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Why Socialism for the Rich, Capitalism for the Poor?
- draw_down 10y agoWell, that's how really-existing capitalism functions. Socialized losses and golden parachutes for the ruling class, wage theft and austerity programs for the working class. Still, I suppose the "why" is worth pondering.
- TallGuyShort 10y agoThe sad thing is this article only focuses on the kind of "socialism for rich" that isn't even really socialism: it's purely private arrangements for those who have huge amounts of leverage in a free market. All that considered, I still generally support a free market, but what the article brings up is bad to begin with, but then you see that Republicans tend to also support lots of special treatment from the government - perhaps not always in the form of direct government funding - but in massive tax cuts, regulations in their favor and other special treatment only for select insiders, etc. and then turn around and scream 'free markets!' when it's somebody else's turn. Rank hypocrisy. They criticize the welfare state, but only as long as it's for individuals, they suddenly fall silent when it's for corporations.
- devoply 10y agoThe market is free only for those who have earned or inherited FU money. No one else can actually compete in any meaningful way in the free market, they might get lucky now and then but over time that's become nearly impossible similar to winning a lottery ticket, as anyone without money is competing against people with money or their lackeys. And with that same money they can buy preferential treatment when their bad bets blow up... which is paid for by the masses, but controlled by people who they can buy or at least coerce due mostly to wealth.
- nickik 10y agoSo how does society get richer? Is everything only because of government? Or some other thing? All those poor immigrants that came to the US, when the US had 2% of GDP in Federal government spending, did they all stay poor? There is a discussion about poor people and opportunity, but your statement is just plain false. Its false both empirically and theoretically.
- devoply 10y agoNo when enough wealth is created at the top, the people at the top want to generate yet more wealth as appetite for wealth is never satisfied, so they trickle down some of that wealth mostly as a means to create more wealth for themselves, which pushes the standards of living up. They create schools and educate the masses, to train them as employees that can do more complicated things so that they can sell those things to other people for more profit. Competition between the rich is what pushes everyone up.
- vacri 10y agoPoe's Law strikes again.
- TallGuyShort 10y agoThis sounds border-line conspiracy-theory-ish, but think about this the next time you hear wealthy or powerful people talking about how to improve education. They might not talk about how education opens your mind, expands your horizons, liberates you from poverty, etc. (some do, and those people are awesome). They may instead talk about educating people to prepare them for specific jobs. That sounds great as a direct impact of education, but that's a hint that they're really looking for publicly-subsidized training of their future employees so they can get away with not providing the training or necessary financial incentives themselves.
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- nickik 10y ago
- nickik 10y agoThe pure fiction that Republicans have anything to do with free market is simply refusing to die. I simply don't understand why people even still have this connection in its head.
- Declanomous 10y agoBecause Republican politicians tend to talk about "The Free Market" whenever they talk about regulations and laws. "We need to let the free market work!" Basically, it's just the brand identity the Republicans have created for themselves.
- nickik 10y agoThe Left is always there to point out how false everything they say is, on this point however they stay silent. I seems to benefit both of them, the left have the perfect boggy man (neoliberalism is literally the source of all evil) while the right seems to use is mostly to oppose leftist schemes. The never talk about free markets when they are talking about their own policy.
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- dragonwriter 10y ago> The Left is always there to point out how false everything they say is, on this point however they stay silent. The Left has been pointing out that capitalist markets are coercive rather than free since socialists coined the term "capitalism" for the economic system whose coercive structures they were criticizing, something like 150 years ago. If you aren't noticing it, you aren't paying much attention to the Left. This often happens when people, for example, mistake the dominant faction of the US Democratic Party (center-right neoliberal capitalists) for "the Left."
- phkahler 10y agoRight. In reality a free market can exist under most regulations, particularly ones that are evenly applied. If everyone has to play by the same rules competition should still exist and the players will learn to work within those rules. Regulation != death to free markets.
