The Economics Spin-Off Thread!

[danaphanous]

Over in general discussions here, we were discussing the announcement that civilization V will be used in American classrooms to teach things like economics! A lot of off-topic economic discussion ensued and the mods told us to move it so I'm opening a thread here.

I know a lot of people have strong ideas about this stuff so if you contribute to this discussion please be civil. No assumptions, no ad hominem, etc. I love economics and would love to just chat with other players who do as well. Here's some of the stuff we were talking about and my opinions, and I lean more towards free market economics just a warning! Economics as a science is not really political, it's mathematical. The way we express our ideas about how it should be is where politics enters.

I'm gonna copy over a bit of the discussion here:

My first 2 points:

taxing businesses directly is silly. A business is not a person, it's what supports the economy by buying/selling and hiring people. it does NOT help employees or buyers but just raises prices as businesses just amortize any costs they get. You can tax individuals when make money from their business but don't tax the business for existing and don't tax a business for investing its profits into growing as this creates jobs. I see taxing businesses heavily as just directly hurting the economy as it raises entry barriers to starting new companies and entrepreneurship and makes everything cost more. It also serves to keep established businesses in control ironically because its harder for new companies to get started and compete with all the red tape.

The same goes for setting a MINIMUM wage at AVERAGE living level. That's silly as well, it erases entry-level jobs and makes it harder to get a new job. Why do you think unemployment for the young generation is so high in places like California and jobs are good in places like Tennessee that didn't set minimum wage too high? I can remember over the past 15 years fast-food like MacDonalds going from having 15 people working in the back to 4-5 today. Why? Minimum wages. MacDonalds doesn't want to make their food expensive because their whole selling point is cheap&fast! So they instead make their existing employees work harder and hire less of them. Oh, and your food also takes 2-3x as long to make because of it. And we wonder why young people have a hard time getting jobs...if these places were allowed to hire new people for less they'd immediately do it, but they can't because these places have to make money to survive. So we've erased millions of jobs to make those with jobs already more comfortable. I liked the old way where you started at a low wage that was below average living level but quickly got raises if you worked hard. Places like MacDonald's actually used to work this way to encourage employees to work hard and stay since getting new low-paying jobs was pretty easy. Good luck getting a raise there today.


We had a few positive responses and one negative, I'll copy the opposing answer here:
Alleria:

I'd like more libertarian propaganda right down my throat, please.

Debunking all that is wrong in this post would take way too long, especially in English as this is not my first language, so I'll keep it to rhethorical questions aimed at your first paragrap to put into perspective your "knowledge" about economy.

Did you know that income tax for companies is calculated based on profits, i.e. on the revenues, less operating expenditures, less financial expenditures, less exceptional expenditures, less capital expenditures? In other words, do you realize that this means that income taxe does not impact a company's ability to create value through its activity at all, and only impacts profits that will be paid as dividends? Do you realize that this means that income tax is not a barrier of entry? Do you actually even know how the P&L of a company works?

As for minimum wages, you probably have never heard of Fordism: if people can't afford the goods and services that you produce, your economy is trash.

To conclude on your introduction, yes, it would definitly be nice if all citizens actually had some background on economy, maybe they would not spout libertarian propaganda on the forum of a computer game. And for your information, libertarian is not economy, it's an ideology. You should take a look at how well ideologies fared in the past century, and you'll get an idea where the libertarian ideology is going.

My response, (moved here by request of mods):

I'm not sure why you call me a Libertarian, I never used that word and am not in the movement. Libertarianism is more of a philosophy about the government and how much power it should have, and only tangentially related to what I was talking about, though maybe they've said similar things? If so it's coincidence because everything I said is basically my own conclusions after taking economics and studying the current system. Now, I agree a modicum of governmental regulation is needed to prevent established companies from putting in their own barriers (monopolies), prevent companies from disadvantaging others when they are not aware (pollution, releasing cancer-causing agents during manufacturing, etc), and to promote law and order and maintain the fairness and prevent foreign invasions or market takeovers. I approve of these kinds of government intervention and regulation, but we've moved well beyond this.

Yes I'm aware federal minimum wage is calculated from a standard of living system, however I'm gonna give you a pass here that you would not know that individual states and cities can set it arbitrarily higher to whatever they want and there have been plenty of instances of politicians saying they'll change it for their city, getting in office, and setting it too high and unemployment being created. It's why I think politicians should not be able to have the power to change it or make it a part of elections and we should accept a more absolute standard such as the federal standard for now (though I think they overcalculate it looking at the things they consider, I've lived without plenty of that stuff before when things were tight in the past). You and many people seem to be confusing minimum wage with average wage, they should never be the same, the minimum wage, by definition should be the lowest livable wage, this is all I'm saying. If you set it any higher you erase those low-paying jobs and there are less entry-level jobs. In an ideal system you enter on the minimum wage and quickly get raises if you work hard. Today it is high enough to be comfortable and you have the opposite where many people make minimum wage most of their life. This system has less jobs, which was my point. We complain about young people in America having a high unemployment rate and difficulty finding entry-level jobs but won't point to the obvious culprit, the too-high minimum wage. Plenty of companies would hire more people if they could pay less, I'm not arguing for abolishing the minimum which seems to be what you thought. I'm well aware that before the minimum there were lots of abuses such as whole families of immigrants needing to work 18-hour days just to live due to over-abundance of workers. But you set it too high and workers no longer have the freedom to easily find jobs since they are scarcer. The balance is somewhere in between.

Also I'm confused by your trash economy example. Minimum wage is not what sets the living standard or affordability of things. The government has never had that kind of control, how do you think companies respond to changes in the minimum wage? If it goes up that's an immediate extra cost so they either fire some employees and work the ones they have harder or they make the prices on their services more expensive. The government can't suddenly make everyone have great lives by doubling the minimum wage. They tried that in California and what happened was California became about twice as expensive to live in as the rest of the US over the next couple years. This is why I say the government mandated wage can't control the living standard. Things were affordable for the majority of people in America long before minimum wages ever became a thing. This is because prices are driven by supply and demand not by the government's arbitrary ideas of what things should cost or how much people should make. In fact, the places you are probably thinking of where lots of unaffordable goods were being created and the economy "was trash" are cases where the government had the ability to set prices or quotas. (basically non free markets) A famous recent example is Russia where there were endless cycles of shortages and surpluses thanks to the government setting prices instead of them being set naturally by buyers and sellers willingness. Why do you think business happens at all? Because people are willing to buy stuff. In your trash economy example, if it was a free market and no one can buy stuff those businesses either lower their prices or go out of business! Thanks for the link on Fordism though, interesting article there! You may be thinking of case examples, such as the immigrant family I idealized above. These things do happen in a free market with no minimum wage but the economy can't function without most people being happy with the current prices. Free markets are a bit utilitarian like that but it's striking that most other kinds of systems have been even worse. This is why I am happy with the compromise of a minimum wage, but one low enough not to remove too many jobs. I hope my examples made sense to you here as a lot of people don't understand all the effects something like a minimum wage has.

