Hi all,
I’m seeing a lot of hate for capitalism here, and I’m wondering why that is and what the rationale behind it is. I’m pretty pro-capitalism myself, so I want to see the logic on the other side of the fence.
If this isn’t the right forum for a political/economic discussion-- I’m happy to take this somewhere else.
Cheers!
I find that many people conflate capitalism with free markets. They are different things.
Free market economies are ones where many businesses which provide competing products can use price as a parameter on which to compete. Even in famously free market economies, e.g, the United States, some things have prices regulated by the government. Think electricity, certain prescription drugs, other things deinfed in the arena of “utilities” or “necessities” for the general public.
Capitalism, on the other hand, is where there is an ownership class (which does little or no labor) and a labor class (which does most or all of the labor), and an portion of the compensation for the value that the labor class produces is redirected to the ownership class. Some of that is reasonable; I think it’s true that putting capital at risk in order to start and operate a business should come with some kind of reward.
However, the amount of reward that the ownership class realizes is often far more than is reasonable, and the effect is that the labor class is drastically undercompensated. This amounts to wage theft, above and beyond the already common kind of wage theft that includes unpaid work hours or withholding agreed upon compensation for unjustifiable reasons. Furthermore, again in the US, the amount of risk that owners assume when staking their capital is very low or nonexistent; profits are privatized, losses are socialized. The labor class gets the double whammy of being undercompensated on one side, and paying for business failures on the other.
Sorry I gotta provide some counterbalance here. This is a very dated Marxist perspective that I think is missing some modern fundamentals. Dividing the world into “ownership class” and “labor class” is simplistic thinking from the Industrial Revolution and doesn’t hold up anymore without modifications. Your typical high salary cube dweller is neither ownership nor identifiably labor. If you’re negatively classifying labor as “not ownership”, you’re talking about 99.9%+ of the population and it’s a rather meaningless distinction and unhelpful in discussing policy.
First, I definitely appreciate your counterbalance and disagreement. That’s how we all work together to develop ideas. I will do my best to be non-confrontational with this response.
Information work and physical work are both labor. When you refer to a “typical high salary cube dweller,” yes, the information labor of people who work at desks can most certainly command high salaries in the modern world when compared to physical or “unskilled” labor. Those people are still undercompensated. The owners (less so for smaller businesses, as I described elsewhere) are still receiving a portion of the compensation for the value of information workers’ labor solely on the basis of their ownership status, and not for any other value they provide through their own efforts.
I’m not trying to discount the value that leadership, and vision, and true unsocialized capital risk has. What I am saying is that ownership is vastly overvalued and vastly overcompensated for, and that in order to do that overcompensation, the reward has to come from somewhere. The balloon gets squeezed on the labor end in order to shift wealth to the ownership end. Am I talking about a huge proportion of the population being labor and a comparatively tiny part being owners? Yup. That makes it a worse problem, not a meaningless one.
But you’re right, I have not offered any sort of possible solution to this quandary. It’s oh so easy to armchair quarterback, point out the problems, and fold my arms in smug satisfaction, and I say that without sarcasm.
Ideally, everyone would have easy access to everything they need. Food, housing, healthcare, clothing, clean water, personal and property security, education, all sorts of things. And I say access on purpose: individuals should need to express agency about what they need, and make decisions about their own destiny in that context, which includes making the decisions about what is needed, and making the easy level of effort that would ideally be required to receive those things. We are all in this together, and I think we should come to some agreements, together, on what resources all people need, and to what fair degree. And then we should all contribute together, each according to their ability, to make sure that those things are provided to those who need them. Recall that in the mid 20th century, there were marginal tax rates in the 90% and higher range in the US. (For anyone reading this who’s unfamiliar with marginal tax rates, that means that income over a certain amount is taxed at that rate, while income below that amount is taxed at lower rates). That’s something I wouldn’t mind seeing again.
I also wouldn’t mind seeing a separate capital gains tax completely removed. Capital gains, when realized, should be taxed at the same rate as earned income. Why should owners get to pay a reduced tax rate on profits from selling a portion of their ownership? Why should the people who are already higher on the wealth ladder get a tax break? Why do we continually place a larger actual tax burden on people who spend essentially all of their income, who have no wealth to speak of, and a lower actual tax burden on people for whom that burden or a much larger one would come from their surplus and not impact their quality of life at all?
I know I’m doing the thing where I’m “asking questions that I know you know what I want you to think the answer is, which makes you automatically think it inside your own head, which uses human psychology to make my argument seem stronger,” but fuck man, we have to stop doing those things.
The average “high salary” cube dweller collects an only marginally higher wage than everyone else, and is forced to work in order to avoid homelessness and starvation. That’s clearly labor class.
Losses are socialized only for very big companies though. If you are a minor capitalist with a small restaurant chain or something in that size no one will watch out for you.
That is certainly true. Smaller capitalists definitely do not enjoy the protection of socialized losses in the same way that large capitalists do. This fact is exemplary of the inherent unfairness of capitalism: the people who need the socialization of losses more don’t get it, while the ones who need it least, or not at all, receive it.
It’s a scramble to the top of the wealth pile, and the ones who are higher get there and stay there by kicking the faces of the ones who are lower.
A proprietor of a restaurant is not a capitalist, he’s a shopkeeper. An owner of a restaurant chain that is expanding constantly, a Macdonalds, a Starbucks, a corporation that has to demonstrate perpetual growth to satisfy its investors, that is a capitalist.
Great comment, OP is definitely conflating the two.
Bullshit part is that OP is just gonna cherry pick arguments and not bother understanding this one.