EPTI was hoping the OP would be more provocative tbh. This is just what everyone who lives outside of America thinks anyway.
The Lie of Capitalism and Globalization - Page 7
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Piy
Scotland3152 Posts
I was hoping the OP would be more provocative tbh. This is just what everyone who lives outside of America thinks anyway. | ||
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semantics
10040 Posts
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Alethios
New Zealand2765 Posts
On January 28 2010 08:56 Virtue wrote: The only issue with the current system to me is that the division of wealth has not been really at all balanced by the irs in the past 30 years taxing the rich has become less and less of an ability and a stronger reliance in getting the money when people die at least in the US. So we get the filthy rich and really poor in the US with a getting by middle class. That's my only complaint. You're only complaint is that the current system causes massive inequality and unemployment then. Fair enough. | ||
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Creationism
China505 Posts
On January 28 2010 08:51 StorkHwaiting wrote: My problem with asymmetrical information is that a lot of people even with the info will not make a smart decision. You ever tried to walk into a Walmart and start telling people why the products in their cart are bad for them, are not worth the money, etc? How do you think that would turn out? I've insisted this repeatedly. The majority of humanity is not that clever. Giving them perfect info won't mean much when their intellect can't even compute the information. Asymmetrical info as a problem is one of those theories bandied about by academics, yet has very little application in the real world. The academics forget that the average person can be rather stupid. What is a serious problem for the middle-lower classes is not their access to information. Rather, it's the simple fact that they need jobs they are capable of working and need wages that can support a decent quality of life. And they need regulation by the government to guide them into doing things that are beneficial for themselves. Because, sorry, people are NOT perfectly rational beings. And while they are selfish, they do not always do what is in their best interests. Even if they have the information needed to make a correct decision in front of them. There are plenty of people who know getting a college degree is pretty important. They've got the info in their faces 24/7. They still drop out. I think most people know heroin and cocaine are bad drugs. People still shoot and snort. Leaving the druggies out of it (not general population), I agree that the general population is stupid (read my sig, i think we see eye to eye here). But I think we disagree to what is actually real economic information. It's not something like telling people in WalMart why a OreO would kill them (which actually.... class action lawsuit i believe?), but rather that they will live 10 years less if they buy this crap. Or the full economic impact of going to college. If you told an average person that he will make (whats the average salary in the US, dont wanna google it) after 4 years of college instead of his shitty $10/hr job, you really dont think hed do it? (minus the tuition n what not of course) The rational being we're talking about here is a person who value what gives him more pleasure, as simple as getting laid once a day or twice a day. He spends more energy, but he gets a lot of pleasure out of it. Eventually you will meet a guy whos so lazy that he would forgo the pleasure to save that energy, but even he is rational utility wise. From a God's Eye view, yes, people will not do whats best for them even given ENOUGH information to pick the best choice, simply because they cannot process the information. But that rationality is different from the "rational consumer" we speak of in economics. The "real world" rationality is the ability to make logical steps to arrive at a conclusion, some people can't do that. But I mean if he REALLY had all the information, he would make the rational choice. The job situation now I believe is a result of the factor movement to basically all overseas over these last couple years. This not completely the fault of capitalism, but the lack of regulation on the factors section of the market, which it really seems no one cares about. Regulations such as the transfer of labor to overseas while still maintaining a ratio of workers here in the US might have come up a few years ago, not quite sure on that now... saw it a while ago. But taxing corporations that have effectly moved sectors overseas as a foreign unit would fix the problem instantly. But I guess you're right about how you'd have to be Moses to pass that bill. | ||
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Emon_
3925 Posts
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ZeroJumps
United States18 Posts
I have followed the TeamLiquid forums for a while now, but have thus far avoided posting. This thread, however, merits special attention. It's a provocative title I know. But it's exactly what I want to debate. Not just because the opening post is lacking in specificity and riddled with errors, but also because the majority of responses have been mere echoes of assent. Its a provocative opening, I know. But it’s exactly what I want to debate. FIERCELY. Good. To start things off I'd like to open with the latest address by President Sarkozy of France: Globalization Got Out of Control It’s difficult to believe that one would ever see an argument in favor of globalization and capitalism coming out from Sarkozy. Over the last few decades, France has seen significant cultural, social, and economic unrest among its population due to increasing number of immigrants, particularly those from Eastern Europe and the Middle East. I suspect if Sarkozy was seen to be advocating for greater globalization, he would soon be out of a job. This isn’t to say that his points should be discounted, but rather just that one should recognize his likely biases. Now, the way I see it, what's currently taught in economics and finance classes in America is this concept of globalization, free market, capitalism, and less taxes/regulation = increased economic prosperity. I want to go ahead and say that's crap. And I’m going to go ahead and say that you’re wrong. (This isn’t meant to spark a flame-war, but rather to announce my intention to debate the rest of your post) To begin, you will need to be a little more specific in your terminology. What do you mean when you say “free-market”, and less “taxes and regulation”? Are you talking about capital gains taxes, income taxes, or taxes in general? Do you mean less regulation on business? Or less regulation on capital and labor flows? One last point on this paragraph, and that is to say, as written, it is mostly correct. However, it should be noted that the predicted increase in economic prosperity is never immediate, nor does it imply that there will not be losers among certain segments of the population. Rather, increased economic prosperity is viewed in the aggregate, or the sum of the entire population. First, one of the central tenets of modern capitalism is this concept that the "free" market leads to benefit for everyone. They think that things naturally move to an equilibrium in demand/supply/price if left alone. The rationale for this is that people, with enough info, are