I know companies are only taxed on their profit, I'd have to be an idiot to not know that. But reinvesting money into themselves to grow falls under that category even though that is creating jobs and value for the economy so we are still taxing companies for existing and growing. You seem to be conflating business profits with individual profits. The most value in the economy is generated when the supply and demand is free to meet naturally. The more restrictions, taxes, fees, etc. you have the farther you push the market from this equilibrium therefore creating less "transactions" and the economy generates less value (created by moving goods from one place where they are worth less to someone they are worth more too) It's simple math really, taxes on individuals doesn't affect this at all other then giving them less money to spend, but taxing businesses DOES because they amortize these extra costs (and yes after-taxes is planned in advance by most companies as a "cost"). They usually handle higher taxes by either increasing the cost of their services or paying employees less. This is the most common effect, not simply "less" profits as people think. Even if it was just less in profits without these price changing effects less profits means a successful company has less money to invest in growing itself and hiring new people, so it definitely has bad economic effects. Now, back to prices being raised by taxation: there is another effect as well and that is to reduce the amount of sales in the economy, meaning it's less healthy. This is pretty much accepted as economic fact and I'm confused that you would not realize they have this effect as the rest of your discussion seems solid. This is why I draw such a distinction between taxing individuals and businesses: the economic results are not the same and the effects for one are quite a bit different then the other.

You talk about business taxation like it's always been, it hasn't. We used to only tax the individuals that made the money. What is the effect of this? It encouraged businesses to reinvest their profits and grow themselves creating more jobs because if the owner took all the profit every year he would get high taxes on it all but keeping the profit in the company and growing it was tax free. Some people say this is an unfair tax shelter but not really. If the owner ever sells their business or tries to take the money out he gets taxed on it so its fair. Under this system there was a big incentive to hire people and expand. Bernie Sanders talks about this but in a skewed way. He doesn't want to lower business taxes but just raise income taxes higher for the same effect: less taxed to reinvest the business profits then take them home. Ironically, he accuses the Republicans of being greedy for lowering business taxes when this has the exact same effect of making income taxes higher then business taxes, which is healthy for the reasons I've talked about above. Anyway, the fact that the government can change business taxes every election year is a major problem because it encourages business collusion. Businesses will fund candidates solely to get tax breaks and advantages, or if they are trying to drive a struggling competitor out of business sometimes even higher taxes is good for them for 4 years. But the current system in America is broken where companies can privately donate billions to candidates who then immediately change the taxes the next cycle. It's why I think no business taxes is better, it prevents this abuse altogether AND is healthier for the economy since it is a major encouragement to businesses to expand and grow which creates jobs and means more people get hired. And contrary to popular belief removing business taxes won't make the big cats much more money because they still get higher tax rates for taking more profit home personally--its biggest effect is as I said to encourage businesses to grow and hire people.

Anyway, back to your discussion, yes there are entry barriers to business when businesses are taxed and regulated. I'm not sure why you think there are not. I've worked for companies and I've had my own small "businesses" and sources of income on the side and I can tell you, the money I made from my own enterprise was taxed quite a bit more even though it was very little because I technically "owned" a business even though I wasn't making much money. That's an entry barrier right there discouraging people from working for themselves and it makes established companies that are used to the complex system more likely to stay in power. Contrary to popular belief having a system of manipulable business taxes is great for the big businesses currently in power, it hurts little businesses and startups the most which is a shame. I know this from personal experience of the US tax system as a worker and an entrepreneur.

ok...that was more then brief, sorry but I AM passionate haha.

Anyone agree/disagree or want to add their insights? These are my opinions of course, keep that in mind and be respectful.

 

[Old Hippy]

The same goes for setting a MINIMUM wage at AVERAGE living level. That's silly as well, it erases entry-level jobs and makes it harder to get a new job. Why do you think unemployment for the young generation is so high in places like California and jobs are good in places like Tennessee that didn't set minimum wage too high? I can remember over the past 15 years fast-food like MacDonalds going from having 15 people working in the back to 4-5 today. Why? Minimum wages. MacDonalds doesn't want to make their food expensive because their whole selling point is cheap&fast! So they instead make their existing employees work harder and hire less of them. Oh, and your food also takes 2-3x as long to make because of it. And we wonder why young people have a hard time getting jobs...if these places were allowed to hire new people for less they'd immediately do it, but they can't because these places have to make money to survive. So we've erased millions of jobs to make those with jobs already more comfortable. I liked the old way where you started at a low wage that was below average living level but quickly got raises if you worked hard. Places like MacDonald's actually used to work this way to encourage employees to work hard and stay since getting new low-paying jobs was pretty easy. Good luck getting a raise there today.

minimum wage is not set at average level of wages but at survival level of wage, at current rates that is average wage is $25.59 (2016)that is not minimum wage but something entirely different and has little effect on entry level jobs

I disagree with your premise that McDonalds are not business savvy enough to know that employing less staff makes more profit they might have had more staff years ago but they have timers and bells on the fries machine now and the guy on the drive-through goes to take the fries out of the fryer, the jobs you are talking about have been automated, they no longer exist, it is no wonder why young people have a hard time getting jobs

McDonald's is not going to pay someone $1.00 an hour to stand around and do a job that is not required. if they were required, some one would be doing them, if they are not required, they are not jobs

it is just the same old argument that people can do jobs below the poverty line because if they don't they are somehow the ones responsible for how people are not getting hired. the jobs have gone overseas and are paid 25 cents a hour.

 

[Cheetah]

taxing businesses directly is silly. A business is not a person, it's what supports the economy by buying/selling and hiring people.

I didn't fully read the rest, but just for this point, I'd like to point out one thing:

As long as corporations are legal persons with all the rights modern states have decided to award them, it seems natural that they should also pay taxes, and take on any other financial and legal responsibilities which natural persons must. Otherwise it will just create an uneven playing field, and unreasonably favour corporations.

The alternative, of course, is to go back to how it was until the 1870s or so, in which corporations were set up to solve a single project, and had a finite existence, in which afterwards the owners got their share of the profits or losses.

 

[Cutlass]

Business taxes are not 'silly'. However, and I say this as a liberal with something of an economics education, they are bad policy. That's for a great many reasons. But the core reason is something called 'tax incidence'. What that's about is who the tax actually falls on. And not all business taxes fall the same, because firms are in different markets and face different conditions. But, that said, the majority of business taxes fall on the firm's workers, some on the firm's consumers, and little if any on the firm's owners. It also reduces investment. And there's several other negatives I could talk about if you like.

