Is profit different from unfair tax?

[Kidicious]

Originally posted by Jules

You've obviously never taken a graduate level macroeconomics course. Micro foundations are key to the models. Individual households maximize lifetime utility; firms maximize profits; the economy is competitive; and so on.

If the fundamentals of your macroeconomic theory are based in microeconomics your theory sucks. That's not the way the economy works. The whole is greater than the sum of the parts.

[Velociryx]

That's the crux of Kid's entire argument:

"Your theory sucks."

Note how, with such a theory, it is unnecessary to bother with such things as backing ANYTHING up with real world data or solid fact. Just....it sucks.

*sigh*

So tell us, wise one, how can the state run utopia you espouse POSSIBLY do a better job than normal market forces at providing incentives to skilled labor to keep them at their productive best? Further, how can these incentives POSSIBLY be given in such a way that will prevent that much-dreaded and always-to-be-on-guard-against tendency for those with more to exploit those with less?

-=Vel=-

[Velociryx]

Further, why *shouldn't* we count on CEO's getting some of those hard-to-come-by raises in commieland? I mean, if a guy who's running a company is really FREAKIN brilliant at it and does a super job....is that not worthy of reward, just like the other forms of work (surgeons, pilots, etc) that you plan to reward?

Oh, I forgot....that's not work. Anybody can run a multi-billion dollar company, right? Why, if some evil capitalist pigdog would but give you the chance, you could do his job with your eyes closed! Isn't that correct?

-=Vel=-

[Kidicious]

Originally posted by Flubber
Many of the unemployed don't have the skill sets to perform more difficult jobs so they could be " given" more basic work.

That is a very solvable problem.

Originally posted by Flubber
1. pay them the same to work less with the result that the product or service costs more and is uncompetitive

You're talking about temporary shortages in labor for certain jobs. This is adjustable. There are certain advantages to the new system.

Originally posted by Flubber
2. Proportionally decrease salaries in line with the reduction in hours worked-- This would hurt their incomes.

I don't see any reason to do this. Send them to retraining or put them in the university. Solve the problem. That is the whole point of planning, to solve problems that weren't solved with the old system.

Originally posted by Flubber
THis suggestion only works if you have sufficient people that want to job-share and it does not hurt productivity too much. But the same concept works equally well in a capitalist system if there is both a supply and demand for part time workers.

No. In a capitalist system you always have unemployment. Neither of these solutions work.

Originally posted by Flubber
You seem to think that workers are interchangeable and can go wherever needed, or that the state can figure that out. Interesting that even a resource rich state like the former Soviet UNion could never figure things out and avoid shortages of basic goods let alone of skilled personnell

Workers are not interchangable and they are not mobile. They consistantly make independent decisions for the capitalist system as a whole that create surpluses and shortages in the labor market. Combine that with a govt that does little to correct for the inherent inefficiency and you have the chaos that we call capitalism. We can do better.

[Berzerker]

That's not the way the economy works. The whole is greater than the sum of the parts.

Or in the case of communism, less.

Care to identify this "greater" than the sum?

[Velociryx]

Are you aware of the fact (not the supposition, but the FACT) that retraining workers isn't free? That it takes time, and costs both money and productivity (ie - productivity drops because you a) have to take someone who knows how to do a given job away from that job to train the new guy, and b) the new guy will screw up at least some as he's learning, and even barring that, will take time to become as productive as the folks who have been doing it a while)?

Where will the money come to pay for such training? Can't come from profits, cos...there won't be any, remember? And if you cut people's pay to fund the training, then you're exploiting them, by not giving them the full value of their labor...tsk tsk...that just will not do!

And further, since it is your contention that workers are neither interchangable NOR mobile, then I guess we'll need job retraining centers set up for ALL industries in all major population centers....that's a lot of brick and mortar, and a whoooooole lot of staff to train these folks.

-=Vel=-

[Kidicious]

Originally posted by Velociryx
So tell us, wise one, how can the state run utopia you espouse POSSIBLY do a better job than normal market forces at providing incentives to skilled labor to keep them at their productive best?