perfectly rational beings that make the best choices .This is true if one is considering only the most basic or unrealistic economic models. I’m not entirely sure what you mean by “if left alone”, but I’ll take it to mean zero regulation, no taxes, and complete freedom in the movement of capital and labor. Also, I think you will find that every market, no matter how regulated or restricted, reaches some kind of equilibrium. I think what you meant to say is that economists believe the market will reach a perfectly competitive equilibrium, where you have many identical firms producing a given good at where price is equal to marginal cost. While some models do predict a perfectly competitive equilibrium from these things (and often only because they simply don’t include measures of them), I don’t think you could find a serious economist who believes such an equilibrium would result. As an aside, that kind of world is essentially anarchistic, and it is difficult to imagine any sort of nation-state even existing, let alone trading. The problem with this theory is it doesn't account for the destructiveness of monopolies . Which theory? Please be more specific. There are many economic models which do, in fact, account for the “destructiveness” of monopolies. Some kinds of monopolies also argue against your belief that economists always believe less regulation is a good thing. There are many situations where a regulated monopoly is the most desirable option. Any industry with high fixed costs and low marginal costs is well suited to allowing such a monopoly to exist, such as electric companies and telephone companies. (Imagine if there were many electric companies, and each had to lay their own power lines!) You are right that such monopolies could be “destructive” if they weren’t regulated, but my point here is that even “free market” economists see the value in certain kinds of regulation. In business, anytime a group has either grown or merged into a large enough economic body, they can start to implement destructive strategies like dumping a ton of their products at a very cheap price onto a foreign market and wrecking the local competition. This is validated by capitalism and the free market because this is merely a strategy to increase market share, and if they have the resources to engage in such an act, then they have every right to. Over the span of a few years, this group demolishes the local competition and creates a monopoly. Then they jack up the prices a ton and win back all the profits they gave up with this strategy. Except once they've recouped their investment, they continue to do it perpetually. This is a win-lose scenario. Yet, it's an example of what happens on the "free" market. This doesn't lead to constant competition and cheaper prices/higher quality for everyone. This leads to a stagnant market where one giant is in control and sells at exorbitant prices because they are the controllers of all supply. I’ll begin by saying that many countries do indeed have anti-dumping laws to protect against just that. But such laws are foolhardy. Your assessment lumps together two distinct kinds of dumping. The situation you’re describing is one in which a company prices their goods such that price is less than marginal cost, meaning they take a loss on every item sold (a.k.a. several recent game consoles). Such maneuvers can often result in other companies being forced out (note, however, that this is not limited to international competition). However, such behavior is not economically viable in the long run. As you say, prices must eventually go up. The extent to which people are willing to pay premiums above which they originally paid however, is limited by the elasticity of demand for that good. No one is going to pay $12 for a nail when they can buy a screw instead for $.01. Furthermore, once the company raises prices to above price equals marginal cost, it opens the door for competition to once again enter the market. The second situation is one in which the company prices their goods below the prices of other similar goods in the area, but at a price above marginal cost. This is a perfect example of specialization. If one company or country can make a profit by selling their goods at a lower price than another, then that company or country should specialize in the making of that good. Certainly, there will be some negative elements involved, such as workers of the higher-priced company being laid off, but the net gain to society more than compensates for that loss. Although this gain is most often considered in terms of lower prices, consider that lower prices result in increased profits of other companies, allowing them to expand and create new jobs. In capitalism, it's theorized that the only way to combat this is for another giant group to emerge. Yet, this sort of competition doesn't help at all. While the two giants are growing, they experience economies of scale and their efficiency increases. Yet, once they reach a certain size, they start to experience the DISeconomies of scale from being too bloated. But they have to continue this arms race, because if they try to scale back, the other one will have the advantage in buying power for that short window of time and can steal more market share, thus perpetuating an advantage until the guy who stepped back first is destroyed. What? This sounds like something you didn’t think through properly. Did you have a specific example in mind here? What does it mean to have “an advantage in buying power”? What do you mean by “scale back”? I also think you are confused about the nature and importance of market share. For the sake of argument, however, this is how I will take this paragraph: Both companies are too large. Thus, the price of their goods has risen (due to operating inefficiencies perhaps). One company recognizes this, and reins in their production (perhaps closing several production plants or store outlets). The other does not. By not doing so, the inefficient company gains an advantage over the efficient company (perhaps because they have more production plants relative to the other company now), and uses that inefficiency to eliminate the other company. The problem with that is that the first company is, by definition, inefficient. It cannot gain an advantage over the other company. How could it? The other company will produce the same good, but for a lower price. I think perhaps you believe market share to exhibit some kind of snowball effect, whereby once you achieve the largest market share, then you automatically eliminate the competition. Perhaps I have misunderstood you, but such behavior is not predicted in economic theory, nor is it seen in the real world. In the case you described, the inefficient company has no choice but to follow suit. This creates an effect where giants are constantly forced to grow bigger to compete This is misattributing cause and effect. Companies don’t grow bigger so that they can compete, companies grow bigger because they are competitive. Walmart didn’t just decide to become a national chain so that they could be competitive. They became a national chain because they were competitive. At the risk of being too repetitive, companies rarely ever grow bigger unless they are efficient. even though in the long run it leads to a net loss in efficiency. This is what the free market creates. My previous statement makes this false. The most successful companies are the most efficient. This makes intuitive sense. You don’t see large, successful