As to the minimum wage, don't make any definitive statement too quickly. Because of the structure of the labor markets, something called monopsony conditions exist. That means that labor is not part of a free market, but rather firms are not competing with setting wages, and so 'free market' wages are set below what would actually occur in an actually free market. A minimum wage is because of this actually correcting a market failure. The evidence does not say that the minimum wage reduces the quantity of jobs. The evidence is actually inconclusive. Setting a minimum wage which was significantly above workers' marginal product would cause job losses. And that would be true in most of the country if the MW was set to $15/hr. However, under current conditions setting the MW to $11-12/hr probably would not cause job losses, and would be an efficiency gain to the whole economy.

But the MW by itself isn't the best poverty fighting tool. And a, much, higher Earned Income Tax Credit or a Negative Income Tax would probably be better for reducing poverty.




People misuse the term 'free market' pretty much all the time these days. It's not a thing. And they also misuse the term 'socialism' most of the time too. It's a dead and obsolete thing which doesn't have enough supporters left to fill a single football stadium. So in virtually all the cases where in the modern American context when people start talking about how good free markets are, and how bad socialism is, they really don't have their terms correctly defined. The reality is that neither one actually exists. Not as the proponents of them tell you that they do.

The reality is that every economy from the time of the dawn of economies and from now until doomsday have been, are, and will be, mixed economies.

That's right, boys and girls, the only type of economy is a mixed economy. Part private market, part state control. It is the only thing that there is. It is the only thing that there ever has been. It is the only thing there ever will be. Unless you want to go to a model that has no society larger than a singe village in which every person is known to every other person, and there's no outside contact, this is what you got. Deal with it.

So there is no debate between 'free markets' and 'socialism'. It's all a mixed economy. Now once you understand that, the question becomes where to draw the line.

 

[MagisterCultuum]

Taxing anyone (business or individual) based on income, trade, or any productive activity is silly, at least until we have exhausted the opportunities to tax negative externalities (including the monopolization of natural resources). Taxing land values and pollution could probably provide more revenue than the state would ever need to fulfill all of the functions it has any business performing.


Having any minimum wage at all is a very poor substitute for a Basic Income Guarantee or Citizen's Dividend.



When discussing a company like MacDonald's it is important to keep in mind their business model. MacDonald's corporate is extremely profitable, but they are really focused more on real estate speculation than on food preparation. They don't pay low wage food service workers at all. That is the responsibility of the local franchise owners, who generally don't have high profit margins.

 

[Old Hippy]

Having any minimum wage at all is a very poor substitute for a Basic Income Guarantee or Citizen's Dividend.

who actually has a basic income Guarantee or citizens dividend so I disagree that it is a poor substitute. Tho I did hear that Alaska gives $1884.00 this year, still think a basic minimum wage is better if you want to eat all year

 

[warpus]

As long as corporations are legal persons with all the rights modern states have decided to award them

They aren't though, when's the last time a corporation was convicted for murder or homicide, and punished accordingly?

 

[danaphanous]

I'm not as familiar with the terms basic income guarantee or citizens dividend, I'l have to look these things up.

I agree with Old_Hippy that federal minimum wage is supposed to be set at the minimum survival level, because they understand the ramifications of making it too high. But states and cities can decide to set it higher and they do, making it an election issue which I think is a bit foolish. My point was about states that set it even higher arbitrarily through elections without scientific or mathematical backing. Each state should run the living cost calcs and set it to the result. Not set it arbitrarily or through elections. California for instance. It is not a coincidence that they set much higher state minimum wages and living costs rose over the next few years. It is now almost twice as expensive to live in even though they get twice the normal minimum wages in many areas. As the saying goes, if you give everyone a million dollars its no longer worth a million dollars. I'm pretty sure it is true that minimum wages do erase some jobs, it just makes sense if you think about it, and I've had economic professors admit this to me. but maybe for macdonald's example it is more about automation. I don't disagree that automation removes low paying jobs but it hasn't removed all of them at the moment and there are still jobs $1-2 below minimum wage that would exist if it wasn't there. The question is, what is the greatest good for everyone? And that is the logic of minimum wage. I think we all agree that we want to set it at a low enough level it doesn't remove too many jobs but at a high enough level everyone can live on what they make and that is it's purpose. Feel free to correct me if I misunderstand the issue but this is my understanding from microecon.

It seems like we mostly agree Cutlass. That was also my point about business taxes that the tax burden falls more on the employees or buyers as businesses just amortize any extra costs in an effort to get the profit margin they want and that it also reduces investment. All these are negatives. I actually would like to hear about the others you seem to know of because you've already listed my main points. I've heard this argument before that increasing the minimum wage by a little bit causes very little job loss and an efficiency gain to the economy. The idea being it gives people more money to spend and improves the economy the next year as a result. But I think it is pretty undeniable that if you give people more money to spend by raising minimum wage prices creep up over the next 2 years or so and you're back where you started. It promotes more rapid inflation of product prices. This, to me, which has happened in certain areas with high minimum wage tells me that those wages instituted in places like California actually were higher then they should have been. Anyway, subtle point, I think for the most part we agree, but except for our ideas of the long-term effects. Changes like this to the economy of california, the best case study for 15 dollar minimum wage, indicate to me the simple concept of supply and demand. The issue is it does take the prices a year or so to catch up to changes in the minimum wage. But I admit it is hard to know for sure, perhaps $11-12 is not high enough to cause this price inflation phenomenon. I don't know I haven't done the research and it seems like you have, but I do know that very few goods are static in price. If more people get more money to buy them, almost inevitably the prices for it go up. The reason being most goods prices are set to maximize profit at the current demand. If you increase demand by giving people more money, companies figure out they can make more profit at the higher price. There is always this equilibrium point. Maybe after everything stabilizes life is better for most people then it used to be but it's an effect that has to be considered when we mess with MW. It doesn't simply correspond to raised living standards which is a big part of my discussion in part 3 of the original post. I tend to believe that the biggest promoter of increased living standards and prosperity is NOT MW but progressing technology. As we reduce the costs in making things, businesses actually can make a bigger profit at lower prices and open the market to people that have less. This is the main reason living costs have gone up over the past century imho and it is why even poor americans have television, water, electricity, air conditioning, and food. We've made all these things cheap.

I agree with you that free markets have never, and can not ever exist in the pure form and that every country has a mixed market. But I think the line should have been drawn farther back then it is now. Other people disagree and say we moved to where we are now because the less regulated market had problems. From my study of market history I say that some of that is true but not all. The reason being a lot of the changes made came from politicians and elections, and market panics like in the great depression. The average person doesn't understand economics, so to put policy power in their hand by allowing politicians to campaign on things like: free college, $15 minimum wage, etc. often means these things will make it into policy because people want these things. It happens for this reason not because these systems are actually better, rational, or addressing huge problems.

