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Funny picture!

 

But seriously: what does "economic injustice" mean? Does it mean "it's an injustice that other people are making more than us" or "it's an injustice that corporations get baliouts" or even "it's an injustice that the corporations aren't paying higher taxes?"

 

But if we're sharing pictures, here's a picture of an actual Wall Street protestor.

 

article-0-0DFC321800000578-526_634x954.jpg

 

I rest my case.

 

All good questions that I'm sure someone else can probably answer. As to the picture, it wouldn't surprise me if the person sporting anarchy has no idea what it actually is... it'd equally surprise me if the person was an actual protestor and not just a spy disguised as a protestor (this actually happened in the infamous Battle for Seattle incidents).

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But seriously: what does "economic injustice" mean? Does it mean "it's an injustice that other people are making more than us" or "it's an injustice that corporations get baliouts" or even "it's an injustice that the corporations aren't paying higher taxes?"
It means some of those things. I don't think anyone rational is arguing about someone making more than someone else, but there's some perspective too. Here's the most recent graph showing wealth distribution in the United States, recently updated:

 

table_wealth_divide_110906_2.jpg

Note: In the "Actual" line, the bottom two quintiles are not visible because the lowest quintile owns just 0.1% of all wealth, and the second-lowest quintile owns 0.2%.

 

Source: http://www.cbsnews.com/8301-503544_162-20120052-503544.html

 

This graph may not mean much to you, although I found this video:

 

 

If you don't feel like watching it, the short version that strictly in terms of wealth distribution, the current level of wealth distribution in the United States is practically identical with feudalism during the Middle Ages. That's not exactly a progressive thing. Things haven't always been this way, it's been a steady shift in this direction for the past several decades. The economic injustice means a very small percentage of people are controlling an unprecedented level of wealth, to the point that it's having serious social impacts on society and the population as a whole is largely powerless to influence it.

 

In practical terms, this translates to many, many side effects. Rising unemployment, many Americans who cannot afford health care, a collapse of many social services, having your wages cut, having your retirement cut or eliminated, etc. A lot of harm to society is coming out of this shift in overall wealth.

 

But if we're sharing pictures, here's a picture of an actual Wall Street protestor.
This is just a more extremist view of one of the protestors. The economic changes that are occurring affect over 99% of the population in a negative way, regardless of whether they're protesting or not.

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i'm not usually this type of guy, but i'm trying to make sense of this...so people are pissed that richer people are getting more money so they're protesting? or are they just mad that no one's getting really anything?

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If you don't feel like watching it, the short version that strictly in terms of wealth distribution, the current level of wealth distribution in the United States is practically identical with feudalism during the Middle Ages. That's not exactly a progressive thing. Things haven't always been this way, it's been a steady shift in this direction for the past several decades.

 

You're right when you say things haven't always been this way. During the feudal system (i.e. before modern capitalism), there was no middle class; you were either a serf, or you were royalty (or a knight or priest and you got your way there through political pulls, and not success). Capitalism and production allowed unskilled people to become more productive and wealthy, ergo a middle class was born.

 

In practical terms, this translates to many, many side effects. Rising unemployment, many Americans who cannot afford health care, a collapse of many social services, having your wages cut, having your retirement cut or eliminated, etc. A lot of harm to society is coming out of this shift in overall wealth.

 

I don't really think "shift" is a proper word to describe wealth. Wealth is not static; wealth is something that's created and produced and not a solid quantity that simply just exchanges hands.

 

This means that just because someone else makes a lot of money, does not in any way prevent you from making a lot of money i.e. the wealthy person doesn't harm you by being successful. So with this in mind:

 

The economic injustice means a very small percentage of people are controlling an unprecedented level of wealth, to the point that it's having serious social impacts on society and the population as a whole is largely powerless to influence it.

 

Now I realize that the "economic injustice" refers to people being upset that other people make more money than them and are more successful. It's kind of like the feeling you get when you bombed a test in high school when the goody two-shoes, smug, successful bastard sitting next to you got an A+.

 

If this happens, you should study harder and learn the material next time so you can be just as good if not better than the other guy. I think that the Wall Street protestors are asking the teacher to not let the high-achieving students continue getting good marks.

 

I'm all for separation of state and economics, which means I agree that corporations shouldn't receive bailouts from the government and that superior corporations should absorb them; but I think that the protestors think that if the government lets the corporations do their thing and make money, then that's a bailout. There's a difference between the corporations who made money through honest hard work and trading and corporations that stay afloat because of bailouts; the former should be praised and be allowed to keep doing what they're doing while the latter should be left to die. I don't think the Wall Street protestors know the difference between the two.

 

I think the solution to the problem is a lassiez-faire government policy: let the good corporations continue to prosper, and let the bad ones die. Good corporations should not be constrained or punished--that's punishing the good for being good.

 

Also, does your graph mean that people want a "redistribution of wealth"? Oh boy. "Redistribution of wealth" implies that the wealth belongs to the country as opposed to the producers, and that's a can of worms I don't want to open just yet.

