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Capitalism, and the income inequality it causes, has proven itself time and again as the most efficient organizing principle to create wealth. You may not like

Capitalism, and the income inequality it causes, has proven itself time and again as the most efficient organizing principle to create wealth. You may not like that but I don't think there is any way around that fact. If you want to go to a less efficient organizing principle you will have to accept that there will be less wealth. If history is any guide the people who will suffer the most from there being less wealth will be the ones at the bottom, not those at the top. Be careful what you wish for.

s_jambo 16y ago
I think a large amount of our monetary inequality is down to the way we've allowed our markets to become warped. The numerous examples of CEOs who kill their company but still make out like a bandit. The traders who're supposedly part of price discovery mechanisms but who actually just seem to keep blowing bubbles. The musicians who're granted a government monopoly to sell something we already have too much of (pop music). These are alot of the top 10% and mostly they're doing so well because our capitalist systems are broken. Even when you get to what you might think of as 'real' work. Advertising is generally not informative but emotive - thus these jobs mostly exist to distort markets. Lobbyists are in the same line of work but using government edict to achieve the same distortions. Yes the EMH demonstrates that markets are efficient at distributing resources, but it assumes products are fungible, actors are rational and have perfect information. Vast swaths of our economy are about stopping products being fungible (branding, copyright, patents, lobbying) and limiting how rational actors are (marketing, branding).
- speleding 16y ago
  I agree. My position is not that capitalism is infallible, far from it, and the distortions of incentives you mention can and should be addressed. But you will find even worse excesses in nations organized around communism.
loewenskind 16y ago
>Capitalism, and the income inequality it causes, has proven itself time and again as the most efficient organizing principle to create wealth. Bizarre statement. Compared to what? Primitive cultures that didn't have money? At what do you mean by "wealth"? Fiat currency (in which case Mugabe has been the most successful)? Accumulated toys and gadgets? Because if you're talking about anything else you're talking about capitalist countries. Sweden is capitalist, as in Denmark (despite both having over 50% tax rates). Hell, so is "communist" China. The question is just how much regulation they use and where, but make no mistake: they are all capitalist systems.
- speleding 16y ago
  I'm talking about capitalism as organizing principle: where people create wealth for society as a whole by pursuing their own interests. Wealth does not have to be money, I was talking about the economic definition of wealth. For groups of more than a few hundred people (some say 50) this turns out to work better than any of the alternatives such as communism. But it does cause income inequality as a necessary side effect. Nations label themselves in various confusing ways, as you point out. China may label itself communist but it is quite far removed from using communism as an organizing principle to create wealth.
  - loewenskind 16y ago
    >For groups of more than a few hundred people (some say 50) this turns out to work better than any of the alternatives such as communism. Citation please? Where has communism seriously been tried? Russia was trying a lot of things at the same time while simultaneously engaging in wars and dealing with their own in fighting. Communism didn't flourish in this environment, but what would? Capitalism itself depends on rule of law which was spotty at best. >But it does cause income inequality as a necessary side effect. Again, if you're talking about US levels of inequality I'm going to need another citation. I can't think of any developed country that isn't capitalist but I can think of a lot that don't have US levels of inequality. >China may label itself communist but it is quite far removed from using communism as an organizing principle to create wealth. Exactly. Granted, China does interfere in their markets a great deal (e.g. pinning their currency to the dollar artificially) but market interference isn't communism. It's a capitalist market their interfering with not a communist one.
    - speleding 16y ago
      > Citation please? Where has communism seriously been tried? Actually communism works well on a small scale and even in the US it is practiced widely: the family. No one presents their kids with a bill at breakfast. There have been attempts of various success to scale this up in communities / kibuts / etc especially in the sixties. But everywhere it was tried on a nation wide level it failed, which was my point exactly. > Again, if you're talking about US levels of inequality I'm going to need another citation. I'm not claiming the US has the "right" level of inequality. They do have one of the highest inequalities and also one of the highest per capita incomes (discounting a countries with natural wealth like Norway). The OECD.org web site has all the numbers you are looking for. I'm not claiming that this is fair, I'm claiming the US has more wealth, albeit not equally divided. If you make things more equal there is a good chance you destroy wealth, and there is also a good chance less wealth hurts those at the bottom, although it can take a few years for the effects to show.

