheristics that allow us to perceive ideological/practical differences between the systems. I'll skip communism here, as it's not necessary to deliver my idea, and focus only in the two you compared:

Feudalism:

The system of feudalism was a historical contingency. Born from the remains of the barbaric wars, after the fall of Rome, it was the most able production system, for Europe, at the time, due to a few circunstances, the primary of them being the lack of safety to produce freely, the second being the lack of centralized power (which not only boosted the lack of safety, it also failed to deliver comercial standards and made the practice of trade very difficult - the many different currencies in a small land area being a practical example of that).

Well than; there are several differences between capitalistic and feudalistic caractheristics when it comes to property. See, in Feudalism, the owner of the means of production was the Feudal Lord. He used to exchange the allowance of usage of his land to peasents, trading it for protection against criminals, enemies and barbarians, as well as a (large) part of the production.

What we have, then, is a system that is very different from what we are used to deal with when it comes to relation with means of production - like today, still, the most valuable part of it was still in the hands of an elite - and perhaps that's why under my definition (without this clarification), the systems look alike - but see, in feudalism, the Lord was not *buying the force of labour to produce goodies that belong to him* (like modern capitalists do); quite differently, the labour force belonged to the worker all the time, and he used it at his own discretion. Only that he - the worker - rented the means of production from the Feudal Lord with the duty of surrendering a significant part of what was achieved with the appliance of such force.

The boundary, than, was between man (worker or Lord) and land; and the flowing of the wealthy was dependent on which position the person occupied in his relation with the land. Should a Lord die, or trade, or loose, his lands, for whatever reason, the worker would go with them, and have the same linkage with whoever now possessed the means.

Also, the bondage between Lord and Worker was different from now - they weren't "equal" (legally speaking); there is, two parts making a deal with what they owned; the position of the Lord was inherently, not practically, superior, and the decision to call off the arrengement belonged to the Lord only. Also, it was invasive of the workers life, as the power of deliberation of the Lord surpassed the economical sphere, and he actually ruled all aspects of the life of the vassals.

Capitalism:

In capitalism, we see a very different realationship. The boundary now is still between man and possession, but no longer a triple "vassal-land-Lord"; the link is now only between "capitalist" and "possession". There is also a link between ordinary worker and his own possession (what for the most lacked in feudalism, as then people owned no productive possession - so while now we have "micro-capitalists", back then there were no "micro-lords").

The working link now, however, is no longer between man and land; it's now between "man" and "capitalist". A relation between people, and a relation between *formally* equal people, that can theoretically be undone by any part at any given moment. Now, work is no longer the currency the worker use for the privilege to dispose of the land - Now, work is a *commodity*, bought by the capitalist for appliance in a mean of production that is handled, but never is at disposition, of the worker. This is a very distinct linkage than the one of feudalism, and a quite smarter one, for it allows for the protection of owners rights without the blurring factor that is a "third party" possession, a relation that would be troublesome if the parts were not unequal in feudalism.

The mindset differences:

While these are the practical guides to separate the systems, still, your critique of my definition would be meritorious if it was not for this aspect that I'll now handle - for this is where the systems really separate one from the other.

First, let me bring the key aspect of my definition:

“Capitalism” is a system where the right of ownership, and the disposition of such ownership, to commercial or personal purposes, are the primary guidelines for the civilian relations.

Well, in capitalism, that is true. When a farmer grows plants, it's not the growth of the plants "per se" that he wants. What he wants is to maximize his level of ownership, what he does through the appliance of the workforce over the work mean. Theoretically, the desire for wealthy and profit is superior to the desire of the pratical result (a good crop), and hence, a farmer would burn his production to the ground if someone payed him more cash to do it than what the crop was worth.

Now, in feudalism, also, it's not the product "per se" that is desired; what is desired is survival, that the product (crops) will guarantee. Also, someone would burn the crops for a larger crop, but you see, "owning" the "production" (not the weathy) is the finalistic goal. In feudalism, exchanges happened strictly due to necessity, not for the desire of the enlargement of the level of ownership.