companies that are inefficient. (Unless you count the US government as successful, but that’s beside the point  )The problems with this are obvious. This is why countries have effected protectionist policies to defend against these sorts of aggressive economic strategies. Then you no longer have a free market. It becomes mixed. Our world is full of mixed economies. Since your earlier statements were not true, the problems with this are not obvious (sorry if this seems too confrontational, it is the way my mind proceeds when I attempt to make an argument). You are right that countries have created protectionist policies to defend against domestic problems resulting from international trade. But those policies are always misguided. Why do they create them? Because the advantages gained from trade are much more difficult to see than the losses. A reduction in the price of nails from $.02 to $.01 as a result of trade saves millions, if not billions, of dollars per year. But no single company sees that entire picture. But the workers in the U.S. who make nails and got laid off are highly visible. They write to their congressional delegation. They appear in the newspaper and on television. Yet the sum of their wages might not even total a million dollars per year. Even though the net gain is much higher, it is not as noticeable. The last 30 years of economics in the USA and the world, is a constant attempt to try to bring down these protectionist strategies on the belief that free market was more efficient and beneficial for all. Peep the giant economic collapse we just had. It's pretty obvious to everyone now that this free market liberalization was a horrible idea. It destroyed local industries, it gutted nations, it destroyed whole swathes of industry in nations, and all it really did was lower the retail prices of goods. As another previous post said, this seems like nothing more than a populist outcry. Blaming the economic collapse on efforts to bring down protectionist barriers does not make sense. I fail to see how trade tariffs, immigration restrictions, and limits on international capital flows have anything to do with banking regulation. Capital flows and capital gains taxation are in the realm of banking, but are not themselves causal agents in the collapse. What use are lower prices when you don't have a job? They make your food stamps and unemployment insurance stretch a lot further. That's the problem with the concept of free market. It's too focused on price of goods as a barometer for efficiency. It fails to address the issues of labor and wages. Now if you try to approach the labor market using capitalist and free market principles, you end up with sweatshops in China and India. I think the price of goods is an excellent barometer for efficiency. While I believe using it as a measure does neglect many important other things, such as happiness or environmental concerns, the one aspect it does excel at is to provide a measure for labor and wages. Wages mean nothing with a price to compare them to. $1 a day will buy one nothing now, but 100 years ago? Similarly, a wage is nothing more than the price of labor. Perhaps you meant that the focus of companies on the price of goods prevents them from paying adequate attention to the needs of their workers. (I think this is, after rereading your paragraph, how you meant it). Sweatshops are an oft-cited example of “evil corporations” that exploit people. I typically associate this kind of statement with people who have never been outside of first-world countries, or experienced true poverty. Not poverty as defined by the US ($22,000 for a family of four), but poverty of the kind where people earn less than a $1 a day. In such situations, a job at a sweatshop is almost a miracle. The alternative to such jobs in poor countries is frequently to not know if or when you will eat again. People living in developed countries often forget how terrible situations can be elsewhere. A common counter-argument to this is “Well, why don’t companies just pay them as much as they pay their American workers?” There are many answers to this. The best is probably that the labor pool is just too large. The United States makes up a but a tiny fraction of the world’s population. For every child in Egypt making shoes for $2 a day, there are a hundred more who would be willing and happy to do it for $1 a day. A second is that, if they did, there would be no incentive to hire workers abroad. All it would do is increase the costs of their goods, as they would need to be shipped further. Does anyone honestly think it is a good thing to compete with sweatshop workers in terms of pay/productivity? There is a reason manufacturing industries are declining in the United States. Does anyone honestly think this is a bad thing? American wages have been increasingly consistently over the last...250 years. Unemployment has stayed all but constant, and far lower than almost any other country on the planet. This suggests that the positive effects from structural changes in the economy, such as the shift from a manufacturing based economy to service based economy, far outweigh the negative. There is a common story told about such shifts: Everyone used to worry that robots would take over all of the manufacturing jobs, and then there would be massive unemployment. Except, when the robots took over, the unemployment spike didn’t happen. Why? Because people were needed to build, operate, and maintain the robots. Countries specialize in the things they are best at. The United States used to be among the best manufacturers in the world. So there were many manufacturing jobs. Now, as our standard of living, our productivity, and educational attainment have all increased, we are no longer the best at manufacturing. We still might be able to produce more per person than another country if we focused on manufacturing, due to our infrastructure and technology, but what would be the point? Instead, we move onward and upward into a service-based economy. There is only one real way to improve labor's market value, which is training that improves their productivity. Yet, the sad truth of the matter is that even with a great education, a large proportion of the population is not that clever. They can't really be trained that far past the level of a sweatshop worker. This is what's traditionally known as "retail sector" or "blue collar." The first sentence is more or less correct, though it neglects the role of technology. I agree that the intelligence of the average person of the United States is “not that clever”. But, again, go outside of the first-world. The literacy rate in the US is close to 100%, and almost every student attends some high school. While poor countries have made great strides in recent years (thanks to globalization. . .), almost 100 still have literacy rates below 80%. This makes up a pretty large percentage of the world population. Yet, the blue collar workers in America don't want to work in sweat shop conditions. Capitalism and the free market tells us that the smart thing to do is just tell those blue collar workers to fuck off and move the factories to China. And this is a problem because? I understand that, given the current unemployment rate, and given how the recession has disproportionately effected men in manufacturing, that such a response seems callous. That’s because it is, in the short term. This is why you see an increasing wealth disparity between the rich and poor in America. The poor have lost