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#13
10-06-2005, 12:50 AM
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Re: Democracy = Capitalism?
How is that so?
I see that Capitalism helps the "winners" of the free market and destroys the "losers" outright. Unless you own your own business you are earning less than you produce (unless the business you work for returns no profit, then you could earn exactly what you produce.) Since the majority of people do not own their own business they are producing something but not earning what its worth. This would mean that most people are hurt by capitalism Since they could earn what their production is worth under other systems. 
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#16
10-06-2005, 01:26 AM
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Re: Democracy = Capitalism?
yes
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#18
10-06-2005, 09:04 AM
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Re: Democracy = Capitalism?
[ QUOTE ]
How is that so? I see that Capitalism helps the "winners" of the free market and destroys the "losers" outright. [/ QUOTE ] The winners are everyone. Everyone benefits when competition forces producers to increase efficiency. The "losers" in competition are not "destroyed", but their inefficient methods are punished by way of financial losses. The losers themselves are free to improve their methods and try again, or find another line of work. [ QUOTE ] Unless you own your own business you are earning less than you produce (unless the business you work for returns no profit, then you could earn exactly what you produce.) [/ QUOTE ] But you're producing something with materials owned by someone else. You're earning what your *labor* is worth. [ QUOTE ] Since the majority of people do not own their own business they are producing something but not earning what its worth. This would mean that most people are hurt by capitalism Since they could earn what their production is worth under other systems. [/ QUOTE ] What system values their labor more?
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#19
10-06-2005, 10:41 AM
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Re: Democracy = Capitalism?
Obviously a communist system values labour much much more than a capitalist one.
Certainly the losers can try again to run their own business but very, very few people have the capital needed to make one attempt, much less two or more, at opening a business. For the majority of the people ownership is not an option due to lack of capital. For those who are able to start thier own business it is unlikely that they will have enough capital to sustain a serious loss and still be able to start over again. A capitalist system strongly favors the rich and keeps the poor entralled by false ideas that anyone can get rich through hard work. In reality most businesses fail and ruin the ones who started them.
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#20
10-06-2005, 06:33 PM
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Re: Democracy = Capitalism?
So lets start with this comment:
"Unless you own your own business you are earning less than you produce (unless the business you work for returns no profit, then you could earn exactly what you produce.)" You said you took macro economics so I'll assume you understand both marginal product of labor and economic versus nominal profit. In a competitive marketplace businesses earn what is referred to as economic profit. That is thier profit is a function of the risk and time value of the capital they allocate. Since you have to put up money to start and run a business, and that capital is at risk, you need to be compensated with a certain level of economic profit. Consider it the cost of capital (are you familair with that financial term? It isn't necessarilly microecon but more finance). An additional worker produces value to the company equal to his marginal utility. So for instance, if I'm hired by a business and my labor helps produce $100,000 worth of utility that is my marginal product. However, note the use of the word help. You didn't produce that $100,000 worth of value out of the blue. You did it with the assistance of anothers capital, another ideas and business model, anothers relationship, anothers reputation. I can make quite a lot of money trading for my company, but I couldn't do it on my own without assistance. You only produce part of that $100,000 worth of value, and that is your salary. The remaining amount goes toward compensating the business owner for the use of the above items. I'll give government wealth redistribution programs a terse mention, because that's all they deserve. Governmental attempts to redistribute worth have all failed miserably. One need not even gesture as to peoples rights to thier own property, such moral posturing is unecessary to prove the point. Those systems fail because they have been unable to provide a better life for thier propulations. It is a pure failure with no redeeming qualities.
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