- facepalm 10y agoIt sounds like a nice move to give employees shares in one's company. But what is stopping employees from simply buying shares from their salary? Giving them a high enough salary so that they could buy any shares they want seems like a nicer move than promising them shares in one's own company. Also, people who get angry about this are often beneficiaries themselves - the article mentions the pension funds who own most shares, but who will also later pay most people's pensions.
- JoeAltmaier 10y agoBecause a company can print shares; cash hurts the bottom line.
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- omouse 10y agoOwning shares is not the same as ownership. Profit sharing on the other hand...
- theandrewbailey 10y agoPaying people more money is more expensive; giving people ownership is less costly. Employee owned shares encourage employees to work better. It also gives them a louder voice in how things are done.
- facepalm 10y agoWhat if I own a company and don't want my employees to have a voice in how things are done? Why shouldn't that be allowed? And what if I hire workers to build me a house - should they be entitled to parts of the house after they build it? Or what if they absolute want to put marble into the bathroom, but I don't? Should they be entitled to put marble, because after all they are doing the work? Meaning what is wrong with making a contract and fulfilling it? You do work x for me, I give you money y in return? Why make things more complicated?
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- warcher 10y agoI hate to get into politics here, but I will say that the one thing that capitalists truly despise is a free market. Competition is terrible for profits. Anybody worth their salt is always always always looking for unfair advantages, cause that's where the money is.
- theseatoms 10y ago> Anybody worth their salt is always always always looking for unfair advantages, cause that's where the money is. Those people aren't capitalists in the proper definition of the term. Capitalism is voluntarism, which manifests as free markets in practice.
- chc 10y agoWouldn't you consider monopolies like Standard Oil to be in line with voluntarism? Because it seems like to me, but their dedication to avoiding fair competition is the stuff of legend.
- oxide 10y agoThe free market in the United States is celebrated by the mouth of those who pass the laws, but often gets beaten by the hand. I don't think my ISP choice is a result of free market capitalism. It seems an awful lot like collusion against the free market, against competition, locking me down to one ISP depending in which region I happen to live.
- blunte 10y agoThat's basically what Reich is talking about. The people with money (power) make the rules. The label is still "capitalism", but the reality is otherwise. The US definitely does not have a free market. I would venture a guess that most of the regulations are actually designed to benefit a select few at the top of some company or investment system.
- dragonwriter 10y ago
- paulpauper 10y agoTheirs is cutthroat hyper-capitalism—in which wages are shrinking, median household income continues to drop, workers are fired without warning, two-thirds are living paycheck to paycheck and employees are being classified as “independent contractors” without any labor protections at all. But many businesses are also struggling . By some estimates, this is this harshest environment ever for small business. Employees are being squeezed but so is small business (except web 2.0 and stuff like that), which is another component of capitalism
- thesagan 10y agoQuite right in your point. Myself and people close to me know that first-hand. Also, lots of businesses are started by ex-employees who've been squeezed out of their former position. However the article is careful to distinguish between financial/corporate elites and small business (whose owners are generally not of the former group). It's almost misleading calling both small businesses and large corps "businesses". It's like ignoring the difference between a house cat and a lion in a debate about how one might goose-step on the other.
- Ensorceled 10y agoMany small businesses are not rich, the rules are not crafted for them either.
- jcslzr 10y agoI live in Mexico, I feel that we bring the US American jobs down here but without the salaries, now there are no customers, most markets does not exist under Mexican salaries.
- nickik 10y agoOf course the salaries don't come with it, that why it was moved in the first place. However, the reality is that if a country has good enough policies so that more industry starts there it will lead to more growth. If you sustain that for 40 years you can go from the poorest to one of the richest countries. That's how growth works.
- 10y ago
- ogezi 10y agoFor almost all of history the rich and powerful have had to play by different (more favourable) rules than everyone else. I suppose that the general situation is a better now since people can get into positions of power by means other than their birth and there's democracy, but in some ways much hasn't changed. It's interesting to me when I think of a world where people that paid higher taxes (absolute values and not a % of income) had more votes during elections.
