[Merged]All businesses convert to non-profit and salary caps

[The_Animus]

I personally hate the way businesses in general are run. Almost all businesses are set up for the purpose of huge financial gain in the hands of a few people. This results in numerous issues such as choosing more profit for the company at the expense of the environment. This means that we sell poor quality products or refuse to upgrade to better technology (cars and gas). This means that prices for all products and services are higher than they need to be, which in turn means that people have to work more hours than needed to pay for the things they need. I'm sure there is more, but you get the point.

I believe this conflicts are interferes with progress for all humanity.

As such I would like to propose the idea that all businesses convert to non-profit businesses/organizations and that all jobs have a maximum yearly salary cap. If businesses are non profit they have no need to charge more than needed for their products. With the salary cap there would be no way for them to use bad or unethical business practice to make extra money for themselves and as such there would no longer be any incentive to continue those practices.

This thread is mostly just to discuss the benefits and possible downfalls of this idea. For the purposes of this discussion let's assume that it was made a law that all businesses must be non-profit, and that there is a maximum salary cap of say $200,000 a year or something like that. Let's also assume that all businesses follow this and that there is no way for them to get around these restrictions to give themselves more money.

[Wolfman]

Interesting thread; but this is really just a modified form of the Communist ideal. In theory, it sounds great -- everyone equal, and other such arguments.

The problem is that, in the real world, it simply doesn't work very well. People are, essentially, selfish. Let me illustrate:

Assume a group of employees who work in a company such as the one you've described. The salary cap means that no matter how hard they work, or how much better than their colleagues they are, they still get paid the same money. Now, you may get the rare idealist who works his hardest only for personal satisfaction. But for the majority, this serves only as incentive for mediocrity and negligence.

Consider, one of them works really hard, does his best, puts in a lot of overtime, makes real sacrifices in order to get the best results. He sees other people on his team slacking off...they don't do a bad job, they just don't work hard, either; they do the minimum amount of work necessary to get their salary. Month after month after month, this guy sees the same thing...he busts his butt and makes significant personal sacrifices, but at the end of the month, the others who did much less work than him still get paid exactly the same amount of money.

I'm not talking in theory here, either. I'm in China, which for some 50 years ran its businesses essentially the way that you have proposed. Companies were all state-owned, and were effectively non-profit (in fact, quite a few were downright unprofitable, and survived only through gov't subsidies). Employees all got paid the same salaries across the board; you could get a slightly higher pay with a promotion, but it wasn't that significant.

The result? Incredible incompetence and inefficiency.

Now, when the Chinese gov't turned around and privatized these companies -- so that they now operated on a more 'capitalistic' model -- not only did those companies become more profitable, but the people in those companies worked harder, and had greater commitment to their work. Because they knew that now, if they worked hard, they'd actually be rewarded for it.

In some idealized utopia, ideas such as yours might work; a utopia where everyone worked purely for the joy of working, where nobody cared about personal benefit, or being better than others.

But that's not the world we live in. Experiments similar to yours have been tried many, many times; and I am not aware of any of them that have proven to be even moderately successful.

[The Atheist]

I personally hate the way businesses in general are run.

What Wolfman said.

But there's another issue as well - without the potential returns, people wouldn't run businesses and the global economy would be reduced to barter and probably 3/4 of the population would die of starvation.

The bad news for your theory is that capitalism has produced the most reasonable system. Very few people starve to death - except by lifestyle choice - in OECD countries, because the capitalist system provides sufficient income so that governments can establish safety nets to support those who can't support themselves.

I agree that your premise sounds great on the surface, but it certainly doesn't take human emotion into account.

[TriangleMan]

Other issues with the OP theory:

1) risk/reward relationship is thrown out the window. Why would someone risk their money starting up a business when, at best, they can only have a set salary regardless of how well the business does, yet can still lose all their money if the business fails.

2) no incentive to grow a business, set up new franchises etc. because there is little financial benefit to do so

3) government tax base will be significantly decreased (will these non-profit businesses even be taxable?) thereby reducing government social and infrastucture spending.

[The_Animus]

I think there has been a misunderstanding. I am not proposing that everyone gets paid the same. Quite the opposite. People would still get paid in a wide range of salaries, but there would be no one who makes such a grossly unnecessary amount of money. By all means pay harder working people and more difficult positions more money. No one needs to make a million dollars a year. They can live more than comfortable on that $200,000. Obviously a CEO or a Doctor would be paid more than a cook or cashier. And if there is an instance where there are two Doctors and one is much better than another then they would be paid differently.

If someone doesn't do their job well then I'm sure there is someone else who can and would appreciate making more money.

But there's another issue as well - without the potential returns, people wouldn't run businesses and the global economy would be reduced to barter and probably 3/4 of the population would die of starvation.

The bad news for your theory is that capitalism has produced the most reasonable system. Very few people starve to death - except by lifestyle choice - in OECD countries, because the capitalist system provides sufficient income so that governments can establish safety nets to support those who can't support themselves.

I don't think that is how it would work. There would still be benefits to run a business. If you run the business you would make more money than if you were simply an employee at another business. There is still a benefit to having a business, you still make a higher than average salary. You just don't get to make $2 million.

I don't know what OECD means. However there would still be taxes to pay for things that are otherwise unpaid for. And if businesses were more geared towards trying to benefit all of humanity there wouldn't be any world starvation. We currently waste ridiculous amounts of food with our current system. Even by just eliminating the meat industry you could provide more food to people. The animals we raise to eat eat more plant life than people do.

[quixotecoyote]

The one thing I found interesting was the concept of salary caps (or investment profit cap) as applied to corporate America. If there could be some way of enforcing that it might be interesting.

I think about the instances where it is the most profitable action for a company to heaily pollute or screw their employees for salary or benefits. Usually the people who are making these decisions are already obscenely rich, have more money than they know what to do with, and are playing their networth like a high score chart. Either they are or the investors behind them are. Capping expected returns might remove an incentive to behave unethically for greater profit.

Lots of problems in implementation making it practically unworkable, but the idea's worth kicking around.

[TriangleMan]

. There would still be benefits to run a business. If you run the business you would make more money than if you were simply an employee at another business. There is still a benefit to having a business, you still make a higher than average salary. You just don't get to make $2 million.
No, running a business does not generally mean that you make more then on salary because most businesses either fail or barely scrape by, leaving the person who started the business in debt. Only successful businesses reward the risk-taker and under your scenario that reward is now limited. Is someone going to put five million dollars into a start-up tech/manufacturing business when at best he could make $200,000 a year? No, not at the risk of losing the money.

I don't know what OECD means.
www.oecd.org

[Wolfman]

Ditto on what TriangleMan said.

Consider if I want to start a company making cars. I have to build large factory facilities, invest money in research and development, etc. The cost is going to be in the tens of millions of dollars at the very least.

Under your proposal, you are basically telling me that the worst I can expect is that my business goes under, and I lose everything; the best I can expect is that I get one million dollars a year maximum, meaning that I won't even recover my initial investment for 20 or 30 years...much less make a profit.

[The Atheist]

I can give a classic example - me. Along with headhunting, I own the major stake in a solar energy company.

No way, no how, would I ever take the risks associated with the investment if I didn't see a healthy return at the end of it all.

Also, there's a fallacy in the idea of paying a salary to the company owner - during the first year, most company owners make nothing, then spend the next few years recouping their investment. Who's gonna pay my salary?

[The_Animus]

What if we change it so that you can choose the option of either a max salary cap of something like $250,000 or a certain % of the profits. That way you can still benefit from higher expenses, higher profit business.

Also you have to understand that all that initial cost in setting up the factory or store or whatever is still there in the net worth of the business. So it's not as if you are really losing 4 million dollars and only getting $200,000 a year.

You could also change it so that if the business does go under you are able to sell everything off to try to recoup your losses.

There is also the possibility of government subsidies.

It's also possible that this would encourage multiple investors in business.

I do understand there are issues. So let's see if we can't come up with some way to fix this up.

[The_Animus]

I have another idea.

Let's say instead that the person who starts the business does not have a salary cap or % of profits each year cap. Instead they are allowed to only make double the amount of money invested to start the company up. So if you invested $1,000,000 in a company you could make $2,000,000. You might be able to change the ratio a little depending on certain investment brackets that could be set up.

After you make that much from the company you can't make any more aside from the previously mentioned salary cap.

This would encourage business growth because of the greed for more money that it can bring, while still putting a limit on the amount of overall money that can be made from each particular business by one person.

[The Atheist]

Wow! You really have got a bee in your bonnet about this, haven't you?

Aside from the simply wrong assumptions about what makes people tick, you have to realise that you'd have no support whatsoever for your plan. Businesspeople are probably the sector wanting least government involvement and here you are threatening to drown them in further red tape as companies have all these new profitability rules to follow. Who will police it? Every company in the world would become a corrupt entity concentrating on the best way to avoid draconian capital laws.

What you're proposing would make Prohibition seem like a Sunday School picnic.

[tkingdoll]

Meh, I take all the risk, so I want all the reward.

Also, I work anything up to 20 hours a day, seven days a week. There is no limit to the amount of money I want my business to make in order for that sacrifice to have been worth it.

Someone has to start the businesses that the 'capped salary' people work for. Those who take that risk, reap the rewards. If the business goes bust, they could lose everything, including the right to start another company.

I can guarantee that if I had a maximum income I could earn from my business, I wouldn't have started it. I'd guess that's also true for probably 99% of the business owners I know, too.

[TriangleMan]

Who will police it? Every company in the world would become a corrupt entity concentrating on the best way to avoid draconian capital laws.
well he did say in the OP to assume that everyone complied and there was no way to get around the caps so we may as well continue with those assumptions (otherwise the taxation issues alone kill the idea)

[H3LL]

Is it just me?

I thought that the OP had so many strawmen that this thread was in danger of becoming a fire hazard.

.

[TriangleMan]

Also you have to understand that all that initial cost in setting up the factory or store or whatever is still there in the net worth of the business. So it's not as if you are really losing 4 million dollars and only getting $200,000 a year.

Your assumption is incorrect. Most types of businesses, if they go under, get little return on the initial investment. $5m in a manufacturing business that goes under would be lucky to get $1m back, and that would be only if they didn't have bank debts (which would be collateralized by the assets of the business) and they could find someone to buy the assets, not necessarily an easy thing to do.

Other types of businesses would be even worse off. IT or R&D has very few hard assets, a mining or oil company would have little that anyone would want (an oil well with no oil: cost to set up = millions, value = 0)

[tkingdoll]

Perhaps The Animus doesn't realise what it takes to run a successful business?

i.e. blood, sweat, tears, graft, and bigger iron balls than has ever been demonstrated in a forum thread.

[Ivor the Engineer]

The_Animus, I too think that capitalism is a deeply flawed ideology, giving immense amounts of power to the greediest people in society. E.g., It costs $1 billion to become president of the US now.

All the people who champion the system implicitly condone millions of people living in poverty or staving to death, while they enjoy the comforts of their energy guzzling cars and mansions and watch said staving people on the news on their 64" LCD TV.

People have become so brainwashed by capitalist propaganda pushed during the cold war they cannot imagine a different way to organize the economy, such that extremes are curtailed while still providing a gradient to motivate people to work hard. In fact, I think the idea terrifies them.

[Wolfman]

Ivor,

I personally am a champion of a system that has a reasonable combination of capitalism and socialism -- such as that you find in countries like Canada and Sweden (two countries that have the highest standards of living in the world).

You think there is a better way? Then please do more than spout vague theory. Look at a country like Canada, and the poverty levels there, and compare that to any other system, and the poverty levels within that system.

Its easy to claim a superior idea (or the inferiority of another idea) if you don't actually have to provide practical demonstrations of the idea you are championing. So put your money where your mouth is.

[tkingdoll]

So put your money where your mouth is.

Or even better, donate it all to people living in poverty...;)

[Ivor the Engineer]

Ivor,

I personally am a champion of a system that has a reasonable combination of capitalism and socialism -- such as that you find in countries like Canada and Sweden (two countries that have the highest standards of living in the world).

You think there is a better way? Then please do more than spout vague theory. Look at a country like Canada, and the poverty levels there, and compare that to any other system, and the poverty levels within that system.

Its easy to claim a superior idea (or the inferiority of another idea) if you don't actually have to provide practical demonstrations of the idea you are championing. So put your money where your mouth is.

I wasn't championing any particular ideology. I was pointing out that those who tend to benefit the most from a system tend to quickly dismiss any idea for change that would curtail their idleness, greed or power as unfair or unworkable.

As for what can be done to curb the excesses of individuals, the only way that I can see it being made to work is with a internationally agreed 100% income tax for those whose earnings are over a certain threshold.

Please feel free to spend 2 seconds considering how to make this idea work and any advantages it might have over the present system, and 2 hours picking fault with it.

[Ivor the Engineer]

Or even better, donate it all to people living in poverty...;)

Nah, they'd just use it to buy AK-47's.

[tkingdoll]

Nah, they'd just use it to buy AK-47's.

In this country? I doubt that (although knives are a popular choice, I hear).

There's a massive difference between redistribution of wealth in your one country, and worldwide, of course. And cultural, environmental differences et al make for a conflict of priorities. There is no workable worldwide solution. Not even sure there's a national one.

However, the individual can make a difference to the individual. Personal responsibility is king, at least in the west.

Example: I grew up in extreme poverty, by UK standards. As a result, I had almost no formal education. That's not much better than second world standards, really. But the opportunities that were available to me were great, and I have worked my little rear end off to make an extremely nice (if busy) life for myself. I bought my first property with cash when I was 25, and started my own business 18 months ago. I work harder than anyone I know. I plan to retire at 50, as rich as possible. Yay me, frankly.

The opportunities I had and made the most of are available to anyone in this country who is prepared to work hard. To be fair, it helps if you are intellectually gifted, but short of eugenics, there is no way to address that particular imbalance.

In return for the opportunities I've had, I work with a local charity which helps families in poverty, and a local homeless shelter.

But FSM help anyone who tries to cap the amount of money I can earn. If I can be a multi-millionaire, I will be. The poverty I grew up in certainly wasn't capped. Unlimited opportunities should bring unlimited reward.

[Rob Lister]

No one needs to make a million dollars a year. They can live more than comfortable on that $200,000.

Before you get too far down the idealist road, what is it that people that make 1M+ a year do with that money?

[Wolfman]

I wasn't championing any particular ideology. I was pointing out that those who tend to benefit the most from a system tend to quickly dismiss any idea for change that would curtail their idleness, greed or power as unfair or unworkable.
Ah, I get it...you get to state that capitalism is the "wrong" idea, but have no obligation to provide us with any superior alternative!

Its rather easy to "win" an argument when you don't give us any actual position to debate. Does a capitalistic system have problems? Yes. But the fact remains, every single country in the world with the highest standard of living and lowest level of poverty is based on a capitalistic system (although the most successful of those seem to have a balance between capitalism and socialism).

But hey...let's ignore that and rely on vague claims with no substantiation or alternative possibilities.
As for what can be done to curb the excesses of individuals, the only way that I can see it being made to work is with a internationally agreed 100% income tax for those whose earnings are over a certain threshold.

Please feel free to spend 2 seconds considering how to make this idea work and any advantages it might have over the present system, and 2 hours picking fault with it.
"how to make this idea work"? Ummmm...what idea?!? You've given us nothing to consider, except your basic claim that "capitalism is wrong". Where have you suggested a viable alternative idea for me to consider?

I spent two seconds "considering" your idea because you haven't given me any idea to consider.

I present to you concrete examples -- countries like Canada and Sweden -- that enjoy high standards of living, low rates of poverty, etc. No country based on Communism, Fascism, or any other system of government has produced a comparable standard of living for its citizens, nor has been as successful in decreasing rates of poverty.

If you want to disagree, that's fine; but you'll have to do better than vague claims based on no evidence whatsoever, or without proposing another system that would work better.

[Ivor the Engineer]

Ah, I get it...you get to state that capitalism is the "wrong" idea, but have no obligation to provide us with any superior alternative!

Its rather easy to "win" an argument when you don't give us any actual position to debate. Does a capitalistic system have problems? Yes. But the fact remains, every single country in the world with the highest standard of living and lowest level of poverty is based on a capitalistic system (although the most successful of those seem to have a balance between capitalism and socialism).

But hey...let's ignore that and rely on vague claims with no substantiation or alternative possibilities.

"how to make this idea work"? Ummmm...what idea?!? You've given us nothing to consider, except your basic claim that "capitalism is wrong". Where have you suggested a viable alternative idea for me to consider?

I spent two seconds "considering" your idea because you haven't given me any idea to consider.

I present to you concrete examples -- countries like Canada and Sweden -- that enjoy high standards of living, low rates of poverty, etc. No country based on Communism, Fascism, or any other system of government has produced a comparable standard of living for its citizens, nor has been as successful in decreasing rates of poverty.