 

[Traitorfish]

That's right, boys and girls, the only type of economy is a mixed economy. Part private market, part state control. It is the only thing that there is. It is the only thing that there ever has been. It is the only thing there ever will be. Unless you want to go to a model that has no society larger than a singe village in which every person is known to every other person, and there's no outside contact, this is what you got. Deal with it.

I mean, there was a world before 1850, so you might be over-generalising just a smidgen.

But, yeah, so far as modern capitalist society goes, mixed economy is the inevitable rule. I'm not even sure that "mixed economy" is a useful term, because it presents the market and the state as two fundamentally distinct spheres which overlap in certain circumstances, where the reality is that economic activity simply weaves its way in and out of that part of society we've bracketed off as "the state". The ideal of a stateless market is every bit as fantastical as the Stalinist ideal ideal of a marketless state.

 

[Cutlass]

I mean, there was a world before 1850, so you might be over-generalising just a smidgen.

But, yeah, so far as modern capitalist society goes, mixed economy is the inevitable rule. I'm not even sure that "mixed economy" is a useful term, because it presents the market and the state as two fundamentally distinct spheres which overlap in certain circumstances, where the reality is that economic activity simply weaves its way in and out of that part of society we've bracketed off as "the state". The ideal of a stateless market is every bit as fantastical as the Stalinist ideal ideal of a marketless state.

I have yet to see an argument that society before capitalism but after the rise of cities didn't have markets. A village highly isolated from the rest of the world might not have had markets. But markets =/= capitalism. Pre-Columbian Indians may not have been really market economies, but they did have the concept of trade. We know that they did engage in trade, and that's market activity.

I tend to think that "mixed economy" is a necessary term to use. And the reason for that is that the alternative terms only breed misunderstanding.



@ danaphanous:

The minimum wage cannot cause inflation. Why not? Because MW earners are well under 2% of the labor force, and even further under 1% of the total wage bill and consumer purchasing power. In short, there's just not enough money involved to be a statistically identifiable issue. Statistically speaking, the noise in the system from measurement errors, the margin of error itself, is many times larger than the maximum pressure a change in the MW could possibly apply on prices. And, even where that not true, it's extremely difficult for inflation to ever be larger than what the central bank decides to allow it to be. So if there were inflationary pressure, monetary policy would convert that to higher unemployment instead. But, as I say, the number are just too small to identify cause and effect.


Further, the US economy is very severely under-regulated. That's why lawsuits are so out of control. Rather, say that the US economy is very poorly regulated, because anti-regulation political forces have much stronger access to elected officials than people who want regulation have. When a company like General Motors can intentionally kill a number of their customers because not doing so might cost them $1-2 more per car, you can't call that an over regulated economy.

 

[Traitorfish]

I have yet to see an argument that society before capitalism but after the rise of cities didn't have markets. A village highly isolated from the rest of the world might not have had markets. But markets =/= capitalism. Pre-Columbian Indians may not have been really market economies, but they did have the concept of trade. We know that they did engage in trade, and that's market activity.

I'm not sure that's true. Exchange can take the form of gift-giving or tribute as well as trade, and where trade does occur in pre-modern societies, it can be sporadic and opportunistic, rather than the sort of regular interactions we'd need to describe it as "market activity". So if you're conflating exchange with trade and trade with markets, at that point, why not conflate markets with capitalism, when all the hard work is behind you? No point making the fine distinctions if we're neglecting the big ones.

I tend to think that "mixed economy" is a necessary term to use. And the reason for that is that the alternative terms only breed misunderstanding.

The alternative term is just "economy". If we really want to get people away from the idea that "the market" and "the state" are two distinct spheres of human activity which occasionally interact, you have to attack the idea at its root, not just insist that the interactions are inevitable.

 

[Cutlass]

I'm not sure that's true. Exchange can take the form of gift-giving or tribute as well as trade, and where trade does occur in pre-modern societies, it can be sporadic and opportunistic, rather than the sort of regular interactions we'd need to describe it as "market activity". So if you're conflating exchange with trade and trade with markets, at that point, why not conflate markets with capitalism, when all the hard work is behind you? No point making the fine distinctions if we're neglecting the big ones.

I don't agree. "Markets" only refer to a system where there is exchanges. It requires not size, not regularity of operation, not formalization of any sort. All that is required is the quid pro quo and lack of compulsion. Any time 2 or more people meet and and say "I give this to you, on the condition that I get that from you", that, at it's most fundamental level, is a market. Going further than that is both overthinking it, and over complicating it. And so pushes us away from understanding.

Markets don't require capitalism. "Capitalism" is actually an incorrect word to refer to an economic system. "Capitalism" is more of a descriptor term for an aspect of market economics. The aspect where people collect savings, and use savings to finance business ventures and expansions. But that is not necessary to having markets, market exchange, or a market based economy.

The alternative term is just "economy". If we really want to get people away from the idea that "the market" and "the state" are two distinct spheres of human activity which occasionally interact, you have to attack the idea at its root, not just insist that the interactions are inevitable.

The interactions of the two are inevitable. The problem comes from people who don't realize that.

 

[danaphanous]

@ danaphanous:

The minimum wage cannot cause inflation. Why not? Because MW earners are well under 2% of the labor force, and even further under 1% of the total wage bill and consumer purchasing power. In short, there's just not enough money involved to be a statistically identifiable issue. Statistically speaking, the noise in the system from measurement errors, the margin of error itself, is many times larger than the maximum pressure a change in the MW could possibly apply on prices. And, even where that not true, it's extremely difficult for inflation to ever be larger than what the central bank decides to allow it to be. So if there were inflationary pressure, monetary policy would convert that to higher unemployment instead. But, as I say, the number are just too small to identify cause and effect.


Further, the US economy is very severely under-regulated. That's why lawsuits are so out of control. Rather, say that the US economy is very poorly regulated, because anti-regulation political forces have much stronger access to elected officials than people who want regulation have. When a company like General Motors can intentionally kill a number of their customers because not doing so might cost them $1-2 more per car, you can't call that an over regulated economy.

Interesting view, thanks for sharing! When I say price "inflation" I am not talking about general inflation which is controlled by the US printing more money directly. There is also control over spending via interest rates on loans which I'm aware has a bigger effect on spending then MW probably. Price inflation is different. It can happen without changes in the amount of money. All that is required is that employees are paid more and things cost more. This is exactly what California is like. The variance is limited, yes, but there. Are living standards in California better for their higher MW? It's hard to say and I'd need a source, but the connection is difficult to make since Californian economy is different then other states. But I think you can definitely say that higher MW didn't hurt the Californian economy much, so maybe it's fine. I tend to think it probably caused slightly higher unemployment but maybe it was negligible, I'm not an expert just thinking about the obvious cause and effect. I wonder if the positive effect is a lot smaller then we think.

