Exegesis - Cap/Com-ist

[Kidlicious]

Originally posted by Kuciwalker




I have Y labor which creates X value. I have Z capital, which I apply to Y. Y now produces k*X value, where k > 1.

Ah, but there are dynamics involved. Z affects Y profoundly.

[Flubber]

Originally posted by Arrian
Like fixing up the house Vel bought?

Vel put labor into it, coupled with capital (he had to pay for the supplies). I'd say that's part labor, part risk (more money into the investment). If innovation was involved, that figures in as well, although I was thinking more along the lines of inventing a new product (in which case Vel might REALLY become a pigdog oppressor).

-Arrian

No leave aside the labor element for the moment. Assume I buy a house for 300K and without any repairs at all it is now worth 350K. Assume that rent adequately compensated for the labor for maintaining the property. Inflation generally was only 2% in those two years.

Is the property owner "entitled" to this compensation on the sale of the property?

[Arrian]

Clearly, to make a profit, they receive more than just compensation for their costs... but that's where the "risk" element comes into play.

Profit is the incentive to risk their capital on the investment in the first place.

-Arrian

[Kidlicious]

Originally posted by GePap
My uncle, who was one of 7 children who grew up in the house his mothers family had built for themselves became a doctor, and ow he has 4 properties, One huge 8 room house, a beach house, a house in the hills, an apartment in the City, none of which he rents.

Anyways, what does renting a property have to do with capitalism?

Capitalism =/ free markets, or even markets. Its a much more complicated relation, and of course, making money a commodity in itself. A Landlord is not a capitalist, since a feudal lord or a Mercantalist might as well be a landlord.

A landlord is a capitalist. He owns capital. He invests that capital to exploit someone. It's no different than owning a business. And why do you think rent isn't determined in the market?

[Kidlicious]

Originally posted by Arrian
Clearly, to make a profit, they receive more than just compensation for their costs... but that's where the "risk" element comes into play.

It's the risk bit that justifies (to me) their profit. It's the incentive to risk their capital on the investment in the first place.

-Arrian

Ok so you think that they should be compensated for their risk beyond the cost. Why is that? And obviously you think there should be a limit to this. Why, and how much?

[Flubber]

Originally posted by Kuciwalker




I have Y labor which creates X value. I have Z capital, which I apply to Y. Y now produces k*X value, where k > 1.

Kuci

we have been down this road before. Its the old ditchdigher-tractor problem. If I recall correctly, it may be "fair" to pay a ditchdigger 30 kulats per hour but if a dirty capitalist provides a tractor to the ditchdigger such that he can work 10 times as quickly, this is exploitation even if the ditchdigger nets 100 kulats an hour. It seemed irrelevent to kid whther the the ditchdigger/tractor driver paid rent for the use of the tractor OR was paid a wage. . . . It was exploitation if te tractor owner profited at all.

[Arrian]

Originally posted by Kidicious


Ok so you think that they should be compensated for their risk beyond the cost. Why is that? And obviously you think there should be a limit to this. Why, and how much?

Generally, what the market will bear. However, some markets aren't really free markets due to entry costs (like energy). The other exception, to me, is when the product provided is considered a basic necessity (shelter). In short, there is a difference between selling a luxury (say, Televisions) and a necessity (being a landlord). This is why you often see rent controls (NYC has them, IIRC), but nobody seriously advances the idea of price controls on TVs. We have food stamps (government intervention in the marketplace), but we don't have TV stamps.

-Arrian

[GePap]

Originally posted by Kidicious
A landlord is a capitalist. He owns capital. He invests that capital to exploit someone. It's no different than owning a business. And why do you think rent isn't determined in the market?

Real estate is NOT capital. It can be converted into Capital, but it is NOT capital in and off itself. A landlord can go bankrupt (if they refuse to liquidate their assets into Capital to pay back creditors). This was the very heart of the dispute between moneyed Merchants and the landed nobility in Europe.

You can't argue this very well can you kid, if you are wrong about stuff as basic as this.

[Kidlicious]

Originally posted by Arrian


Generally, what the market will bear. However, some markets aren't really free markets due to entry costs (like energy). The other exception, to me, is when the product provided is considered a basic necessity (shelter). In short, there is a difference between selling a luxury (say, Televisions) and a necessity (being a landlord). This is why you often see rent controls (NYC has them, IIRC), but nobody seriously advances the idea of price controls on TVs. We have food stamps (government intervention in the marketplace), but we don't have TV stamps.