If you want to disagree, that's fine; but you'll have to do better than vague claims based on no evidence whatsoever, or without proposing another system that would work better.

I'm not out to "win" a debate with you. I was putting forward an idea for discussion, which you appear to have missed so I'll state it again:

As for what can be done to curb the excesses of individuals, the only way that I can see it being made to work is with a internationally agreed 100% income tax for those whose earnings are over a certain threshold.

So, what problems do you see with this idea and how may they be overcome (if at all)?

[roger]

Warren Buffett has about 1/4 million direct employees, and a lot more indirectly through his extensive stock holdings in various companies. Call it half a million people.

Cap his returns, and you put 1/2 million people out of work.

[Ivor the Engineer]

Warren Buffett has about 1/4 million direct employees, and a lot more indirectly through his extensive stock holdings in various companies. Call it half a million people.

Cap his returns, and you put 1/2 million people out of work.

His annual salary is about $100,000. I wouldn't call that excessive.

[roger]

His income is rather higher.

ETA: since I don't want to do this blow by blow, allow me to expand...


First, if you only cap salary, there will be no change. Compensation will change from salary, which is already quite low for the average S&P 500 CEO, to alternative forms of income, such as options, etc. Warren's salary is 100K, but his income made him one of the richest men in the world.

Second, if businesses were non-profit, those 1/2 million people would be out of work. Why? Well, Buffett started out by investing in stocks. He would not have done that with non-profits.Then, he started investing money for friends. This is where he made his millions, and he would not have done that. Then, he divested his fund, and bought Berkshire Hathaway. Again, he would not have done that if BH was a non-profit. Then, he turned the company into a cash cow. Wouldn't have happened. he took this cash flow and bought: Geico (another cash cow), Dairy Queen, Washington Post, Coca Cola, Bank of America, Wells Fargo, etc., etc., etc.

In all, he directly employees around 1/4 million people through BH.

In other words, no millionare or billionare takes their money and stuffs it in a sock and buries it. If they did, the OP would have a point. The money is reinvested, even if it just sits in a checking account bearin 0% interest. The bank invests it in businesses (and they wouldn't if there was no profit in it, why would they). Smart people, like Buffet, invest it either in bonds, stocks, or entire companies. None of this would happen if the money wasn't earned in the first place. Buffett did not transfer wealth from your pocket to his, though he gets tenth of a cent or so everytime you buy a coke. No, he created wealth, he created jobs, he provided home building materials, sofas, couches, tables, newpapers, soda, bricks, business jets, etc., to the world, all created by people working at jobs. He provides insurance to people who get wiped out by hurricanes. Why would he do any of this if there wasn't the potential for profit? he wouldn't? Why would any bank lend anybody money if there was no potential for profit (remember, the OP states that all businesses should be not for profit)? They wouldn't.

The economy would die, there would be no new job creation, there would be massive unemployment, etc.

Anyone who wants to replace the capitalistic system needs to provide an alternative form of wealth creation. I haven't seen it yet.

[Ivor the Engineer]

In this country? I doubt that (although knives are a popular choice, I hear).

There's a massive difference between redistribution of wealth in your one country, and worldwide, of course. And cultural, environmental differences et al make for a conflict of priorities. There is no workable worldwide solution. Not even sure there's a national one.

However, the individual can make a difference to the individual. Personal responsibility is king, at least in the west.

Example: I grew up in extreme poverty, by UK standards. As a result, I had almost no formal education. That's not much better than second world standards, really. But the opportunities that were available to me were great, and I have worked my little rear end off to make an extremely nice (if busy) life for myself. I bought my first property with cash when I was 25, and started my own business 18 months ago. I work harder than anyone I know. I plan to retire at 50, as rich as possible. Yay me, frankly.

The opportunities I had and made the most of are available to anyone in this country who is prepared to work hard. To be fair, it helps if you are intellectually gifted, but short of eugenics, there is no way to address that particular imbalance.

In return for the opportunities I've had, I work with a local charity which helps families in poverty, and a local homeless shelter.

But FSM help anyone who tries to cap the amount of money I can earn. If I can be a multi-millionaire, I will be. The poverty I grew up in certainly wasn't capped. Unlimited opportunities should bring unlimited reward.

Why do you think the injustice you faced as a child (poverty) is a valid justification for the injustice you wish to attain (excessive wealth)?

Why do you want to retire at 50?

Funny how often successful people claim it was their hard work and unsuccessful people claim it was their bad luck that got them where they are. It must be true:rolleyes:

[Wolfman]

I'm not out to "win" a debate with you. I was putting forward an idea for discussion, which you appear to have missed so I'll state it again:

As for what can be done to curb the excesses of individuals, the only way that I can see it being made to work is with a internationally agreed 100% income tax for those whose earnings are over a certain threshold.

So, what problems do you see with this idea and how may they be overcome (if at all)?
So, essentially, you argue in favor of a world-wide government that has the right to impose laws, taxes, etc. on every nation and government. Because that is the only way that such a thing works.

I also have yet to see you to respond to my question as to how it is that if, as you claim, capitalism is so bad, why is it that the countries with the highest standards of living for all their citizens, and the lowest rates of poverty, are consistently those with capitalist-based economies?

What problems do I see with your proposal? Oh, where to begin:

1) It would require a world-wide, global government with the power to force such laws on countries that did not agree (and among the countries that would not agree would be U.S., China, etc...pretty darned formidable opposition). I'm most definitely opposed to such an idea.

2) It would be an entirely counter-intuitive system. Let me see...if I don't work hard, and strive only for mediocrity, I can keep most of my money. But if I show initiative, work really hard, and build a really successful business that not only benefits me, but that provides employment to hundreds/thousands of other people, you punish me by taking every cent of the money I've made.

3) Far from benefiting a nation's economy, it would cripple it. If forced to pay 100% income tax, the owners of such companies would quickly go bankrupt, and the companies would shut down. The employees in those companies would then lose their jobs, and the economy would fall apart.

Again -- if you want to argue for your point, please demonstrate A) how such a system could possibly be implemented, and B) how such a system could possibly benefit anyone?

[Wolfman]

Funny how often successful people claim it was their hard work and unsuccessful people claim it was their bad luck that got them where they are. It must be true:rolleyes:
Talk about a meaningless argument.

And your theory is...what, exactly? I grew up in a village of 900 people in Canada, in a family with a father who was a pastor, and didn't even have enough money to buy new clothes for us. I had to work part-time jobs to put myself through university. I came to China 14 years ago, busted my butt in difficult and unrewarding jobs until I got experience. Then I started building my own businesses, again through hard work.

There are many others I went to university with who had far better situations than me, but who never accomplished anywhere near as much as me.

So...exactly what should I attribute my success to, if not hard work?

Honestly, this is sounding to me more and more like the arguments of someone who has never risen above mediocrity in their own life, and seeks to blame it on the "oppression" of others with more success. It can't be his own fault, so it must be the fault of others who actually have accomplished something.

The solution? Forget about all the work they've put into what they've done; forget the significant risks they've taken. The only way to treat everyone fairly is to take the money from the people who are "successful", and give it to those who aren't.

I'm very, very sure that your life would be much more comfortable, and much easier, if such a system were implemented. Then there'd be no need for you to do much at all...let others do the work, make the profits, then take it from them and use it for yourself.

Truly a utopia...for those who revel in inadequacy and who feel they "deserve" reward for nothing more than existing.

[Wolfman]

For the record; I don't think that a purely capitalistic system is a good thing. What I argue for -- as should be made plain above -- is a combination of socialist and capitalist systems,

In this way, those who work hard and demonstrate exceptional capability have no limit to the rewards they can accomplish; but there is still gov't control to prevent abuse, stop monopolies, and 'redistribute' a certain percentage of those profits to the rest of the population.

I think Canada is a great example of this. The richest people in Canada are nowhere near as rich as the richest people in the U.S.; but the poorest people in Canada are nowhere near as poor as the poorest people in the U.S. The division between "rich" and "poor" is significantly smaller. Furthermore, taxes are higher, and are used to pay for things such as universal health care.

Yes, as others will point out, this system has its problems...but it is still overall better than most other systems in the world, and is one of the reasons why Canada is consistently in the top 3 countries with the highest standard of living in the world (way ahead of the U.S., despite the U.S. having far more wealth).

The problem is, the moment you remove the incentive for success (or, even worse as in Ivor's suggestion, penalize people for success), then a country is effectively doomed. Why would people take risks to introduce new technologies if they know that being successful in their efforts means that they have to pay 100% income taxes, for example? All the people who had the best ideas, all the people who were willing to work the hardest for success, would leave your country and go to another country where they would actually be rewarded for their efforts.

I do think that businesses and corporations have a 'social responsibility', and I'm fully in favor of the government taxing such entities and using that money for the betterment of society -- things like health care, education, etc. But I also believe that there has to be a balance...those corporations still need to have the opportunity to make profits, and to grow.

Please note -- in a country that encourages the capitalistic development of companies, that country will have a far larger corporate tax base than a country that penalizes capitalism. China's a great example. When capitalism was not allowed, the state had to pay money to the companies in order to keep them working; now that China is changing to a more capitalistic system, the state is getting money from those businesses. So instead of having to use a significant part of its money to prop up failing businesses, the gov't can use that money to improve education, health care, etc. (which is exactly what they're doing).

There's a quotation from Churchhill that goes (if I remember properly), "Democracy is the worst form of government, except for all the others that have been tried". Essentially, he was saying that democracy has its weaknesses and problems, but still works better than any of the other systems out there.

I'd argue the same thing here. There have been experiments with many different kinds of economies, many different styles of government.

And what do we see today?

Make a list of the five countries in the world with the highest standards of living for all citizens? You'll find that all of them are democratic, and all of them have capitalism.

Make a list of the five countries in the world that have the highest focus on human rights and individual freedom? You'll find that all of them are democratic, and all of them have capitalism.

I'd argue there's a good reason for that.

If you're going to argue against this, you've got to do more than propose vague theories that have no basis in reality.

[Ivor the Engineer]

Talk about a meaningless argument.

And your theory is...what, exactly? I grew up in a village of 900 people in Canada, in a family with a father who was a pastor, and didn't even have enough money to buy new clothes for us. I had to work part-time jobs to put myself through university. I came to China 14 years ago, busted my butt in difficult and unrewarding jobs until I got experience. Then I started building my own businesses, again through hard work.

There are many others I went to university with who had far better situations than me, but who never accomplished anywhere near as much as me.

So...exactly what should I attribute my success to, if not hard work?

Honestly, this is sounding to me more and more like the arguments of someone who has never risen above mediocrity in their own life, and seeks to blame it on the "oppression" of others with more success. It can't be his own fault, so it must be the fault of others who actually have accomplished something.

The solution? Forget about all the work they've put into what they've done; forget the significant risks they've taken. The only way to treat everyone fairly is to take the money from the people who are "successful", and give it to those who aren't.

I'm very, very sure that your life would be much more comfortable, and much easier, if such a system were implemented. Then there'd be no need for you to do much at all...let others do the work, make the profits, then take it from them and use it for yourself.

Truly a utopia...for those who revel in inadequacy and who feel they "deserve" reward for nothing more than existing.

I'll tackle your little rant first because I have stuff to do. I'll work on your problems with my idea later.

I think a more realistic reason people are either successful or not is through a combination of both the amount of effort they put in and luck. I.e. Those that are successful have often worked hard and had some good luck, while those who are unsuccessful have often not worked particularly hard and had some bad luck.

Now, as for your "let others do the work" crap, that is exactly what the CEO's of most (all?) companies do. The CEO of the company I work for has approximately 60,000 "others doing the work" for him. So, what fraction of the companies success is down to his work and what fraction is down to the other 60,000 do you think? Apparently you believe that the 60,000 (including me) are just mediocre bottom feeders who are frustrated that we can't all be like the boss (or you).

And don't worry, I will not be requiring any of your profits. I already earn (or as you seem to think, am given) more than enough to cover my mediocre existence.

[Wolfman]

I'll tackle your little rant first because I have stuff to do. I'll work on your problems with my idea later.

I think a more realistic reason people are either successful or not is through a combination of both the amount of effort they put in and luck. I.e. Those that are successful have often worked hard and had some good luck, while those who are unsuccessful have often not worked particularly hard and had some bad luck.

Now, as for your "let others do the work" crap, that is exactly what the CEO's of most (all?) companies do. The CEO of the company I work for has approximately 60,000 "others doing the work" for him. So, what fraction of the companies success is down to his work and what fraction is down to the other 60,000 do you think? Apparently you believe that the 60,000 (including me) are just mediocre bottom feeders who are frustrated that we can't all be like the boss (or you).

And don't worry, I will not be requiring any of your profits. I already earn (or as you seem to think, am given) more than enough to cover my mediocre existence.
And for all of that, you have yet to respond once to the oft-repeated question of why it is that the countries with the highest standards of living, greatest levels of freedom and equality, etc....all happen to have capitalistic economies?

Nor have you answered the question of how one could possibly institute a solution such as yours (100% income tax above certain income level) without an autocratic world-wide government.

I am CEO and President of my company. I have quite a few other people working on me (and within a few years, I hope that this number will be in the hundreds or thousands). In starting up this company, I have taken significant risk, investing every cent that I have...if it fails, I'm completely bankrupt. Not one single other person in my company is taking that risk. If the company fails, at worst they lose their job...but they don't lose their life savings as a result.

But, according to you, if I'm somehow successful in building up this company, and reach a certain income level, I should be subject to a 100% income tax that punishes me for that success.

And no, I don't think that my employees are "bottom feeders"; I used to be in exactly the same situation. I do my best to provide incentive for them -- if they do a superior job, they get better pay, higher position, etc. If some of them, like me, take the experience that they've gotten and go on to start their own businesses, then I say more power to them.

If others choose not to do that, or do not have the opportunity, I don't look down on them.

What I do look down on is people who take a simplistic worldview in which the successful should be punished for their success, and who think that I somehow "owe them" something because I make more money than them.

And in regards to your CEO, I'll readily grant that there are some people making tons of money who arguably "don't deserve it"; for example, heirs who live off their parents' hard work (think Paris Hilton) without contributing anything of value themselves. Or someone who gets a high-paying position just because of his connections, instead of because of his actual ability and experience.

However, by far the majority of top business people that I know -- particularly those who have built their own companies -- are people who've worked incredibly hard, and who've taken huge personal risks, to get to where they are today.

You have not answered one single question that I've raised; I assume that it is because you are unable to supply a reasonable answer. So, just in case you've forgotten them in the 10 or 15 seconds its taken you to get this far, here they are again:

1) If capitalism is so bad, why is it that the countries with the highest standards of living, and the greatest freedoms, are all based on capitalistic economies (with some degree of socialism to moderate it)?

2) How on earth could your suggestion (100% income tax above a certain level of income for all countries) ever be implemented without an autocratic world-wide government? You are arguing in favor of an international dictatorship? Because that's the only way such a proposal could even have a hope of happening.

3) Why is it that, under your system, a person who never tries very hard, never takes any risks, and who actually throws away opportunities to improve himself, would still deserve all or most of his income; but someone who took busted their butt for decades, took significant risks, and built up a very successful company, should be punished by having 100% of his income seized by the government?

If you can't answer these three simple questions -- please don't bother with any further responses.

[quixotecoyote]

But Wolfman, isn't that only true of 'first generation' businesses? If you start up a company with your own resources then I've got nothing but respect for you. But I've never personally known anyone that's done that. The few well-off people I know schmoozed up various corporate ladders. Those corporate ladders were not built by the people currently in charge, but were bought and sold may times after the original entrepreneur washed his/her hands of it. Think Cerberus Group buying Chrysler. I've little respect for those kinds of profits.

[Wolfman]

It would be true that the risks for subsequent leaders within the organization would be significantly less...the company is already there, already successful.

But as far as the necessary ability or commitment to keep that company functioning, or to build it larger...there are still only a relatively small number of people who can actually do that. For those who think that the CEO position in a large multinational could be filled by anyone, that he's just a figurehead or doesn't require any special skills or knowledge, I'd just point out how radical a difference changing a company's CEO can have on that business. Yeah, there are tons of people under the CEO doing the 'grunt work', and yeah the company could not function without them; but if they have an incompetent or lazy CEO, the company will fall apart, and they'll have no job whatsoever.

The higher the responsibility, and the higher the position, the higher the pay should be -- in my opinion.

I agree 100% with laws and regulations to protect the rights of workers within that organization, which is part of the reason that I support a combination of socialism and capitalism.

But my question remains -- if capitalism is so bad, if this system is so evil and oppressive, why is it that the countries with the highest standards of living and highest levels of equality are all based on capitalist systems?

I'll gladly accept an argument that another system is superior, if you could provide any actual proof of that...but every other system that has been tried has failed to produce results as positive or beneficial as this one.