"too small to cause an effect" is definitely an opinion statement. I'd like to see math because from my experience 2% of the population and their spending money definitely has AN effect. You can't just say that because it's 2% and 1% of the total spending money the effect can't be big. 2% of 350 million is still a lot of new spenders if they suddenly have enough money to buy new things in certain sectors. I guarantee you prices go up in the sectors they do spend in even if those sectors are limited. Because there is always a maximum profit equilibrium point and generally more consumers with money means higher prices the next year. This is a basic microecon effect. It doesn't matter that more spenders means more money then last year, companies look for the maximum point and if there is suddenly a lot of new demand they see how high they can set prices without losing too many of the new customers.

I also have no idea of the degree of the effect but you can't just assume it's small, we need a study, can you link me the study you saw on this because I am curious to read more on the subject. thanks for your interesting insights here!

EDIT: I looked up numbers on minimum wage earners, I saw that only a few states have 1-2% on federal minimum wage, many have higher numbers the states with the lowest percentage on it are: Alaska, California, Oregon, and Washington (basically the entire West Coast) and these are the ones quoted as 1-2% and maybe where you got your numbers. But this is probably more because these states have higher mandated minimum wages then federal so most MW earners are naturally above the federal rate. Now this begs the question why there are 1-2% on the federal at all if the West coast mandates it be higher. The only ones that aren't are those on disability or with special exclusions to work for less to make them more marketable. The reason the government allows this is in the current system in those states those people would be permanently unemployed otherwise since they have disabilities that impede their work. This exclusion status allows them to make some money at least. This was my point in the beginning about high MW. Interesting read here.

source: http://www.bls.gov/opub/reports/min...racteristics-of-minimum-wage-workers-2014.pdf

 

[Camikaze]

They aren't though, when's the last time a corporation was convicted for murder or homicide, and punished accordingly?

Well, when was the last time a corporation formed the requisite state of mind to actually qualify for liability for murder? It's not that corporations aren't subject to criminal law, and aren't theoretically capable of murdering someone. It's just that it's extremely difficult to pin down mens rea in all but strict liability or objective standard cases. Of course, that still leaves a whole lot of regulatory offences, which corporations are liable for all the time.

 

[Lexicus]

I don't agree. "Markets" only refer to a system where there is exchanges. It requires not size, not regularity of operation, not formalization of any sort. All that is required is the quid pro quo and lack of compulsion. Any time 2 or more people meet and and say "I give this to you, on the condition that I get that from you", that, at it's most fundamental level, is a market. Going further than that is both overthinking it, and over complicating it. And so pushes us away from understanding.

But of course these conditions you lay out here are almost vanishingly rare in history. People actually engaging in this kind of instantaneous exchange for reasons of 'quid pro quo' is just something that almost never happened in real history. When it did happen, it happened under conditions that precluded its being the basis of anything we might call an "economy" or a "society".
In real life the great majority of exchange systems functioned according to social imperatives and had little if anything to do with the market. In stateless societies nothing remotely resembling markets governs people's material exchange, and even in most state societies through history markets have played at best a peripheral role in social organization.

Markets don't require capitalism. "Capitalism" is actually an incorrect word to refer to an economic system. "Capitalism" is more of a descriptor term for an aspect of market economics. The aspect where people collect savings, and use savings to finance business ventures and expansions. But that is not necessary to having markets, market exchange, or a market based economy.

True, markets are not synonymous with capitalism - but this definition of capitalism is idealized to the point of uselessness. The real distinguishing feature of capitalism is that the dominant mode of production is wage labor.

 

[inthesomeday]

Ah man, I was excited about this thread but it turned out to be all in the context of capitalism.

Yes, the results in my signature are real. But that test asked me tons of questions in the context of capitalism as well. In reality compared to the relative scale presented by a political compass, I'd say I probably clock in at around -20.

This conversation, however, and most of the discussion made so far exists in the context of a capitalist economy. These discussions are not about economy, but rather policy, because they do not discuss the operation of a society in regards to resources but the way that a specific set of resources should be handled in regards to a pre-existing economic system; this is to say, capital, labor, and organizations (companies) in the context of a capitalist system.

With that said, there are some interesting points about policy (in the context of capitalism) made in this thread so far. I would say that, about taxing corporations (in the idealized capitalist society) would of course be detrimental to the economy's operation, as would a high minimum wage. This is because capitalism is about competition, right? And the advancement of society through competition between individuals and corporate organizations. So if these were truly the goals of a capitalist economy, then the treatment of corporations should favor the most successful and the treatment of individuals should as well.

This idea is basically social Darwinism; an economy that is built to favor the most successful companies and individuals lends itself to the starvation of companies and individuals who are not the most successful. The moral justification, irrelevant to the discussion of policy but very relevant to a discussion of economy, is that these peoples' contribution to the population at large is less than that of the more successful, and that therefore the economy loses less by losing them.

But in the context of capitalist economy, where this justification has already theoretically been accepted, then the social Darwinist reasoning supports higher taxes and impositions of labor, poor conditions, etc. on weaker or less "successful" people or organizations-- meaning those who who out-competed others operating in the same field.

Of course, I as a person reject capitalism for not just this but a number of reasons. In terms of raw theory, even before historical/realpolitikal implications, capitalism is morally destitute. But for the purposes of this conversation, in the context of capitalism as accepted or inevitable, the following positions are most logical based on the fundamental philosophical basis of capitalist economy:

-The point: The point of capitalist economic organization in terms of society is based on the idea that companies/individuals without equality will compete for capital, a vital resource. Resources would be exploited for this competition, and the access of society at large to resources would be through the markets created by resource exploitation. Simply put, resources that people need would be purchased by capital, and capital would be gained through effort to create, exploit, enhance, or make available resources. This manner of restricting resources would breed competition, which would lead those exploiting resources to enhance them for society at large-- innovation through competition. This is essentially the ideal strength of capitalism. Innovation and the ability of individuals to, through competition and effort, to rise to power, thus rewarding those who were successful and worked hard.

-Regulation: The ideal capitalist economy would have the lowest possible regulation, because a government that interfered with the operations of companies or individuals could interfere with proper competition and may therefore restrict innovation and the enhancement of resources.

-Monopolies: Ideal capitalism would support monopolization of resources wholeheartedly! Any corporation capable of monopolizing resources should be allowed to as both reward and incentive for innovation, competition, and the rise of the hard-working to success.