s_jambo 16y ago

I think a large amount of our monetary inequality is down to the way we've allowed our markets to become warped. The numerous examples of CEOs who kill their company but still make out like a bandit. The traders who're supposedly part of price discovery mechanisms but who actually just seem to keep blowing bubbles. The musicians who're granted a government monopoly to sell something we already have too much of (pop music). These are alot of the top 10% and mostly they're doing so well because our capitalist systems are broken. Even when you get to what you might think of as 'real' work. Advertising is generally not informative but emotive - thus these jobs mostly exist to distort markets. Lobbyists are in the same line of work but using government edict to achieve the same distortions. Yes the EMH demonstrates that markets are efficient at distributing resources, but it assumes products are fungible, actors are rational and have perfect information. Vast swaths of our economy are about stopping products being fungible (branding, copyright, patents, lobbying) and limiting how rational actors are (marketing, branding).

speleding 16y ago
I agree. My position is not that capitalism is infallible, far from it, and the distortions of incentives you mention can and should be addressed. But you will find even worse excesses in nations organized around communism.

loewenskind 16y ago

>Capitalism, and the income inequality it causes, has proven itself time and again as the most efficient organizing principle to create wealth. Bizarre statement. Compared to what? Primitive cultures that didn't have money? At what do you mean by "wealth"? Fiat currency (in which case Mugabe has been the most successful)? Accumulated toys and gadgets? Because if you're talking about anything else you're talking about capitalist countries. Sweden is capitalist, as in Denmark (despite both having over 50% tax rates). Hell, so is "communist" China. The question is just how much regulation they use and where, but make no mistake: they are all capitalist systems.

speleding 16y ago
I'm talking about capitalism as organizing principle: where people create wealth for society as a whole by pursuing their own interests. Wealth does not have to be money, I was talking about the economic definition of wealth. For groups of more than a few hundred people (some say 50) this turns out to work better than any of the alternatives such as communism. But it does cause income inequality as a necessary side effect. Nations label themselves in various confusing ways, as you point out. China may label itself communist but it is quite far removed from using communism as an organizing principle to create wealth.
- loewenskind 16y ago
  >For groups of more than a few hundred people (some say 50) this turns out to work better than any of the alternatives such as communism. Citation please? Where has communism seriously been tried? Russia was trying a lot of things at the same time while simultaneously engaging in wars and dealing with their own in fighting. Communism didn't flourish in this environment, but what would? Capitalism itself depends on rule of law which was spotty at best. >But it does cause income inequality as a necessary side effect. Again, if you're talking about US levels of inequality I'm going to need another citation. I can't think of any developed country that isn't capitalist but I can think of a lot that don't have US levels of inequality. >China may label itself communist but it is quite far removed from using communism as an organizing principle to create wealth. Exactly. Granted, China does interfere in their markets a great deal (e.g. pinning their currency to the dollar artificially) but market interference isn't communism. It's a capitalist market their interfering with not a communist one.
  - speleding 16y ago
    > Citation please? Where has communism seriously been tried? Actually communism works well on a small scale and even in the US it is practiced widely: the family. No one presents their kids with a bill at breakfast. There have been attempts of various success to scale this up in communities / kibuts / etc especially in the sixties. But everywhere it was tried on a nation wide level it failed, which was my point exactly. > Again, if you're talking about US levels of inequality I'm going to need another citation. I'm not claiming the US has the "right" level of inequality. They do have one of the highest inequalities and also one of the highest per capita incomes (discounting a countries with natural wealth like Norway). The OECD.org web site has all the numbers you are looking for. I'm not claiming that this is fair, I'm claiming the US has more wealth, albeit not equally divided. If you make things more equal there is a good chance you destroy wealth, and there is also a good chance less wealth hurts those at the bottom, although it can take a few years for the effects to show.