com/cap/com debate - laboring under delusions

[The Mad Viking]

The whole inheritance / gift thing is a complete load of crap.

I believe in a market economy. I believe people are entitled to the fruits of their labour. I believe in trade, and that a free market will set prices and adjust supply to suit demand far more effectively than any planned economy.

But the logical basis for capitalism is that people should be allowed to retain the value of the work they have created.

It is a false leap to say that they should then be able do whatever they want with that capital, including gifting it to others.

A gift is a sweater. It is not a Hibernia oil rig.

The logical basis for owning capital is that the owner's labour created it.

That principle is grossly violated when an inheritor gets capital of enormous value without doing any work to deserve it.

This act is an act of violence to all members of the society born at the same time who do not accrue the same benefit.

Because NO-ONES LABOUR COULD ACCRUE ALL THE CAPITAL THAT THEY ARE PASSING ON TO THEIR KIDS!!!!

It is an accumulation of generations. In many cases, it leads back to nobility; to wealth stolen or generated through other illegal means.

The myth perpetrated by hard-core capitalists is that you too can, through your hard work, become wealthy beyond your dreams.

You can also be struck by lightning, or win a lottery.

It is statistically insignificant. Sure it happens. People occasionally assemble a combination of brilliance, hard work and luck and get rich. But to go from no wealth to become a mult-millionaire in a single life-time, strictly by hard work and smarts? Less than one in a million.

Yet it is held up as justification for a system which serves a small elite that hordes all the wealth amongst themselves.

Children do not need to inherit the Hibernia oil rig to be cared for by their parents.

*

So, who owns THE OIL that is actually getting pumped out of the ground?

One might think that every person in the country would get an equal share in the net value of the resources (assets) that sat under their feet for millenia.

But no.

Because of the "risk", a few people get ALL the value. And scream mightily if the people ask for a tiny slice at tax time.

I have no problem the principle of compensation for risk. In fact, it is necessary to stimulate beneficial actions that otherwise would not be undertaken.

But- resources have an intrinsic value. Our governments too often give them away at a fraction of that value. They are not doing their job.

[Kidlicious]

Originally posted by The Mad Viking
The logical basis for owning capital is that the owner's labour created it.

That principle is grossly violated when an inheritor gets capital of enormous value without doing any work to deserve it.

This act is an act of violence to all members of the society born at the same time who do not accrue the same benefit.

The act of violence is not the giving of the gift. The violence is what the system does to people who do not inherit these gifts.

I see nothing morally repugnant with passing on the fruits of your labor to your children, as long as those fruits are not ill gotten gains or used to exploit.

[Flubber]

Originally posted by The Mad Viking
So, who owns THE OIL that is actually getting pumped out of the ground?

One might think that every person in the country would get an equal share in the net value of the resources (assets) that sat under their feet for millenia.

But no.

Because of the "risk", a few people get ALL the value. And scream mightily if the people ask for a tiny slice at tax time.

errmm-- with all respect-- you have no clue what you are talking about. . . . oil in the Canadian offshore and oil and gas elsewhere are all subject to pretty substantial royalties. In many schemes they are gross royalties meaning that the government takes a fixed proportion of production regardless of the cost of development.

So oil and gas companies pay three ways

1. the cost of obtaining the petroleum rights in the first place in an open bidding process ( and they don't get this back if there happens to be no petroleum there

2. Royalties

3. Corporate taxation

So they pay for the resources rights twice and then pay again in tax if profitable. What's wrong with this?

If the governement wants to be in the oil business, nothing is stopping them from taking the risk themselves on lands where they have not conveyed away the petroleum rights.

[Flubber]

On gifts and inheritences . . . sorry but IF you accept private ownership, you have to accept the freedom of a person to do with those assets as they choose.

But on social policy grounds I don't really object to a small wealth tax on the rich but lets NOT jack this thread in that direction.