There shouldn't be as much variance in the compensation that people recieve for education and experience. You aren't directly compensated for these things in the capitalist system therefore there is much variance in compensation (in depends on market forces)

Originally posted by Velociryx
Further, how can these incentives POSSIBLY be given in such a way that will prevent that much-dreaded and always-to-be-on-guard-against tendency for those with more to exploit those with less?

-=Vel=-

Exploitation will be unethical and illegal.

[Velociryx]

So....who will decide, in their infinite wisdom just how much variance there should be? You? What qualifications have you to make informed determinations regarding this?

How much more is a surgeon's time worth than a janitor's? How much is that 12 years of the doctor's life that went into training worth, over and above the work of the janitor? How will you determine this value?

It's illegal to speed. Do you actually believe the existance of the law prevents it? Let me guess....those caught breaking THIS particular law though, will get sent to....what do they call them? Oh yes, "re-education" camps, right?

Witness the proud "new" face of Communism.

-=Vel=-

[Ramo]

The PM is a capitalist billionaire conglomerate mogul type. Hardly the type that would occur as a result of "economic democracy"

I never asserted any such connection.

And why not? Mussolini's dictatorship occured largely in reaction to the workers getting uppity and taking over businesses.

"isn't a significant amount" meaning "none"

Well, I'm sure there exist socialist computer dealers, etc., but as I said, not significant compared to the likes of Intel.

GM isn't a computer company, either.

Really? I wasn't aware of that.

It is, however, a large conglomerate with a lot of internal competition for internal and external resources. Intel is an R&D heavy heavy enterprise that has long, relatively high-risk development cycles and a mixed bag of products. Neither of these are types of enterprises that lend themselves well to meddling by the peasantry. If you have a 50 person weaving and clothesmaking enterprise, that's and all lovey-dovey granola-esque, so you do your democrating thing there, but it's hardly much impact on the economy.

Nice theory, but it fails if you look at industry in Catalonia during the Spanish Civil War - not limited to textiles FYI.

Just because it currently doesn't exist, doesn't mean it never will, nor does it mean it inherently can't.

[Velociryx]

Here's a genuine question, and something of a paradox, as I see it.

The workers own the means of production.

Okay, so if I own the means of production, then by extension, I own whatever I produce using the means of production.

If I own it, it's....mine. Not yours.

So let's say that because I'm a clever fellow, I use my owned "means of production" to create a brand new, never-been-seen-before tool that allows me to double my personal productivity. That's a pretty smokin' sweet tool, right? And hey! I own it!

I'm sure you'd be proud to own one too, cos it could either save you TONS of time, or double your productivity....that's pretty valuable.

I'll make one for you and let you benefit from the fruits of my cleverness, in exchange for 1 of whatever you make with it per day. How is that unfair, precisely?

The above description is RENT, and that's a big no-no. So tell me why it's wrong given the following:

* You will benefit directly from using my tool. Say your normal production is 10 whatevers a day. With my tool, you're now able to make 20. I want one, for letting you use one of my spiffy tools. So...you were making ten, now you're making 19....that's good, right! I mean, that's hugely more than you were making on your own, and because I made the tool that enabled this increase in your productivity, I get one a day from you. That's good for me too. So where's the crime?

* You couldn't make 19 without my tool. You'd be stuck at ten, unless you wanted to figure out how I made my spiffy tool for yourself, and that's fine too. Nothing stopping you from applying your brain to the problem....but why bother? I've already got a working model. No effort required on your part to make use of it...I'll trade you one for a portion of your increased productivity. Rent.

* I know, I know, I should just give you the plans like a good commie, except that it was MY idea! Ideas are just as valuable as work, so why shouldn't I be compensated for it? If I double your productivity with my new invention, then my tool....the idea that spawned my tool has a definite, measurable value. Do you deny the value (and thus, my compensation) for it? In what way is that invalid?

-=Vel=-

[Berzerker]

Ramo -

And you know mine.

As I recall, we actually agreed for the most part - the rightful owners should be identified and if they aren't, a legal system for beginning a chain of "right"ful ownership should be implemented.
I see no other moral means of determining ownership...

Regardless of the "land is stolen debate" which isn't directly relevant, I'm just making a comment on the concept of ownership. If the state owns all property, it has every right to taxes from "tenants." Just as if corporations own the means of production, they have every right to total influence over what happens to profits.