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You're right when you say things haven't always been this way. During the feudal system (i.e. before modern capitalism), there was no middle class; you were either a serf, or you were royalty (or a knight or priest and you got your way there through political pulls, and not success). Capitalism and production allowed unskilled people to become more productive and wealthy, ergo a middle class was born.
Well that's part of the point, is that middle class has been shrinking over the past several decades. Besides even in the middle ages you had tradesman. A blacksmith wouldn't have been the same status as a serf.

 

This means that just because someone else makes a lot of money, does not in any way prevent you from making a lot of money i.e. the wealthy person doesn't harm you by being successful.
It depends, the link can sometimes be complicated to draw out. For instance, is someone making a lot of money harming you in these scenarios:

 

-You have a grandmother depending on Medicaid. Lobbyists hired by a corporation push to have drastic tax cuts so they can increase their profit margin even farther. The government votes for this and has to make up the money somewhere, so her check gets cut in half from removing funding.

 

-You work at an automotive factory maintaining the robotics used in the assembly, this factory employs most of the town. The car company ends up shutting down everything, doesn't pay benefits, moves the entire operation to Mexico where they can operate at a third of the price due to more lax labor laws. The company was already making record profits and doing this causes the CEO to receive an extra 15 million dollar bonus, leaving 30,000 people unemployed in a town it's been operating in for the past 30 years.

 

-A company is able to funnel their earnings to offshore banking operations so that they don't pay taxes in the places they are operating in, or severely less than any individual would. Because of this, the state no longer has the funding it was depending on and ends up having to close some libraries and cut the funds for public schools in half.

 

-A health insurance company wants to raise their earnings by 500 million this year, up from earnings of 4.2 billion in order to keep shareholders happy. In order to achieve this, they become more aggressive concerning who they will provide coverage too. Any technicality that may have been overlooked in the past will no longer be covered. So you get in a car accident with a medical bill of $50,000 and are expecting coverage, but because you forgot to mention that you have sleep apnea on your application form, your coverage is denied.

 

 

Now I realize that the "economic injustice" refers to people being upset that other people make more money than them and are more successful. It's kind of like the feeling you get when you bombed a test in high school when the goody two-shoes, smug, successful bastard sitting next to you got an A+.

 

If this happens, you should study harder and learn the material next time so you can be just as good if not better than the other guy. I think that the Wall Street protestors are asking the teacher to not let the high-achieving students continue getting good marks.

This isn't really a comparable situation. Given this analogy, it would be more like half the class is already busting their ass and have the answers correct, but one student not only paid the teacher to give him all A's, but also went further saying that she'll have to flunk 20% more of the class, regardless of what their answers are.

 

I saw this quote before in another forum:

 

"A tremendous number of people have been raised and conditioned all their life to believe in what George Carlin would rather sarcastically refer to as the "American Dream". They don't have sufficient knowledge of how things really work, and/or the critical thinking skills, to consider how many of the rich white men got rich. In their mind, their instinctive grasp of the situation is that every one of those bankers and hedge fund managers is a genius who rolled his sleeves up, took a hammer to a pile of lumber, and personally built this business empire by himself and is justly rewarded by the founding fathers and God."

 

You mention "hard honest work" and "producers", that really doesn't describe the biggest players in this. What does a company like AIG produce? The majority of their income comes from manipulating stocks. This contributes practically nothing to society.

 

I think the solution to the problem is a lassiez-faire government policy: let the good corporations continue to prosper, and let the bad ones die. Good corporations should not be constrained or punished--that's punishing the good for being good.
I think it depends on your definition of "good." In my mind there should be more practices that should be illegal and enforced as such. For example if a Starbucks opens up 4 stores in a cluster around a local coffee shop, operating at a loss, then after the local shop goes out of business, they pull back and shut down the other stores so that they only have one again, it might be smart business, but I consider it a little unethical. Or back about 10 years ago, where Intel sold their chips to vendors below cost on the condition that they not buy any from AMD, so they could kneecap them and prevent them from gaining market share, I also consider that unethical. It's hard to compete against a larger company when they're essentially blackmailing vendors and selling their products below cost.

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i'm not usually this type of guy, but i'm trying to make sense of this...so people are pissed that richer people are getting more money so they're protesting? or are they just mad that no one's getting really anything?

 

The protests are a gathering place for everybody who's mad about anything at all. They have no cohesive or coherent message, according to their own website. They're still looking for a consensus on "what we should think." They're not going to find one.

 

Some of them are probably more damaging to the cause than others:

http://www.cracked.com/blog/3-types-wall-street-protesters-hurting-their-own-cause/

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Wow, from what I see the last few days, these guys have absolutely no plan. They could have at least had a demand for one reform. Instead they generally protest against everything. How is that going to get them anywhere?

 

Sounds like people forgot how to protest.....

 

Also:

 

This guy :D, you may remember him from such films as fahrenheit, columbia....

 

MNuQlg_IWw8

 

Besides even in the middle ages you had tradesman. A blacksmith wouldn't have been the same status as a serf.

 

Not to mention freemasons, philosophers, teachers and religious people such as priests.

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i'm not usually this type of guy, but i'm trying to make sense of this...so people are pissed that richer people are getting more money so they're protesting? or are they just mad that no one's getting really anything?