[Flubber]

More generally

1. Some communists are talking about a wonderful world where nobody needs to work at anything they don't like and all needs are met. It sounds wonderful but is far far from the current reality and they seem to offer no plan for transition while talking about the wonders of the end result.

2. At least one other espouses worker owned corporations or co-ops. An interesting idea that can exist within the existing framework.

3. Kid continues with his claims and logic that most seem not to get. Even on the simplest questions there seems to be no clear answer. One of my simplest questions was " Who determines and on what basis, the amount a worker is paid for a given piece of work?". At different times I have seen concepts such as the value of their production (with no statement as to by whom) or the social utility of the work ( which can be quite different than economic value)

[Kuciwalker]

I like Spiffor's model best, I think it's the most realistic, but I don't think it's even possible to have an innovative economy owned almost entirely by the state.

[GePap]

Further still, I observe that communism is essentially at odds with itself.

One of the mandates in pure communism is that there IS no state, and yet, "the state" owns all the means of production and controls production (centralized, command economy).

Thus, the paradox. IF the state owns everything, then some means of enforcement and self-preservation MUST exist. IF the state is to set production paramaters, then there must be someone serving IN that capacity (and in Kid's utopia, we've got to have LOTS of State "Watchers" to ensure that no one ever becomes wealthier, or ever has an opportunity to exploit).

The two conditions cannot exist together, rendering the entire argument....smoke.

This is still a misunderstanding of the idea.

The notion of a centralized state controlled economy is a Leninist notion of the vanguard of the party pre-empting history and "building socialism"-hence the centralized economy. In the original Marxist theory, capitalism reaches a stage so advanced that it has created the conditions for its collapse, and what replaces it is more akin the Anarcho-Syndicalist notion that Ramo espouses, or more like the original Soviets, not the centralized party structure that was built up.

Communism is not against wealth-it is against exploitation and the alienation of man from his labor.

The main problem of the centralized economy, and what the market fixes, is the general inability of central planners to have the necessary information- so the market overcomes the inherent problem of central planners to know what is needed when. But again, centralized economics =/communism. Communal economics = communism.

[Flubber]

Originally posted by GePap

Communism is not against wealth-it is against exploitation and the alienation of man from his labor.

While I will accept what you say, it is apparent that several of the poly communists are making statements that show them to be against a great accumulation of wealth. In fact some seem to think that ANY accumulation of greater wealth either is defacto exploitation or at least, MUST have come from exploitation somewhere.

Some seem comfortable with even taking the wealth of others in situations where clearly no one was ever exploited ( the deserted island scenarios where someone acquires substantial assts through their own efforts alone). The ideology for a few seems to be as simple as " NO one may have more than me"

[Kidlicious]

Here's just a few problems that I have with capitalism. I thought I would please a few people and make a post with a bit of substance. Enjoy