Yes, capitalism can be abused; I think that capitalism in the U.S., particularly as practiced/encouraged under the Republican gov't, is dangerous and wrong. There is too little gov't oversight, and the gap between the rich and the poor is absolutely inexcusable, especially for the richest nation on the planet. Rather than government controlling big business, too often it is big business controlling the government.

And that form of capitalism would be one that I personally have significant problems with.

But that doesn't automatically render all capitalism as "bad". With appropriate regulations and safeguards, a capitalist system can provide maximum motivation for its population (there is no limit to what you can achieve, based on your own ability and efforts), while also serving as an economic base that makes the country as a whole richer and stronger.

Plain fact; no government is going to collect a lot of taxes if all the businesses only have small profits. The higher the profits, the higher the tax revenue. The higher the tax revenue, the more money the gov't has to address other social concerns (like education, health, etc.).

But there's a limit on those taxes...charge too much (as in Ivor's argument), and the companies (or their owners) reach a plateau beyond which further growth or development is impossible. This benefits nobody. No new jobs are created. No funds are available for development of new technology (and if new technology is developed, they won't produce it, because all their profits will be taken away from them anyway).

[roger]

What strikes me about these arguments about these is how they seem to miss how tooth-and-nail big business is. Name me a big business that isn't locked in a survivial of the fittest fight (I do this in the next paragraph, btw). To put some perspective on this, look at how many of the biggest companies from 100 years ago still exist today. I forget the numbers, but Kenneth Fisher wrote about this back in the 50s and 60s - the upshot, almost every company eventually dies. The few that do survive have changed radically multiple times, each with a particularly strong and effective CEO at the helm. Any time there is a nice profit margin, other companies come in to try to get a piece of the action. This inevitibily leads to a lower profit margin, and hence lower prices to the consumer.

As an aside, we can point to a few businesses for which this doesn't really apply, such as Coke. People will buy coke even when a generic brand is half the price. Go to a tiny village in China with no running water and you will find Coke. give somebody 10 billion dollars to take over Coke's market share and they can't do it. But there are only a very tiny handful of companies that have that kind of competitive advantage.

So, we have a scenerio where companies are competing fiercely to reduce prices to the consumer, and we are being offered an alternative scenerio where companies are no long profit driven, where people are not rewarded in any way for reducing prices further, and where we have no way to motivate a CEO to take a company through a difficult period where it's death is imminent. Doesn't make sense to me.

ETA: I'd like to see an estimate of how many start up companies would be in Southern California with no profit potential, no VC, no reason to try to invent iPods, blackberries, microprocessors, Oscilloscopes, CNC machines, artificial hearts, etc., etc., etc.

[tkingdoll]

But Wolfman, isn't that only true of 'first generation' businesses? If you start up a company with your own resources then I've got nothing but respect for you.

There are at least two in this thread.

And I don't have the stats, but I'd be willing to bet that the majority of companies are of that type.

[jimlintott]

There are at least two in this thread.

And I don't have the stats, but I'd be willing to bet that the majority of companies are of that type.

I bought an existing company and that certainly doesn't come risk free (but you knew that).

It's not the rich that are the problem. They spend more money on goods than the poor. They pay substantially more taxes than most people. They have jobs (generally).

I've always maintained that if you could evenly distribute the wealth among the world's population it will be a very short time before the ambitious have all the lazy people's wealth. Capitalism works fairly well because it accepts human nature for what it is. A system that is supposedly philosophically fair often has to make the assumption that all people are equally ambitious.

[Ivor the Engineer]

<snip>
1) If capitalism is so bad, why is it that the countries with the highest standards of living, and the greatest freedoms, are all based on capitalistic economies (with some degree of socialism to moderate it)?

The critical factor in your question is the "with some degree of socialism to moderate it." Pure capitalism = natural selection. I am not proposing to divorce the world's economies from it, just moderate them by limiting the extremes.

The insidious aspect to capitalism is the way it gives the few (i.e. the rich) enormous power to exploit the world's resources for their benefit, often at a cost to the many. Most (all?) of the other economic systems in the past have had the similar or worse flaws.

2) How on earth could your suggestion (100% income tax above a certain level of income for all countries) ever be implemented without an autocratic world-wide government? You are arguing in favor of an international dictatorship? Because that's the only way such a proposal could even have a hope of happening.

Self regulation and international audits. Countries that cheat have sanctions brought against them. E.g., increased import duty or restriction of supply of resources.

3) Why is it that, under your system, a person who never tries very hard, never takes any risks, and who actually throws away opportunities to improve himself, would still deserve all or most of his income; but someone who took busted their butt for decades, took significant risks, and built up a very successful company, should be punished by having 100% of his income seized by the government?

Firstly, I must address why you think taking risk should mean you deserve a reward. If I go into a casino, play roulette and put my life savings on No. 2, most people would say I'm an idiot. Certainly no one would say I deserved my winnings if the ball happened to land in No. 2. I don't know about you, but I'd prefer a economic environment where extreme risk takers are not in control of the destiny of thousands of peoples' livelihoods.

Secondly, you (and Teek) seem to think you are working exceptionally hard for the huge rewards you desire. IIRC, the most dangerous job in the world is crab fishing in Alaska. The men who do that job risk their lives. I don't believe they become (or expect or think they deserve to become) multi-millionaires.

A little more down-to-earth could be the stress and workload of junior doctors. Do you think you work as hard as them? Do you think the mistakes you could make could have as serious consequences as those they could make? Teek, what if the doctor looking at the lump in your breast had made an error?

I think you over-estimate the risk you are taking for the rewards you think that risk deserves.

Thirdly, who said anything about 100% of income being seized by the government? The CEO could choose to re-invest the money in the company. All a salary cap would stop is individuals getting rich.

In addition I would get rid of the stock market and the public ownership of companies.

-----------------------

A simpler idea would be to make a law that only allowed the CEO of a company to have an income that was, for example, 10 times that of the lowest paid employee.

[tkingdoll]

A little more down-to-earth could be the stress and workload of junior doctors. Do you think you work as hard as them? Do you think the mistakes you could make could have as serious consequences as those they could make? Teek, what if the doctor looking at the lump in your breast had made an error?



What an utterly, utterly inane and stupid thing to say. You, sir, do not have my respect. What kind of argument do you think you are formulating here?

What kind of person uses someone's cancer scare as a strawman in a debate about money? The lowest kind, I'd say.

But to answer your staggeringly ridiculous point, junior doctors are training to become extremely highly paid individuals. Most UK GPs, for example, earn over £100,000 per year. The surgeon, Mr Paterson, who removed my lump, works both NHS and private and earns considerably more than a GP.

But, without people like me, no-one would know the private sector exists. I wouldn't have been able to get my lump diagnosed and removed so quickly, because I would simply not have known that there is such a thing as BUPA.

And yes, my workload in hours is comparable with a junior doctor. I have worked 48 hours straight. To save a life? No. Is that the only profession worth pursuing? It seems you think so.

Get off your high horse, you look ridiculous.

[Marquis de Carabas]

I think you over-estimate the risk you are taking for the rewards you think that risk deserves.
Here's the beautiful bit: Wolfman, teek, and others don't have to estimate. They know what their hard work is worth: whatever they can sell it for. Why should they settle for less than they can get?

[skeptifem]

Secondly, you (and Teek) seem to think you are working exceptionally hard for the huge rewards you desire. IIRC, the most dangerous job in the world is crab fishing in Alaska. The men who do that job risk their lives. I don't believe they become (or expect or think they deserve to become) multi-millionaires.

ooooh someones been watching discovery channel :p

A little more down-to-earth could be the stress and workload of junior doctors. Do you think you work as hard as them? Do you think the mistakes you could make could have as serious consequences as those they could make? Teek, what if the doctor looking at the lump in your breast had made an error?

wow that was a cheap shot.

[Zygar]

Here's the beautiful bit: Wolfman, teek, and others don't have to estimate. They know what their hard work is worth: whatever they can sell it for. Why should they settle for less than they can get?

Precisely. How much you make isn't about straight risk. It is a complex combination of economic factors. People risk their lives and get nothing in return (look at firemen, especially the volunteer forces).

The thing is, you risk what you do with a certain goal in mind. In the case of brosdki and teek I think I can safely say they are doing it in an entrepreneurial spirit. That cannot necessarily be said for any of Ivor's counterexamples.

Of course capitalism results in an imbalanced system, but no one has ever come up with a better balanced system that I am aware of. Certainly not in this thread.

[dudalb]

In addition I would get rid of the stock market and the public ownership of companies.

Worst idea ever.
Sounds to like Ivor is advocating a pure Socialist system with a happy face painted on it in the form of "non Profit companies" instead of Government agencies.
And I get the feeling that Ivor and Animus really think that the profit motive is basically evil,but don't want to say so in so many words.

[Ivor the Engineer]

What an utterly, utterly inane and stupid thing to say. You, sir, do not have my respect. What kind of argument do you think you are formulating here?

What kind of person uses someone's cancer scare as a strawman in a debate about money? The lowest kind, I'd say.

In what way was I "using" your cancer scare? I'd have "used" my own father's cancer scare, but his wasn't just a scare, you didn't know him and the doctor did made a mistake. However, feel free to use this as an example; I won't get offended or upset.

Anyhow, I was making the point that there are people in regular jobs who make decisions every day which have much greater risks and consequences than any CEO of a company has to deal with when (s)he makes a decision.

Another (hopefully less emotive) example would be Firemen. They risk their own lives for the benefit of others. How much would you need to be paid to run into a burning building to rescue a stranger? What motivates them?

But to answer your staggeringly ridiculous point, junior doctors are training to become extremely highly paid individuals. Most UK GPs, for example, earn over £100,000 per year. The surgeon, Mr Paterson, who removed my lump, works both NHS and private and earns considerably more than a GP.

That's a long way from the millions (billions?) you think an individual should personally be able to have. Makes you wonder why he keeps on going. Perhaps there's something other than money that drives him?

BTW, the fact your surgeon was doing private work means the people who pay his NHS salary have to wait longer while he does his moonlighting for BUPA.

I'm going to ask my boss if I can have a day or two off a week to go do some contracting for the competition.

But, without people like me, no-one would know the private sector exists. I wouldn't have been able to get my lump diagnosed and removed so quickly, because I would simply not have known that there is such a thing as BUPA.

And yes, my workload in hours is comparable with a junior doctor. I have worked 48 hours straight. To save a life? No. Is that the only profession worth pursuing? It seems you think so.

Let's just say that if meteor is detected heading for earth, I don't think there will be many people from the world of advertising being invited into the bunker.

You might be needed to come up with a catchy advertisement giving directions to it, though.

Get off your high horse, you look ridiculous.

I wasn't aware I was on my high horse.

[tkingdoll]

In what way was I "using" your cancer scare? I'd have "used" my own father's cancer scare, but his wasn't just a scare, you didn't know him and the doctor did made a mistake. However, feel free to use this as an example; I won't get offended or upset.

Anyhow, I was making the point that there are people in regular jobs who make decisions every day which have much greater risks and consequences than any CEO of a company has to deal with when (s)he makes a decision.

Another (hopefully less emotive) example would be Firemen. They risk their own lives for the benefit of others. How much would you need to be paid to run into a burning building to rescue a stranger? What motivates them?



That's a long way from the millions (billions?) you think an individual should personally be able to have. Makes you wonder why he keeps on going. Perhaps there's something other than money that drives him?

BTW, the fact your surgeon was doing private work means the people who pay his NHS salary have to wait longer while he does his moonlighting for BUPA.

I'm going to ask my boss if I can have a day or two off a week to go do some contracting for the competition.



Let's just say that if meteor is detected heading for earth, I don't think there will be many people from the world of advertising being invited into the bunker.

You might be needed to come up with a catchy advertisement giving directions to it, though.



I wasn't aware I was on my high horse.

All I have to do here is quote your entire post, in all its smug and condescending (and inaccurate) glory, with the last sentence intact. I don't need to respond to any of it. You've done all the work for me. Well done.

[Ivor the Engineer]

Worst idea ever.
Sounds to like Ivor is advocating a pure Socialist system with a happy face painted on it in the form of "non Profit companies" instead of Government agencies.

No, I'm not.

And I get the feeling that Ivor and Animus really think that the profit motive is basically evil,but don't want to say so in so many words.

No, I don't.

[PopeTom]

Secondly, you (and Teek) seem to think you are working exceptionally hard for the huge rewards you desire. IIRC, the most dangerous job in the world is crab fishing in Alaska. The men who do that job risk their lives. I don't believe they become (or expect or think they deserve to become) multi-millionaires.



according to here (http://www.cvtips.com/alaska_commercial_fishing_job_opportunities.html)
an Alaskan crab fisherman can earn $15,000 per month for the risk that they take. Though this of course can vary depending on a bit of luck and length of the fishing season.

Currently US minimum wage earns a person $11,700 per year. Is making more money in one month then a minimum wage job would earn someone in a year worth the risk? I don't know not for me, but for plenty of people it clearly is.

How would any of the business owners reading this thread feel if they could gross $15,000 a month for their hard work?

[Ivor the Engineer]

ooooh someones been watching discovery channel :p

I don't have Sky. Can you guess why?

wow that was a cheap shot.

So some people seem to think:confused:

[Ohmer]

I work in higher education. We are private and non-profit. This simply does not have the effects that the OP suggests. Our salaries are lower than equivalent jobs in for-profit companies and tuition is increasing faster than inflation. We make due with limited recourses just like for-profit companies. Sometimes we have make decisions that are not the best for the environment or our employees in order to accomplish our goals.

I think you are assuming that if you take the profit out of business that all the time and energy spent making that money will magically be transformed into making the world a better place. There is no reason to think that will happen.

[fuelair]

I personally hate the way businesses in general are run. Almost all businesses are set up for the purpose of huge financial gain in the hands of a few people. This results in numerous issues such as choosing more profit for the company at the expense of the environment. This means that we sell poor quality products or refuse to upgrade to better technology (cars and gas). This means that prices for all products and services are higher than they need to be, which in turn means that people have to work more hours than needed to pay for the things they need. I'm sure there is more, but you get the point.

I believe this conflicts are interferes with progress for all humanity.

As such I would like to propose the idea that all businesses convert to non-profit businesses/organizations and that all jobs have a maximum yearly salary cap. If businesses are non profit they have no need to charge more than needed for their products. With the salary cap there would be no way for them to use bad or unethical business practice to make extra money for themselves and as such there would no longer be any incentive to continue those practices.

This thread is mostly just to discuss the benefits and possible downfalls of this idea. For the purposes of this discussion let's assume that it was made a law that all businesses must be non-profit, and that there is a maximum salary cap of say $200,000 a year or something like that. Let's also assume that all businesses follow this and that there is no way for them to get around these restrictions to give themselves more money.
Your problem is that the reason for businesses to exist is to make money for ther owner(s). There is no point in having a business otherwise ("wow! I think I'll spend years of my life working my butt off to make a company that makes and sells stuff so I can have no profit and have all aspects controlled by someone else!! That's the life for me, buddy boy!!!).

[The Atheist]

All the people who champion the system implicitly condone millions of people living in poverty or staving to death, while they enjoy the comforts of their energy guzzling cars and mansions and watch said staving people on the news on their 64" LCD TV.

What an offensive little strawman you've created here.

Wouldn't the simple expedient of checking who the world's greatest altruists are have saved you an awful lot of embarrassment?

Warren Buffet and Bill Gates are giving away BILLIONS of dollars to charities.

I find it hard to believe that you could get as far as leaving school and still hold the opinion you display above. Seriously, it's the sort of rubbish I'd expect from Revolutionary91. You may as well blame it all on the Jooos.

[TriangleMan]

And I get the feeling that Ivor and Animus really think that the profit motive is basically evil,but don't want to say so in so many words.
I'm willing to give Animus the benefit of the doubt. The OP was essentially wanting to discuss ways to rectify unequal wealth distribution. While Animus's initial idea of salary caps is not tenable it could have led to a worthwhile discussion about how the inequality occurs and ways that might mitigate it to a degree. Sadly, Ivor "I'd get rid of the stock market" Engineer has taken the thread in an unproductive direction.

[The Atheist]

I'm willing to give Animus the benefit of the doubt. The OP was essentially wanting to discuss ways to rectify unequal wealth distribution. While Animus's initial idea of salary caps is not tenable it could have led to a worthwhile discussion about how the inequality occurs and ways that might mitigate it to a degree. Sadly, Ivor "I'd get rid of the stock market" Engineer has taken the thread in an unproductive direction.

Agree. I think Animus' question was more naivety than anything else and worth explaining the realities.

[Wolfman]

Agree. I think Animus' question was more naivety than anything else and worth explaining the realities.
Ditto...I think that some more investigation on Animus' part would find that my proposed model of a combination of capitalism and socialism would address most of his concerns.