their jobs to the increasingly "free" labor market, Is it? Does $30,000 a year for a factory worker job narrow the wealth disparity between the rich and the poor? No, it does not. whereas the rich and intelligent Americans have increased their value because they have some of the world's best education, coupled with some of the world's best tools of production .I don’t argue with this. AKA, the American factory worker must compete with the Chinese sweat shop worker. I just want to point out here that the standard of living and the wage level for all income groups has being increasing in America since its founding. It isn’t that the poor are getting poorer and the rich richer, it is that the rich are getting richer faster than the poor are getting richer. The American Harvard graduate competes with the Chinese Beijing University graduate. Except the Harvard graduate gets to enter an organization like Goldman Sachs, with some of the world's best financial algorithms and the best financing and the best connections. I think you meant: The American Harvard graduate competes with the Chinese Harvard graduate. And that is one the best thing about having less protectionism. With more freedom of movement for labor and capital, the best and brightest in other countries are allowed to make use of the top schools in the world. Therefore, while the free market has allowed the Harvard graduate to reach greater and greater heights by reaching the pinnacle of the financial world and reaping the benefits of competing vs the world due to massive, built-in advantages, the American factory worker has been laid off and can't find another job because he/she is now competing versus the 5 billion people of the developing world. Right. But again, this is a short term loss for a much greater long term gain. Think about the industrial revolution. It was essentially the same, except that instead of services replacing manufacturing, manufacturing replaced agriculture. Does anyone (other than dirty hippies) think America is worse off for having undergone that transformation? Do you guys see now why the free market is not helping the vast majority of America? To go back to the linkage between prices and wages: you don’t see how it is helping because you simply don’t notice it. When you go grocery shopping, do you stop to think, “My grocery bill this week was $100 less this week because of free trade”? Free trade results in a purchasing power increase of tens-of-thousands of dollars every year for each and every person in the United States. That is not an exaggeration. Consider how many goods you buy every year, and then realize that anything not made in the United States is cheaper than it would be otherwise. Even goods made in the United States, such as strawberries from California, are cheaper because they have to compete with Mexico. And, if that’s not enough, consider that you even have the option to buy strawberries in January. All because of free trade. And if you look at the labor markets, the greatest shift has been away from manufacturing and towards retail. Yet it's a nonsensical shift. How does it make any sense when the retail industry is driven by consumption, and the consumption is paid for by wages from the retail industry? Are you asking how can goods continue to be produced in a country if no one is actually making goods? This is like saying, I get a job at Gamestop. Then I buy a ton of games from Gamestop. Eventually, Gamestop will expand because I'm buying so many games with my wages from them, that Gamestop's sales will be enough to expand. It makes no sense. Money is constantly being pulled OUT of the economy this way. Every time you put $50 through the system, you end up with less. First, I get the job at Gamestop. They pay me $50. Yet, I pay income tax on that $50. It then becomes $42. This $42 is then spent to buy a game. Yet I need to supplement it with another $8 from somewhere. So, already I'm at -$8. Okay, $50 + tax = $53. Now I'm at -$11. Then Gamestop gets their $50 and has to pay corporate tax on it. So they're down to what? $40? A net of $-21 for a single transaction between retail to employee and back to retail. So, in every transaction of $50 of wages going out of the system, we end up with only $29 of it going back in. It's rather obvious that the US labor/wage market can not be sustained by this type of relationship. I don’t really know what to make of this. It almost seems like you see tax money as being removed from the system. The middle and lower classes cannot live much longer with these types of conditions. This is why there is a constant drain of money OUT of the middle and lower classes and INTO the upper classes. It is not a zero-sum game. The reason is because the tax dollars are being siphoned off. That $21 that was taken out is given to the government. Right. You do see taxed dollars as just vanishing. Let me redo your gamestop example (keeping it simple): You work at gamestop. You get paid $100. Income tax takes 20%. You now have $80. You buy a game for $50, with $5 of sales tax. Now, gamestop has -$50 (the game – your income). You have $25. The government has $25. The government uses that $25 to buy concrete an pay a worker to repair the pothole in your street. Now that worker has $25. Now he buys a game from gamestop. Which fuels your next paycheck. Economies are vast. Money changes hands very frequently. Money doesn’t just disappear from the system. Yet, the government we have today is increasingly controlled by corporations. According to current moral and economic philosophy, like that espoused by Jibba and others on TL, it's perfectly okay and constitutional for a corporation to get involved with government. On top of that, morals have no place in economic decisions. Therefore, it is completely okay for a corporation to try to pay to get laws passed that benefit the corporation. This reads like a conspiracy theory website. I can’t argue that corporations don’t heavily influence politics. But, two points to consider: first, the United States has one of the highest capital gains tax rates in the world. This is extremely detrimental to business. Second, income tax is progressive. Larger corporations pay more in taxes. One would think that, if corporations really had significant influence, these items in particular would be among the first to change. What this means is that those $21 instead of going back into an industry that benefits the lower classes could be funneled into an industry that doesn't support hardly any of the middle-lower classes. Such as the banking industry! So, not only is the middle class losing jobs, competing with a vast number of foreign competitors, but they lose nearly half of every dollar to that mfing Harvard graduate. Because he/she is busy wheeling and dealing, screwed a bunch of people over with greedy "capitalist" ploys, and then needed a bailout. I realize that writing quality goes down the longer one writes (witness my own comments), but there really isn’t anything of substance in here. I guess I’ll just point out recent income tax statistics: (google IRS summary of Federal Individual Income Tax Data 2007 or 2008 for source) In 2007, The top 1% of income earners paid 40% of total income tax. The top 50% of income earners paid 97% of total income tax. In other words, of that $21 dollars in taxes, $20.50 of it came from the wealthy. I find it hard to make an argument that taxation is hurting the poor. This is how Main Street gets shafted. On top of that, to the people who claim that of