- dkarapetyan 10y agoDon't forget the good looking.
- pm90 10y agoIf you look at history, the rich often used their influence to reduce their tax burden from the state, and this often led to crushing tax burdens on the people who could not represent themselves: peasants and the like. I think Fukuyama gives some great examples of how this led to instability in the political order and finance in pre-revolutionary France [0]. I'm afraid we are seeing something similar now, with some billionaires desperately trying to reduce any and all kinds of taxes they need to pay. Frankly its breathtaking to see how much greed these people have...also, a supreme lack of solidarity with they society they live in (and apparently a lack of knowledge of historical precedents as well). I should add that the same doesn't hold for all the rich/billionaires. Very much respect the work the Gates foundation is doing, just as an example. [0]: http://www.goodreads.com/book/show/9704856-the-origins-of-political-order http://www.goodreads.com/book/show/9704856-the-origins-of-po...
- dragonwriter 10y agoPublic policy mitigating risk at the top and increasing it at the bottom isn't "socialism for the rich, capitalism for the poor", it's just capitalism, a system that was named by its (socialist) critics for the way in which its structures inherently favor the interests of the holders of capital.
- mtgx 10y agoReasonable public policy would stop too much consolidation from happening, knowing it will represent a risk for the economy in the long term, though. That's not happening anymore...because campaign bribes.
- dragonwriter 10y ago> Reasonable public policy ...is not a defining feature of the real 19th Century system for which the term "capitalism" was coined as a label by its critics.
- Broken_Hippo 10y agoThis is only theoretically good because he's giving the employees stock. Most times, stock options seem like a rip-off that folks can never really cash in on properly. Maybe I've only encountered this with folks working retail and in places like call centeres, never quite having enough either to buy stocks nor exercise their options after they've left the company. Even $75,0000 (half of the lower stock price amount) can be a life-changing amount for someone making 30k per year. I understand it is cheaper on the bottom line to offer stocks, but it still can be worthless to the bottom-rung employee.
- jimbokun 10y ago"Even $75,0000 (half of the lower stock price amount) can be a life-changing amount for someone making 30k per year." Yeah, ever see the people openly weeping at the end of every Undercover Boss?
- Broken_Hippo 10y agoI had to look up what Undercover Boss was, honestly, so no :)
- zeteo 10y ago> Even if Yahoo’s board fires her, her contract stipulates she gets $54.9 million in severance. [...] In other words, Mayer can’t lose. [For the rest of America] wages are shrinking, median household income continues to drop, workers are fired without warning, two-thirds are living paycheck to paycheck and employees are being classified as “independent contractors” without any labor protections at all. > Before we go to the barricades, you should know about another CEO named Hamdi Ulukaya [...] Last Tuesday Ulukaya announced he’s giving all his 2,000 full-time workers shares of stock worth up to 10 percent of the privately held company’s value when it’s sold or goes public This is comparing apples to orange socks. The issue at hand is the safety net. If she gets fired, the underperforming CEO gets enough money to continue her lifestyle - perhaps indefinitely. The Chobani employees get a little more upside, but their downside is pretty much the same. E.g. they're still in deep sh*t if the company does badly.
- dkarapetyan 10y agoWait what? Are you seriously poking a hole in the argument by saying it's fine because CEOs are just used to being rich?
- zeteo 10y ago>Are you seriously poking a hole in the argument by saying it's fine because CEOs are just used to being rich? That's pretty much the opposite of what I'm saying.
- dkarapetyan 10y agoKinda hard to parse your argument then because > This is comparing apples and orange socks. The issue at hand is the safety net. If she gets fired, the underperforming CEO gets enough money to continue her lifestyle - perhaps indefinitely. I guess you're saying the comparison isn't even fair because it is completely different playing fields but it's hard to parse that from the above sentence structure.