-Taxation and tariffs: There should be NO taxes!!! Taxes are regulation, and governments would not be nearly as efficient at rendering services like roads, schools, or health care as corporations whose profit was on the line.

-Individual: The individual is a resource, as is its labor. The rights or endeavors of an individual should exist only in the context of its ability to enrich the exploitation of resources to the whole of society.

Now these reasons, which is to say the fact that the most ideal philosophy of capitalism is horrifically harmful to humanity, make me a socialist. The real world in relation to the results of economic philosophies, as well as their applications, makes me a communist. And the history of economy, its operations and the by-products of capitalism and feudalism, the two prevalent economic systems insofar (racism, gender constructs, religion, nepotism, genocide) make me an anarchic, revolutionary communist.

If you're a capitalist and would rather pursue the discussion of capitalist policy in this thread, which is to say a discussion of how resources, services, individuals, and organizations should be treated in the narrow context of capitalism, read only the list. It's a discussion of proper policy pretending like I was a capitalist.

 

[danaphanous]

I personally have no problem taking the discussion outside of capitalism.

I agree with your statements about the nature of capitalism. Also your conclusion that generally it works better and more efficiently the less the government has control through regulation or taxation because as soon as the government can affect the open competition, collusion between government and business to reduce free competition is inevitable. And it's a huge problem in most capitalist economies today where the governments have so many measures of control imo. Not to mention governments, with a few exceptions on certain kinds of goods with static demand, are generally less efficient at providing those services costing more money in the long run and less able to respond optimally to market demands and conditions then small businesses. In the case of goods with static demand there is an exception if you consider "most efficient" to mean cheapest for the consumer. Health care for instance, can be very pricey because it's something most people feel they NEED no matter how expensive it is and there isn't a lot of competition between health services meaning that the prices can be far higher then they actually need to be, similar problems occur in the automobile industry. Companies don't even need to openly collude there's just an unspoken agreement that not having an all-out price war is better for all of them. A government can force these costs to be lowered since it is the only consumer.

This brings me around to an important point and that is that the current capitalist system is an unstable equilibrium. It is impossible to prevent big companies colluding or large monopolies from forming. Maybe I don't understand capitalism as well as you, but I don't believe the goal of capitalism is to reward the most adept companies, this is only a motivator that makes the system work--the fact that there is definite reward. No, the goal is to keep the market open for competition and you need a government for this because any big established company can lock out new companies simply because they have reserves of money. They can even under-price their goods until new companies go bankrupt, lose money for a year, then raise them. This makes the most money for them but it is not efficient because at this point they no longer have the motivation of competition to improve their services or innovate, because the motivator is money, not quality products. In order to make sure that the buyers also benefit the market has to stay in competition so that the motivator of greatest profit also approximately results in the best quality products or services for the consumer. This is the reason that anti-monopoly laws were passed early in most capitalist societies. Only the government can enforce this, and punish companies that compete through illegal means like crime, killing, assassination, etc, so unfortunately to ensure that the market is healthy you need to give the government control measures. This inevitably, in a hundred years or so, leads to corruption where businesses figure out they can collude with the government. Anti-monopoly laws came from trying to adapt the capitalist system to something that benefitted the most people. The thought behind it was this happens only in open competition which limits the power of the successful by their competitors. which means actually all competitors going out of business is a bad thing as is the removal of the incentive to under-price each other.

We have this problem today. Corruption is inevitable, all it takes is one crooked guy in office to start the chain and it gets worse and worse. It is suspected this sort of thing goes on in every election in America these days since private funding of politicians is allowed. To limit it you need to limit the benefits that companies can give politicians or remove as many ways the government can directly benefit businesses as possible. This is why I support both the open publication of donations, and a donation cap for politicians so you know exactly who gives them money and large donations alone won't decide the campaign. I also want earmarking to be punishable by expulsion from the Senate or house of representatives, and I want no politicians to be able to receive donations from private companies only their own salaries. I also want the electoral college system abolished because it makes gaming the system using swing states very easy. Lastly, I want business taxes abolished because it promotes a more efficient market and removes the biggest factor that promotes government and company collusion. They still have random regulations they can use but business taxes are the biggest and easiest control measure that promotes corruption. This is what I see as the ideal free market system, not capitalist. The government is the missing piece that makes sure the market stays in competition and thus consumers are benefitted and companies don't resort to collusion or crime to compete. Yes, it's still utilitarian, but at least this translates to benefitting the majority of people rather then just successful businesses. This is the motivating factor for competition not the ideal state of the system.

Now with the rise of social awareness people began to be dissatisfied with a system that was all about competition and benefitting the majority and wanted to make sure that all people were taken care of by the system. Previously this was not the case because there were many disadvantaged classes. For instance, if you were an immigrant or disabled you would be payed far less then everyone else because businesses will pay you as low as you will accept and you need to eat or you'll starve. This is the point sabre made above that labor didn't really have the ability to compete in certain situations. So labor unions formed, these then drove the labor party in Britain and drove the increase of social awareness bringing ideas like a minimum wage, business taxes and a graded income tax system for wealth redistribution, etc. All of this makes the system less efficient but it does take care of people which was your point. In a capitalist system since disabled people are less able to work they can't compete and thus are destitute without social programs. This is the natural result of free market capitalism. It is utilitarian in that even if the majority of people are benefitted from the system, there is always a minority that isn't. The natural system doesn't care about these people because they can't contribute as much value so I agree with you there. I don't approve of this goal, which is why I think such a system needs to be tempered by care for the poor, needy, disabled, etc. The government can only do so much to help other people but the one thing it can never do is make people care about others. I've watched western countries get more and more social programs but people continue to act very selfishly, it's why we needed the government to take care of problems we wouldn't address on our own. Something fundamental needs to transform selfish people so that they care about others as well as themselves. This is the only way a better system can occur in my opinion.