In regards to Ivor, he lives in a world so far removed from reality that discussion is pointless; I'm bowing out.

[The Atheist]

Ditto...I think that some more investigation on Animus' part would find that my proposed model of a combination of capitalism and socialism would address most of his concerns.

Yeah, there's no harm in testing the water with those thoughts every now and then. Let's face it, if it were possible, it might well be the Utopia which ought to be self-evident for humankind by now. I think that was Animus' point which we've perhaps overlooked:

If humans would operate in the way he suggests, keeping productivity at current levels, then yes, there would be enough money to go around the entire planet, rather than the 50-60% we have now. As a Utopian ideal, it sounds great, but it just can never happen. Humans don't work like that.

Your local example - China - is going to be a fascinating example of how a weird hybrid of totalitarianism and capitalism can co-exist. Personally, I can't see it avoiding the type of corruption rife in Russia, but time will tell.

Those inscrutable Orientals...

[Hokulele]

Those inscrutable Orientals...


Bite me.

(Meant in the most pleasant manner possible of course. :) Wouldn't want to initiate the modding in Business!)

[TriangleMan]

Ditto...I think that some more investigation on Animus' part would find that my proposed model of a combination of capitalism and socialism would address most of his concerns.
Perhaps to an extent within a country, but I'm not sure how it would assist inequalities in wealth on an international trade basis.

One issue is that under democracy the decision makers are more geared towards economic solutions that assist their citizens, even if that policy would be detrimental to others or potentially even harmful in the long-term. Such policies are a small part of what creates unfair subsidizing, tariffs and other protectionist measures, and developing nations willingness to look the other way on issues of regulations and worker abuse just to be able to attract companies to set up factories there. But as a policymaker you come to a tough decision: would you rather a factory pay 1000 citizens $1 a day, or do you demand they get $2 a day and risk that they get nothing because the company decided to set up in a country where they can pay workers $1.

Attempts by nations to rectify some of these issues is a long and arduous process. Agricultural subsidies by the West is what I consider the prime example. Issues like these will not change overnight.

[Wolfman]

Your local example - China - is going to be a fascinating example of how a weird hybrid of totalitarianism and capitalism can co-exist. Personally, I can't see it avoiding the type of corruption rife in Russia, but time will tell.

Those inscrutable Orientals...
Very true...it is fascinating to watch the process, moreso to be a part of it.

Under the 'old' system, all companies were state-owned and operated. The primary purpose of any company was to "support the state" and to "support society"; actually generating financial profits was not a priority at all.

In regards to "supporting the state", virtually every industry was a monopoly. There was no competition, thus no need to try to improve quality. And prices were set by the government, based on what it could afford, rather than on actual market value.

"Support society" meant that workers in these companies benefited from incredibly stability -- they were not only guaranteed a job for life, but the company also provided their housing, clothing, food, etc. Of course, in return, you sacrificed any real freedom. The government chose where you lived, what you studied, where you worked, etc.

In many cases, factories produced a product that was not in demand at that time (they might work for three months each year, at which point they would have filled the year's quota, then have nine months with nothing to do). So they'd go to work, then sit around all day playing cards, watching TV, or sleeping.

Promotion to senior management was almost never based on actual experience or ability (since everything was a monopoly, quality made no difference and incompetent managers were the norm); instead, it was based on politics. If you were a member in good standing with the Communist Party, and had the right political connections, you'd get a promotion. Otherwise, you were out of luck.

40 years of this economic model resulted in Chinese banks (also all owned by the government) holding absolutely massive debts, paid out to continue supporting factories and companies that were completely unprofitable. This not only made for a weak economy, but also meant that far less money was available for things like health care, education, etc.

Approximately ten years ago, the Chinese gov't started an aggressive program of privatizing all their state-owned companies. They got rid of monopolies, and opened the market up to competition, and stopped providing financial support for companies that were managed incompetently.

The resultant change in China's economy was incredible, as anyone observing China's economic growth over the past decade will be readily aware.

Of course, this meant that individual citizens no longer had guaranteed job security. Non-state-owned companies generally do not provide housing, food, and clothing for their employees; nor do they guarantee life-long employment. For the older generation of Chinese, who grew up used to that level of stability (and who have little hope of competing in this new more capitalistic model) generally object to and complain about this.

But the younger generation? They love it. For the first time, they get to choose what they study, where they live, where they work, etc. And they know that if they work hard and do a good job, they'll be rewarded for their efforts with promotions and higher pay.

The under-25 generation of Chinese, who have essentially grown up entirely outside the context of the old state-run businesses, have also become extremely entrepreneurial. For a culture that traditionally has a reputation of being conservative and risk-adverse, this new generation is a complete reversal of the stereotype. Everybody and their brother is setting up their own small business; only a few are really successful, but most manage to at least make a living at it.

Within the context of this discussion, let me point out that while the government still exercises a certain minimal degree of control (and within certain industries, such as health care industry, still retains a strong grip), for the most part it is a very strongly capitalistic system. And the Chinese are proving to be among the most capitalistic people in the world.

Of course, in China, it is never called "capitalism". It is called "Socialism with Chinese characteristics".

[The Atheist]

Agricultural subsidies by the West is what I consider the prime example. Issues like these will not change overnight.

Now there's a subject which just sickens me - farming subsidies.

Which country has the lest-protected farmers by way of subsidy and import tariff?

New Zealand.

Which country is [arguably] the most-successful (on weighted basis) exporter and producer of agricultural commodities?

New Zealand.

If only the EU and USA would realise that subsidising farmers allows inefficiency to be rewarded, the planet would be a much better place.

[The Atheist]

But the younger generation? They love it. For the first time, they get to choose what they study, where they live, where they work, etc. And they know that if they work hard and do a good job, they'll be rewarded for their efforts with promotions and higher pay.

Good synopsis.

This will be the interesting part - as this generation gets older, their thoughts are likely to turn towards change. It'll be interesting to watch how the changes occur, or if they are allowed to.

[Wolfman]

Perhaps to an extent within a country, but I'm not sure how it would assist inequalities in wealth on an international trade basis.
Actually, the way I see it, capitalism in many ways promotes economic development in less-developed countries. Consider the current move to outsourcing labor and manufacturing to other countries. Capitalism encourages such a move, which in turn results in more jobs and greater economic development in those other countries. It is protectionism or regionalism, the idea that "those jobs belong to us", that hurts other countries more.

There is certainly potential for abuse, such as when people are used virtually as slave labor. But in China, for example, a company can set up a factory that pays very fair wages, and provides a safe working environment, and still save significantly over setting up the same factory in the U.S.

I don't believe that we are ever going to reach a point where multinational companies are going to invest in other countries out of a sense of altruism; the bottom line is always about making a profit.

Providing a positive incentive for investment that benefits developing nations -- providing jobs, income, new technology, skills training, etc. -- is, in my opinion, a very good thing; and capitalism very strongly supports such actions (albeit for selfish reasons), since such investment not only benefits the local people, it also benefits the company's profit margin.

But you need to have safeguards and restrictions, also, to ensure the this investment actually does benefit the local people, and does not simply exploit them.

Question -- can you propose any way that is more likely to induce rich, powerful countries to invest significantly in undeveloped countries than the capitalistic incentive of increasing their profits? Sure, it'd be nice to rely on altruism, but this is the real world...and in the real world, a capitalistic system that has the proper controls and balances in place to minimize abuse, will be the one that provides the most long-term benefits.

I do not contest at all that capitalism has hurt many developing nations, by exploiting local labor and resources in a way that hurts them, and benefits only the foreign companies. And, if left with no government oversight or regulation, I'm sure that such behavior would continue to be common.

But I can also point to many, many examples where capitalistic investment in developing nations has benefited the local people phenomenally. And where, without the incentive for increased profits, those companies would never have bothered to do anything at all.

[Ivor the Engineer]

What an offensive little strawman you've created here.

Well I guess that depends on what you believe money is. I would say it is a symbol for access to and use of the world's FINITE resources.

Wouldn't the simple expedient of checking who the world's greatest altruists are have saved you an awful lot of embarrassment?

No. What embarrassment?

Warren Buffet and Bill Gates are giving away BILLIONS of dollars to charities.

Oh, isn't that generous of them. After they're finished salving their consciences they'll probably only have a billion or two left. I bet their kids are annoyed they'll only be inheriting a few million each.

Has it ever crossed your mind that people don't want charity, or that it is nowhere near an optimal way to utilize resources and it is unlikely to solve any of the world's problems?

What about the idea that the $37 billion Buffet is giving away might have been better spent over the period of time he was amassing his personal fortune?

Or that people may exist who, after their basic needs and comforts are met, are not motivated by more money?

As for the stock market, read this:

http://www.slate.com/id/2154152/fr/rss/

[Wolfman]

Or that people may exist who, after their basic needs and comforts are met, are not motivated by more money?
Dude, you are so close, and yet so far away.

Personally, I'm not motivated by more money; not directly, anyway. I am motivated by challenge, by doing new things, by the opportunity for success, by the opportunity to help others, etc.

Starting a new company enables me to do all those things.

You know what my number one motivation for "making more money" is? Besides my business, I am also founder of a non-profit organization that works with one of the most remote Chinese minority groups, the Mosuo (you can read about them in my post here (http://forums.randi.org/showthread.php?t=72651)). The more money I make in my business, the more money I'm able to channel towards the projects that they are doing -- projects that improve education, health care, economic development, etc.

And I'm not doing this to "salve my conscience". My greatest priority and passion is in working with the Mosuo; running my business, and making more profits, is a means to bring about that goal.

Of course, not all -- or even most -- businessmen would think the same way, but the thing is that you do not have the right to tell them what their goals should be, any more than they have the right to tell you what your goals should be.

And in regard to Bill Gates and Warren Buffet, I fully agree that their donations do not represent a huge "sacrifice" on their parts, they still have tons of money. But I don't see why only a person who lives in poverty is "noble".

Here's a fact for you to chew on. The billions of dollars that Gates and Buffet have donated go to things like education, and AIDS research (in fact Gates by himself has donated more money to AIDS research than all other donations in the world put together). Millions of people will benefit, directly or indirectly, from the work that is made possible by those donations.

So let me ask you.

Make a list of all the people whose lives will be made quantifiably "better" by you; and make a list of all the people whose lives will be made quantifiably "better" because of the donations from Bill Gates (people who will have access to better education, or better treatment for AIDS for example).

If we're measuring the worth of a life according to how many lives are improved or made better because of that person, then you, my friend, barely even register. And Gates and Buffet have managed not only to bring benefit and assistance to millions of other people, they've also managed to have comfortable lives for themselves.

You can be proud of mediocrity if you want. You can feel free to condemn those who have had the terrible audacity to be successful, and then use that success to help others. That's your opinion, and you have every right to that opinion.

But I will tell you -- for the AIDS victims who are desperate for a cure, or the inner-city kids that are desperate to get a better education -- they value the contributions of someone like Bill Gates or Warren Buffet far, far more than the abstract meanderings of someone like yourself who, in all likelihood, despite all his high-sounding principles, is never going to do anything to help or benefit even a tiny minority of those people.
Has it ever crossed your mind that people don't want charityI don't know -- has it crossed your mind that people dying from AIDS, or crying for a better education, just might appreciate an actual effort to help them, rather than someone shouting vague philosophies and principles on a street corner?

[The Atheist]

In regards to Ivor, he lives in a world so far removed from reality that discussion is pointless; I'm bowing out.

...many words...

Busted!

[TriangleMan]

Question -- can you propose any way that is more likely to induce rich, powerful countries to invest significantly in undeveloped countries than the capitalistic incentive of increasing their profits? Sure, it'd be nice to rely on altruism, but this is the real world...and in the real world, a capitalistic system that has the proper controls and balances in place to minimize abuse, will be the one that provides the most long-term benefits.
The portion that is in italics is the important point. Such control systems are simply lacking or ineffective in a lot of the world and if that could be addressed it could go part of the way in alleviating wealth inequalities between countries. But as Western history has shown the battle to put those controls in place is a long and challenging one. With the ease from which goods can now be moved around the world such systems would also need to be introduced, piecemeal if need be, on a global scale in order to reduce regulatory arbitrage by multi-nationals. Without it exploitation will continue to be a common feature of developing world business practices.

[Ivor the Engineer]

Dude, you are so close, and yet so far away.

Personally, I'm not motivated by more money; not directly, anyway. I am motivated by challenge, by doing new things, by the opportunity for success, by the opportunity to help others, etc.

Starting a new company enables me to do all those things.

You know what my number one motivation for "making more money" is? Besides my business, I am also founder of a non-profit organization that works with one of the most remote Chinese minority groups, the Mosuo (you can read about them in my post here (http://forums.randi.org/showthread.php?t=72651)). The more money I make in my business, the more money I'm able to channel towards the projects that they are doing -- projects that improve education, health care, economic development, etc.

And I'm not doing this to "salve my conscience". My greatest priority and passion is in working with the Mosuo; running my business, and making more profits, is a means to bring about that goal.

So, how would limiting your personal fortune stop you from doing any of these things?

Of course, not all -- or even most -- businessmen would think the same way, but the thing is that you do not have the right to tell them what their goals should be, any more than they have the right to tell you what your goals should be.

But we do try to teach children to share their sweets, don’t we?

And in regard to Bill Gates and Warren Buffet, I fully agree that their donations do not represent a huge "sacrifice" on their parts, they still have tons of money. But I don't see why only a person who lives in poverty is "noble".

Did I say anything about living in poverty? Or even all people should have exactly the same standard of living? I have already acknowledged that there needs to be a gradient to motivate people to work. All I have suggested is:

i) Claiming huge financial rewards are justified by the risks taken is often untrue, and that many people take significantly higher risks with their own or others' lives for comparatively tiny reward.

ii) Limiting individuals' personal wealth will not stop competition. In fact, if owners were forced to invest profits in their businesses or other projects, rather than amassing huge personal fortunes (which they may then decide to start giving away), far more people would benefit from capitalism.

iii) The stock market does not do what it claims it does particularly well.

Here's a fact for you to chew on. The billions of dollars that Gates and Buffet have donated go to things like education, and AIDS research (in fact Gates by himself has donated more money to AIDS research than all other donations in the world put together). Millions of people will benefit, directly or indirectly, from the work that is made possible by those donations.

So let me ask you.

Make a list of all the people whose lives will be made quantifiably "better" by you; and make a list of all the people whose lives will be made quantifiably "better" because of the donations from Bill Gates (people who will have access to better education, or better treatment for AIDS for example).

If we're measuring the worth of a life according to how many lives are improved or made better because of that person, then you, my friend, barely even register. And Gates and Buffet have managed not only to bring benefit and assistance to millions of other people, they've also managed to have comfortable lives for themselves.

Hang on, why do Gates or Buffet get the credit if their money helps find a cure for HIV or malaria? What about the scientists, doctors, NGO’s etc. who do the work? Do I get the credit for the work of charities I donate a fraction of my salary to?

The capitalist principles that have allowed Gates and Buffet to amass their huge personal fortunes have been one of the driving forces for the African HIV pandemic. Africans have had their resources plundered by companies in the west for decades.

You can be proud of mediocrity if you want. You can feel free to condemn those who have had the terrible audacity to be successful, and then use that success to help others. That's your opinion, and you have every right to that opinion.

I’m not “condemning” them; I’m saying that giving away money and having billions left over is not considered to be a huge sacrifice by most people.

But I will tell you -- for the AIDS victims who are desperate for a cure, or the inner-city kids that are desperate to get a better education -- they value the contributions of someone like Bill Gates or Warren Buffet far, far more than the abstract meanderings of someone like yourself who, in all likelihood, despite all his high-sounding principles, is never going to do anything to help or benefit even a tiny minority of those people.

Why do you think I’m not going to do anything to help other people?

I don't know -- has it crossed your mind that people dying from AIDS, or crying for a better education, just might appreciate an actual effort to help them, rather than someone shouting vague philosophies and principles on a street corner?

They might also appreciate a fairer world where, for example, goods are not dumped on them to keep the price artificially high in the west, which in turn makes their only sources of income worthless.

E.g,

http://www.maketradefair.com/en/index.php?file=23062003172617.htm

[Wolfman]

Busted!
LOL

Yeah, I know. :blush:

[The_Animus]

Enough.

Man do I love thread hijacking. If you want to argue about the benefits of capitalism over other current business systems make your own thread. If you want to sit and argue with each other with the occasional ad hominem please do so elsewhere. Or better yet stop wasting your precious time on these forums since you have your 20 hour work day business to attend to.

The purpose for this thread was to admit that capitalism is not a perfect system. While it does have its merits it is still flawed in many ways. Though no other better working system is being used by another country that does not mean we cannot make the attempt to formulate a new outline of business conduct which would address the flaws in capitalism, while still keeping some of the strong points of it.

