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> If someone else is producing wealth in order for your accounts to grow and you as the owner of the accounts are the beneficiary of this growth then that means

by cheald 11y ago

> If someone else is producing wealth in order for your accounts to grow and you as the owner of the accounts are the beneficiary of this growth then that means you are exploiting someone else's work. This is NOT fair. You are the partial beneficiary; the person who has used your money has also benefited from it. They have accomplished business goals and produced goods and services that they could not have without capital, and the price of that capital (a percentage return on the funding raised) is worth access to that capital without access to its associated risk. This is a fundamental tenet of capitalism - exchanges and transactions are only entered into when they are mutually beneficial. Somehow, the whole is greater than the sum of its parts! > If I have 20 million dollars in a stable fund that grows 10% a year, that means I get 2 million a year sitting on my ass. The majority of people in the US will not never even touch 2 million in their lifetime. You want to justify that kind of compensation by saying that index funds still involve certain risk? If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic. > bubbles pop and industries heal, the economy goes up in aggregate, and many rich people stay rich or get richer in extreme and extravagant ways that are grossly un-proportional to the amount of work they output. Bubbles pop (with investors in risky ventures/funds eating the brunt of that), industries heal (certainly not overnight, and during those recoveries, it is again the capital-holders who bear the financial burden), the economy does go up in aggregate (because it's not zero-sum, which is why laborers benefit even if the rich get richer), but are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it.

crimsonalucard 11y ago
>You are the partial beneficiary; the person who has used your money has also benefited from it. They have accomplished business goals and produced goods and services that they could not have without capital, and the price of that capital (a percentage return on the funding raised) is worth access to that capital without access to its associated risk. This is a fundamental tenet of capitalism - exchanges and transactions are only entered into when they are mutually beneficial. Somehow, the whole is greater than the sum of its parts! I'm not talking about venture capitalists risking and betting money on speculative private businesses. I'm talking about what a typical rich person does to preserve and grow wealth. They put it in stable index funds and live off the interest for the rest of their lives while contributing almost nothing to economy. There is no beneficiary in the stock market. The money goes to another trader while the stock price reflects either speculation or corporate output. But that's besides the point, in a low risk index fund, a 20 million investment yields 2 million with no work while your average worker gets 50k annually for working 5 days a week. There is no fairness in this no matter how you justify it. >If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic. Your view of risk is very incorrect. No stable index fund goes to zero overnight. Worst case scenario you lose 90% of 20 mill overnight and you're still 2 million dollars rich. Even then in every case, your investment fund will eventually go back to and past 20 million over time. This has always been the case, historically, for the American Economy. Ever hear of a 401k? Even though those are essentially stock funds, people put money in them for safety, not risk, these are the same funds rich people throw their money into. Also your symbiotic view of laborer and capitalist is flawed. The laborer creates a 2 million dollar product and only sees a 100k annual salary, while the capitalist put in an investment of 100k annually and reaps the benefit of the 2 million dollars. If the laborer's labor is worth 100k then we're talking about different returns by a magnitude of well over 100% for equal investments. That's not symbiotic, it's parasitic because the returns are not not distributed fairly. Rich people justify this with "risk" but the risk is minimal; remember I'm not talking about the startup game, I'm talking about rich people and their low risk strategy to grow their money. >"are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it." You're telling me it's ludicrous to get paid fairly for labor contributed and that empirical evidence supports this? How about this? The laborer creates a 2 million dollar product, the laborer gets 1 million, and the capitalist gets the other million? That's way more fair than what we see in the real world. If there's an economist who thinks this is unfair I have to disagree with him/her. Have you heard of the term wealth inequality? Did you know it's especially bad in the united states, and that it's growing? These are real problems and there is genuine discontent among the masses. People aren't stupid, if things were truly fair no one would be talking about it.

by cheald 11y ago

crimsonalucard 11y ago

>You are the partial beneficiary; the person who has used your money has also benefited from it. They have accomplished business goals and produced goods and services that they could not have without capital, and the price of that capital (a percentage return on the funding raised) is worth access to that capital without access to its associated risk. This is a fundamental tenet of capitalism - exchanges and transactions are only entered into when they are mutually beneficial. Somehow, the whole is greater than the sum of its parts! I'm not talking about venture capitalists risking and betting money on speculative private businesses. I'm talking about what a typical rich person does to preserve and grow wealth. They put it in stable index funds and live off the interest for the rest of their lives while contributing almost nothing to economy. There is no beneficiary in the stock market. The money goes to another trader while the stock price reflects either speculation or corporate output. But that's besides the point, in a low risk index fund, a 20 million investment yields 2 million with no work while your average worker gets 50k annually for working 5 days a week. There is no fairness in this no matter how you justify it. >If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic. Your view of risk is very incorrect. No stable index fund goes to zero overnight. Worst case scenario you lose 90% of 20 mill overnight and you're still 2 million dollars rich. Even then in every case, your investment fund will eventually go back to and past 20 million over time. This has always been the case, historically, for the American Economy. Ever hear of a 401k? Even though those are essentially stock funds, people put money in them for safety, not risk, these are the same funds rich people throw their money into. Also your symbiotic view of laborer and capitalist is flawed. The laborer creates a 2 million dollar product and only sees a 100k annual salary, while the capitalist put in an investment of 100k annually and reaps the benefit of the 2 million dollars. If the laborer's labor is worth 100k then we're talking about different returns by a magnitude of well over 100% for equal investments. That's not symbiotic, it's parasitic because the returns are not not distributed fairly. Rich people justify this with "risk" but the risk is minimal; remember I'm not talking about the startup game, I'm talking about rich people and their low risk strategy to grow their money. >"are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it." You're telling me it's ludicrous to get paid fairly for labor contributed and that empirical evidence supports this? How about this? The laborer creates a 2 million dollar product, the laborer gets 1 million, and the capitalist gets the other million? That's way more fair than what we see in the real world. If there's an economist who thinks this is unfair I have to disagree with him/her. Have you heard of the term wealth inequality? Did you know it's especially bad in the united states, and that it's growing? These are real problems and there is genuine discontent among the masses. People aren't stupid, if things were truly fair no one would be talking about it.