What is the "state"? Just a group of people. How did this group come to own everything? Well, under communism they killed off the previous owners without regard to rightful ownership. Yes, if the "state" was the rightful owner to all property, it could charge people wanting to live on that land a fee, even a 100% fee. But communists have this nasty habit of trying to prevent people who don't like the fee from leaving...

Not really. In theory, the state dissolves in a communist society. In practice, of course it doesn't work out that well.

Thx for dis-agreeing only to repeat what I said.

The state is only superficially run by the people. And it'd be pretty easy, depending on the specifics of ownership. Suppose you've got stock in a land corporation. Does that mean you're not a squatter if you occupy part of it without the consent of the corporation?

Yes, but the "state" is not a person(s), therefore it cannot "own" anything. It can only "own" land because the people who are the state own land. A state that owns all the land (within specified borders) must have morally acquired that land from those who did own it, and we know states don't do that...

Any non-worker owned business. By definition, wages aren't included in profits.

But part of wages are profit. By virtue of the owner's investments, the worker makes more money than they would without those investments - that's profit. Even if all I do is push a broom, my labor would be worth less if the business owner didn't have dirty floors for me to sweep.

Where did I defend communism? As far as I can tell, I have only criticized capitalism.

My initial response was making a point to Kid (I assume he's reading side-debates).

No doubt you would murder strikers whenever you evil libertarians sieze power.

Nah, just kick 'em off our property. But if they "strike" and try to shut us down by terrorising "scabs", etc, then maybe lethal force will be employed.

I define capitalism to exclude worker-control of the means of production. So yes, it does.

Is that definition valid? Many businesses are owned and run by the same person(s). Why does capitalism require the exclusion of worker-contolled businesses?

[Flubber]

Originally posted by Kidicious

There shouldn't be as much variance in the compensation that people recieve for education and experience. You aren't directly compensated for these things in the capitalist system therefore there is much variance in compensation (in depends on market forces)

.

That one made me laugh-- people with degrees make on avergae way way more than folks without one but I guess I'll take your word for it that people aren't compeensated for education

Oh and in Calgary an articling lawyer at a big firm makes about 60K while a 4th year associate makes around 100K . They are both expected to bill a similar number of hours and bonuses are possible but the 4th years bills at a higher rate since the market rates value experience . people pay a higher hourlu rate for a more experienced lawyer so how doesn't the market directly compensate for experience again ??

[JohnT]

Originally posted by Kidicious


Don't count on CEOs getting a raise though.

Merely because you haven't the slightest idea what a CEO or other executives bring to a company?

[Flubber]

Originally posted by Kidicious

Workers are not interchangable and they are not mobile. They consistantly make independent decisions for the capitalist system as a whole that create surpluses and shortages in the labor market. Combine that with a govt that does little to correct for the inherent inefficiency and you have the chaos that we call capitalism. We can do better.

This one also made me laugh. Somehow some magical central body is going to figure everything out. Enlightened philosopher kings will emerge and will make all decisions for the benefit of the people without any self interest when a ruling elite had taken power in every authoritarian centrally planned society.

I REALLY like the " We can do better" line. No communist state in history has done "better", as is evidenced by the fact that most have disappeared and NONE even came close to the wealth and standard of living of the capitalistic west. If "better" means that everyone has lower but equal standards of living . . . thanks but I'll take "worse"


Yes there are poor people in free-market countries and if the working poor are at an impoverished state, that is PERHAPS an argument for government assistence not an argument for creating a system that destroys ANY incentive for initiative and drive. ( although in Calgary I would be shocked if any able-bodied person can't make a decent wage). Wait tables at minimum wage . . . provide a good service and watch the tips roll in . ..

There are also the people that no system might touch . . the people with a tenuous ability to function but individuals sane and competent enough to make their own decisions ( in our current mental health system), even if such decisions lead them to spiral downward into drugs and alcohol and homelessness.

Kidicious, in your system how would you help these people-- you would give them jobs and homes of course but what do you do when they refuse treatments, trash their homes and don't show up at work. What are your choices?If you don't give them money the same as others, won't you have a small but significant underclass? Wouldn't trying to prevent these behaviors move into authoritarianism?