Because this thread has gotten so far off track I would like to ask the admin to delete it. I am going to repost my relevant posts in a new thread with the hopes that we can have a friendly constructive discussion on the original matter of the OP and my subsequent posts.

Thanks.

[quixotecoyote]

Good luck with that

[The_Animus]

*Note* This is a reposting of a previous thread I made. The thread was hijacked and was brought off topic from the original intend of the thread.

The purpose for this thread is to admit that capitalism is not a perfect system. While it does have its merits it is still flawed in many ways. Though no other better working system is being used by another country, that does not mean we cannot make the attempt to formulate a new outline of business conduct which would address the flaws in capitalism, while still keeping some of the strong points of it.

I am reposting this in a new thread with the hopes that we can have a friendly constructive discussion on the this matter. If you think there is a problem please state it but also see if you can't figure out a way to fix this issue.

Thank you for your cooperation.

I personally hate the way businesses in general are run. Almost all businesses are set up for the purpose of huge financial gain in the hands of a few people. This results in numerous issues such as choosing more profit for the company at the expense of the environment. This means that we sell poor quality products or refuse to upgrade to better technology (cars and gas). This means that prices for all products and services are higher than they need to be, which in turn means that people have to work more hours than needed to pay for the things they need. I'm sure there is more, but you get the point.

I believe this conflicts and interferes with progress for all humanity.

As such I would like to propose the idea that all businesses convert to non-profit businesses/organizations and that all jobs have a maximum yearly salary cap. If businesses are non profit they have no need to charge more than needed for their products. With the salary cap there would be no way for them to use bad or unethical business practice to make extra money for themselves and as such there would no longer be any incentive to continue those practices.

This thread is mostly just to discuss the benefits and possible downfalls of this idea. For the purposes of this discussion let's assume that it was made a law that all businesses must be non-profit, and that there is a maximum salary cap of say $200,000 a year or something like that. Let's also assume that all businesses follow this and that there is no way for them to get around these restrictions to give themselves more money.

------------------------

I am not proposing that everyone gets paid the same. Quite the opposite. People would still get paid in a wide range of salaries, but there would be no one who makes such a grossly unnecessary amount of money. By all means pay harder working people and more difficult positions more money. No one needs to make a million dollars a year. They can live more than comfortable on that $200,000. Obviously a CEO or a Doctor would be paid more than a cook or cashier. And if there is an instance where there are two Doctors and one is much better than another then they would be paid differently.

If someone doesn't do their job well then I'm sure there is someone else who can and would appreciate making more money.

But there's another issue as well - without the potential returns, people wouldn't run businesses and the global economy would be reduced to barter and probably 3/4 of the population would die of starvation.

The bad news for your theory is that capitalism has produced the most reasonable system. Very few people starve to death - except by lifestyle choice - in OECD countries, because the capitalist system provides sufficient income so that governments can establish safety nets to support those who can't support themselves.



I don't think that is how it would work. There would still be benefits to run a business. If you run the business you would make more money than if you were simply an employee at another business. There is still a benefit to having a business, you still make a higher than average salary. You just don't get to make $2 million.

I don't know what OECD means. However there would still be taxes to pay for things that are otherwise unpaid for. And if businesses were more geared towards trying to benefit all of humanity there wouldn't be any world starvation. We currently waste ridiculous amounts of food with our current system. Even by just eliminating the meat industry you could provide more food to people. The animals we raise to eat eat more plant life than people do.

------------------------------

No, running a business does not generally mean that you make more then on salary because most businesses either fail or barely scrape by, leaving the person who started the business in debt. Only successful businesses reward the risk-taker and under your scenario that reward is now limited. Is someone going to put five million dollars into a start-up tech/manufacturing business when at best he could make $200,000 a year? No, not at the risk of losing the money.

Yes. I agree. That is a valid point.

What if we change it so that you can choose the option of either a max salary cap of something like $250,000 or a certain % of the profits. That way you can still benefit from higher expenses, higher profit business.

Also you have to understand that all that initial cost in setting up the factory or store or whatever is still there in the net worth of the business. So it's not as if you are really losing 4 million dollars and only getting $200,000 a year.

You could also change it so that if the business does go under you are able to sell everything off to try to recoup your losses.

There is also the possibility of government subsidies.

It's also possible that this would encourage multiple investors in business.

Or... I have another idea.

Let's say instead that the person who starts the business does not have a salary cap or % of profits each year cap. Instead they are allowed to only make double the amount of money invested to start the company up. So if you invested $1,000,000 in a company you could make $2,000,000. You might be able to change the ratio a little depending on certain investment brackets that could be set up.

After you make that much from the company you can't make any more aside from the previously mentioned salary cap.

This would encourage business growth because there is still considerable profit to be made, while still putting a limit on the amount of overall money that can be made from each particular business by one person.

I do understand there are issues. So let's see if we can't come up with some way to fix this up.

[Miss Anthrope]

I've merged the restarted and clarified thread with the original. Thread drift happens in the course of discussion, and I see no attempts to hijack or deliberately derail the thread. Other moderators and admins have reviewed it as well.

[The_Animus]

Some people continue to say that its not enough money. That's its not worth the risk. I do not understand. If you put in $1 million to start up the company you are able to make $2 million dollars before the salary or % of profits cap comes into play. So not only are you able to make a million extra above what you started with as fast as you are able to do so according to your profits, but after that you are able to continue making a significant sum of money each year from the business.

Why do you need to make more money than that? Do you need 4 summer homes in addition to the one you have? Do you need your own personal plane or maybe a collection of fast cars?

With capitalism there is just as much risk involved. You can still go bankrupt. Just like with this system. They are the same. With capitalism its worth the risk for the potential benefits. The same is true with this system. You can make large amounts of money that would otherwise be impossible. The only difference is that with this system you aren't making profits far far above and beyond what is even remotely necessary, at the expense of others (higher product costs, lower employee pay, environmental issues, etc). Again why isn't making an extra million enough? Why do you need ten?

Maybe its not that. Maybe you are looking at this from the perspective of smaller businesses. Well in that instance I agree it may not be worth the risk for double the profit. For example if you put in $25,000 for your business, making $50,000 isn't that great a bargain for the risk. But as I mentioned earlier there would be investment brackets. As such businesses with a lower start up cost would be able to make more than 2x the initial investment. Maybe 4x or 5x, these numbers can always be adjusted so as to be worth the risk involved. While businesses with a large start up cost would be more limited due to the higher potential revenue. As such a start up investment of $5 mil would only be able to make the CEO $10 mil before the caps come into play.

[roger]

Why do you need to make more money than that? Do you need 4 summer homes in addition to the one you have? Do you need your own personal plane or maybe a collection of fast cars?Because I want to make a $10M dollar business, for example. Or I want to built an oil tanker. Or make some jets. Or buy a single CNC machine. Or drill an oil well. Or do research in solar panels. Or gamble and hire 50 biochemists to try to invent a cancer beating drug. Or I want to build and give away a dam in area that floods and causes maleria every year in Africa. Or I want to buy a mountain that is being threatened of being leveled by a coal mining company and make it a nature preserve. Or I want to give money to UNICEF. Or I want to produce a documentary exposing pork barrel projects in congress. Or I want to start a publishing company to print books on how people have excessive salaries. Or....

yes, sometimes buy a fourth home, which uses the labor of a bunch of people, i.e. provides jobs.

ETA: at one time my father built vacation homes for people. You better believe that we didn't complain that people had money to buy these homes. Cause you know, it fed, clothed us, and sent us to school.

[fuelair]

By the by, the mods/admins were quite right - and here's the reason (by me)you made a suggestion - as is your right - but you do not want to have arguments against it, you just want to hear it agreed with (maybe a minor difference or two). But, that is almost never how a discussion or a forum goes if there is any possibility for disagreement - and I think you see there is a lot of disagreement.

My suggestion - given that there has been a long time that commerce has been present here on Earth - is to hunt (research) around and see if there has ever been a reasonably successful society with any functionally developed economy and with scarcities of any hard to get,but necessary, materials that operated in this manner (because the liklihood that you have stumbled into one that would work that everybody missed over a few thousand years is not particularly likely).

[Ohmer]

As such I would like to propose the idea that all businesses convert to non-profit businesses/organizations and that all jobs have a maximum yearly salary cap. If businesses are non profit they have no need to charge more than needed for their products.

Is $31,840 per year "more than needed" for a liberal arts education? That is what our non-profit school charges. These charges are rising faster than inflation, despite that fact everyone here has a fixed salary that is generally lower than equivalent jobs in for-profit companies.

With the salary cap there would be no way for them to use bad or unethical business practice to make extra money for themselves and as such there would no longer be any incentive to continue those practices.

Our previous president loaned $12 million of the college's money to a failing company and then bought stock in that company. The company went bankrupt and we lost all $12 million. Drawing a fixed salary does not stop one from being stupid or unethical.

Your basic premise is flawed. Taking the profit out of a business will not turn it into a benevolent, environment loving organization that will deliver cheap products and develop new technology. You seem to think that if profit is limited that the money will still be generated and redistributed in way that is more to your liking. There is no reason to think this will happen.

[The_Animus]

but you do not want to have arguments against it, you just want to hear it agreed with (maybe a minor difference or two).

Quite wrong. I don't doubt there will be arguments against it. However...

If you think there is a problem please state it but also see if you can't figure out a way to fix this issue.

So it is not that there won't be conflict or problems with this system. I am simply trying to avoid posts of the manner "This idea won't work because of this, therefor I shall not attempt to think of any solution to this issue but instead continue to complain that this won't work over and over again rather than try to provide constructive solutions."

Because I want to make a $10M dollar business, for example. Or I want to built an oil tanker. Or make some jets. Or buy a single CNC machine. Or drill an oil well. Or do research in solar panels...

For what purpose are you making these things? To ultimately make more money? Or is it for the benefit of everyone? If so then couldn't you also have multiple investors in higher investment businesses? And there is nothing to stop you from making $10 million. It just requires either multiple companies or a higher initial investment company. There are also business loans.

Our previous president loaned $12 million of the college's money

Our president shoudn't have been president. And the idea of use college money to fund a business is terrible in the first place. And you cannot use flaws in the current system to say this one doesn't work. That's the point of making and working out a new system, to avoid the problems of the current one.

Taking the profit out of a business will not turn it into a benevolent, environment loving organization that will deliver cheap products and develop new technology. You seem to think that if profit is limited that the money will still be generated and redistributed in way that is more to your liking. There is no reason to think this will happen.

I'm taking immense profit from individuals. If it's not in the hands of a few then it can be spent on more important things. The way things are now if a company is making tons of profit the CEO can make virtually as much of that profit as they want. If there is a cap then no matter how much profit the company makes the CEO/board members or whoever is limited in how much of those profits they can have for themselves. As a result they can either give the excess profit away to some sort of charitable organization or to help pay for roads, or pay their lower salary employees more money, or lower the price of their products, or use it to improve the quality of their products. Or they can do any combination thereof. In any case they are forced to use the excess money to something which benefits large numbers of people instead of themselves.

I am not saying I have all the answers or that this is perfect and flawless. Not at all. This is simply an idea, and I encourage people to help find issues with it and to then work to solve those issues.

[Wolfman]

Animus,

One problem with your proposed salary cap is that it fails entirely to account for different values of the company, or the investment made in that company.

Let me take your argument about investing one million dollars to start a company. If I'm allowed to get a maximum of $2 million in personal profits each year, that means that after five years, I've made $10 million, a 1000% return on my initial investment. That is, arguably, a reasonable return on investment.

However, what if I have to invest $10 million to start a company? Under your system, which still only allows a maximum of $2 million in personal profits each year, that means that after five years, I've just barely broken even. I haven't made one cent in profit. A 0% return on investment over five years...nobody is going to consider that reasonable.

And if I have to invest $50 million to start the company, under your system, I will have to wait 25 years just to recover my initial investment!!!!

Sorry, but I just do not see how such a system could possibly work. You would at the very least have to have the salary cap indexed according to the amount of the initial investment, so that the owner would be able to get at least a 500% ROI over five years (if the company does well). Thus, the salary cap for someone who invested $50 million to start a company would be $50 million/year. Any ROI less than this would make the risk of starting the company too high, compared to the potential benefit.

And as soon as you start acknowledging that this person is allowed to make far more money, its going to be very difficult making the argument that other people are only allowed to make $ 2 million/year.

Another note, and one that is extremely important:

Any country that implemented such a system would find its economy effectively destroyed within a year. Why? Because every major company in that country would leave and set up their operations in another country that did not have such salary caps. Factories would be shut down, industries would disappear overnight. The only way such a plan would have even a chance of working would be if every country in the world adopted it. Which is a practical impossibility.

My arguments are based not on how I'd like things to be; if my arguments were based on how I'd like things to be, I'd say something like, "Wouldn't it be nice if all humans would suddenly stop being selfish, and would run companies for the betterment of society, rather than for their own benefit and profit?". Yes, that'd be wonderful; but its not a practical reality.

I believe that any discussions such as this must focus on practical realities of what can actually be done, given the current situation in our world.

There are already existing, practical models of capitalism being modified somewhat by a socialist framework; these still put no limit on what profits you can make, but take a higher percentage of those profits and channel them back into society (ie. education, health care, etc.), and put stronger limits to prevent potential abuse (no monopolies, worker's rights, etc.).

This model provides a balance between encouraging companies to invest in that country, and preventing abuses by those same companies, while also channeling profits back into society.

In your model, there is no "balance". It is essentially an all-or-nothing proposition.

Honestly -- give a businessman a choice. You can invest to start your company in a country where the maximum profits you'll be allowed is $2 million per year; or in a country where there is no maximum. Which country do you think he's going to choose? If he never expects his company to make over $2 million, he might invest in your country; but if he expects to make more than that, there's almost no businessman on the planet who'd invest in your country. The result would be crippling rates of unemployment, complete lack of technological development, etc.

None of which are, by any argument, beneficial for society as a whole.

[Hokulele]

However, what if I have to invest $10 million to start a company? Under your system, which still only allows a maximum of $2 million in personal profits each year, that means that after five years, I've just barely broken even. I haven't made one cent in profit. A 0% return on investment over five years...nobody is going to consider that reasonable.

And if I have to invest $50 million to start the company, under your system, I will have to wait 25 years just to recover my initial investment!!!!


Even worse, where are you going to get the $10 or $50 million to get started? If no one can earn that much money, why would banks or VC firms loan that much money? Are you going to work for 25 years to raise the capital, then work another 25 to get some kind of return?

[The_Animus]

One problem with your proposed salary cap is that it fails entirely to account for different values of the company, or the investment made in that company.

Let me take your argument about investing one million dollars to start a company. If I'm allowed to get a maximum of $2 million in personal profits each year, that means that after five years, I've made $10 million, a 1000% return on my initial investment. That is, arguably, a reasonable return on investment.

However, what if I have to invest $10 million to start a company? Under your system, which still only allows a maximum of $2 million in personal profits each year, that means that after five years, I've just barely broken even. I haven't made one cent in profit. A 0% return on investment over five years...nobody is going to consider that reasonable.

And if I have to invest $50 million to start the company, under your system, I will have to wait 25 years just to recover my initial investment!!!!

I'm afraid you have misunderstood or missed key parts. The idea is not that there is a singular cap of $2 mil. It ranges depending on the initial investment. Lower investments are allowed higher multipliers of a return. For example a $50,000 investment may yield a 5x return. So you could make $250,000 as quickly as your profits allow BEFORE the salary cap of $250,000/yr even COMES INTO EFFECT. However for larger investments such as $5mil the multiplier is smaller say 3x so you would be able to make $15 mil as quickly as your profits allow BEFORE the salary cap comes into effect. Now these multipliers are just EXAMPLES. They are not set in stone, they are just being used to show you how I see the system working. Now this would be pre-set up into brackets. So for investments from $1000 to 50,000 you get n times the profit before the salary cap comes into effect. From $50,001 to $200,000 you get y times the profit. And so forth and so on up the ladder.

Also you have to understand that you aren't losing that investment money if your business succeeds. If your company is successful and from your $5mil investment you make $15mil you still have the company itself which is still worth the $5mil + whatever its accrued value is.

Any country that implemented such a system would find its economy effectively destroyed within a year. Why? Because every major company in that country would leave and set up their operations in another country that did not have such salary caps. Factories would be shut down, industries would disappear overnight. The only way such a plan would have even a chance of working would be if every country in the world adopted it. Which is a practical impossibility.

This is a good point. Thank you for bringing it up. Let's see if we can't figure out some way to get around this. Perhaps not allowing the exporting of businesses to other countries. Or something along the lines of not buying good produced out of the country. Also while this system does encourage the business owner to want to start the business in another country instead, you also have to consider that there would be a demand for businesses of this type due to the lower product costs and higher wages for employees. Nonetheless I see your point. While at the moment this doesn't seem possible to make the whole world adopt this system, it may be more likely in the future as continental trade unions and agreements become stronger.