1.
Inefficiency . Capitalist economists argue that free markets are always in efficient balance and so resources are allocated efficiently. This is not true for a few reasons. One of which is that producers can not possibly know what the market will be like in the future. So they over allocate resources where they are not socially necessary, and they under allocate resources where they are socially necessary. And even when they do allocate resources where they are socially necessary they often do so where they benefit society less then they would otherwise. For example, because of the unequal distribution of income in the economy goods and services are consumed by those who get less utility from then than others would. That’s because of the Law of Diminishing Utility.
2.
Incentive for Greed . While government regulation and redistribution of income might correct some of these short fallings of capitalism is usually does not, because capitalism requires the greed be rewarded. The capitalists will only, and can only, start up and maintain businesses if they make a nice tidy profit. Each capitalist nation must give incentives to the capitalists to keep the capital within their country, and to keep the economy going. This incentive goes beyond what the capitalists need to pay for their operations. Therefore it’s a cost to society with not other benefit to it, besides the continuation of the capitalist system.
3.
Poverty and Classism . Because society must incur this cost it can not afford to help those who need help the most; the poor. This is coupled with a strange mentality common within the capitalist world. That is the mentality that the poor have to be poor, not so that the rich can be rich, but because they are lazy. Maybe it is a justification created within the subconscious.
4.
Nationalism and War . There is no other purpose of the nation state but for the capitalist class to pit one group of people against each other; people who have no enemies except for the capitalists themselves. Whenever the capitalists see their own people turning against them they use create propaganda and hate speech against other nations and their people to divert the people’s attention from the true cause of their suffering, and falsely to people who have a common interest for them. And it’s the poor who always fight these wars. Never the rich.
5.
Unsustainable growth and and pollution . Similar to the reason that capitalism can not provide for its entire citizen’s, it can not maintain itself without overusing resources and over polluting the earth. Always the reason for overusing resources and over polluting is economic growth. Of course it is the capitalists again who benefit at a cost to us all, even future generations.
6.
Job Satisfaction . Another way that we have to give these capitalists incentive to provide jobs for us is to sacrifice our job satisfaction. Efficiency and productivity is placed above job satisfaction to the extreme. Of course we should consider efficiency, but job satisfaction is also very important to the happiness of individuals.
7.
Productivity . You might think I’m going to claim that capitalism is not productive. No I’m not. My claim is that productivity is reaching levels that are unsustainable for capitalism. People are going to have to work fewer hours in the future. There will simply not be enough jobs otherwise. But they will have to be paid the same, otherwise demand will fall. That’s a disincentive to the capitalists to create jobs. So it’s not going to work.

[Flubber]

Originally posted by Kidicious
Here's just a few problems that I have with capitalism. I thought I would please a few people and make a post with a bit of substance.

THank you for the substance. Unsuprisingly I disagree with much of what you say but I will respond later when I have more time. I have to go add some value to feed my greedy needs

Oh and kid I am sure you will be delighted to know that my firm was profitable this year and that as a good worker, I will be entitled to a nice chunk from our profit sharing arrangement. I figure the redistribution would appeal to you

[The Mad Viking]

Originally posted by Flubber

errmm-- with all respect-- you have no clue what you are talking about. . . . oil in the Canadian offshore and oil and gas elsewhere are all subject to pretty substantial royalties. In many schemes they are gross royalties meaning that the government takes a fixed proportion of production regardless of the cost of development.

So oil and gas companies pay three ways

1. the cost of obtaining the petroleum rights in the first place in an open bidding process ( and they don't get this back if there happens to be no petroleum there

2. Royalties

3. Corporate taxation

So they pay for the resources rights twice and then pay again in tax if profitable. What's wrong with this?

If the governement wants to be in the oil business, nothing is stopping them from taking the risk themselves on lands where they have not conveyed away the petroleum rights.

Define "open" bidding process. The minimum bid is $1,000,000. That sort of counts me out. The exploration costs are huge, yes, as a raw number. But only 5 to 10% of the value of the petrochemicals extracted. The bid is not on the oil, but on the exploration and land tenure rights.

Why do the people collect "royalties" on WHAT WE OWN?

The oil companies should be paid "royalties" on what they extract. The royalties are a small fraction of the value of the crude.

You want to pump out my crude oil. How cheaply will you do it? Now you are talking bidding.

[Velociryx]

Here are my responses to the latest additions to the thread. I realize that we're talking in circles, and that no one will ever convince anyone else to "join the other side" but what the heck....

Mad Viking: What Flubber said. If you accept that private ownership is valuable, then the owners of the asset (WHATEVER it may be) are free to do with it as they wish. That would include giving it to their children. I don't have one, but if I DID have an oil rig, you can bet your britches I'd be leaving it to my kids!