While these debates are a good laugh . . Nobody takes them seriously-- There are far too many comfortable middle class folks that consider that they have earned what they have and would be loathe to give it up.

How many of them would you have to kill or imprison in order to set up your orderly society of equality?

[PLATO]

I can't believe that no one has posted this answer yet (or did I just miss it?)

Profit is a return on RISK. This is a very simple but highly accurate definition. The profit you earn is simply the rate of return that society assigns to the risk taken (once cogs and other expenses are deducted).

Taxes are not risk related. They exist to provide the services and infrastructure that society desires and for onr reason or another choose to have it overseen by the government.

Unfair taxes are the amount that the government collects in excess of the above. Usually using this to support little known or little supported programs.

So, Kid, to answer the original question, Yes. Profit is drastically different to Unfair taxes as society has placed a value on profits, but has placed no value on unfair taxes.

[MichaeltheGreat]

Originally posted by Ramo


I never asserted any such connection.

No, you ignored it, while blabbing about Italy's "economic democracy." I used Berlusconi facetiously as an "example"

And why not? Mussolini's dictatorship occured largely in reaction to the workers getting uppity and taking over businesses.

And I'm sure that 1920's Italy has lots to teach us about modern markets and economies.

Well, I'm sure there exist socialist computer dealers, etc., but as I said, not significant compared to the likes of Intel.

Dealers? You could hire chimps to work at computer dealers - been to a CompUSA, Fry's or BestBuy lately?

Nice theory, but it fails if you look at industry in Catalonia during the Spanish Civil War - not limited to textiles FYI.

There isn't a snide smilie. But then again, I wouldn't hold Spanish industry in the 1930's as much example of a modern standard, either.

Just because it currently doesn't exist, doesn't mean it never will, nor does it mean it inherently can't.

Oh yeah, some day, some where, there will be a closet CEO that emerges from some anonymous line rat. But then any initiative he'll have will be wasted trying to convince the rest of the two-digit IQ half of the company that his idea deserves financial support.

They'll agree, once a normally run competitor proves that his idea was right by bringing it to market first and making tons of money.

[Imran Siddiqui]

A state that owns all the land (within specified borders) must have morally acquired that land from those who did own it, and we know states don't do that...

It depends on how you define 'morally acquired'.

[Mordoch]

Originally posted by Berzerker
Is that definition valid? Many businesses are owned and run by the same person(s). Why does capitalism require the exclusion of worker-contolled businesses?

Its a really bad definition. Basicly Kid is trying to completely ignore the fact that owners often put a huge amount of work into their company. As far as I can determine, in his mind Henry Ford concieving of and implementing the concept of mass production when producing cars isn't actually work nor does it need to be rewarded. Obviously there are start up companies where the owner may provide the most value for his work and work the hardest.

Many startup companies are owned exclusively by the employees, and it can be quite sound to do this, since the empolyee all stand to make huge amount of money if the company suceeds. Companies today often ENCOURAGE their employees to buy stock in the company, since it gives the employees an additional stake in ensuring the company makes money. If enough employees own enough stock, this gives them an enourmous voice in how the company is run, even if they don't own enough of the companies stock to completely dictate corperate policy.

[JohnT]

Funny how I can own a company and yet still not be considered a capitalist, isn't it?

[Arrian]

Originally posted by monkspider
Kid makes some good points, I think that capitalism is, inescapably a form of theft. And it is a form of theft that is not long for this world, thankfully.

How can someone be so delusional?

-Arrian

[Ned]

I think we ought to approach communism as a form of mental disorder. It is so illogical and counter-intuitive as to be completely indefensible, and yet we have so many who seem to actually believe communism will work.

Is communism a form schizophrenia?

[Jules]

Ned, does this mean you've moved on from Ann Coulter to Michael Savage?

[Kuciwalker]

Originally posted by monkspider
Kid makes some good points, I think that capitalism is, inescapably a form of theft. And it is a form of theft that is not long for this world, thankfully.

Yup, it is theft to not give stuff out of the goodness of my heart

[Velociryx]

I'm still waiting for someone, ANYONE from the Red camp to answer the "nanny" question.