Also not all businessmen are completely greedy. As such I'm sure that there would be some people who would start businesses here to benefit more people instead of moving it to another country to soley benefit themselves. At this point they 'should' be able to sell their product at a price that competing companies cannot match without destroying their products quality or cutting their own profits.

There are already existing, practical models of capitalism being modified somewhat by a socialist framework; these still put no limit on what profits you can make, but take a higher percentage of those profits and channel them back into society (ie. education, health care, etc.), and put stronger limits to prevent potential abuse (no monopolies, worker's rights, etc.).

Why isn't this sort of thing being done then? This is basically saying that companies have the option to put a higher % of those profits and put them back into society or they can choose to keep it for themselves. Which will they do...

In any case if you'd like to work out your own model of capitalism with more socialist framework in it then please do so in another thread and we can discuss both options seperately in seperate threads.

If you still do not fully understand what I am proposing for this system please feel free to ask questions or post your current understanding. That way there won't be more posts proclaiming problems based on an incorrect understanding of the system

[TriangleMan]

Even worse, where are you going to get the $10 or $50 million to get started? If no one can earn that much money, why would banks or VC firms loan that much money? Are you going to work for 25 years to raise the capital, then work another 25 to get some kind of return?
That was my immediate thought as well - where is all the start-up capital coming from if there are caps on earnings? How could we possibly develop financial services industries that protect markets against catastrophic effects or economic contagion? How would banks be able to develop the liquidity to loan money? What insurance company would have the capital to provide people with hurricane or earthquake insurance?

Setting caps on what people can earn then imposes de facto limits on the start-up capital or investment capital of businesses. And many of those businesses need a lot of capital just to be able to adequately perform their function.

[TriangleMan]

This is a good point. Thank you for bringing it up. Let's see if we can't figure out some way to get around this. Perhaps not allowing the exporting of businesses to other countries. Or something along the lines of not buying good produced out of the country. Also while this system does encourage the business owner to want to start the business in another country instead, you also have to consider that there would be a demand for businesses of this type due to the lower product costs and higher wages for employees. Nonetheless I see your point. While at the moment this doesn't seem possible to make the whole world adopt this system, it may be more likely in the future as continental trade unions and agreements become stronger.
Animus, please understand, your idea of salary caps is not tenable. It will not achieve the ends you think it will achieve. In some ways you knew this - that's why your OP proposed those neat assumptions that everyone would comply and that there was no way around the caps. That's because there are in actuality a zillion ways around it (start up multiple businesses under your name, set up trusts, complicated corporate structures, cross-corporate business for commission, set up businesses in other countries, stock options, put your family on the payroll, have the company provide you with housing/jet/car/benefits etc). So wondering about how to implement it globally, with restrictions on cross-border trade and tariffs for non-compliance etc, is moot. Your idea is fundamentally flawed. It will not stop people from having nice cars, vacation homes, $40,000 purses and private jets. It will not magically funnel money to poor people in other countries.

And you also make assumptions about what happens with this additional profit that did not go to the owner. You just handwave "workers salaries will increase". Is it because you think business owners will just go "Gee, I don't know what to do with all this extra money my business earned, guess I'll just raise wages!"? Generally the extra money will sit with the company and will be used for further investment, but guess what? Many companies already do distribute portions of profits to employees. These are called 'bonuses' and 'stock options'.

If competition is fierce then some of it will go towards lowering product costs to stay competitive and retain or gain market share, but this is a fixture of the current system already in place, so arguing that your system lowers product costs is flawed because the current system already does that.

Leave your idea behind so we can look at other proposals, starting with a good analysis of why exactly there are income inequalities in this world, at which point you may find issues that may have long-term workable solutions.

[The_Animus]

I would ask that people please read my posts through a few times so as to understand it all. I do not appreciate having to repeat myself over and over because someone else is unwilling to take the time to read carefully.

These businesses are still making tons of profits. That is what businesses do. However now a significant majority of those profits cannot go to an individual person or even a group of people. Nonetheless it is still there. So do you think that all these businesses will burn the extra money? Maybe bury it in the ground? No, this money will be used for other things to benefit the masses. It can be used for higher wages, and lower product prices (which btw will mean people will have more money), and better quality products (which means they will break less, which in turn means spending less money on products, which in turn means the masses will be able to save more money), and donated to charities, and used to build/maintain roads, and it could also be used to start up other businesses.

Now the extra profits used in this way would not be subject to the same rules that apply to the individual investing their own money to start a business. Otherwise all the money would keep being put into new businesses for continued massive financial gain of the individual.

Or maybe to make things simpler all the excess profits from all businesses would be pooled into a large fund which is used for all the things I previously mentioned and that Triangleman mentioned. There would be some sort of council or possibly several councils who would take petitions from various people/organizations wanting some of the money for various purposes such as those mentioned above. If the petition is for a good sound cause then they would give out the money for that purpose.

[Hokulele]

Or maybe to make things simpler all the excess profits from all businesses would be pooled into a large fund which is used for all the things I previously mentioned and that Triangleman mentioned. There would be some sort of council or possibly several councils who would take petitions from various people/organizations wanting some of the money for various purposes such as those mentioned above. If the petition is for a good sound cause then they would give out the money for that purpose.


Egads. Fraud, corruption, and graft central. No thanks.

[The_Animus]

Animus, please understand, your idea of salary caps is not tenable. It will not achieve the ends you think it will achieve. In some ways you knew this - that's why your OP proposed those neat assumptions that everyone would comply and that there was no way around the caps. That's because there are in actuality a zillion ways around it (start up multiple businesses under your name, set up trusts, complicated corporate structures, cross-corporate business for commission, set up businesses in other countries, stock options, put your family on the payroll, have the company provide you with housing/jet/car/benefits etc). So wondering about how to implement it globally, with restrictions on cross-border trade and tariffs for non-compliance etc, is moot. Your idea is fundamentally flawed. It will not stop people from having nice cars, vacation homes, $40,000 purses and private jets. It will not magically funnel money to poor people in other countries.

My OP proposed those assumptions because this system is not based upon the previous system, and as such is not subject to its rules and laws and loopholes. Even if it was, I would rather first set up a working system, and then worry about how to avoid people getting around it. You can't work everything out at once, and for right now I want to work on the system itself. As for all those things you mentioned, every business would be required to make all company information completely available to the public. Also anyone would be allowed to make inquires into the company and as such if they are found to be putting family on payroll when they actually have no positions, there would be penalties or the CEO would be removed from his business. You think the CEO will think its worth it to make a little extra money when if caught he will no longer own any of his businesses? I certainly wouldn't risk it. They do now, because if they are caught nothing is done to them.

You could also set up a commission to review these public records and investigate suspicious businesses.

And you also make assumptions about what happens with this additional profit that did not go to the owner. You just handwave "workers salaries will increase". Is it because you think business owners will just go "Gee, I don't know what to do with all this extra money my business earned, guess I'll just raise wages!"? Generally the extra money will sit with the company and will be used for further investment, but guess what? Many companies already do distribute portions of profits to employees. These are called 'bonuses' and 'stock options'.

This was covered in my previous post.

If competition is fierce then some of it will go towards lowering product costs to stay competitive and retain or gain market share, but this is a fixture of the current system already in place, so arguing that your system lowers product costs is flawed because the current system already does that.

Oh? This is only to an extent. When the entire food industry is owned by 3 companies its pretty easy to meet behind closed doors to set prices. The same goes for oil/gas. Or larger companies only need to compete with other large companies. The immense amount of money the larger companies have allows them to undercut any new or smaller business prices until they go out of business, at which point they are free to raise them again. And when there are only a few huge companies in each particular industry it becomes quite easy for the rich of the rich to agree on pricing so they can both makes vast amounts of money.

Have you ever read "Fast food nation"?

Leave your idea behind so we can look at other proposals, starting with a good analysis of why exactly there are income inequalities in this world, at which point you may find issues that may have long-term workable solutions.

No thanks. You are more than welcome to start your own thread for that purpose though, and I would be glad to contribute.

[The_Animus]

Egads. Fraud, corruption, and graft central. No thanks.Oh? It is rather obvious that all of the dealing of these councils or commissions would be public as well. I don't see how its much different than the way the US government is set up. They have the BBB, and the EPA, and FCC, and the FDA.

Who decides how the US government money is spent right now?

My concept isn't too much different from that. There would be several agencies or commissions or whatever you wish to call them. One could give out money for environmental purposes, one for transportation, one for education, and so on and so forth.

Think about it, this is already done to a lesser extent. It's called taxes.

[Hokulele]

Oh? It is rather obvious that all of the dealing of these councils or commissions would be public as well. I don't see how its much different than the way the US government is set up. They have the BBB, and the EPA, and FCC, and the FDA.

Who decides how the US government money is spent right now?

My concept isn't too much different from that. There would be several agencies or commissions or whatever you wish to call them. One could give out money for environmental purposes, one for transportation, one for education, and so on and so forth.

Think about it, this is already done to a lesser extent. It's called taxes.


Are you suggesting that fraud and graft cannot occur in a governmental fiscal distribution system?

http://www.washingtonpost.com/wp-dyn/articles/A24468-2005Feb14.html

[TriangleMan]

Oh? It is rather obvious that all of the dealing of these councils or commissions would be public as well. I don't see how its much different than the way the US government is set up. They have the BBB, and the EPA, and FCC, and the FDA.

Who decides how the US government money is spent right now?

My concept isn't too much different from that. There would be several agencies or commissions or whatever you wish to call them. One could give out money for environmental purposes, one for transportation, one for education, and so on and so forth.

Think about it, this is already done to a lesser extent. It's called taxes.
So in your previous post you state your system is not based on the old system, yet this post is just replacing government with some 'public' commissions (as opposed to government which is 'non-public' somehow?) that do the same thing, and replacing taxes with something along the lines of 'collecting money from corporations and individuals based on earnings and profits'. And in the previous post you note that you'd have
every business would be required to make all company information completely available to the public. Also anyone would be allowed to make inquires into the company and as such if they are found to be putting family on payroll when they actually have no positions, there would be penalties or the CEO would be removed from his business.
We have systems like that already as well, they are called audits, accounting standards, and organizations such as the SEC and federal/state regulators imposing disclosure requirements on companies.

(Oh, by the way, if I start up a business with my own money I'll put my wife/son/nephew on the payroll and pay them whatever I darn well please thank you very much. I believe that I have that right.)

And if other countries don't comply you levy penalties, embargos and tariffs to convince them to comply. Hey, isn't this why lots of people protest against the WTO right now?

So it appears that you aren't really changing much, just renaming the existing checks and balances in the system.

Except that under your scenario tax rates are 100% over a certain level, based on initial investment or salary.

[Ohmer]

Our president shoudn't have been president. And the idea of use college money to fund a business is terrible in the first place. And you cannot use flaws in the current system to say this one doesn't work. That's the point of making and working out a new system, to avoid the problems of the current one.

You completely missed the point. The guy who did this was the head of a non-profit organization. One like you are proposing. It is a counter example to show that your proposal will not have the effects that you think it will in the real world. It was probably even easier for him to take this stupid risk because he knew it would not effect his personal income.

[The_Animus]

Are you suggesting that fraud and graft cannot occur in a governmental fiscal distribution system?

No. I'm saying you can't say my system won't work because of something that also happens in the current system. Regardless of what system you use there will always be corruption and fraud. You simply have to do the best you can to stop it. So unless you intend on showing that this system will be worse in regards to corruption and fraud, which you can't, it cannot be used as an argument to throw the entire system out.

(Oh, by the way, if I start up a business with my own money I'll put my wife/son/nephew on the payroll and pay them whatever I darn well please thank you very much. I believe that I have that right.)

That's fine, but they have to work there. Otherwise thats called fraud. Paying someone money from a company payroll that they don't work for is called fraud.

So it appears that you aren't really changing much, just renaming the existing checks and balances in the system.

No. I am applying current checks and balances to the new system. The system itself it different. The checks and balances are not. Unless you wish to suggest a new and improved form of checks and balances, which I would be glad to hear as it would be a positive solution rather than a continuous slew of nay saying.

Except that under your scenario tax rates are 100% over a certain level, based on initial investment or salary.

I made zero mention of taxation of individuals. I only talked about what would basically be taxation of excess profits of the companies. And even then these are just ideas. It doesn't necessarily have to be done one specific way. I also mentioned the idea that the owner of each company could decide how to spend the excess money for the benefit of the masses. I had hoped that people wouldn't look at these things as set in stone, but rather as numerous ideas to choose between and improve upon.

There have been threads in these forums which point out that JREF forum members are pessimistic and only have the ability to find fault but are never optimistic or able to find solutions. While I can't say whether this is true on a whole, I can say that from my experience reading and posting on these forums that this seems for the most part accurate. That's to be expected though. With all the time spent debating with woo woo's and CT's and constantly finding fault it's bound to become habit.

[The_Animus]

You completely missed the point. The guy who did this was the head of a non-profit organization. One like you are proposing. It is a counter example to show that your proposal will not have the effects that you think it will in the real world. It was probably even easier for him to take this stupid risk because he knew it would not effect his personal income.

Why would a non-profit organization take college money to start up a business. That makes absolutely no sense at all. This wouldn't even be legal to do in the system I'm proposing because it's ridiculous. I fail to see how showing that someone who does something under the current system which wouldn't even be allowed in the one I propose is a counter example. It is possible that the excess money from businesses that is used to start up a new business would result in that new business failing and that money being lost. But that is the case with ANY system regardless of how its set up. In this instance though the money being used for this is meant for that purpose rather than taking it from a college that needs it. So no. I do not think that is a good counter example.

[TriangleMan]

No. I'm saying you can't say my system won't work because of something that also happens in the current system. Regardless of what system you use there will always be corruption and fraud. You simply have to do the best you can to stop it. So unless you intend on showing that this system will be worse in regards to corruption and fraud, which you can't, it cannot be used as an argument to throw the entire system out.
But at the same time you have not shown how your system creates any improvements. Your assertion that the extra retained profits would go to higher wages, lower prices and improved product quality has so far been little but wishful thinking, you have not been able to demonstrate that these extra profits will go to the areas you think they will go to.

If your business is doing well you are not going to spend a bunch of money just to improve quality for the heck of it. External competition that steals market share due to improved quality is the driver for quality improvement (e.g. American auto industry when Japanese imports arrived) not because companies simply have some money they don't know how to spend. If there is no pressure to improve quality then it is generally an inefficient use of resources to do so. The money could be spent on a new product line, R&D, a new ad campaign, or even a shiny new jet to keep your senior management happy.

Likewise wages & bonuses are driven by supply/demand factors in the workforce. Unskilled labour is paid less because they are easier to replace. A business looking to retain valuable employees will keep salaries and bonuses at a competitive level to prevent competitors from poaching staff. But employers will not just raise wages simply because they have tons of assets when the assets could be better used invested in something else.

That's fine, but they have to work there. Otherwise thats called fraud. Paying someone money from a company payroll that they don't work for is called fraud.
Who am I defrauding, myself? I am the 100% owner of the company and started it with my money.

Now tax authorities might question to see if it is a means of tax deduction but if they receive the correct share of taxes they will not be concerned either.

Would it be okay to hire my son to come in after school and sweep the floors for a couple of hours a day? I guess I'll pay him - what's the salary cap again? $200,000? Okay, I'll pay him that I guess.

Unless you wish to suggest a new and improved form of checks and balances, which I would be glad to hear as it would be a positive solution rather than a continuous slew of nay saying.
You asked in your OP for the downsides of your system, and many are providing them to you. In truth having read details of your system it appears to me to be little more than increasing taxes for rich people and corps up to 100% once a threshold is crossed.

I made zero mention of taxation of individuals. I only talked about what would basically be taxation of excess profits of the companies.
Salary caps and limiting the income people earn from jobs in order to funnel money elsewhere based on a legal reqirement from government/society/whomever is essentially 100% taxation on earnings above a threshold. Your scheme is a taxation scheme on companies and individuals whether you knew it or not. So yes you have been mentioning taxation of individuals, right from the first post of this thread.

There have been threads in these forums which point out that JREF forum members are pessimistic and only have the ability to find fault but are never optimistic or able to find solutions. While I can't say whether this is true on a whole, I can say that from my experience reading and posting on these forums that this seems for the most part accurate. That's to be expected though. With all the time spent debating with woo woo's and CT's and constantly finding fault it's bound to become habit.
In this very thread I wanted to move on to an analysis of why income inqeualities occur to see if mitigants could be found, but you told me to start a new thread instead of continuing in this one. When we bring up how human nature and economic realities will not mesh with your assumptions you dismiss them. When I asked you to leave your model behind to see if others were more tenable you didn't want to.