Also, as said, the relation was an unequal one, where the boundaries between people, ordinarily, were friendship, and these between vassals and Lords were relations of subservience. A vassal would not (and could not) leave his Lord for another Lord offering better conditions; he was bound to the land he was born at (as good or bad as it was), and indirectly, to whoever owned it.

Hence, in feudalism, the "primary drives" for civil relations (not human relation, but civil relations, there is, those between man and means of production) were subjective (family ties, friendship, and subservience/power between Vassal and Lord), and not objective (to acquire more wealthy). Sure, more disposition of goodies were welcome, but a man would not have an urge for more than the strictely needed - like we have today - nor, generally, even the theoretical capacity to enhance - these been the main factors that determined it as a inferior system.

Social Democracies are capitalists:

Well, given the concise clarification above, I think you should have no problem understanding why I consider "social democracies" as capitalists. Nevertheless, just in case, let me put it in clear words: they are capitalist because, in them, the relation man/capital follow the basic structure of capitalism. The dread consequences that are inherent to capitalism - the tendency to over-accumulation, and the exclusion of a significant part of human beings - are mitigated by state intervention. Still, this mitigation does not alter the quality of the mindset behind it.

See, capitalism is very adaptable, and had many variations (pure metalism, mercantilism, laissez-faire and social democracy), these being just the approach on how the mindset of accumulation is dealt, and what are the limits it finds... but not a challenge to the essence of the mindset.

Well, I hope that the lines of my overview is clear now, but if it isn't, please feel free to ask whatever you wish (just don't hope for a fast comeback).

Regards .

 

[FredLC]

Joseph, while you have not stated your position officially, nor answered the topic questions, I think your stand is clear enough so you can get a reply, so here it goes:

No, exploitation doesn't exist because it's based upon the Labory theory of value. By this theory, any surplus value b/w the labor that went into production of a good, and the market value of the good is "exploitation". People that believe in Marxist nonsense have absolutely nothing other than pejoratives for their arguments, e.g. slave wage, exploitation, sweatshops. The clear fact is that those people are voluntarily selling their labor at that rate, however low it may be. It's done so of their own volition. If you want to call that "exploitation" you're just inserting a subjective value judgement. And the "solution" of minimum wage laws won't help those poor sweat shop workers. It'll just kick some of them to the streets. Wealth has to be produced, it can't be decreed.

I bolded that particular excerpt because I wanted to demonstrate that you are in fact incurring in the very same error that you accuse them of doing; you are making a strawman of your opposition. So, criticism on capitalism is “Marxism nonsense”, mere “pejoratives”, huh? Don’t they have any value in and on themselves?

Look, first of all, the ideal of the “people doing things at their own volition”, the laissez-faire creed, is as delusional as anything Marx proposed. People act on their volition only to a limited extent – and in fact, it’s very uncommon that it’s people’s free desire that lead them to their economical choices.

What really drive people’s decisions are their necessities, which influence their desires in a pursuit of the best achievable combination. Hence, people’s decisions are not completely “free”, as the classic liberalism desires; people are oppressed by circumstances. Most certainly – and perhaps this is the most clever achievement of the modern economical setting – it’s difficult to point faces to blame for the inherent oppression of the capital; it’s a systemic oppression, one that does not require soldiers pointing guns at civilians… but it’s oppression still – people giving up their true desires, and surrendering to unsatisfactorily working conditions and compensation, under the floating menace of abandon, and starvation.

That is where due criticism have it’s place, and what makes “sweatshops” and the likes of it truly immoral, instead of being “mere pejoratives”. People of means pretend not to know that people, compelled by misery, sell their dignity to have a little less misery. They recite the “they chose to do it” excuse as gospel, and as if they truly was so shallow as not to know that nature can torture as hideously as any oppression, and that hunger is as much coercion as a whip.

Is it a subjective judgment? Hell, yes. But here goes a newsflash for you – we are subjective beings, that can perceive right and wrong, justice and injustice, in layers deeper than that of “how much money can be made with this behavior?”.