 

The protests are a gathering place for everybody who's mad about anything at all. They have no cohesive or coherent message, according to their own website. They're still looking for a consensus on "what we should think." They're not going to find one.

 

Some of them are probably more damaging to the cause than others:

http://www.cracked.com/blog/3-types-wall-street-protesters-hurting-their-own-cause/

That cracked.com article is well written. I like the links at the beginning, since that hones back more to the points I was making, but the rest of the article also points out the downfalls; I didn't realize the protests as a whole were as incoherent as they were. This isn't a matter of random people just complaining and there not being a real issue, it's that the legitimate points behind it may be getting thoroughly muddied by the catch-all "supporters." Like the author, I also thought it was odd that this was focused on wall street and not in Washington D.C.

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I've seen way too many pictures of "tax corporations more!" posters in the Wall Street protest to be somewhat interested in their cause. Also, the "we are the 99%" posters are the worst: what the hell do they imply? Does it imply that the 99% has more rights than the 1%? Does it mean the 99% has the right to lynch the 1% because the 99% is the majority?

 

It seems to me that they want socialism, with all the benefits of capitalism i.e. they want government support for the 99% and they want the corporations to be heavily regulated and taxed (i.e. punished for being good), but they still want the jobs and the products that the corporations make.

 

I'd also like to point out that socialism involves corporations being run by the state. The protestors don't want separation of state and economics; they just don't like the current corporations being involved in the government.

 

-You have a grandmother depending on Medicaid. Lobbyists hired by a corporation push to have drastic tax cuts so they can increase their profit margin even farther. The government votes for this and has to make up the money somewhere, so her check gets cut in half from removing funding.

 

Well, that's not really making money by production; that's government favors. I was talking about people that actually create wealth.

 

I think we can agree that the state and economics should be separate and that there's a difference to be made between hard working people and government favors people.

 

-You work at an automotive factory maintaining the robotics used in the assembly, this factory employs most of the town. The car company ends up shutting down everything, doesn't pay benefits, moves the entire operation to Mexico where they can operate at a third of the price due to more lax labor laws. The company was already making record profits and doing this causes the CEO to receive an extra 15 million dollar bonus, leaving 30,000 people unemployed in a town it's been operating in for the past 30 years.

 

I meant that the act of production does not come at the expense of anyone; in this scenario, no one is really being "expended"--new workers are just being hired. I meant that no one is sacrificed (i.e. no one is forced to give up something for someone else) when wealth is created.

 

By the same reasoning, it could be said that by putting the factory in the United States, they were cheating the Mexicans out of jobs. There is no such thing as a right to a job--such a right would involve forcing businessmen to hire people they didn't want i.e. a violation of their rights.

 

-A company is able to funnel their earnings to offshore banking operations so that they don't pay taxes in the places they are operating in, or severely less than any individual would. Because of this, the state no longer has the funding it was depending on and ends up having to close some libraries and cut the funds for public schools in half.

 

The very nature of communism (state-run education is one of the tenants in the Communist Manifesto) punishes success, and forces everyone to be legally dependent on everyone else. Because there is no such thing as a "right to another's property", it's not really "making money at the expense of someone else" to not pay as much as you should in taxes.

 

-A health insurance company wants to raise their earnings by 500 million this year, up from earnings of 4.2 billion in order to keep shareholders happy. In order to achieve this, they become more aggressive concerning who they will provide coverage too. Any technicality that may have been overlooked in the past will no longer be covered. So you get in a car accident with a medical bill of $50,000 and are expecting coverage, but because you forgot to mention that you have sleep apnea on your application form, your coverage is denied.

 

I believe that you have to sign a contract when you get health insurance. If they denied you coverage for a reason that wasn't in the contract, I agree that that's making money at the expense of someone else; that's why, if that happens, you can bring a claim against them to the court of law for fraud.

 

If, however, the terms of the contract explicitly say that coverage can be denied if you don't mention a "technicality" and you sign the contract, then there's no claim. If you don't like the terms of a contract, you don't have to sign it. It's not "making money at the expense of someone else" to uphold your end of a contract.

 

This isn't really a comparable situation. Given this analogy, it would be more like half the class is already busting their ass and have the answers correct, but one student not only paid the teacher to give him all A's, but also went further saying that she'll have to flunk 20% more of the class, regardless of what their answers are.

 

I agree that the government (the teacher?) shouldn't be allowed to take bribes or have a say in the economic system, but I don't understand the second part of your analogy. The government doesn't force anyone to "flunk"; the government, like the teacher, makes sure you don't bully the other kids or cheat and assess your papers objectively--like she should.

 

You mention "hard honest work" and "producers", that really doesn't describe the biggest players in this. What does a company like AIG produce? The majority of their income comes from manipulating stocks. This contributes practically nothing to society.

 

I think they provide a valuable service to many people, but the virtue of a company shouldn't by evaluated based on "how much they contribute to society." for reasons such as: Contribute to whom? What part of society? How much more do they "contribute" as opposed to other people? What objective standards are there for "contribution"?

 

I think a corporation's virtue should be evaluated solely on how they earned their money: did they get their money and stay in business through lobbying and government favors? Or did they work honestly and never committed fraud?

