4 ms·

Karl Marx saw a couple flaws in Capitalism, similar to what we practice today. I think he's right about one and wrong about the other. And the part he's right

by nemo44x 11y ago

Karl Marx saw a couple flaws in Capitalism, similar to what we practice today. I think he's right about one and wrong about the other. And the part he's right about is what people find unfair. He's right in that Capitalism is not about marking up a product to generate a profit by taking the cost of the goods and the labor to produce it but rather by paying labor less than what their labor is worth. And this is what bothers people. It isn't fair. And they are helpless to change it. And it is what is happening more and more. And the eventuality of it is Capitalism will eat itself as those without will be large enough in numbers where they assume power. Those which did the exploiting will either have their heads rolled or at the very least made impotent and marginalized. This is revolution and leads to Socialism and eventually Communism. The second part Marx argues is that only the State can sort out the best way to distribute means and goods - that the free market is too chaotic. This I disagree with and I think time has shown this to be false. The state will eventually be corrupt if it isn't already. And whose to say what is best for one person is also the best for the other? So, the free market exists where people can pick and choose. They have freedom. This allows some to have more than others and I think people are in fact OK with that. In fact I think people want that because we believe in getting what you're worth. Its just they don't want their own labor to be discounted to the point of being exploited - which is happening more and more with through wage suppression via policy or globalism which has displaced a lot of people very quickly, even if it might eventually benefit everyone as a whole.

nickff 11y ago
>"He's right in that Capitalism is not about marking up a product to generate a profit by taking the cost of the goods and the labor to produce it but rather by paying labor less than what their labor is worth. And this is what bothers people. It isn't fair. And they are helpless to change it." This has been clearly demonstrated to be incorrect many times.[1] [1] https://en.wikipedia.org/wiki/Price https://en.wikipedia.org/wiki/Price
- crimsonalucard 11y ago
  The definition of price doesn't really demonstrate anything.
  - nickff 11y ago
    The Wikipedia entry is titled 'price', but is actually mostly about price theory.
    - nemo44x 11y ago
      The theory might be sound but the effects of policy unilaterally advantage the capitalist at the expense of the local worker. This is why people feel they are being treated unfairly. They are competing with other groups around the world who haven't caught up yet. I believe we will eventually progress to the mean here but until then there are people feeling cheated. The trade agreements and bank bailouts did not consider the displacement in the near term and thus has created a growing group that is angry due to feeling that the system is not fair.
      - nickff 11y ago
        Price theory shows how businesses don't 'mark up' to generate prices; they sell for as much as they can, whether at a loss or a profit. >"policy unilaterally advantage the capitalist at the expense of the local worker" This is obviously untrue, and can simply be demonstrated by looking at how many of the supposedly disadvantaged workers strike out on their own, and form new businesses; if it were so easy and so sure, everyone would be doing it. Most employees with enough money to form a business in their field do not, because they do not think it is worth it. >"people feel they are being treated unfairly" People can feel they are being treated unfairly for a number of reasons, but we should make it clear that there are a few kinds of fairness that people care about, and they are not always mutually compatible. Fairness of treatment refers to procedural guarantees, and fairness of outcome refers to how equitable people feel the result of the process was. Conservatives tend to value the former, and liberals tend to value the latter. >"I believe we will eventually progress to the mean here but until then there are people feeling cheated. The trade agreements and bank bailouts did not consider the displacement in the near term and thus has created a growing group that is angry due to feeling that the system is not fair." You should be careful about making sweeping predictions based on simple theories, as they have the unfortunate tendency to be wrong. Tetlock's book is a good read on the subject of predictions and judgement if you are interested.[1] [1] http://press.princeton.edu/titles/7959.html http://press.princeton.edu/titles/7959.html
jessedhillon 11y ago
> He's right in that Capitalism is not about marking up a product to generate a profit by taking the cost of the goods and the labor to produce it but rather by paying labor less than what their labor is worth. And this is what bothers people. It isn't fair. And they are helpless to change it. Given your other statements, this is not a sensible position. A widget is priced according to the value it delivers a buyer -- if there are 100 brands of widgets on the market and they are easy to make, it's priced low; if I am the only widget maker, the only limit on the price is what I can convince people to pay. And what I pay my factory workers is subject to the same competitive forces -- labor's value is limited by my ability to replace it. That's your free market in effect, labor is only extracting value for itself until it exceeds the cost of the alternative, be that a robot or another worker. So if you are a believer that free markets deliver the best pairing of choice and freedom, how do you not look at a person working in a factory, being paid a low wage, enjoying no participation in profit, and think if they had more value to offer, they would negotiate a better deal.
- nemo44x 11y ago
  Because of policy, as I stated. They can't negotiate a better deal because the labor pool they are competing with is global. So they are now valued less and feel it is unfair. I'm not here preaching socialism. I'm just saying a near term effect of rampant globalization is people are going to be displaced and feel they are being exploited. I think this is where unrest comes from.
- s73v3r 11y ago
  Your statement only makes sense in a context where both the buyer and seller have roughly equal power. As it is, that has almost never been true when talking about labor. An employer who doesn't have enough employees is still going to be able to compete and make money, just not as much. However, an employee who doesn't get enough work is going to be homeless or starve.
  - zo1 11y ago
    "However, an employee who doesn't get enough work is going to be homeless or starve." Don't mean to be sarcastic here, but isn't that the whole point of government right now? Foodstamps, welfare payments, child-assistance money, social security, free medical care, etc. At what point can we stop using this supposed "power-differential" between employer and employee as some sort of silent force in the labour market?
mrchucklepants 11y ago
The answer to the first question is the time-value of money. The capitalist has put his capital into the production and is delaying the return on his investment to the future. The employee is being paid now, regardless of when the income from their labor is realized. This is why a good is sold for more than the worker is paid. The worker is not being paid less than their labor is worth.
- nemo44x 11y ago
  And the money earned with labor is taxed heavily while the money earned with capital is taxed minimally. This seems fair?
  - zo1 11y ago
    Money earned through capital gains, yes. Investing your capital into business/machinery yields higher profits. Those get taxed at corporate tax rate, which is 35%. This rate is only matched with the highest income-tax rate bracket. It may not "look" fair on the surface, but to compare capital gains tax with income tax is an oversimplification. For one, invested capital is unpredictable.
crimsonalucard 11y ago
This is a good way to describe it. He got the first part right, and identified the true flaw of capitalism. Too many people still associate him and his theory of communism with failed communist states like the soviet union, North Korea or pre-capitalistic China. While the association may or may not be real, his observation about capitalism is unequivocal.
- nemo44x 11y ago
  Thanks. It's amazing to see how many folks in the tech industry don't see this when the whole idea of H1B visas is to get workers that can easily be exploited over here. Especially since the first attempt in the late 90's of out sourcing failed. But out sourcing has worked fabulously for many other industries. And although I agree globalization has many benefits the side effect is many displaced people today seething with anger as the capitalist class gets wealthier. That anger will turn to pitch forks when there's enough of them. to compete with people around the world means to be exploited here and policy doesn't help it so people feel they are not allowed to participate in society fairly. Capitalists (including me) need to behave otherwise revolution will come and our bourgeois heads will roll.