You appear to be looking for back-patting and support but there is a reason you have not been receiving it from me:

I do not believe that your system works. Period.

Salary and earnings caps will not:
-- raise wages like you claim (and which you have not provided support for)
-- lower product costs like you claim (and which you have not provided support for)
-- improve product quality like you claim (and which you have not provided support for)
-- funnel money to the poor and needy like you claim (etc)
-- stop people buying private jets and $40,000 Louis Vuitton bags while others starve (which is what your goal was)

It will, I suspect, violate at least a few sections of your Constitution and Bill of Rights, as well as a whole slew of court rulings. It will, I also suspect, grind your economy to a halt. This is why I do not support it. And this is why I am not bothering to find ways to get past these 'flaws'.

Saying "don't do it" when you want to throw yourself off a bridge because you think you can fly is not 'naysaying' or being 'pessimistic'. Similar principle applies.

[The Central Scrutinizer]

I personally hate the way businesses in general are run. Almost all businesses are set up for the purpose of huge financial gain in the hands of a few people.

Right off the bat - False.

So I didn't see any point in reading the rest of it.

[matt-r]

Although I'm undoubtedly on the side of Triangleman, teek and Wolfman on this one, I just think it might be worthwhile to pause and think about different kinds of companies that seem to be being confused/conflated in this discussion. Note that I'm only addressing salary caps here; to be honest, I find it hard to address the whole compulsory nonprofit thing because I just don't see how it's meant to work.

There are some people on these forums who clearly have a lot of experience at being owner/managers of their own businesses. Owner/managers want to make enough profit to support a good salary, but they may also have an interest in building up the capital value of the company (by growing it, employing more people, investing in better technology, providing a better service and building up a good reputation). What drives this second desire? The reason is that, if they own shares in the company (and an owner/manager may be the sole shareholder) then, ultimately, they will want to sell their shares to a third party and realise a capital gain. It wouldn't be unusual for this to be a prime motivating factor, because capital gains are taxed more favourably than employment income in a lot of countries (I'm a UK tax lawyer by profession). I don't think those two kinds of "income" (i.e. salary during the course of owning the business, and the capital gain at the end when the business is sold) have been clearly differentiated in this discussion. For a lot of owner/managers, their salary will be nothing special for years on end (no private jets here!), but the payoff is when the company that they have built up is sold on at a significant profit.

Animus, you seem to have been talking about income (i.e. salary) a lot; do you have any thoughts about capital gains? Should they be treated as income, like any other payment of salary? Whilst I don't believe your idea has any practical possibility of being implemented (and I believe it could be disastrous if it were implemented) I thought it would be useful to add another element of complexity; I'm not sure you really understand how complex business is, and the various factors that drive businesspeople. That's nothing to be ashamed of. I didn't have any good idea until I started working as a lawyer, but I think it's a topic which it would be worth you researching.

At the other end of the scale, you have huge listed companies, which work in a completely different way. Here you need to really understand the tripartite arrangement that governs most corporate systems, since it will be most evident in big listed companies. The three main players are:-

1. The company, which has its own legal identity and actually conducts the business (i.e. it employs all the employees, it owns all the property, it does all the deals).
2. The shareholders, who own the company, and exercise overall oversight over how the company does business. The biggest shareholders of big listed companies are banks, pension funds, insurance companies and other institutional investors.
3. The directors, who are employed by the company and have day-to-day control over the company. In many systems they have a legal duty of care, to act in the best interests of the company. They will rarely hold a very significant stake in the company (although they may be given shares/options in the company as part of their remuneration package).

You can often add a fourth major player to the list: the bank. However, we won't complicate things any more at this stage. Although this is a long post, I'm still massively simplifying things.

The people with the most to lose if a listed company goes bust are (directly) the shareholders and (indirectly) the rest of us, since our pension funds are invested in the stock market and our fates are intertwined with the fate of listed companies in lots of complicated ways, whether we hold shares directly or not. It is generally accepted, therefore, that listed companies should be subject to greater publicity requirements (i.e. they need to publish more information about themselves than private companies) and they should generally be held to a higher standard of corporate governance. As part of this, institutional investors will exercise their powers of oversight and they are (ultimately) the people who decide whether a director is earning their salary. If the shareholders of a company want to boot out a director, they can and will do so, and through this power they indirectly control director's remuneration. In other words, the directors don't simply get to decide how much they are paid. They will be paid as much as they are worth. How do we know what they are worth? The shareholders effectively decide. If a company is looking for a new managing director or CEO, there may be a choice. There may be a number of people suitable for the job. The job will involve very long hours, high stress, press attention and a significant degree of risk to the reputation of the individual if the company's business takes a downward turn. Say that the company (in practice, it will be a combination of the other directors and major shareholders) wants to employ a particular person. They think he will deliver the best results for the company. Note that he is NOT going to be an investor in the company - the company want his skills, not his cash.

Under the current system, they will try to attract him by putting together a remuneration package which will persuade him to take the job. They will balance what they think the company can afford with how much they value the skills of the candidate (and such value will inevitably be linked to how well they think the company will do under his management).

But what if there is a salary cap? What happens then? In practice, people won't be willing to take on the job. In fact, salary caps will have already discouraged companies from even creating such a high-profile, high-stress, difficult job. There would not be an incentive for companies to aim that high. In practice, investment is likely to stagnate, inefficiencies within the company will build up, and anyone who reaches the salary cap is not going to stretch themselves any further or try any harder than they have to to keep themselves in that job. The whole economy would sicken. Your thinking seems to be (correct me if I'm wrong) that a salary cap would lead to (broadly) the same amount of money sloshing around the economy, but simply sloshing in a different way, and in the direction of different people. I honestly don't think it would. The amount of money sloshing around would take a dramatic dive. It is very likely that everyone's quality of life would take a dive.

I know that I've only talked about two types of companies - in practice there are many many more - but I thought it would be useful to look at specific (yet fairly common) scenarios. This thread has indirectly touched upon the subject of how states compete for investment, through the tax or regulatory regimes of those companies. I think this is a slightly separate and fascinating subject and I might start a thread on it, because I would be interested in everyone's opinion on that.

[roger]

For businesses to succeed in any way, they need capital, ie cash. If individuals don't have it (and they won't if you cap their income), it'll have to come from banks. So, we've effectively transferred wealth from individuals to businesses. um, yay???

[Spindrift]

Who am I defrauding, myself? I am the 100% owner of the company and started it with my money.

Now tax authorities might question to see if it is a means of tax deduction but if they receive the correct share of taxes they will not be concerned either.

Would it be okay to hire my son to come in after school and sweep the floors for a couple of hours a day? I guess I'll pay him - what's the salary cap again? $200,000? Okay, I'll pay him that I guess.


Minor point:

Actually in the US it is illegal to pay someone for a job they do not perform. Even if you pay the taxes. You can pay your son $200,000 to sweep floors as long as he does sweep the floor.

[matt-r]

Minor point:

Actually in the US it is illegal to pay someone for a job they do not perform. Even if you pay the taxes. You can pay your son $200,000 to sweep floors as long as he does sweep the floor.

That's interesting Spindrift. In what sense is it illegal? It's not a crime is it? If it's a civil matter, who would bring the claim? The company?

I'm not aware of any similar law in the UK, except the more general law that directors have to act in the interests of the company. But since the interests of the company are primarily decided by the shareholders, they can give their blessing to an arrangement if they want, and someone could (I think) be paid for doing nothing.

[roger]

That's interesting Spindrift. In what sense is it illegal? It's not a crime is it? IANAL, but the Taft-Hartley Act outlaws featherbedding, the practice of paying for work not performed. Why? Well, unions used to insist that companies hire people to perform jobs that didn't exist; for example, a coal shoveler for a plant that does not use coal.

[tkingdoll]

Excellent post matt-r.

[nw843x]

I would ask that people please read my posts through a few times so as to understand it all. I do not appreciate having to repeat myself over and over because someone else is unwilling to take the time to read carefully.

These businesses are still making tons of profits. That is what businesses do. However now a significant majority of those profits cannot go to an individual person or even a group of people. Nonetheless it is still there. So do you think that all these businesses will burn the extra money? Maybe bury it in the ground? No, this money will be used for other things to benefit the masses. It can be used for higher wages, and lower product prices (which btw will mean people will have more money), and better quality products (which means they will break less, which in turn means spending less money on products, which in turn means the masses will be able to save more money), and donated to charities, and used to build/maintain roads, and it could also be used to start up other businesses.

Now the extra profits used in this way would not be subject to the same rules that apply to the individual investing their own money to start a business. Otherwise all the money would keep being put into new businesses for continued massive financial gain of the individual.

Or maybe to make things simpler all the excess profits from all businesses would be pooled into a large fund which is used for all the things I previously mentioned and that Triangleman mentioned. There would be some sort of council or possibly several councils who would take petitions from various people/organizations wanting some of the money for various purposes such as those mentioned above. If the petition is for a good sound cause then they would give out the money for that purpose.

Re: bolded see this http://en.wikipedia.org/wiki/Licence_Raj

The PBS series The Commanding Heights had alot to say about this.

Also here : http://www.indianembassy.ru/docs-htm/en/en_hp_win_ms_t001.htm

[jimlintott]

That's interesting Spindrift. In what sense is it illegal? It's not a crime is it? If it's a civil matter, who would bring the claim? The company?



It would be a form of tax evasion. Salaries are a legitimate deduction before taxes. A phony salary on the books would save taxes for the company.

[Spindrift]

That's interesting Spindrift. In what sense is it illegal? It's not a crime is it? If it's a civil matter, who would bring the claim? The company?

I'm not aware of any similar law in the UK, except the more general law that directors have to act in the interests of the company. But since the interests of the company are primarily decided by the shareholders, they can give their blessing to an arrangement if they want, and someone could (I think) be paid for doing nothing.

It's a federal offense, defrauding the IRS. Here's someone who got caught:
http://newhaven.fbi.gov/dojpressrel/2007/nh051507.htm

It has to do with the fact that the income is not really income I think because no service was given in return for the payment. It is just a gift.

So the offender usually also gets charged with filing false income tax returns which may be plea bargained out and the company gets in trouble for deducting the payment as an illegitimate business expense.

[The_Animus]

If your business is doing well you are not going to spend a bunch of money just to improve quality for the heck of it. External competition that steals market share due to improved quality is the driver for quality improvement (e.g. American auto industry when Japanese imports arrived) not because companies simply have some money they don't know how to spend. If there is no pressure to improve quality then it is generally an inefficient use of resources to do so. The money could be spent on a new product line, R&D, a new ad campaign, or even a shiny new jet to keep your senior management happy.

The jet is unnecessary to keep senior management 'happy' and is a bogus company expense in my eyes. So lets look at the other option you pointed out.

The extra money certainly could be spent on a new product line, or a new ad campaign, both of which are done for the purpose of increasing profits. So okay you've done that. Now you are back to square one except you have even more extra money sitting there. So now what? Is the company going to constantly spend 100% of its extra profits solely on a new product and advertising? Doubtful. Especially when doing so doesn't benefit the owner of the company at all.

the driver for quality improvement (e.g. American auto industry when Japanese imports arrived)

You're joking right? I haven't looked at the latest numbers but to my understanding gas mileage for any other countries cars have been getting better while American cars have been getting worse.

Lets say I made a car company using the system I've proposed. I have extra profits sitting there that can't go into my pocket. Now I also know that I appreciate cars with good gas mileage and that have a high durability for as cheap a price as possible. I have read that car prices are sold to dealerships for about 4-5x the cost to make them, and then dealerships sell the cars for about 2x the price they paid for them.

So if a car is $20,000 at a dealership, chances are it cost about $2000-$2500 to make. So my car company would first use the excess money to make a car that is as durable and gas efficient as possible. After that the excess money would be used to lower car prices to as low as possible but still keep the company in good standing. I know about 1 billion people who would sure appreciate it if they could buy a durable, efficient, new car for $5000.

And what do you think the other car companies would do if this happened? Do you think they'd be able to stay in business if the best price you can get for one of their new cars is $15,000-$20,000?

But in any case, I would do this not only for everyone else, but because I WANT to be able to buy a car like that. I want to be able to get cheap high quality products. So does every other person on the planet.

our scheme is a taxation scheme on companies and individuals whether you knew it or not.

A tax is taken from your wages. In this case a tax would be if money was taken out of your salary. The money being used for this belongs to no one aside from the company. It simply has restrictions of use.

When I asked you to leave your model behind to see if others were more tenable you didn't want to.

Again feel free to do so in a new thread. This thread is to discuss this. Again I'd be more than happy to participate in your new thread, but I prefer to keep separate topics in separate threads. So stop complaining about it and go do it already. No one is stopping you from making your own thread, and me giving up my idea and this thread doesn't stop you in any way from doing so.

matt-r - I mentioned earlier that certain people withing the company, rather than a salary cap, or perhaps with it, could also make a certain small % of the company profits. Not to the extent that they make what they do today, but so that there is money incentive for the company to do well because it directly benefits them. As far as capital gains go, some could still be kept so long as they are limited so the individual(s) would not be making grossly vast sums of money for themselves. For instance stocks could be kept, but perhaps limit the amount of stock in any one company that an individual can have. I'm not really aware of all the various ways businessmen have come up with to make more money for themselves, but the basic rule would be that some incentives can be kept so long as what they make from them isn't vast amounts. IF the CEO runs the company well, then he can make an extra $100,000 that year, or an extra $million depending upon the business. Just so long as they aren't making $80mil extra.

Re: bolded see this http://en.wikipedia.org/wiki/Licence_Raj

Licence Raj refers to the elaborate licences, regulations and the accompanying red tape (http://en.wikipedia.org/wiki/Red_tape) that were required to set up business in India (http://en.wikipedia.org/wiki/India) between 1947 (http://en.wikipedia.org/wiki/1947)-1990 (http://en.wikipedia.org/wiki/1990) [1] (http://en.wikipedia.org/wiki/Licence_Raj#_note-0). The Licence Raj was a result of India's decision to have a planned economy (http://en.wikipedia.org/wiki/Planned_economy), where all aspects of the economy are controlled by the state and licences were given to a select few.

I stopped reading after that. Giving the licences to a select few is opposite to what I propose. In order to get a business loan from a bank you have to write up a business plan. If the bank reviews this and believes you know what you are doing, that the business plan is sound, and that this business has the potential to work, they give you the loan. The same idea applies to the commissions I proposed.

[Marquis de Carabas]

The jet is unnecessary to keep senior management 'happy'...
Unless you are the senior management in question, you are not qualified to make that statement.

[tkingdoll]

I think The_Animus recently got fired.

I'm interested to know what he thinks will happen with natural resources in his model, though. You know - those things for which the cost is not stable because the supply is not stable.

[Hokulele]

I think The_Animus recently got fired.


I also think s/he has never written a business plan, nor tried to drum up starting capital for a business venture.

I'm interested to know what he thinks will happen with natural resources in his model, though. You know - those things for which the cost is not stable because the supply is not stable.


I'm also interested to see how s/he plans to cover retirement and catastrophic health-care costs.

[The_Animus]

I think The_Animus recently got fired.

I'm interested to know what he thinks will happen with natural resources in his model, though. You know - those things for which the cost is not stable because the supply is not stable.Nope. I've never been fired actually. I'm a good employee. Not that this has any relevancy.

Well obviously prices for natural resources and materials will vary. You vary the price of your products based on that. Do you expect that I'd think you could keep the price of a product the same if the cost to make it went up? Please.

I also think s/he has never written a business plan, nor tried to drum up starting capital for a business venture.I am a he, and you are correct. Though my previous boss, previous because he sold his business to someone else, has and he has talked about it. The first business he ever started was a pizza shop. He said that the business plan he wrote out was pathetic compared to the ones he does now for new businesses. His first business plan was only a few pages and didn't include many of the things normally needed in a business plan, which include such things as expected number of employees, products you will sell, pricing, market for your products, among other things. Nonetheless the bank gave him a business loan.

I'm also interested to see how s/he plans to cover retirement and catastrophic health-care costs.Well all those extra profits from every business do add up to a gigantic amount of money...

I seem to think I covered this somewhere else... not only one... but multiple times. Though I didn't specifically mention that exact thing I would hope you could infer from it that it applied to other things as well, hence the "etc.".

BTW tking your statement of saying you think i was fired is dangerously close to an ad hominem. Please be sure to follow the forum rules and let's try to keep personal aspects out of the forums.

[nw843x]

The jet is unnecessary to keep senior management 'happy' and is a bogus company expense in my eyes. So lets look at the other option you pointed out.

I stopped reading after that. Giving the licences to a select few is opposite to what I propose. In order to get a business loan from a bank you have to write up a business plan. If the bank reviews this and believes you know what you are doing, that the business plan is sound, and that this business has the potential to work, they give you the loan. The same idea applies to the commissions I proposed.