 

In my mind there should be more practices that should be illegal and enforced as such. For example if a Starbucks opens up 4 stores in a cluster around a local coffee shop, operating at a loss, then after the local shop goes out of business, they pull back and shut down the other stores so that they only have one again, it might be smart business, but I consider it a little unethical. Or back about 10 years ago, where Intel sold their chips to vendors below cost on the condition that they not buy any from AMD, so they could kneecap them and prevent them from gaining market share, I also consider that unethical. It's hard to compete against a larger company when they're essentially blackmailing vendors and selling their products below cost.

 

We have laws that are supposed to stop those called "Antitrust Laws". The problem with the antitrust laws is that law is supposed to be objective: every man needs to be able to know what exactly is against the law and what exactly the punishment would be should he choose to break the law. Antitrust laws are nothing like that; they're the most subjective laws in existence. Literally anything a corporation does can be considered a violation of the antitrust laws e.g. if he sets his prices around market value, he can be charged with "collusion"; if he sets his prices higher (or even lower!), he can be charged with "intent to monopolize." They're the most unfair laws in existence.

 

In response to your other scenarios: Starbucks should not be punished for be superior and better than a local competitor. Clearly, Starbucks is a better chain than the local coffee shop; to make them pay the other coffee shop back or allow them to compete would result in the local coffee shop making money at Starbuck's expense and punishing Starbucks for being good.

 

I'm sure Intel had contracts with the vendors and one of the details was not to buy from AMD. Contracts are holdable in force (as they should be), but the vendors are free to turn Intel away if they feel like it. "Blackmailing" implies that the "blackmailer" has something against you that you'd rather not have; it's not a good analogy, since the vendors agreed to enter into that contract.

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Michael Archer: I seem to be getting this vibe from you that if you're a business or corporation, and you obey the letter of the law, you can do no wrong. If I'm misunderstanding, let me know. Some of the scenarios I've described I would consider unethical behavior, even if they're 100% legal. What sort of behavior by a corporation would you consider unethical, even if they're perfectly within their rights / the law to do it? I think this might better help me understand your perspective.

 

I've seen way too many pictures of "tax corporations more!" posters in the Wall Street protest to be somewhat interested in their cause.

Well Exxon-Mobil made 15 billion in 2009, and paid no U.S. income tax

General Electric made almost 11 billion in 2010 and also paid no U.S. income tax

 

but I agree, just saying "more" doesn't really help anything.

 

Also, the "we are the 99%" posters are the worst: what the hell do they imply? Does it imply that the 99% has more rights than the 1%? Does it mean the 99% has the right to lynch the 1% because the 99% is the majority?
I think they're implying that currently the 99% have LESS rights than the highest-earning 1%. I personally believe a substantial portion of our Congress has more loyalty to lobbyists supplying millions to their campaign than it does to actual voters. It makes sense in a way, since without all that money, it's difficult to get elected, but I think it's become more of a mess

 

It seems to me that they want socialism, with all the benefits of capitalism i.e. they want government support for the 99% and they want the corporations to be heavily regulated and taxed (i.e. punished for being good), but they still want the jobs and the products that the corporations make.

 

I meant that the act of production does not come at the expense of anyone; in this scenario, no one is really being "expended"--new workers are just being hired. I meant that no one is sacrificed (i.e. no one is forced to give up something for someone else) when wealth is created.

 

By the same reasoning, it could be said that by putting the factory in the United States, they were cheating the Mexicans out of jobs. There is no such thing as a right to a job--such a right would involve forcing businessmen to hire people they didn't want i.e. a violation of their rights.

Well there's a difference between creating wealth and extracting it. In my scenario, I believe it's being extracted (explained below). Creating wealth would be something like working a mine and discovering a mineral deposit, or working a tract of land and using it to grow crops. In those cases, wealth is genuinely being created.

 

And I totally understand your point regarding workers and it's valid, but I think there are other factors to consider as well. I agree that there shouldn't be a right to a job, but I also think it's important to consider the motivations in this scenario. If a corporation is based and founded in the USA and has been in operation in a town like that for some 30 years, it could be argued that there's some sense of dependence of the town on the company. While that's nothing sacred, it's worth considering. What I think is more important, is if this shift in workers is done during a time when the company is having record profits. So by closing the American factories and moving things to Mexico, the money saved goes straight to the upper management. The company may save 350 million, the CEO gets a 10 million dollar bonus, etc. So the rich get richer. I have no problem with that if that's ALL it means, but this isn't a vacuum. The workers in that town are largely ruined financially, so they all get poorer. In Mexico, it's true the workers have gained some prosperity, but now the standards have changed. The company now only has to pay them a third of what they were paying the workers in the U.S. They may not need to provide health care or other benefits anymore. The workers may now be required to work 12+ hours instead of 8. This is exactly how the middle class is eroded. Look at the net result of this scenario:

 

-A small number of already wealthy people in upper management get even richer

-the company becomes even more valuable

-thousands of people get economically devastated

-a lesser number of people (since they won't need to hire as many now) do have better lives, since their previous conditions were likely very impoverished

-the standard of living for workers overall has been lowered

 

From a utilitarian perspective, the amount of societal "good" has been lowered. While I think the Mexicans are just as deserving as Americans, I also feel the standards for working for the company should also be the same. If you've ever read or are familiar with "The Jungle" by Upton Sinclair, this illustrates the problem I have with complete unbridled capitalism. It has a tendency to marginalize workers' rights so that the only people of value are those that will work their absolute hardest for the lowest amount of pay.