Kid - here are my responses to your post "problems with capitalism"

Inefficiency All the things you say are true, and all are automatically corrected by the market. No outside inputs required. Contrast this with what you would replace it with....a central planning committee who has to use blind guesswork to estimate future demand. With "the market" essentially being destroyed by your model, supply is arbitrary, and as has often been the case (Soviet five year plans), it misses the mark hugely. If you are arguing that Capitalism is inefficient to THIS model, history will tell you quite plainly that you're off your rocker. Capitalism is far more efficient at resource allocation than anything that's come before it, and anything we've seen since. One need only look at your acknowledgement that capitalism is monsterously productive to see further evidence of this. Inefficient paradigms do not tend to be overly productive ones.

Incentive for Greed
You should have stopped at simply "Incentive" and yes, there's plenty of that in a capitalist system.

Again, any time someone RISKS their capital for a productive enterprise, there is a premium to be paid. If you don't like the premium, then don't use the capital, but you cannot cry foul when the owners OF that capital want compensation for assuming all the risk and responsibility.

As I have pointed out before, the risk part doesn't vanish just because the state owns everything. Decisions about how and where to allocate state-owned capital will be made in EXACTLY the same fashion, and enterprises that are seen as bad risks or incapable of supporting themselves profitably will be shunned, in favor of better risks/more profitable ventures. That's the way it is when you own capital. There are some form whom greed plays a major role, but that would be akin to me saying that EVERY communist on 'poly wants to enslave me and steal my house. So far, that's only you and Che...

Poverty and Classism
Yes, both exist, and the divide is growing in America between the rich and the poor. In the same breath, America has created more millionaires in her two hundred year history than any other nation on the planet, and capitalism has brought about a higher standard of living for a tremendous number of people worldwide. The only lines you have to stand in in a capitalist country are checkout lines. Contrast that to the Glories of the Russian Revolution where people waited for days at a time in the breadlines, often to reurn home empty handed. And yet, you would have us believe that this is the system that will save us from poverty?

Also, do not be so foolish as to assume that EVEN IF you equalized incomes tomorrow, there would not be different strata of people in your paradise. If not with incomes, then it would manifest itself in other, and probably more sinister ways (party bosses lording their power to break up families over the "peasants" of your utopia, party membership being withheld as a punishment, former capitalists watched more closely than the rest as likely dissidents, and targets for persecution. Oh yes...there would be class differences. Much darker ones than we have now.

Nationalism and War
HARDLY a thing unique to capitalism, and in fact, having NOTHING whatsoever to do with the paradigm.

Unsustainable growth and pollution
Again, as compared to what? The Utopia you preach about? Would that be the same utopia Russia tried to found? The one that sacrificed tens of millions for rapid economic development, essentially turning whole segments of her population into slaves? The same utopia that virtually destroyed the Aral sea and left putrid stains all over eastern europe that easily rival (and often surpass) the very worst pollution caused by the capitalist-oriented west? Compared to the alternative, we're not doing too bad AND we're worlds more productive.

Job Satisfaction
Was actually very surprised to see this on your list, given that you have expressed the desire to FORCE people to work at a job, with no mention of taking their preferences or desires into account at all.

Here's a little tip for you. In capitalist-oriented America, if you love dogs, you can study to be a veterinarian, and do well at it. If you love numbers, you can study accounting and do well at that. In Kidatopia, the party bosses tell you where to work, and this is supposed to INCREASE job satisfaction somehow? Please elaborate!

Productivity
Not only does this point utterly refute the inefficiency point above, but it also assumes a closed economic system in which no innovation is occuring. In those cases, you are quite correct, however, the size of the economic pie has been growing nonstop since this country was founded. It shows no signs of stopping. Innovation happens every day, leading to a staggering array of new products. Products that need to be built, maintained, and improved upon further.

You can do better than those, Kid, I know you can....

-=Vel=-

[Velociryx]

And while we're about it, please explain to me why the value of your labor should have ANYTHING to do with the value of what you produce?

In today's economy, there are remarkably few products that are produced solely by virtue of one person's labor....there's a whole lot of other stuff that goes into it.