course the solution to all this is just get rid of taxes, I ask the question, ok, then where is the growth? Sure, without taxes the $50 between me and Gamestop is cycled back and forth. Yet, that $50 will never grow. It remains $50. Therefore, even in the most ideal of circumstances, the money is not lost, it only remains the SAME. ZERO growth. In fact, accounting for inflation, you'd still see a loss of $1-2 each year. The industry continues to lose in a perfectly ideal situation. This is why the concept of consumer-based society leading to growth is total bullshit. You cannot grow an economy by spending money. That doesn't work. We don’t have a consumer based economy. We are moving toward a service based economy. The only way to grow the economic pie is technological innovation which decreases the cost of production. This way, I spend $50, Gamestop gets their $50 back. Yet, they have factories/studios that can produce the game for only $5. Therefore, they pay me $50, I buy from them for $50, they get back $45. They can then afford to make 9 more games. With 9 more games, they can make enough money back to hire 8 more workers. This way the loop continues. Except somewhere in the loop, the business decides that instead, they're just going to pay all those profits to the CEO. We don't need to increase that many jobs. We'll just give it to the top guys. Therefore, once again the middle and lower classes are powerless to stop the flight of money from the consumer-supplier loop. Technological innovation is certainly a good thing. It reduces prices. But so does shifting labor to another country. Perhaps another example: Say they fire you because they don’t need you making the game anymore, because they hired a worker in another country. Since they can now make games cheaper, they make more profit, enabling them to expand. You get rehired as architect to design their new buildings. Now instead of being in manufacturing, you’re an architect. (Think about this on a national level, not on an individual level) In pretty much every way, using capitalist and free market principles leads to a loss for the middle and lower classes. This is why Sarkozy says capitalism needs to be refounded to be more moral. That finance, free trade, and competition are a MEANS not an end. And it needs to be redefined and reinvented. Remember what I said about Sarkozy’s likely biases and political pressures? It's because morons run around trying to claim that the free market leads to increased efficiency and prosperity for all as long as everyone just makes decisions in a totally selfish manner. It doesn't. It doesn't work. The past 30 years have shown it doesn't work. It's led to disaster. The globalization and free market proponents were wrong. They did nothing but justify selfishness as a good thing. There isn’t really anything to respond to here. I would be happy to argue with you some more, if you would like. You said you were familiar with economic concepts in a previous post. Maybe we can break out our favorite international macro or international trade models. Thanks for reading! | ||
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StRyKeR
United States1739 Posts
On January 28 2010 09:25 ZeroJumps wrote: First, Hi! 12hatch 13pool 15hatch Drones Drones Sunken Expo 9muta 11muta Lurker upgrade Hive Expo Defilers Cracklings Ultras Expo Expo Expo 5su6su7su8su 1a2a3a4a Op is Terran and ZeroJumps just fucking owned this thread. EDIT: Shit, Op plays Protoss. Whatever, ZvT is fun. | ||
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L
Canada4732 Posts
Any industry with high fixed costs and low marginal costs is well suited to allowing such a monopoly to exist, such as electric companies and telephone companies. (Imagine if there were many electric companies, and each had to lay their own power lines!) Look up the war of the currents. That's exactly what Edison wanted to do, as long as he owned all of said electric companies.Additionally, look at the intense propaganda campaign he used to try and justify his clearly shitty plan; its got a number of modern day equivalents. | ||
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Alethios
New Zealand2765 Posts
On January 28 2010 09:25 ZeroJumps wrote: This reads like a conspiracy theory website. I can’t argue that corporations don’t heavily influence politics. But, two points to consider: first, the United States has one of the highest capital gains tax rates in the world. This is extremely detrimental to business. Second, income tax is progressive. Larger corporations pay more in taxes. One would think that, if corporations really had significant influence, these items in particular would be among the first to change. You're saying you know corporations heavily influence politics, but it's not significant? It's a conspiracy theory to suggest otherwise presumably. Taxation laws in the US are incredibly difficult to change, so the corporations pick their battles. They ensure that their interests are served abroad ( 'unfriendly' governments being overthrown in US backed military coups) that their particular company gets nice juicy contracts (haliburton under Bush for example) and that environmental regulation, indeed regulation in general, is blocked somewhere along the line. EDIT: yarders... can you spoiler that shit? We don't need it twice on one page. | ||
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Orome
Switzerland11984 Posts
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Caller
Poland8075 Posts
On January 28 2010 09:36 StRyKeR wrote: Op is Terran and ZeroJumps just fucking owned this thread. EDIT: Shit, Op plays Protoss. Whatever, ZvT is fun. 5/5 | ||
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Two_DoWn
United States13684 Posts
All that you are doing is complaining about something that has problems, but gets the job done. This is the same as saying that we should cut people's hearts out because they have heart attacks. Sure they fail sometimes, but it's better than nothing. | ||
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Saturnize
United States2473 Posts
 5/5 | ||
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ZeroJumps
United States18 Posts
You're saying you know corporations heavily influence politics, but it's not significant? It's a conspiracy theory to suggest otherwise presumably. Taxation laws in the US are incredibly difficult to change, so the corporations pick their battles. They ensure that their interests are served abroad ( 'unfriendly' governments being overthrown in US backed military coups) that their particular company gets nice juicy contracts (haliburton under Bush for example) and that environmental regulation, indeed regulation in general, is blocked somewhere along the line. I intended that to imply that, while corporations certainly exert influence on political decisions, there are many other powerful groups as well who also exert their own influence. Consider lobbying groups such as the ACLU, the NAACP, the NRA, and most of all, the AARP. | ||
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mahnini
United States6862 Posts