by nemo44x 11y ago

nickff 11y ago

>"He's right in that Capitalism is not about marking up a product to generate a profit by taking the cost of the goods and the labor to produce it but rather by paying labor less than what their labor is worth. And this is what bothers people. It isn't fair. And they are helpless to change it." This has been clearly demonstrated to be incorrect many times.[1] [1] https://en.wikipedia.org/wiki/Price https://en.wikipedia.org/wiki/Price

crimsonalucard 11y ago
The definition of price doesn't really demonstrate anything.
- nickff 11y ago
  The Wikipedia entry is titled 'price', but is actually mostly about price theory.
  - nemo44x 11y ago
    The theory might be sound but the effects of policy unilaterally advantage the capitalist at the expense of the local worker. This is why people feel they are being treated unfairly. They are competing with other groups around the world who haven't caught up yet. I believe we will eventually progress to the mean here but until then there are people feeling cheated. The trade agreements and bank bailouts did not consider the displacement in the near term and thus has created a growing group that is angry due to feeling that the system is not fair.
    - nickff 11y ago
      Price theory shows how businesses don't 'mark up' to generate prices; they sell for as much as they can, whether at a loss or a profit. >"policy unilaterally advantage the capitalist at the expense of the local worker" This is obviously untrue, and can simply be demonstrated by looking at how many of the supposedly disadvantaged workers strike out on their own, and form new businesses; if it were so easy and so sure, everyone would be doing it. Most employees with enough money to form a business in their field do not, because they do not think it is worth it. >"people feel they are being treated unfairly" People can feel they are being treated unfairly for a number of reasons, but we should make it clear that there are a few kinds of fairness that people care about, and they are not always mutually compatible. Fairness of treatment refers to procedural guarantees, and fairness of outcome refers to how equitable people feel the result of the process was. Conservatives tend to value the former, and liberals tend to value the latter. >"I believe we will eventually progress to the mean here but until then there are people feeling cheated. The trade agreements and bank bailouts did not consider the displacement in the near term and thus has created a growing group that is angry due to feeling that the system is not fair." You should be careful about making sweeping predictions based on simple theories, as they have the unfortunate tendency to be wrong. Tetlock's book is a good read on the subject of predictions and judgement if you are interested.[1] [1] http://press.princeton.edu/titles/7959.html http://press.princeton.edu/titles/7959.html