Part of that value belongs to the folks marketing and selling it, part to the folks researching ways to make it better, part to whomever owns the raw materials from which the whatever it is, is made from, and part from the tools/facilities used in the making of the product.

Your labor is actually quite a scant contribution to the overall whole, so why is it again, that you should be the only consideration?

-=Vel=-

[Flubber]

Originally posted by The Mad Viking


Define "open" bidding process. The minimum bid is $1,000,000. That sort of counts me out.

Open-- anyone can bid and highest bid wins . . .


Minimum bid 1 M and the bid deposit is $10,000-- so what?? Its simple prudence to require a minimum level of commitment. Anyone that can't raise a lousy million has no capability of doing meaningful work in the offshore. Its basically a seriousness test since frankly 1 million dollars buys you diddly squat!! Is your complaint that you can't win? Do you really expect that you should be able to win?

Originally posted by The Mad Viking

The oil companies should be paid "royalties" on what they extract. The royalties are a small fraction of the value of the crude.

If you would guarantee oil companies a return -- say as a service contractor with a 15% markup on the costs of paying the skilled personell. . . .. they would likely go for it-- In fact there are companies that specialize in production service operations. AS for going for a royalty, that would probably be acceptable if the government would actually pay the exploration costs and the production and operating costs all along. A 2% GORR based on finding Hibernia could be much more lucrative than an ownership position considering the MASSIVE amounts of capital required and the unknown which is the abandonment and restoration costs on project completion.

I LOVE the second guessers. Gulf, now ConocoPhillips , gave away a major ownership stake in Hibernia for NOTHING since they saw the risk as being too great. Now that oil prices are higher than expected, everyone is up in arms about the fact that the Hibernia owners make more profit than anticipated. Thats the nature of risk. Many of the same companies face marginal profits and maybe even losses on the Sable project when the gas reserves were not as anticipated. BUt the royalties continue and I don't hear any talk of doing anything to fix things when they turn out for the bad.

Oh and in the case of the Hibernia project we are talking dollars that the provincial government would have been incapable of raising. The feds could have swung it but do we really want our government running the oil industry. They seem incapable of running even a gun registry.

Originally posted by The Mad Viking

You want to pump out my crude oil. How cheaply will you do it? Now you are talking bidding.

THats a laughable approach since at the times the oil companies bid, they have no idea what if anything is there. On many occasions the answer is NOTHING. If the government paid for all the exploration and proving up of oil finds then you would find ample bidders to provide the services you seek.

But I don't here you mentioning the many , many millions of dollars that will go into governement coffers on that account. It will be into the hundreds of millions . . . money that companies pay for the right to explore for a limited time (5 to 9 years). BUt I bet that doesn't matter at all to you or even fit into your view of all this. Or do you take the fact that pretty much all the oil companies are exiting Nova Scotia as some sort of GOOD omen.

The fact of the matter is that it is a tough sell to get oil companies interested in the Canadian offshore as it is. If you think governmnet could develop it alone, be my guest but the provincial governments can't afford it and I am trying to imagine this as a federal project and shudder at the thought




Oh and do you go on in a similar fashion about YOUR minerals and hydro-power and forest and slate etc etc.

[Kidlicious]

Originally posted by Velociryx
And while we're about it, please explain to me why the value of your labor should have ANYTHING to do with the value of what you produce?

In today's economy, there are remarkably few products that are produced solely by virtue of one person's labor....there's a whole lot of other stuff that goes into it.

Part of that value belongs to the folks marketing and selling it, part to the folks researching ways to make it better, part to whomever owns the raw materials from which the whatever it is, is made from, and part from the tools/facilities used in the making of the product.

Your labor is actually quite a scant contribution to the overall whole, so why is it again, that you should be the only consideration?

-=Vel=-

I think you said it yourself. You want to be paid for all of the work that you do. If someone is paid for something else besides working then that means that someone is not paid for their work. It's that simple.