 

The very nature of communism (state-run education is one of the tenants in the Communist Manifesto) punishes success, and forces everyone to be legally dependent on everyone else. Because there is no such thing as a "right to another's property", it's not really "making money at the expense of someone else" to not pay as much as you should in taxes.
Well this is a more radical perspective, but I can understand that. Let me ask though, where should the funding come from for having clean water, a fire department, a police department, public schools, public roads, etc. if it's not coming from taxes?

 

I believe that you have to sign a contract when you get health insurance. If they denied you coverage for a reason that wasn't in the contract, I agree that that's making money at the expense of someone else; that's why, if that happens, you can bring a claim against them to the court of law for fraud.

 

If, however, the terms of the contract explicitly say that coverage can be denied if you don't mention a "technicality" and you sign the contract, then there's no claim. If you don't like the terms of a contract, you don't have to sign it. It's not "making money at the expense of someone else" to uphold your end of a contract.

I guess this wasn't the best example. What I was really thinking of is when millions (or billions) of dollars of profit come at the expense of finding ways that people should NOT be given health care coverage (excluding fraud obviously) this system strikes me as harmful to people overall.

 

In response to your other scenarios: Starbucks should not be punished for be superior and better than a local competitor. Clearly, Starbucks is a better chain than the local coffee shop; to make them pay the other coffee shop back or allow them to compete would result in the local coffee shop making money at Starbuck's expense and punishing Starbucks for being good.
I think you might be missing what I'm saying. I'm not talking about Starbucks opening up a store next to them and competing that way, that's perfectly fair. I'm talking about a Starbucks management decision where they decide this area is very valuable, but they can't compete with this local store on quality or price, but because they're bigger, they open a cluster of 4 stores around them, all of which are operating at a loss, with the sole goal of putting this local store out of business. The local store can hold out, but with 4 Starbucks all around them, only the most loyal customers will support them, which isn't enough for them to survive long-term. Eventually, the local store goes out of business. Afterwards, Starbucks shuts down the other 3 stores, since they're unprofitable and their only real purpose was to weaken the competing store. It's not a matter of the company being "better", it's a matter of them being more powerful.

 

I'm sure Intel had contracts with the vendors and one of the details was not to buy from AMD. Contracts are holdable in force (as they should be), but the vendors are free to turn Intel away if they feel like it. "Blackmailing" implies that the "blackmailer" has something against you that you'd rather not have; it's not a good analogy, since the vendors agreed to enter into that contract.
Well the blackmail portion would be that vendors would not receive the massive discount if they also sold AMD cpu's. Really it's a different flavor of the starbucks situation, not winning because your product or service is better / cheaper, but because you're more powerful.

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So by closing the American factories and moving things to Mexico, the money saved goes straight to the upper management. The company may save 350 million, the CEO gets a 10 million dollar bonus, etc. So the rich get richer.

 

This is too simplistic. And even in your example you account only for about 3% of the savings.

 

The thing is that by doing this the company increases the value for sharehoders. Even as it moves its production out of the US it will still be owned by, presumably, US owners. They may receive bigger dividends which they will invest or spend, most likely in the US. The company may be publicly listed and the shareholders may include pension funds, local authorities etc. - the benefits of a sound commercial decision will be spread more widely than just among the senior management of the company.

 

The reverse will be true as well - if the company will be run on protectionist basis, the only one who would benefit for a while will be the local employees, union officials and the House representatives. The company itself will likely start losing its market share because of its inability to compete on the cost of its labour. When it will finally collapse or be swallowed by another, those local employees will quickly see their supposed advantages turn into a huge disadvantage.

 

What your example shows, actually, is that the market forces put pressure on societies to always look for a new edge which will bring them back into the game when they can't compete in the old ways (because other people learned how to do it better or are prepared to do it cheaper).

 

But having said this I agree with many other things you said. Things may work very well in theory for academicians debating the ideal markets and abstract economic principles but, in reality, the flaws in the system allow manipulation and corruption, which makes stronger players stronger and reduces the chance of a newcomer to break through. There is no justification for that. That is what must be fought.

 

Regards

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You're right, I overlooked some aspects of this example, but it's a common scenario and I think one that illustrates how the class divide can larger. I put a "small" number for the CEO since the majority of the income boost is likely to go to shareholders. But even then, that I think moves the overall wealth more towards the upper end of the spectrum, I was able to find an article that shows the divide:

 

http://www.fool.com/investing/general/2010/11/17/who-owns-the-stock-market.aspx

 

Upper class earners almost certainly see benefits from larger stock values, middle class earners, perhaps. Most of the middle class isn't involved with stocks directly, though some may have retirement funds, pensions, or some limited stock options given to them from their employers. The working class is lucky to have any excess cash at all, let alone to be thinking about stocks, so they don't see much if any benefit from that. There are many, many variables at work in a situation like this, but I think you can make a strong case that a practice like this leads to a shrinking middle class, a richer upper class, and harsher working conditions for the average global employee.