On January 28 2010 08:46 StorkHwaiting wrote: You're right that the majority of jobs in the last two decades have been in the service industry. And that's exactly why we're seeing a massive spike in unemployment now. The lie was exposed. As soon as the overconsumption went down, all that supposed "growth" in jobs disappeared. It was driven by American consumption. That level of consumption has now been shown to be untenable. People were relying on bubbles to fund their lifestyles. Scooping equity out of their homes to buy shit they didn't need. Now everyone's cutting back and suddenly a generation of workers have no jobs. And there's no foreseeable way to create enough jobs to absorb the unemployment. It is a critical issue when a third of the country is underemployed. We are NOT an industrial country anymore. THe problem is we aren't anything now. I mean, what do we produce? Pharmaceuticals? Britney Spears? Video games? We're a country that creates some brilliant intellectual property, but that doesn't employ a nation. It is a serious issue, one that you will see grow worse over time as each generation enters the labor force and the percentage of them actually finding jobs decreases. no. you can't just blanket the situation like that and blame it all on "overconsumption" which is not the issue we were dealing with in the first place. booms and busts happen, they've happened before and will happen again. it is neigh impossible to have a completely stable economy in that aspect. there was no lie exposed, in fact, i'd like for you to describe to me the lie that was there in the first place. our current receding economy is a by product of numerous factors, none of which are "lies". the fact that this problem is worldwide shows that it is not a problem with our overconsumption. this has nothing to do with globalization or capitalism, perhaps more with the issue of policy-making and regulation. unless you want to destroy the concept of credit everything you've describe could happen to any system of economics. your argument has trickled from globalization and capitalism is bad, to exporting manufacturing is bad, to overconsumption is bad. you have not addressed any issues that have been brought up contrary to your opinion and instead are trying to validate your views and opinions by saying how bad the economy is right now and how obviously so-and-so caused it. PROTIP: it doesn't work that way. also lol one third you're also forgetting that analysts said that when the baby boomers retire there won't be enough workers to fill in positions. | ||
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aidnai
United States1159 Posts
One of the arguments against free markets that I've found strongest is the tendency of democracies and free markets to rely on people voting or acting in their own best interests, i.e. selfishly. Although the OP is pretty wordy, I think the crux of the argument is this exactly, that free markets are immoral in that they cause people to behave selfishly. After being forced to think about this in one class or another in just about every term in college (I attended university in Canada), I have come to the conclusion that the reason the American model has been so successful (America being the world's dominant economic power for how long now?) despite being 'evil' or at least immoral, is the unique conflation of religion, nationalism, work ethic, and morality present in America. Christian principles specifically are more or less an 'antidote' to the immorality inherent in free markets. I also think this is why the problems with free markets are seen so much more readily by those outside the US in post-Christian Europe, and by those in academia (which is also post-Christian). Anyway, just one other dimension of the debate which I haven't seen mentioned yet. | ||
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StRyKeR
United States1739 Posts
Kind of like how humans evolved to be altruistic because of their selfish gene (from the book, The Selfish Gene -- a good read btw), a free market is in many senses altruistic (gives the greatest good to the greatest number) because it is selfish. | ||
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L
Canada4732 Posts
On January 28 2010 12:29 StRyKeR wrote: Selfishness is reality. I would actually argue that it is a reason to SUPPORT free markets. Free market works exactly because it recognizes and tries to take advantage of the reality that is human selfishness. Kind of like how humans evolved to be altruistic because of their selfish gene (from the book, The Selfish Gene -- a good read btw), a free market is in many senses altruistic (gives the greatest good to the greatest number) because it is selfish. An actual free market doesn't give the greatest good to the greatest number of people. That's why you have mixed markets, because free markets are so abusive that they implode. | ||
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Fraidnot
United States824 Posts
It's a good system as long as you can manage the corruption, and yeah maybe you can't keep your family farm competitive, but hey you threw away your Walkman for an ipod how many years ago? | ||
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lOvOlUNiMEDiA
United States643 Posts
On January 28 2010 09:25 ZeroJumps wrote: First, Hi! I have followed the TeamLiquid forums for a while now, but have thus far avoided posting. This thread, however, merits special attention. Not just because the opening post is lacking in specificity and riddled with errors, but also because the majority of responses have been mere echoes of assent. Its a provocative opening, I know. But it’s exactly what I want to debate. Good. It’s difficult to believe that one would ever see an argument in favor of globalization and capitalism coming out from Sarkozy. Over the last few decades, France has seen significant cultural, social, and economic unrest among its population due to increasing number of immigrants, particularly those from Eastern Europe and the Middle East. I suspect if Sarkozy was seen to be advocating for greater globalization, he would soon be out of a job. This isn’t to say that his points should be discounted, but rather just that one should recognize his likely biases. And I’m going to go ahead and say that you’re wrong. (This isn’t meant to spark a flame-war, but rather to announce my intention to debate the rest of your post) To begin, you will need to be a little more specific in your terminology. What do you mean when you say “free-market”, and less “taxes and regulation”? Are you talking about capital gains taxes, income taxes, or taxes in general? Do you mean less regulation on business? Or less regulation on capital and labor flows? One last point on this paragraph, and that is to say, as written, it is mostly correct. However, it should be noted that the predicted increase in economic prosperity is never immediate, nor does it imply that there will not be losers among certain segments of the population. Rather, increased economic prosperity is viewed in the aggregate, or the sum of the entire population. . This is true if one is considering only the most basic or unrealistic economic models. I’m not entirely sure what you mean by “if left alone”, but I’ll take it to mean zero regulation, no taxes, and complete freedom in the movement of capital and labor. Also, I think you will find that every market, no matter how regulated or restricted, reaches some kind of equilibrium. I think what you meant to say is that economists believe the market will reach a perfectly competitive equilibrium, where you have many identical firms producing a given good at where price is equal to marginal cost. While some models do predict a perfectly competitive equilibrium from these things (and often only because they simply don’t include measures of them), I don’t think you could find a serious economist who believes such an equilibrium would