jessedhillon 11y ago

> He's right in that Capitalism is not about marking up a product to generate a profit by taking the cost of the goods and the labor to produce it but rather by paying labor less than what their labor is worth. And this is what bothers people. It isn't fair. And they are helpless to change it. Given your other statements, this is not a sensible position. A widget is priced according to the value it delivers a buyer -- if there are 100 brands of widgets on the market and they are easy to make, it's priced low; if I am the only widget maker, the only limit on the price is what I can convince people to pay. And what I pay my factory workers is subject to the same competitive forces -- labor's value is limited by my ability to replace it. That's your free market in effect, labor is only extracting value for itself until it exceeds the cost of the alternative, be that a robot or another worker. So if you are a believer that free markets deliver the best pairing of choice and freedom, how do you not look at a person working in a factory, being paid a low wage, enjoying no participation in profit, and think if they had more value to offer, they would negotiate a better deal.

nemo44x 11y ago
Because of policy, as I stated. They can't negotiate a better deal because the labor pool they are competing with is global. So they are now valued less and feel it is unfair. I'm not here preaching socialism. I'm just saying a near term effect of rampant globalization is people are going to be displaced and feel they are being exploited. I think this is where unrest comes from.
s73v3r 11y ago
Your statement only makes sense in a context where both the buyer and seller have roughly equal power. As it is, that has almost never been true when talking about labor. An employer who doesn't have enough employees is still going to be able to compete and make money, just not as much. However, an employee who doesn't get enough work is going to be homeless or starve.
- zo1 11y ago
  "However, an employee who doesn't get enough work is going to be homeless or starve." Don't mean to be sarcastic here, but isn't that the whole point of government right now? Foodstamps, welfare payments, child-assistance money, social security, free medical care, etc. At what point can we stop using this supposed "power-differential" between employer and employee as some sort of silent force in the labour market?

mrchucklepants 11y ago

The answer to the first question is the time-value of money. The capitalist has put his capital into the production and is delaying the return on his investment to the future. The employee is being paid now, regardless of when the income from their labor is realized. This is why a good is sold for more than the worker is paid. The worker is not being paid less than their labor is worth.

nemo44x 11y ago
And the money earned with labor is taxed heavily while the money earned with capital is taxed minimally. This seems fair?
- zo1 11y ago
  Money earned through capital gains, yes. Investing your capital into business/machinery yields higher profits. Those get taxed at corporate tax rate, which is 35%. This rate is only matched with the highest income-tax rate bracket. It may not "look" fair on the surface, but to compare capital gains tax with income tax is an oversimplification. For one, invested capital is unpredictable.

crimsonalucard 11y ago

This is a good way to describe it. He got the first part right, and identified the true flaw of capitalism. Too many people still associate him and his theory of communism with failed communist states like the soviet union, North Korea or pre-capitalistic China. While the association may or may not be real, his observation about capitalism is unequivocal.

nemo44x 11y ago
Thanks. It's amazing to see how many folks in the tech industry don't see this when the whole idea of H1B visas is to get workers that can easily be exploited over here. Especially since the first attempt in the late 90's of out sourcing failed. But out sourcing has worked fabulously for many other industries. And although I agree globalization has many benefits the side effect is many displaced people today seething with anger as the capitalist class gets wealthier. That anger will turn to pitch forks when there's enough of them. to compete with people around the world means to be exploited here and policy doesn't help it so people feel they are not allowed to participate in society fairly. Capitalists (including me) need to behave otherwise revolution will come and our bourgeois heads will roll.