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Didn't GE pay no income tax this year because they got a BIG tax credit for working on Green Technology?

 

Also, only 5.1 billion of that money was US profit. The US (and I think other countries) do not require corporations to pay US taxes on non-US profits.

 

Also, tax law allows companies to "carry forward" losses, and apply them to later taxes. GE lost billions in the financial crisis of the previous years.

 

For example, if a corporation loses $10 million every tear for ten years, but makes $100 million in the 11th year, their total tax liability for the combined years will be $0.

 

Regular people can do the same sort of thing. Individuals can carry capital losses forward to offset future gains and up to $3000 ordinary income.

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I think this belongs here. You can state your chat there all about it and watch and read live coverage of the events of the occupy wallstreet..

Some interesting people from all western countries, regions...

http://www.livestream.com/globalrevolution

And I found this:

http://www.huffingtonpost.com/keith-boykin/occupy-wall-street-media_b_1019707.html

 

I question if this is all the effects of the revolutions of Tunisia and Egypt?

 

I don't know whether the website is true but this actually might be an opportunity for some kind of reform.

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If I've got this right, the protestors are protesting the corporations that made the very things that made this protest possible.

 

I read this article the other day. One of the main points in it was--if you take away the things that they're protesting, you have a naked, disheveled ape. "A frightening, noisy, intimidating mob stripped of everything they are protesting against. A George Romero-like Dawn of the Dead. A phenomenon more repellent than a canvas by Pieter Brueghel the Elder of peasants cavorting in the mud. Coming at you, the middle class, the bourgeoisie, the producer of wealth." There's a picture included, but I think the link is broken.

 

The government doesn't produce anything; everything they use to make their bills (e.g. printing presses, desks) are privately made. Even the military uses private contractors.

 

The computer you're using to type, your desk, your mouse, your TV: all made by the private sector. There's a reason why our standard of living is higher than Africa, or North Korea: we have more economic freedom than they do and corporations are (more or less) free to pursue a profit to give us the wonderful products you see in the picture.

 

Michael Archer: I seem to be getting this vibe from you that if you're a business or corporation, and you obey the letter of the law, you can do no wrong. If I'm misunderstanding, let me know. Some of the scenarios I've described I would consider unethical behavior, even if they're 100% legal. What sort of behavior by a corporation would you consider unethical, even if they're perfectly within their rights / the law to do it? I think this might better help me understand your perspective.

 

There are some illegal things that corporation would do that aren't unethical e.g. violating antitrust laws.

 

I thought of something unethical, but legal (it took me a while): hiring and paying someone based on anything but merit and performance (e.g. sex, skin color, religion). It shouldn't be illegal, but it's unethical; I think they'd lose to someone who hired based on performance. Another thing unethical: pursuing a loss, as opposed to pursuing a profit (not as commonplace as the aforementioned practice).

 

It was hard for me to think of something, because corporations and businessmen really are the scapegoats for almost everything in America.

 

If a corporation is based and founded in the USA and has been in operation in a town like that for some 30 years, it could be argued that there's some sense of dependence of the town on the company.

 

In a real-life scenario, I imagine there being another company to meet the demand. In the free market, demand rarely goes unanswered.

 

But even if I'm wrong, and the town would die: what is the only moral option? I mean, one could lobby to the government to force the corporation to stay and operate under their rules and regulations (*cough*Occupy Wall Street*cough*), but I think that would be unethical; that would imply that the corporation has no right to exist for itself and that its only purpose is to serve the people and to be disposed of when it's not needed anymore. That's kind of like treating the corporation as a slave.

 

In Mexico, it's true the workers have gained some prosperity, but now the standards have changed. The company now only has to pay them a third of what they were paying the workers in the U.S. They may not need to provide health care or other benefits anymore. The workers may now be required to work 12+ hours instead of 8. This is exactly how the middle class is eroded. Look at the net result of this scenario:

 

-A small number of already wealthy people in upper management get even richer

-the company becomes even more valuable

-thousands of people get economically devastated

-a lesser number of people (since they won't need to hire as many now) do have better lives, since their previous conditions were likely very impoverished

-the standard of living for workers overall has been lowered

 

From a utilitarian perspective, the amount of societal "good" has been lowered.

 

I'm not much of a technical economics kind of guy, so I like to talk philosophy. So, don't get me started on utilitarianism...

 

"Societal good" raises the question: "good for what?", "good for whom?" "if the 'good of society' is independent of the good for an individual, how do you measure 'good'?" There are no objective answers to these questions. Usually, my response to hypothetical such as these ones (I'm not very good at dealing with hypotheticals or complex abstracts) is "you have no right to initiate force on someone else. If you don't have that right, you can't delegate the initiation of force to a government."

 

In The Jungle, doesn't a lot of their strife come from con men, police and judges who all have to be bribed and have some sort of political pull? I'd actually say political pull is more an aspect of socialism and not capitalism. In capitalism, laws are objectively defined and enforced. You mentioned that "capitalism marginalizes workers' rights"; capitalism doesn't recognize workers' rights per se--it only recognizes the rights of an individual. This is because an individual does not gain more rights by joining a group i.e. you do not get rights to violate others rights, just because you're in a group.