Are you guys so afraid of having to be personally accountable for your success or failure? So frightened of having to be responsible for your own future that you're willing to sign your life away to the state? Do you really believe that most people are so inept that they cannot decide what's best for themselves....themselves?

Mystifying.

-=Vel=-

[Kuciwalker]

I am going to prove you wrong in a very simple way. I am going to assume that you are correct, draw a series of logical conclusions from that, and establish an inconsistancy with the real world. If the logical consequences of what you are claiming is true are inconsistent with the real world, what you are claiming is true must be false (a wordy definition of Modus Tolens, which states that if "P implies Q" is true, and "not Q" is true, then "not P" is also true. Don't try and contest this; it is a basic tenet of logic ).

Kid, you assert that it is the fact that some people have more money than others that makes them more successful. Someone with more money will have a greater negotiating advantage than someone with less money, so that person with more money is exploiting the person with less money. ASSUMING YOU ARE CORRECT, that means that if everyone had the same amount of money, everyone would have the same negotiating advantage, i.e. none. Therefore no one could exploit anyone. Therefore, in this scenario, capitalism would be fine, because it would be impossible to exploit someone. In fact, it would NEVER be possible to exploit someone, because you have to exploit someone to earn more money than someone else (again, a . So capitalism would work fine.

There. I have assumed "P" (the stuff you are claiming is true) is true. I have shown that "P implies Q", that is, "exploitation is possible only through an imbalance in money" (assuming that laws against theft and other normal crimes are enforced) implies that "the lack of an imbalance of money renders exploitation impossible", i.e. capitalism would be fine because the only objection to it is that it allows people to exploit other people. Now to show that "not Q" is true.

People have different levels of skill. This is a basic truth, and one that you will have severe difficulty disputing. Someone with higher skill will be able to produce more of a product than someone with lower skill. The person with higher skill will thus have more product to sell, so he will earn more money. He will then have MORE MONEY than the person with less skill, so he will be able to exploit that person. But wait a second - you can only get more money than someone else by exploiting them, right? And you can only exploit someone by having more money than them, right? So he must be an evil capitalist pig who somehow GOT the money from the land of the evil capitalist pigs, who are trying to destroy our communist paradise. Of course!

So, "not Q" is true, and "P implies Q" is true, therefore "not P" must be true. Therefore...

YOU ARE WRONG

[JohnT]

In short: Mind your P's and Q's, Kid.

[Jules]

But what if P and Q are in the empty set?

[Ramo]

No, you ignored it, while blabbing about Italy's "economic democracy." I used Berlusconi facetiously as an "example"

I "ignored" it because bringing up Berlusconi is a total non-sequitur, not a facetious example. The character of every business in a state is not necessarily reflected in the state's PM.

And I'm sure that 1920's Italy has lots to teach us about modern markets and economies.

Whether or not it does, that's irrelevent. I was showing that a reactionary leader doesn't preclude the existence of socialist businesses.

Dealers? You could hire chimps to work at computer dealers - been to a CompUSA, Fry's or BestBuy lately?

For the third time, not significant...

There isn't a snide smilie. But then again, I wouldn't hold Spanish industry in the 1930's as much example of a modern standard, either.

Parts of Spain, particularly those transformed by the revolution, were fairly industrialized. Barcelona for instance. Engineering firms and the like were successful operated by their workers.

Oh yeah, some day, some where, there will be a closet CEO that emerges from some anonymous line rat. But then any initiative he'll have will be wasted trying to convince the rest of the two-digit IQ half of the company that his idea deserves financial support.

They'll agree, once a normally run competitor proves that his idea was right by bringing it to market first and making tons of money.

And people say commies trivilize the capabilities of ordinary people...

As I recall, we actually agreed for the most part - the rightful owners should be identified and if they aren't, a legal system for beginning a chain of "right"ful ownership should be implemented.
I see no other moral means of determining ownership...

Err.. I don't necessarily agree with that. But I'd prefer not to rehash the argument right here and now.

What is the "state"? Just a group of people. How did this group come to own everything? Well, under communism they killed off the previous owners without regard to rightful ownership. Yes, if the "state" was the rightful owner to all property, it could charge people wanting to live on that land a fee, even a 100% fee. But communists have this nasty habit of trying to prevent people who don't like the fee from leaving...