Now the question now is, is there a better system? Some people say that capitalist societies with social welfare programs and wealth redistribution are the answer. And they work, but not nearly as well, and they also don't make people actually care about each other, they just force people to do so. There are some bad effects with this too because free market capitalism wasn't designed to be like this. Motivating factors are skewed meaning it works less efficiently since a portion of their profits are taken. People realize they can get money from the government and not just from working. Also prices tend to be higher for everyone, there are now small entry barriers to new companies starting, and it is pretty easy for big business to collude with the government when they are given this much power and control. This gradually over time deteriorates the incentive to work and succeed for some people. There are always those that still will strive for it if there is some incentive but the less portion of their profits you let them keep and the more ways you give them to get things without working the less people are willing to have their own businesses and take the risks associated with competing in the open market. We aren't to this point yet, but the slide goes in this direction over time. Many people say the current system is fine. Unfortunately there is no equilibrium. Once politicians start campaigning with social programs as rewards for their voters every year more of this stuff is passed whether it is needed or not, because the majority of people want what's best for them and they like being given benefits and will vote for people who offer them. But the more of the economy the government takes and distributes in this way the more the waste and reduction in efficiency. It is an unstable slide. This is because, as you said, capitalism operates in the absence of morality, the only motivating factor is selfishness. Because of this slide where politics becomes about electing people who do things for your personally, I tend to think social programs should stop after they provide moderate care for the elderly, disabled, children without parents, and sick--basically everyone who has physical impediments to being able to work or take care of themselves. Social Services or arbitrary designation of welfare support tend to erode the incentive to work and allow a backdoor to voting for services for yourself which leads to corruption over time. I'm not saying this social minimum is the best state but it is the most stable state that is compatible with capitalism and it's something that can be set and remain with a minimum of corruption. This is my opinion. I don't think its the government's job to make sure every person has exactly the same things and I think we're asking for corruption and problems if we give them the power to supply this.

Now, again, I ask. Is there a better system? If the majority of people ARE selfish anyway I think not, because capitalism expects this and channels the selfishness in a very productive way by enabling people to get rewards when they benefit others. Because companies are always searching for new ways to make money innovation and technological advances are inevitable and rapid resulting in increasing living standards for most people. Again it's utilitarian because there are people that fall by the wayside and the system teaches you to be rather selfish so unless you institute social programs as most nations have done at this point certain people aren't taken care of or live in poverty.

I'm not aware of any incentives like this in communism. It relies on the good will of people to keep working and clearly there are not enough people that this motivates given the state of communist economies and experiments in the past. I know the philosophy of most communist movements has been good. They want equal treatment of all people and they want to make sure everyone is taken care of and has access to all the same things. But selfish people don't do this naturally so you need a powerful government to enforce it and this is where the system breaks down. Most of the "progress" becomes driven by the vision of the government. Price controls and quotas by the government were a miserable failure resulting in endless shortages and surpluses because in the end people only buy what they want at the price they want. They can't be forced to do otherwise. This seems to indicate the only valid economic system is one where both trading parties are free to set their own equilibrium prices at the very least whether it be amounts in bartering or money this principle holds, people want what they want and you can't change that. This is one core aspect of free market economics that you can't escape. The communist economy with the most success, in my opinion, is China, but it's because they instituted a kind of market socialism, which brought them closer to capitalist economies allowing the competition of businesses and allowing them to set their own prices and participate on the global market. Don't get me wrong, I think other systems can work, but not on a large scale. I've only seen successful communism in very small communities where everyone knew each other and was willing to work for the common good. It is hard to motivate people to care about others they've never met and the larger the country the further goodwill falls short.

I'm intrigued by your phrase "anarchic Communism". This implies the abolishment of the government which seems fair given governmental communism has not worked well, but would your ideal system work? Would you rely on individual people to enforce it all together in community? This would probably just result in every town being their own city state of communism because geographic distance breaks this motivator down. To do this you need everyone to bring their work and efforts into the common pool of resources and then you need to ensure that it is distributed equally. This can only work without abuse in small societies in my opinion. Plus you'd still need some punishment for stealing from the pool of resources which implies some sort of authority or someone with a job of security. Perhaps a guard or police force, which is a government in its most primitive form, it's how governments started in my opinion, to give security to the people, prevent external invasions, punish theft, etc. Naturally if one community accumulated great resources of one type and the neighboring community had too much of another type trade between them would occur. Due to differences in geography, innovation, etc, certain communities would naturally accumulate more resources then others resulting in possible jealousy or, in a more positive note, immigration. Once certain communities started getting too many people for everyone to know each other crowding would occur and the community would have to expand. We're basically talking about prehistoric humanity here and the origin or wars and nations. It always seem to come back to a system like government or nations in the end. Please keep talking I really am intrigued to hear you talk about this because I've met very few people who believe as you do. I understand your motivations perfectly and agree with the rationale for wanting a different system, I guess where we differ is I can't see anarchic communism working. I admit it is better as it has the best interest of everyone at heart, but to do it we'd need to fragment the earth into small communities that trusted each other and keep them that way right?

 

[W|M]

You should learn how to be concise

This is why I support both the open publication of donations, and a donation cap for politicians so you know exactly who gives them money and large donations alone won't decide the campaign. I also want earmarking to be punishable by expulsion from the Senate or house of representatives, and I want no politicians to be able to receive donations from private companies only their own salaries. I also want the electoral college system abolished because it makes gaming the system using swing states very easy. Lastly, I want business taxes abolished because it promotes a more efficient market and removes the biggest factor that promotes government and company collusion. They still have random regulations they can use but business taxes are the biggest and easiest control measure that promotes corruption.

This is what I see as the ideal free market system, not capitalist. The government is the missing piece that makes sure the market stays in competition and thus consumers are benefitted and companies don't resort to collusion or crime to compete. Yes, it's still utilitarian, but at least this translates to benefitting the majority of people rather then just successful businesses.

All of what you proposed continues being capitalist, ''free market system'' or not. It is in the nature of corporations to resort to any methods necessary to make as much money as possible for its owners and shareholders, including unethical ones, and what you proposed is neither utilitarian nor beneficial to most people. As you said earlier:

Corruption is inevitable, all it takes is one crooked guy in office to start the chain and it gets worse and worse

If corruption is inevitable, then you can't simply abolish it by getting rid of a tax

It is utilitarian in that even if the majority of people are benefitted from the system, there is always a minority that isn't

That isn't what utilitarianism is

The natural system

Nothing natural about capitalism, unless you want to count feudalism, plantation economies, etc. as natural, too

I've watched western countries get more and more social programs

Social programs have generally been getting worse in Western countries since at least the 1980s

There are some bad effects with this too because free market capitalism wasn't designed to be like this

Who says capitalism was designed to be anything?

People realize they can get money from the government and not just from working

People who live on welfare do so because they are forced to, and would otherwise starve; If you're living on welfare, you're not exactly living in luxury, especially with the social ostracism that often comes with it. Most work is obsolete or redundant now anyway.

Also prices tend to be higher for everyone

Ignoring the fact that that's false, think about it this way: If in one scenario, I earn $1 per day and a loaf of bread costs $2, while in another scenario, I earn $10 per day and a loaf of bread costs $3, what scenario do you think I would prefer living in?

there are now small entry barriers to new companies starting

''Boo hoo, I can't pay my workers starvation wages''

This gradually over time deteriorates the incentive to work and succeed for some people

The only incentive to work for most workers is money, most work is useless anyway, and work does not equal success

There are always those that still will strive for it if there is some incentive but the less portion of their profits you let them keep and the more ways you give them to get things without working the less people are willing to have their own businesses and take the risks associated with competing in the open market

All profits are theft of wages

Unfortunately there is no equilibrium

What would you define as equilibrium?