 

Socialism is a system "for the common good"; since their are no objective answers or measures to back up that statement, the system is run through pulls; whoever can gain favor with the politicians rule the society. Isn't democracy a fundamental value in socialism? If socialism doesn't get its values through political pull, it gets it through the majority (or anyone who claims to be the "voice of the people") i.e. if the majority says it's ok to rob one person, then it's ok--according to democracy and socialism.

 

Because a capitalist society's philosophy is individualism, the majority (or even another individual, for that matter) may never initiate force on an individual.

 

Let me ask though, where should the funding come from for having clean water, a fire department, a police department, public schools, public roads, etc. if it's not coming from taxes?

 

I think the water companies, fire departments, schools and roads should be privately run. I think police, court and military should be the only government services.

 

If you're interested in how government financing in a free (capitalist) society would work, you should give this a listen. If you don't want to listen to it, that's fine; it's written by the same person who wrote Atlas Shrugged, so you probably won't want to listen to it. In summary, the author says that the government should be viewed as a servant who's paid for its services instead of a gratuitous ruler. Every time you buy something, there's a sales tax to protect that purchase i.e. if you have a dispute concerning that purchase, you can take it to the court of law--without this system, the market would collapse overnight. In a free society it would be completley up to you if you chose to pay this "tax" but if you didn't, you would not be allowed to use the courts to dispute it.

 

I think you might be missing what I'm saying. I'm not talking about Starbucks opening up a store next to them and competing that way, that's perfectly fair. I'm talking about a Starbucks management decision where they decide this area is very valuable, but they can't compete with this local store on quality or price, but because they're bigger, they open a cluster of 4 stores around them, all of which are operating at a loss, with the sole goal of putting this local store out of business. The local store can hold out, but with 4 Starbucks all around them, only the most loyal customers will support them, which isn't enough for them to survive long-term. Eventually, the local store goes out of business. Afterwards, Starbucks shuts down the other 3 stores, since they're unprofitable and their only real purpose was to weaken the competing store. It's not a matter of the company being "better", it's a matter of them being more powerful.

 

Even in this scenario, Starbucks would still have to set their prices to what the market value of their services would be. If they charged higher, that would make room for more competitors.

 

I don't think economic power is independent of performance either. In capitalism (lassiez-faire, anyway), there are no subsidies or government grants; the only way someone can get economic power is by being successful. In our current mixed-economy, I'm not sure how that would work--but it can't be good.

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If I've got this right, the protestors are protesting the corporations that made the very things that made this protest possible.
People have protested (or revolted rather) for centuries, before corporations existed. It doesn't make the protest possible, but I agree the irony is pretty thick, I like that picture.

 

Another thing unethical: pursuing a loss, as opposed to pursuing a profit (not as commonplace as the aforementioned practice).
How about a situation where you have two major competitors for a single product, but both are so powerful, neither can really overtake the other. So instead of competing, they enter an agreement where they'll both raise prices on their products by 15%, thus making their profits much higher. Do you consider this ethical? Some countries have laws against price fixing like this, others don't. When it happens, it's hands-down a very effective way to maximize profit over normal competition.

 

In a real-life scenario, I imagine there being another company to meet the demand. In the free market, demand rarely goes unanswered.
There's loads of real-life scenarios similar to this, generally look at cities that had a large manufacturing industry about 30 years ago. Places like Detroit, Cleveland, Grand Rapids, have all been hit very hard economically because of manufacturing industries pulling out. Yes, the demand gets met, but it gets met in other countries where labor laws are more lax and thus the average standard of living for employees of the company goes down.

 

But even if I'm wrong, and the town would die: what is the only moral option?
Well this part is easy, sure, pull out of the town, but wherever they open up, have equal working conditions as to where they pulled out of. So if you were paying the robotics guy $15 an hour and gave him health coverage, then give the Mexican workers $15 an hour and health coverage.

 

"Societal good" raises the question: "good for what?", "good for whom?" "if the 'good of society' is independent of the good for an individual, how do you measure 'good'?" There are no objective answers to these questions.
Yes there are, here are some objective "goods" for society:

 

-Access to clean water

-Access to affordable housing

-Access to affordable food

-Access to affordable waste disposal / sewage

-Access to affordable heating / lighting / electricity

-Access to affordable health care

-Access to affordable education

-Protection against crime

-Some sort of safety net for people unable to work or find work

-Being able to afford leisure time

 

There's plenty of others, but the things people need to survive and services / comforts that a modern civilization can easily afford its citizens is a good place to start. Since the government doesn't provide all those things, many people depend on wages to try and achieve them. By lowering the standards for workers, it jeopardizes more people from having all of these things. As for whom and what it's good for, it's good for the happiness and survival of the entire population living in an area. All these things are frequently NOT always good for maximizing profit margins. If you think these are subjective goods and not objective ones, I would love to hear who you think should NOT be entitled to those things.