- 10y ago
- lumberjack 10y agoHow are CEOs shielding themselves from risk while still benefiting from the gains? And how is that legal? Seems like some sort of scam.
- VLM 10y agoThere's at least three levels of answer The first level is its just political sloganeering. The next level is they're contract jobs and the pay is high enough to be F-you money if they fail and via the magic of survivorship bias we never hear about those that fail, although they and their kids are the trust fund babies that explode inflation while producing nothing of value other than CO2. The next level of analysis past that is a matter of scale. I can independently afford food and housing and medical care for my kids, maybe not the best but I'd be OK. If my business fails, no biggie, I just won't buy an ocean going sailboat in the 10+ meter range, we're still going to be OK. Someone lower on the socioeconomic totem pole tries to start a business and fails, or gets downsized from his good job, his wife has to leave him to get herself and the kids on the programs or they'll literally starve, that means she'll get the house, its the end of that dudes life, perhaps literally. Certainly its an economic death penalty even if he physically survives or if by some miracle his family survives intact. So the risk is a bit asymmetric because unless you magically have total equality in income, wealth, education, social connections, you're going to have people who will literally die if they lose $5K and others who can shrug off half a mil or more.
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- Mendenhall 10y agoBecause the average citizen does not take an active enough roll in government.That effect has compounded over time to put us in current situation. Also this isnt so much about socialism or capitalism but about why the world seems to favor the rich.
- joepvd 10y agoLet's reword your statement: > Because the average employee does not take an active enough role in management decisions. Think on the politics that are closer most people in their day-to-day lives, at the workplace, active engagement with general policy is disencouraged and might be dangerous. Meaning, most people refrain from engagement with "management material." Being trained like this, it naturally extends to governmental politics.
- Stillrigged777 10y agocosts go up, wages go down, vacation benefits are almost non-existent, so you have to work more to survive. when do you educate yourself on these issues sufficiently? when do you go out and participate? the problems are not secret. they're well discussed in academic circles, for decades, even longer, since the beginning of "capitalism" itself. this particular "well if the people actually did some thing about it!" is one of the oldest. what are they supposed to do in a society that largely tells contrarians to stop behaving like they're special and do their job?
- examancer 10y ago"Have an idea! Don't come in here with half a thing and not be able to... after you've walked me to the brink. And say, 'We've gotta do this. It's important though I have no earthly idea how.'" - Toby Zielgler, The West Wing (https://youtu.be/YKSTkLWjuyo https://youtu.be/YKSTkLWjuyo) Robert Riech makes good points but provides zero ideas how to solve them. Relying on the goodness of CEO's hearts isn't going to cut it. That won't help enough people. How do we incentivize the behavior of employee ownership? Right now the incentives are aligned against that, as Reich seems to make clear. He seems to be advocating against more "radical" approaches advocated by Bernie Sanders because there is this glimmer of hope some CEOs will be nicer. It seems like this article makes the point that structural changes are necessary but the author falls short of that conclusion and instead gives glowing praise to a single CEO in hopes it will inspire a few others. It might, but that won't help much.
- gremlinsinc 10y agoThe answer is easy, just cap CEO pay. Execs can only earn 25X the average salary of employees incl benefits. That multiplier goes up 1x per 1000 employees or whatever is fair there could be a different algorithm but something along those lines. But there's a measurable way to raise the CEO's pay: Hire more employees, and/or raise wages. -- Along these same lines Congress should also be capped at the average American yearly income + benefits = to average American's. -- Why should they get anything better than the rest of us?
- AstralStorm 10y agoBut facetiously, they make the laws to give themselves salaries... Plus there are other loopholes, some of which are already used, such as banking in Cayman I islands, and being located in a more "friendly" country.
- heynowletsgo 10y agoWhen is the denial going to stop? Capitalism is a system of slavery, and the poor are the slaves not the rich. The ownership shares to stay the owners, and the poor work so the owners stay the owners. Sophisticated slavery, all its ever been.