-Arrian

Only two more questions. The next question is "who pays for this incentive?"

[Kidlicious]

Originally posted by GePap


Real estate is NOT capital. It can be converted into Capital, but it is NOT capital in and off itself. A landlord can go bankrupt (if they refuse to liquidate their assets into Capital to pay back creditors). This was the very heart of the dispute between moneyed Merchants and the landed nobility in Europe.

You can't argue this very well can you kid, if you are wrong about stuff as basic as this.

What's your point Gepap? Where is the significant difference?

[Arrian]

In the case of the landlord, clearly the renters. They, meanwhile, are getting the benifit of a home that they either a) cannot afford to simply purchase outright; or b) do not wish to simply purchase outright.

In most cases, it's a mutually benificial relationship. I rented for several years after college. I don't feel like I got screwed over. Especially in my second apartment. It was cheap, and the company that owned it was great about maintenance

-Arrian

[GePap]

Originally posted by Kidicious


What's your point Gepap? Where is the significant difference?

This supposedly is a discussion about Capitalism vs Communism. If that is true, then at least the people participating should know what these two theories are all about.

Capitalism is more than just a market. Barter is a type of market economy, but it has 0 to do with capitalism. In capitalism, money itself becomes a commodity, as opposed to just a means of standardizing the value of goods. There is a reason why capitalism is different from Mercantalism, the previous economic system. For God's sake, if this is really about Cap Vs. Com, then at least lets know the tersm correctly- Marx himself wrote about the difference.

Again, Real Estate does NOT equal capital, and just a landowner is not a capitalist. In fact, the landed gentry was always opposed to capitalism at its inception-hence fights vs free trade and such.

[Kidlicious]

Originally posted by Arrian
In the case of the landlord, clearly the renters.

Bingo Arrian! The renters pay, and they pay becuase they have to. They have to agree to rent because they have no other options. That's not incentive. That's exploitation.

Let's go back to our conversation about polution. You suggest giving companies incentive not to polute and not to move overseas.

I ask you again, why should we allow this. We don't have to pay this 'incentive.' Incentive is just a bull**** term. It's exploitation and you know it.

[Kidlicious]

Originally posted by GePap


This supposedly is a discussion about Capitalism vs Communism. If that is true, then at least the people participating should know what these two theories are all about.

Capitalism is more than just a market. Barter is a type of market economy, but it has 0 to do with capitalism. In capitalism, money itself becomes a commodity, as opposed to just a means of standardizing the value of goods. There is a reason why capitalism is different from Mercantalism, the previous economic system. For God's sake, if this is really about Cap Vs. Com, then at least lets know the tersm correctly- Marx himself wrote about the difference.

Again, Real Estate does NOT equal capital, and just a landowner is not a capitalist. In fact, the landed gentry was always opposed to capitalism at its inception-hence fights vs free trade and such.

Communism is about freedom from exploitation. Rent is an exploitive institution. Marx specifically identified it as so. So it is very relavent to the conversation here.

[Arrian]

No, Kid, it's not.

With regard to the renters, I repeat:

They, meanwhile, are getting the benifit of a home that they either a) cannot afford to simply purchase outright; or b) do not wish to simply purchase outright.

In most cases, it's a mutually benificial relationship. I rented for several years after college. I don't feel like I got screwed over. Especially in my second apartment. It was cheap, and the company that owned it was great about maintenance

I rented before I owned (well, actually my fiancee owns the house, but I contribute). I wasn't exploited.

I paid $575/month for the last year in my last apartment (cheap for a 2 bedroom, eh?). Let's assume that $500 of that simply covers the landlord's costs, and $75 is profit. Multiply that over the # of tenants in the development and you get a lot of money.

But then again, it costs a lot of money to upgrade the buildings, should that become desirable and/or necessary. Maybe $25 per tenant is set aside for that, leaving $50 per tenant per month in profit (minus taxes).

You think that's exploitation. I don't - I see it as an incentive to build the development in the first place and provide a cheap, clean, safe apartment for me to live in.

Again, I understand that landlords can be unscrupulous. But so can the government...

-Arrian