result. As an aside, that kind of world is essentially anarchistic, and it is difficult to imagine any sort of nation-state even existing, let alone trading. . Which theory? Please be more specific. There are many economic models which do, in fact, account for the “destructiveness” of monopolies. Some kinds of monopolies also argue against your belief that economists always believe less regulation is a good thing. There are many situations where a regulated monopoly is the most desirable option. Any industry with high fixed costs and low marginal costs is well suited to allowing such a monopoly to exist, such as electric companies and telephone companies. (Imagine if there were many electric companies, and each had to lay their own power lines!) You are right that such monopolies could be “destructive” if they weren’t regulated, but my point here is that even “free market” economists see the value in certain kinds of regulation. I’ll begin by saying that many countries do indeed have anti-dumping laws to protect against just that. But such laws are foolhardy. Your assessment lumps together two distinct kinds of dumping. The situation you’re describing is one in which a company prices their goods such that price is less than marginal cost, meaning they take a loss on every item sold (a.k.a. several recent game consoles). Such maneuvers can often result in other companies being forced out (note, however, that this is not limited to international competition). However, such behavior is not economically viable in the long run. As you say, prices must eventually go up. The extent to which people are willing to pay premiums above which they originally paid however, is limited by the elasticity of demand for that good. No one is going to pay $12 for a nail when they can buy a screw instead for $.01. Furthermore, once the company raises prices to above price equals marginal cost, it opens the door for competition to once again enter the market. The second situation is one in which the company prices their goods below the prices of other similar goods in the area, but at a price above marginal cost. This is a perfect example of specialization. If one company or country can make a profit by selling their goods at a lower price than another, then that company or country should specialize in the making of that good. Certainly, there will be some negative elements involved, such as workers of the higher-priced company being laid off, but the net gain to society more than compensates for that loss. Although this gain is most often considered in terms of lower prices, consider that lower prices result in increased profits of other companies, allowing them to expand and create new jobs. What? This sounds like something you didn’t think through properly. Did you have a specific example in mind here? What does it mean to have “an advantage in buying power”? What do you mean by “scale back”? I also think you are confused about the nature and importance of market share. For the sake of argument, however, this is how I will take this paragraph: Both companies are too large. Thus, the price of their goods has risen (due to operating inefficiencies perhaps). One company recognizes this, and reins in their production (perhaps closing several production plants or store outlets). The other does not. By not doing so, the inefficient company gains an advantage over the efficient company (perhaps because they have more production plants relative to the other company now), and uses that inefficiency to eliminate the other company. The problem with that is that the first company is, by definition, inefficient. It cannot gain an advantage over the other company. How could it? The other company will produce the same good, but for a lower price. I think perhaps you believe market share to exhibit some kind of snowball effect, whereby once you achieve the largest market share, then you automatically eliminate the competition. Perhaps I have misunderstood you, but such behavior is not predicted in economic theory, nor is it seen in the real world. In the case you described, the inefficient company has no choice but to follow suit. This is misattributing cause and effect. Companies don’t grow bigger so that they can compete, companies grow bigger because they are competitive. Walmart didn’t just decide to become a national chain so that they could be competitive. They became a national chain because they were competitive. At the risk of being too repetitive, companies rarely ever grow bigger unless they are efficient. My previous statement makes this false. The most successful companies are the most efficient. This makes intuitive sense. You don’t see large, successful companies that are inefficient. (Unless you count the US government as successful, but that’s beside the point )Since your earlier statements were not true, the problems with this are not obvious (sorry if this seems too confrontational, it is the way my mind proceeds when I attempt to make an argument). You are right that countries have created protectionist policies to defend against domestic problems resulting from international trade. But those policies are always misguided. Why do they create them? Because the advantages gained from trade are much more difficult to see than the losses. A reduction in the price of nails from $.02 to $.01 as a result of trade saves millions, if not billions, of dollars per year. But no single company sees that entire picture. But the workers in the U.S. who make nails and got laid off are highly visible. They write to their congressional delegation. They appear in the newspaper and on television. Yet the sum of their wages might not even total a million dollars per year. Even though the net gain is much higher, it is not as noticeable. As another previous post said, this seems like nothing more than a populist outcry. Blaming the economic collapse on efforts to bring down protectionist barriers does not make sense. I fail to see how trade tariffs, immigration restrictions, and limits on international capital flows have anything to do with banking regulation. Capital flows and capital gains taxation are in the realm of banking, but are not themselves causal agents in the collapse. They make your food stamps and unemployment insurance stretch a lot further. I think the price of goods is an excellent barometer for efficiency. While I believe using it as a measure does neglect many important other things, such as happiness or environmental concerns, the one aspect it does excel at is to provide a measure for labor and wages. Wages mean nothing with a price to compare them to. $1 a day will buy one nothing now, but 100 years ago? Similarly, a wage is nothing more than the price of labor. Perhaps you meant that the focus of companies on the price of goods prevents them from paying adequate attention to the needs of their workers. (I think this is, after rereading your paragraph, how you meant it). Sweatshops are an oft-cited example of “evil corporations” that exploit people. I typically associate this kind of statement with people who have never been outside of first-world countries, or experienced true poverty. Not poverty as defined by the US ($22,000 for a family of four), but poverty of the kind where people earn less than a $1 a day. In such situations, a job at a sweatshop is almost a miracle. The alternative to such jobs in poor countries is frequently to not know if or when you will eat again. People living in developed countries often forget how terrible situations