Yeah, those dirty commies killing off the likes of the Romanovs, the rightful owners!

Yes, but the "state" is not a person(s), therefore it cannot "own" anything. It can only "own" land because the people who are the state own land. A state that owns all the land (within specified borders) must have morally acquired that land from those who did own it, and we know states don't do that

A state is an organization of people, just like a corporation. If a state cannot own land, nor can a corporation. And BTW, corporations (particularly large ones) aren't in the habit of acquiring land morally.

But part of wages are profit. By virtue of the owner's investments, the worker makes more money than they would without those investments - that's profit. Even if all I do is push a broom, my labor would be worth less if the business owner didn't have dirty floors for me to sweep.

Profit is the cash the owners make after they give the employees their wages and take care of other expenditures. By definition.

Nah, just kick 'em off our property. But if they "strike" and try to shut us down by terrorising "scabs", etc, then maybe lethal force will be employed.

You sure are making your libertarian paradise much more attractive to me.

Is that definition valid? Many businesses are owned and run by the same person(s).

And those businesses are socialist.

Why does capitalism require the exclusion of worker-contolled businesses?

Definition.

[Ramo]

Here's a genuine question, and something of a paradox, as I see it.

The workers own the means of production.

Okay, so if I own the means of production, then by extension, I own whatever I produce using the means of production.

If I own it, it's....mine. Not yours.

So let's say that because I'm a clever fellow, I use my owned "means of production" to create a brand new, never-been-seen-before tool that allows me to double my personal productivity. That's a pretty smokin' sweet tool, right? And hey! I own it!

I'm sure you'd be proud to own one too, cos it could either save you TONS of time, or double your productivity....that's pretty valuable.

I'll make one for you and let you benefit from the fruits of my cleverness, in exchange for 1 of whatever you make with it per day. How is that unfair, precisely?

The above description is RENT, and that's a big no-no. So tell me why it's wrong given the following:

* You will benefit directly from using my tool. Say your normal production is 10 whatevers a day. With my tool, you're now able to make 20. I want one, for letting you use one of my spiffy tools. So...you were making ten, now you're making 19....that's good, right! I mean, that's hugely more than you were making on your own, and because I made the tool that enabled this increase in your productivity, I get one a day from you. That's good for me too. So where's the crime?

* You couldn't make 19 without my tool. You'd be stuck at ten, unless you wanted to figure out how I made my spiffy tool for yourself, and that's fine too. Nothing stopping you from applying your brain to the problem....but why bother? I've already got a working model. No effort required on your part to make use of it...I'll trade you one for a portion of your increased productivity. Rent.

* I know, I know, I should just give you the plans like a good commie, except that it was MY idea! Ideas are just as valuable as work, so why shouldn't I be compensated for it? If I double your productivity with my new invention, then my tool....the idea that spawned my tool has a definite, measurable value. Do you deny the value (and thus, my compensation) for it? In what way is that invalid?

Let's say I'm a fascist industrialist in a country in a severe depression (say, Germany after the WW I). I have significant financial resources, so I decide to start up a huge business, which in addition to enriching myself, feeds thousands of starving people. However, the workers are striking which is crippling my business (the pesky community is in solidarity with them, so I can't replace the strikers) and demanding more wages than I'm willing to part with. As a good liberal capitalist, I suppose I should either give them higher wages or go under. But I call in my influence with the police and have them arrest the leaders of the strike. Would you deny me doing that? After all, if I didn't start my business lots of people would starve. So, the workers overall benefit and I benefit, so what's wrong with that?

Nothing, that's right. So, fascism is clearly a superior system to classical liberalism.

Seriously, rent tends to lead to socio-economic hierarchies, which tend to propagate, thus the institution ought to be minimized.

[David Floyd]

So, the workers overall benefit and I benefit, so what's wrong with that?

Nothing, that's right. So, fascism is clearly a superior system to classical liberalism.

If I can jump in, the scenarios are not similar. In Vel's scenario, no outside coercion is involved. In your scenario, outside coercion (police acting against strikers) IS involved. In that context, it doesn't matter what "benefit" the force produces, only that force was initiated against people who had done nothing morally wrong (but certainly were not acting in their own long term self interest).