According to Francis Bacon, and very right he is, “the measure of one’s true freedom is the number of choices one has”. So, a person that has a choice between working for bananas and starvation really has but a shadow of what freedom is. And those who take advantage of that disgrace does deserve the criticism they get, whether they like it or not.

No, it's relevance depends upon it's existence. Look, minimum wage does absolutely nothing but prevent those who would be willing to work below the minimum wage from becoming employed, and disemploying those who are no longer profitable to employee at the new minimum wage. If the marginal value of a worker's labor is worth 3$ an hour to me, and now i'm forced to pay him $4/hr then I'm not going to employ him b/c I'm losing a dollar for every hour worth of work.

Here you have a very limited overview of the problem. You see, you are right that, if “minimum wage” was abolished, probably wages would be cut lower and more people would be working. However, the “minimum wage” level is not a channel to raise pays beyond the system’s capacity – it’s a guarantee that the value paid would be no less than the necessary for a person to survive with dignity.

If the price of that is that there is a smaller number of jobs available, than what we have is a disequilibrium in the system, for whatever reason, that makes that either some people have no jobs, or all people have jobs, many of them still not having enough to survive. Hardly a solution.

Welfare, so criticized, aims to guarantee that people will still have dignity when they lack job skills for whatever reason. You see, the very reason you are right on the augmentation of the workbase demonstrates my case here - people will work for less than what they need, if circunstances press them hard enough.

And that said, it’s all abaout a political choice on how to approach that disequilibrium: should society think about how much money it’s making, or should it think of the dignity of its members?

I vote for number two, but hey, whatever floats your boat, my friend.

As for preventing monopolies, was that a joke? The government 'creates' monopolies/oligopolies, not the other way around.

You should really look up a little about what are oligarchies, and what anti-trust laws are good for. You see, society does create monopolies; but it also dismantles several of them. You see, power loves more power, and it aims to accumulate – that is a sad fact of life. Economical power and political power being different, and competitive, one keeps the other in check. The problem happens when one of the two goes rampant – either one, not only political (governmental) power.

Regards .

 

[Scuffer]

No, exploitation doesn't exist because it's based upon the Labory theory of value. By this theory, any surplus value b/w the labor that went into production of a good, and the market value of the good is "exploitation". People that believe in Marxist nonsense have absolutely nothing other than pejorativesfor their arguments, e.g. slave wage, exploitation, sweatshops. The clear fact is that those people are voluntarily selling their labor at that rate, however low it may be. It's done so of their own volition. If you want to call that "exploitation" you're just inserting a subjective value judgement. And the "solution" of minimum wage laws won't help those poor sweat shop workers. It'll just kick some of them to the streets. Wealth has to be produced, it can't be decreed.

This is not the sense in which I use exploitation. I am not referring to the Labour theory of value here, or indeed any other economic theory. I know nothing about them. Nor indeed I am limiting it to a lack of a minimum wage. Instead, if a thing (person, group, company, whatever) holds a position where its power can not be challenged or usurped, it is in position to use that power in a way that prevent other things from selling/buying in a free market. Whether wages, diamonds or computer operating systems, where a thing has domination over the market, it can exploit it.
In such a situation, where buying/selling is essntial, buying or selling is not voluntary. Starvation wages or actual starvation is not a business decision.

No, it's relevance depends upon it's existence. Look, minimum wage does absolutely nothing but prevent those who would be willing to work below the minimum wage from becoming employed, and disemploying those who are no longer profitable to employee at the new minimum wage. If the marginal value of a worker's labor is worth 3$ an hour to me, and now i'm forced to pay him $4/hr then I'm not going to employ him b/c I'm losing a dollar for every hour worth of work.

Is this based on actual expereience? In the UK, we introduced a minimum wage in 1996(? - ish anyway) It stands at about $8/h (exchange rates & cost of living obviously affect the value of this to US views) and we have had a sustained period of growth in the economy and a sustained drop in unemployment

As for preventing monopolies, was that a joke? The government 'creates' monopolies/oligopolies, not the other way around.

Please expand.