 

In The Jungle, doesn't a lot of their strife come from con men, police and judges who all have to be bribed and have some sort of political pull?
It's a contributor to his problems, but I'd say it's easily not the source of them. I think the source is that he can't afford all those societal "goods" I discussed before for his family, and that's with he, his wife, and later his children all being very hard workers and spending almost their entire waking lives working. For me, "The Jungle" represents largely unbridled capitalism. In the book, interference from the government with business is minimal (I don't remember any at all, but I read it two years ago), there's competing industries, and they all offer equally shitty conditions, management is far, far wealthier than the working class, and the populace is largely in poverty and engaged in wage slavery. I'd say it's a paradise for pure capitalists; you have cheap, cheap labor, a fair market to compete on, and there's basically no regulation for how you operate your business.

 

You mentioned that "capitalism marginalizes workers' rights";
I said UNBRIDLED Capitalism, in other words, capitalism with basically no limits other than the free market. Taken to extremes, it doesn't FORCE things directly, but it can directly impact and incentivize the majority of a population to work harder for less money, thus lowering the standard of living and quality of life for the majority. Now granted, quality of life is subjective, but I think we can agree that it's better to get paid $9 an hour (assuming the company can EASILY afford it) than 30 cents an hour, and better to have the option of working 8 hours a day or less, than only 12 or more.

 

I think the water companies, fire departments, schools and roads should be privately run. I think police, court and military should be the only government services.
Alright, let's focus on water companies then. Suppose the government no longer is in charge of water purification. A company moves into a town and sets up a water purification service, based on demand. After they're established, they do market research to determine that they will maximize profits if they charge prices that only 90% of the local population can afford. Other companies look at this region, but decide to dismiss it, because while they could open up a competing facility at lower prices, the initial overhead would lead to a profit loss for at least 10 years, so they all decide it's not worth it since the existing company is already there. So 90% of the population has water to drink, and the remaining 15% have to use the river, which is polluted. How does privatization provide for these bottom 10%? Are they simply on their own and don't receive clean drinking water?

 

you should give this a listen
I can listen to the audio when I run, but I won't be doing that until I'm no longer sick. It was mainly the dialogue in Atlas Shrugged that drove me crazy, the rest I figured was worth reading since it's such a famous book.

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Actualy all this happends now in Greece, people are protesting everywhere and i dont mean only burning cars or buildings... people are dying outside at the streets.

Why? It is the same thing.

Only the politicians have those objective "goods", not a simple person with a job.

 

65% of Greeks are without a job, the other ones work for something like 400 Dollars for a month. (1 Euro ~= 1 Dollar)

Many of them see no other option, they just suicide.

 

They tried every political form..... The politicians fund allways a way (with 15000 Dollars for a month) to survive much better than everyone else in the country.

 

Since 2009... before that year - near everyone (example: bus driver, doctor) had a well payed job (2000 Dollars for a month.)

But they have never payed taxes... the health system was allways a nightmare, still was nice to have one down there!*

 

*Believe me... if you have a health insurance this the best way and we dont talk only about Greece or Germany, its simply the best way if you know you can get a extra help from the goverment.

 

But you see now what happends... the same Irony like in the picture above.

 

You can read more about here:

http://www.greekcrisis.net/

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65% of Greeks are without a job, the other ones work for something like 400 Dollars for a month. (1 Euro ~= 1 Dollar)

Many of them see no other option, they just suicide.

 

They tried every political form..... The politicians fund allways a way (with 15000 Dollars for a month) to survive much better than everyone else in the country.

 

Since 2009... before that year - near everyone (example: bus driver, doctor) had a well payed job (2000 Dollars for a month.)

But they have never payed taxes... the health system was allways a nightmare, still was nice to have one down there!*

http://www.greekcrisis.net/

 

Those salaries are falsified by business lying about their income and not paying taxes and politicians not being able/to lazy to control it, however the difference is probably about +1000 $ for whatever you stated but noone really can know now, because of super corruption...

 

However you have to remember salaries are not what really counts.

As an example, in Ukraine over 70-80 % of people own an apartment and over 50 % of people have a dacha (Cottage). Let's remember social surplus: Added wage for minimum workers, health care (free/super cheap medicine), unemployment pay...

 

So even if you get 1000 $ a month all you would need to spend it on is food, electricity, taxes (optional) the rest is whatever you like.

 

What really hits greece hard is a combination of two things (It was politicians 3 years ago but now it's a different problem).

High unemployment and noone paying taxes (Which are used to create employment in the first place)

 

A third would be that they can't produce anything of value, however I disagree, what about olives? Salt? Wine? Tourism? There is plenty GNP potential from that.

 

And then there is the independence from EU problem....

 

In conclusion, greece's problem is much more complex then just 99% vs 1 % and the reasoning there is different.

 

But people, it is important that you know, as Ross stated, money is not what makes a society rich.

This is:

 

-Access to clean water

-Access to affordable housing

-Access to affordable food

-Access to affordable waste disposal / sewage

-Access to affordable heating / lighting / electricity

-Access to affordable health care

-Access to affordable education

-Protection against crime

-Some sort of safety net for people unable to work or find work

-Being able to afford leisure time

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I have this feeling that, come the end of November, most of the OWS will be outta there. It gets cold here in the Northeast.

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