But the more of the economy the government takes and distributes in this way the more the waste and reduction in efficiency

You want people starving so that capitalists can get increasingly richer?

I tend to think social programs should stop after they provide moderate care for the elderly, disabled, children without parents, and sick--basically everyone who has physical impediments to being able to work or take care of themselves

What would you define as moderate care? Would you force the unemployed to do mandatory work?

Now, again, I ask. Is there a better system? If the majority of people ARE selfish anyway I think not, because capitalism expects this and channels the selfishness in a very productive way by enabling people to get rewards when they benefit others

No, you get rewarded when you benefit yourself and your friends, not anyone else.

Because companies are always searching for new ways to make money innovation and technological advances are inevitable

New technologies come about because people make them, not because capitalists give money to them

I'm not aware of any incentives like this in communism. It relies on the good will of people to keep working and clearly there are not enough people that this motivates given the state of communist economies and experiments in the past

If you're thinking of state capitalist economies, they're not communist, regardless of their symbols. In any case, what would you define as ''working''?

Price controls and quotas by the government were a miserable failure resulting in endless shortages and surpluses because in the end people only buy what they want at the price they want. They can't be forced to do otherwise

Not to defend Leninists, but the famous Soviet bread lines only really became a thing by the mid-late 1980s, by which time the USSR was collapsing. Also, in what world are you living in where there aren't massive surpluses and shortages in capitalist economies?

The communist economy with the most success, in my opinion, is China, but it's because they instituted a kind of market socialism, which brought them closer to capitalist economies allowing the competition of businesses and allowing them to set their own prices and participate on the global market

Don't be fooled by the name of the ruling party and the red flag, China has never been communist, and anywhere that has anything that can be called a ''business'' can't be called communist

I've only seen successful communism in very small communities where everyone knew each other and was willing to work for the common good

You leave an unclear definition of success, but Rojava (population: c. 5 million) seems like it's doing pretty well to me

I'm intrigued by your phrase "anarchic Communism"

Anarcho-communism

This implies the abolishment of the government which seems fair given governmental communism has not worked well

Destruction of the state

Would you rely on individual people to enforce it all together in community? This would probably just result in every town being their own city state of communism because geographic distance breaks this motivator down.

People aren't atomized individuals, I don't see what you mean by enforcing anarcho-communism, and anarcho-communists advocate for the destruction of the state

To do this you need everyone to bring their work and efforts into the common pool of resources and then you need to ensure that it is distributed equally. This can only work without abuse in small societies in my opinion. Plus you'd still need some punishment for stealing from the pool of resources which implies some sort of authority or someone with a job of security.

That's a serious misunderstanding of what communism is

Perhaps a guard or police force, which is a government in its most primitive form, it's how governments started in my opinion, to give security to the people, prevent external invasions, punish theft, etc.

The police started out as a way to protect the state from internal threats; The state calls its own violence law, but that of the individual crime.

Naturally if one community accumulated great resources of one type and the neighboring community had too much of another type trade between them would occur. Due to differences in geography, innovation, etc, certain communities would naturally accumulate more resources then others resulting in possible jealousy or, in a more positive note, immigration. Once certain communities started getting too many people for everyone to know each other crowding would occur and the community would have to expand. We're basically talking about prehistoric humanity here and the origin or wars and nations. It always seem to come back to a system like government or nations in the end

History isn't circular, things that humans produce in real life don't work like RTS resources, and your post seems to have no basis in reality in general

 

[danaphanous]

Alright I can be more concise.

As you no doubt gathered by the end I'm musing in my post. I have no answer or perfect system in mind as the stable systems I currently know of are inadequate to provide good to everyone. My point was that the current social programs enacted to address these problems are not a stable system. They change every election which I see as a bad thing. It allows politicians to sell favors for votes resulting in corruption, not to mention the fact that it doesn't address the underlying problem of human selfishness which i see as the main barrier to communism working as a system in anything other then small communities.

My post is basically going through my understanding of the ideas behind free markets and capitalism, how it was found inadequate to address certain problems, how we tried to fix them, and the problems I see as coming from that. Heavily biased by US history since that is what I am most familiar with. I'm sure it is full of inaccuracies or misinformation but I was laying out my understanding so other people could critique it and I could hear other views as you have presented. However, I have come to the bottom and I do not see that you present a solution either. If anarcho-communism is as you say, abolishment of the state and has no enforcement what is it? What happens after? You say I misunderstand the purpose of communism and mislabel China as one, but you don't explain what you think it actually is. If we're talking Karl Marx my understanding is communism is a system where the current classes are overthrown, property is publicly owned, and everyone is cared for. It's the application that varies. But I fail to understand how everyone can simply be cared for without some sort of coordination to ensure they are cared for. If there isn't you are relying on the good nature of everyone and that is what I say I've only seen work in small communities like towns where you see and know everyone. Otherwise you get the problem where no individual thinks it is their problem to care for the guy the hill over. Please clarify for me. How is "communism" simply "abolishment" of the state? I always thought that was "anarchy" not "anarcho-communism". Thank you for your input and I would appreciate clarification.

I'm sorry you think my musings have no basis in reality. I know I don't present a workable system but I'm not trying too. I'm simply discussing problems I see and some changes that I think would help lessen them, but obviously not fix them permanently. This is what I was talking about as the unstable equilibrium. As soon as politicians can trade favors for votes in a democratic society the government inevitably gets more bloated and powerful over time. It could happen slowly or quickly but its basically inevitable once you put the channel in place.

History may not be circular but people are similar and thus certain things in history or likely to repeat. Abolishing the government without a plan for anything different will probably lead back to similar systems like we've seen in the past so I'm asking again, what is the plan or philosophy after this. If you have none I'm not sure you've given me an answer and I'll keep feeling like there's nothing better to look forward to.

 

[Old Hippy]

My post is basically going through my understanding of the ideas behind free markets and capitalism, how it was found inadequate to address certain problems, how we tried to fix them, and the problems I see as coming from that. Heavily biased by US history since that is what I am most familiar with.

you giving Capitalism and the Free Market more credit, than what it is.
it is only a part of a society

the problem of dealing with the unemployed, the sick and corruption that you mentioned in your overall posts are not issues of free markets and capitalism but of democratic countries in the west, that place limits and taxes on business and workers to address the problems like health care or unemployment benefits. We just had an election (Australia) where one side proposed cutting taxes over 10 years by 57 billion for business the other side focused on spending that amount on free health, education and public services, Capitalism had no view on which was best, capitalists did.
the free market had no view, stock market traders did