can be elsewhere. A common counter-argument to this is “Well, why don’t companies just pay them as much as they pay their American workers?” There are many answers to this. The best is probably that the labor pool is just too large. The United States makes up a but a tiny fraction of the world’s population. For every child in Egypt making shoes for $2 a day, there are a hundred more who would be willing and happy to do it for $1 a day. A second is that, if they did, there would be no incentive to hire workers abroad. All it would do is increase the costs of their goods, as they would need to be shipped further. There is a reason manufacturing industries are declining in the United States. Does anyone honestly think this is a bad thing? American wages have been increasingly consistently over the last...250 years. Unemployment has stayed all but constant, and far lower than almost any other country on the planet. This suggests that the positive effects from structural changes in the economy, such as the shift from a manufacturing based economy to service based economy, far outweigh the negative. There is a common story told about such shifts: Everyone used to worry that robots would take over all of the manufacturing jobs, and then there would be massive unemployment. Except, when the robots took over, the unemployment spike didn’t happen. Why? Because people were needed to build, operate, and maintain the robots. Countries specialize in the things they are best at. The United States used to be among the best manufacturers in the world. So there were many manufacturing jobs. Now, as our standard of living, our productivity, and educational attainment have all increased, we are no longer the best at manufacturing. We still might be able to produce more per person than another country if we focused on manufacturing, due to our infrastructure and technology, but what would be the point? Instead, we move onward and upward into a service-based economy. The first sentence is more or less correct, though it neglects the role of technology. I agree that the intelligence of the average person of the United States is “not that clever”. But, again, go outside of the first-world. The literacy rate in the US is close to 100%, and almost every student attends some high school. While poor countries have made great strides in recent years (thanks to globalization. . .), almost 100 still have literacy rates below 80%. And this is a problem because? I understand that, given the current unemployment rate, and given how the recession has disproportionately effected men in manufacturing, that such a response seems callous. That’s because it is, in the short term. Is it? Does $30,000 a year for a factory worker job narrow the wealth disparity between the rich and the poor? No, it does not. . I don’t argue with this. I just want to point out here that the standard of living and the wage level for all income groups has being increasing in America since its founding. It isn’t that the poor are getting poorer and the rich richer, it is that the rich are getting richer faster than the poor are getting richer. I think you meant: The American Harvard graduate competes with the Chinese Harvard graduate. And that is one the best thing about having less protectionism. With more freedom of movement for labor and capital, the best and brightest in other countries are allowed to make use of the top schools in the world. Right. But again, this is a short term loss for a much greater long term gain. Think about the industrial revolution. It was essentially the same, except that instead of services replacing manufacturing, manufacturing replaced agriculture. Does anyone (other than dirty hippies) think America is worse off for having undergone that transformation? To go back to the linkage between prices and wages: you don’t see how it is helping because you simply don’t notice it. When you go grocery shopping, do you stop to think, “My grocery bill this week was $100 less this week because of free trade”? Free trade results in a purchasing power increase of tens-of-thousands of dollars every year for each and every person in the United States. That is not an exaggeration. Consider how many goods you buy every year, and then realize that anything not made in the United States is cheaper than it would be otherwise. Even goods made in the United States, such as strawberries from California, are cheaper because they have to compete with Mexico. And, if that’s not enough, consider that you even have the option to buy strawberries in January. All because of free trade. Are you asking how can goods continue to be produced in a country if no one is actually making goods? I don’t really know what to make of this. It almost seems like you see tax money as being removed from the system. It is not a zero-sum game. Right. You do see taxed dollars as just vanishing. Let me redo your gamestop example (keeping it simple): You work at gamestop. You get paid $100. Income tax takes 20%. You now have $80. You buy a game for $50, with $5 of sales tax. Now, gamestop has -$50 (the game – your income). You have $25. The government has $25. The government uses that $25 to buy concrete an pay a worker to repair the pothole in your street. Now that worker has $25. Now he buys a game from gamestop. Which fuels your next paycheck. Economies are vast. Money changes hands very frequently. Money doesn’t just disappear from the system. This reads like a conspiracy theory website. I can’t argue that corporations don’t heavily influence politics. But, two points to consider: first, the United States has one of the highest capital gains tax rates in the world. This is extremely detrimental to business. Second, income tax is progressive. Larger corporations pay more in taxes. One would think that, if corporations really had significant influence, these items in particular would be among the first to change. I realize that writing quality goes down the longer one writes (witness my own comments), but there really isn’t anything of substance in here. I guess I’ll just point out recent income tax statistics: (google IRS summary of Federal Individual Income Tax Data 2007 or 2008 for source) In 2007, The top 1% of income earners paid 40% of total income tax. The top 50% of income earners paid 97% of total income tax. In other words, of that $21 dollars in taxes, $20.50 of it came from the wealthy. I find it hard to make an argument that taxation is hurting the poor. We don’t have a consumer based economy. We are moving toward a service based economy. Technological innovation is certainly a good thing. It reduces prices. But so does shifting labor to another country. Perhaps another example: Say they fire you because they don’t need you making the game anymore, because they hired a worker in another country. Since they can now make games cheaper, they make more profit, enabling them to expand. You get rehired as architect to design their new buildings. Now instead of being in manufacturing, you’re an architect. (Think about this on a national level, not on an individual level) Remember what I said about Sarkozy’s likely biases and political pressures? There isn’t really anything to respond to here. I would be happy to argue with you some more, if you would like. You said you were familiar with economic concepts in a previous post. Maybe we can break out our favorite international macro or international trade models. Thanks for reading! Fuck....well done! | ||
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