I would ask that people please read my posts through a few times so as to understand it all. I do not appreciate having to repeat myself over and over because someone else is unwilling to take the time to read carefully.


Or maybe to make things simpler all the excess profits from all businesses would be pooled into a large fund which is used for all the things I previously mentioned and that Triangleman mentioned. There would be some sort of council or possibly several councils who would take petitions from various people/organizations wanting some of the money for various purposes such as those mentioned above. If the petition is for a good sound cause then they would give out the money for that purpose.

Re: bolded see this http://en.wikipedia.org/wiki/Licence_Raj

The PBS series The Commanding Heights had alot to say about this.

Also here : http://www.indianembassy.ru/docs-htm/en/en_hp_win_ms_t001.htm


You say it there (underlined) you would create a council or layers of councils to divvy up money to those applying for it. Each council would create rules in which the money would be given out - creating red tape. Just as India started out with the best of intentions, things quickly became an economic nightmare.

I understand your frustration in seeing some companies making billions in profit and yet there are still homeless people on the streets. It boggles my mind too.

Creating a command economy or planned economy sounds good on paper but will never work, as their past history has shown.

edit: This thread is a great read ! :)

[The_Animus]

Business plans today are written up to help get business loans. Obviously they can't just give out money to anyone who has some semblance of an idea. The various councils would work in a similar fashion to how banks determine who to give loans to. It is not tons of red tape so that only a select few will be accepted which is why the example given for India doesn't apply. This isn't modeled after them, its modeled after how the US banks and government determine who to give their money to and how much and for what purpose. The difference is that the money used wouldn't be from a specific bank but from the excess profits of the non-profit businesses.

[tkingdoll]

Business plans today are written up to help get business loans.

That's one use for them, yes. But mostly they are so the business can grow to a plan. Rather than just making best guesses as you go along. For example, I have a very detailed business plan but no bank loan.

BTW tking your statement of saying you think i was fired is dangerously close to an ad hominem.

Wrong. Although I am highly amused that you take exception to me speculating about what might make someone so anti-capitalism when so many other people in this thread have used their own personal experiences and knowledge as examples to prove you wrong.

One of the problems with not giving us a little information about your motivation, is that it becomes hard to see reasons why we should care about your ideas.

[The_Animus]

My motivations? Might want to cut back on the CT's forum. I'm not suggesting this because of personal sour grapes such as losing a job. My motivation is purely for the benefit of humanity.

And capitalism has many very serious flaws. But I suppose many of those can simply be attributed to greed and corruption. Again I suggest you read Fast Food Nation. One of the chapters talks about the food, more specifically the meat industry. There are basically three companies that control the entire food market. As a result they get to set the prices for cattle, chickens and so forth. If a rancher doesn't like their prices they can speak out about it, but at that point they are blackballed and they go bankrupt because they have cattle no one will buy. And yes these companies have been caught meeting in the past to set prices. Despite being found out they were only fined $1000 or something utterly rediculous.

The sheer amount of greed, corruption, and lack of understanding that what helps all of humanity helps themselves makes me sick.

[tkingdoll]

My motivations? Might want to cut back on the CT's forum. I'm not suggesting this because of personal sour grapes such as losing a job. My motivation is purely for the benefit of humanity.

I never post in the CT forum. What an odd thing to think of.

What evidence do you have that your proposal will benefit humanity more than the existing system?

[The_Animus]

You want physical evidence that a system works when there is no such system in existance. Yeah. I'll get right on that. There is no evidence. This is entirely theory. It is an idea. It cannot be proven and no evidence can be given short of having a working model to show it does. What you ask is impossible. This thread was simply for creating the idea and working on potential issues.

[tkingdoll]

You want physical evidence that a system works when there is no such system in existance. Yeah. I'll get right on that. There is no evidence. This is entirely theory. It is an idea. It cannot be proven and no evidence can be given short of having a working model to show it does. What you ask is impossible. This thread was simply for creating the idea and working on potential issues.

Why is there no such system in existence? I mean, you clearly think it's a good idea, you can't be the only one. So what is the fundamental obstacle stopping your idea becoming reality?

[The_Animus]

Maybe because anytime anyone suggest a new system everyone else claims blasphemy and that it won't work, not having put any thought or effort into trying to work on any issues with it?

Or maybe because businessmen get corrupted by the large amount of money they make and have no interest in doing whats good for everyone.

[Marquis de Carabas]

Or maybe because you can't change human nature by fiat.

[The_Animus]

So you don't think greed, and corruption are a largly environmental factor?

[Marquis de Carabas]

The specific ways greed will manifest depend largely on the environment. That it will manifest does not. The beauty of capitalism is that it makes personal greed work for the greater good. My life gets better, my toys get neater, because a bunch of money-grubbing *******s grub money.

That is not to say checks on the system are not needed, nor even to say that the current checks are adequate, but to scrap the whole idea for some pipe dream that we can tweak the greed out of people, instead of letting it work for us? No, thank you.

[The Atheist]

Or maybe because you can't change human nature by fiat.

Eh? They did just that when they bought Ferrari.

[TriangleMan]

It would be a form of tax evasion. Salaries are a legitimate deduction before taxes. A phony salary on the books would save taxes for the company.
Ah but that's why my post noted that while I could pay family members what I wished, tax authorities would care. You are correct that today such things are only done pretty much exclusively for tax evasion, but under Animus's system, where you are capped at what you can earn, you would find that everyone would start this kind of income splitting to get around the cap. The reason that doesn't happen now is that there is no mandated limit on what you can earn, so you don't need to.

I still contend paying a relation $200,000 to mop the floors for a couple of hours a day for my 100%-owned company is not fraud against me or the company; tax evasion yes, but I don't think it is civil fraud, which is the difference. And like matt-r noted (excellent post BTW matt-r) who would bring the charges?

[TriangleMan]

The jet is unnecessary to keep senior management 'happy' and is a bogus company expense in my eyes.
In a free society you cannot dictate what a company can and cannot spend its money on. If the owners and directors decide to buy a private company jet that is their right and there could be legitimate business reasons to do so, including for the benefit of senior management. That you think it is 'bogus' is irrelevant and does not counter my point.

The extra money certainly could be spent on a new product line, or a new ad campaign, both of which are done for the purpose of increasing profits. So okay you've done that. Now you are back to square one except you have even more extra money sitting there. So now what? Is the company going to constantly spend 100% of its extra profits solely on a new product and advertising? Doubtful. Especially when doing so doesn't benefit the owner of the company at all.
Which is why companies take the extra assets and invest it: stocks, bonds, new properties, expansion. They can also give dividends to shareholders, or perhaps do share buy-backs, or pay down existing debt. That is what companies do with extra assets today. That is what they will do under your system.

Your last sentence is ironic considering that under your system, where for some unknown altruistic reason the profits will go to lowering product costs for the consumer and increasing employee wages, will not benefit the owner either because it will increase expenses and decrease his revenue. Such changes are necessary if there are outside competitive pressures driving the changes (i.e. if your wages don't match competitors you will lose staff, if your product costs more than competitors you will lose market share).

You're joking right? I haven't looked at the latest numbers but to my understanding gas mileage for any other countries cars have been getting better while American cars have been getting worse.
You have missed the point of the auto industry example that I made. American Auto ("AA") were the top car makers for many decades in the US. Think what cars were like in the 30s, 40s, 50s and 60s. Big gas guzzlers, not great quality. Cars were designed for what the consumer wanted: big, comfortable, speed. The auto makers made money hand-over-fist and little of it went to quality control, and none of it went to gas efficency, which you appear to contend would be what would happen here:
So my car company would first use the excess money to make a car that is as durable and gas efficient as possible.
As my example demonstrates, that is not the reality. AA had over 40 years of huge profits to create cars of good quality, safety, and gas efficiency. They didn't. Gas efficency only became a big deal in the 70s when the oil crunch occured. Quality became a big deal when Japanese car makers came in with better quality cars and hammered AA on market share. Safety only became a big deal when consumers were becoming concerned about it and it was effecting their purchasing decisions. External market pressures create the changes, not altruism.

You see Animus one of the problems with your idea is that you make unrealistic assumptions about what people and companies will do under your system. You just handwave and go "they'll raise wages" or "they'll make cars more fuel effecient" just because you cap what they can earn so they'll have extra money floating around. Reality demonstrates that your assumptions are wrong. Many companies already have tons of extra money yet you state that you hate how they are run. Giving them more money will not change what they do with it.

And what do you think the other car companies would do if this happened? Do you think they'd be able to stay in business if the best price you can get for one of their new cars is $15,000-$20,000?
Makers of luxury cars do great business today despite cheaper cars being available, so yes, makers of expensive cars stay in business just fine. Again you just assume everyone will buy a cheaper car but reality shows people will pay extra for a luxury car, fast sports car, or gaz-guzzling SUV.
But in any case, I would do this not only for everyone else, but because I WANT to be able to buy a car like that. I want to be able to get cheap high quality products. So does every other person on the planet.
Please explain why SUVs became one of the most successful types of vehicle sold in America in the last 10 years, given that many cheaper vehicles were available.

Again feel free to do so in a new thread. This thread is to discuss this. Again I'd be more than happy to participate in your new thread, but I prefer to keep separate topics in separate threads. So stop complaining about it and go do it already. No one is stopping you from making your own thread, and me giving up my idea and this thread doesn't stop you in any way from doing so.
In time perhaps. It is interesting that youn spend five paragraphs rebutting the auto example but skipped over the more vital part of my post:

Salary and earnings caps will not:
-- raise wages like you claim (and which you have not provided support for)
-- lower product costs like you claim (and which you have not provided support for)
-- improve product quality like you claim (and which you have not provided support for)
-- funnel money to the poor and needy like you claim (etc)
-- stop people buying private jets and $40,000 Louis Vuitton bags while others starve (which is what your goal was)

It will, I suspect, violate at least a few sections of your Constitution and Bill of Rights, as well as a whole slew of court rulings. It will, I also suspect, grind your economy to a halt.
Could you perhaps address the key flaws - that you do not provide support for your assertions about human & company behaviour under conditions of earnings restrictions or excess profits. That it violates entrenched rights in your country.

As far as capital gains go, some could still be kept so long as they are limited so the individual(s) would not be making grossly vast sums of money for themselves. For instance stocks could be kept, but perhaps limit the amount of stock in any one company that an individual can have.
So if someone starts a company for $2 million and it becomes a big success and in a few years has equity of $40 million, he wouldn't be allowed to sell it for $40 million? And 100% ownership of the stock is not acceptable and he should own less? Can you not see the fundamental problem with this? You are denying someone the ability to sell something they own for a fair price.

[matt-r]

I still contend paying a relation $200,000 to mop the floors for a couple of hours a day for my 100%-owned company is not fraud against me or the company; tax evasion yes, but I don't think it is civil fraud, which is the difference. And like matt-r noted (excellent post BTW matt-r) who would bring the charges?

It sounds like it's not illegal as such. Only if you declare the full amount as a tax deduction is it (arguably) illegal. The company, if it wanted to be prudent, could simply not declare those wages as deductible.

The tax deduction point is an interesting one; in the UK, the general rule is that deductible expenses must be incurred "wholly and exclusively" for the purposes of the business. An inflated salary to a family member (including the $200k pa for sweeping the floors!) might well be in jeopardy. However, in practice, the UK Revenue authorities rarely try to second-guess that sort of deduction. A more common tactic would be to instead attribute the salary to the family member who is actually doing the work, often a senior director (and say that the payment is really in respect of THAT person's hard work, and therefore forms part of THAT person's taxable income). The company gets to keep its deduction, but the family doesn't get to take advantage of the tax allowances and low-rate personal tax thresholds of spouses, children, nephews etc...

[TriangleMan]

The tax deduction point is an interesting one; in the UK, the general rule is that deductible expenses must be incurred "wholly and exclusively" for the purposes of the business.
I believe a similar tax structure exists in Canada. I recall physicians with incorporated practices could pay the wife to do the bookkeeping, and it's a reasonable form of income splitting, but accountants were careful to advise about what the adequate wage should be for doing so. I assume Canadian tax authorities monitored such wage declarations and expense deductions for feasibility.

I've moved on to working in countries with no income or corporate taxes, so I've lost touch a bit with these issues. :)

[matt-r]

Animus, I can't help but feel you're trying to crack a walnut with a thermonuclear device.

A completely free market will lead to some companies doing things which are detrimental to society as a whole. So it's just as well that people have noticed this and put in place measures to deal with a lot of these concerns. We have pollution laws. We have employment protection laws. We have competition laws to try to curb monopoly power. I could go on - there is so much to talk about!

You may disagree with how far these laws go. Hell, I often disagree with how far these laws go! I think there are many incremental changes to these laws which would make the world a better place. That is the battle ground for contemporary politics - lots of people have different views on the content of these laws.

Your proposals seem to be aimed at virtually cutting the profit motive out of the economy. Unfortunately, that's what makes the whole economy tick! How the current system works is that laws are used to change what is profitable. If a business' aim is to make a profit, but you don't want them to pollute, you make it unprofitable for them to pollute by introducing environmental laws which will impose significant fines in the event that there is an environmental disaster. To deal with the waste which is a NECESSARY product of a lot of businesses, but which in the interests of society you want to keep to a minimum, you introduce landfill taxes.

There are problems with the system, no doubt about it, but it's not as though no one's noticed, or that no one's trying to come up with solutions.

Greenhouse gases are a significant issue at the moment. There's no shortage of people out there with ideas regarding how to deal with this. Join the debate.

As for the gap between rich and poor, there are all sorts of things that can be done, although no one's found an easy answer. Many countries are doing a better job than others; look to their example.

I would also strongly recommend a book called The Blank Slate by Stephen Pinker. It won't tell you a huge amount about business but it will tell you a lot about human motivations and dispel a few myths. Some of your posts suggest you might have faith in a doctrine called "The Noble Savage". Alas, there's no such thing.

[Geek Goddess]

Why do you think the injustice you faced as a child (poverty) is a valid justification for the injustice you wish to attain (excessive wealth)? Wanting to attain wealth is an injustice? The world is not a zero-sum gain. Teek becoming wealthy doesn't mean that someone, somewhere, has to do with less.

Why do you want to retire at 50? why not? Why not work very hard and put money away so that you can do other things that may not pay as well, or pay anything? Travel? Teach adult literacy classes? Volunteer at the hospital? Sleep late and read the paper until noon (although, I have found people that work hard enough to retire young aren't capable of doing 'nothing' - they go find other great things to do)



Firstly, I must address why you think taking risk should mean you deserve a reward. If I go into a casino, play roulette and put my life savings on No. 2, most people would say I'm an idiot. Certainly no one would say I deserved my winnings if the ball happened to land in No. 2. I don't know about you, but I'd prefer a economic environment where extreme risk takers are not in control of the destiny of thousands of peoples' livelihoods. She didn't say she deserved rewards. She says that if she works very hard, she has the POTENTIAL to reap great rewards. She might also fall flat on her face and end up as a bag lady. There is no random luck in it, as there is in gambling, but there is the need to recognize opportunity and act on that opportunity. People who don't know how to recognize opportunities always accuse those who do of 'being lucky.'

Secondly, you (and Teek) seem to think you are working exceptionally hard for the huge rewards you desire. IIRC, the most dangerous job in the world is crab fishing in Alaska. The men who do that job risk their lives. I don't believe they become (or expect or think they deserve to become) multi-millionaires. Of course, they choose that occupation, knowing in advance that they likely have no possibility of being multi-millionaires. It's a choice.

A little more down-to-earth could be the stress and workload of junior doctors. Do you think you work as hard as them?
I think you over-estimate the risk you are taking for the rewards you think that risk deserves. No, she doesn't. She is not risking her life.

Thirdly, who said anything about 100% of income being seized by the government? The CEO could choose to re-invest the money in the company. All a salary cap would stop is individuals getting rich. Why are you so jealous of people who are able to earn huge salaries, if they are doing it legally and ethically, and creating jobs all the while?

In addition I would get rid of the stock market and the public ownership of companies. My own company just went public with one of our divisions, and is selling stock. We hope to make the new stockholders have more money by increasing the value of their stock. We will use the money raised by the issuance of stock to create new projects and do things that will generate cash flow and employ more people.

When reading a book about the Russian Revolution, written by Richard Pipes (a noted expert on the subject, as well as on Lenin, Trotsky, Stalin), a passage stuck in my mind which discussed the backgrounds of Lenin and others who formulated the philosophy. I am paraphrasing, but the gist was that Lenin et al were men, intellectuals, who greatly desired the trappings of wealth but had no idea how to go about generating wealth.

The word 'greed' has been bandied about here quite a bit. What a pejorative term. The word is used as if it is somehow evil, and that wanting success and financial reward, as well as the lifestyle and material goods they can bring, is also bad. Do I want to be wealthy? Yes. Why? I would like to be secure, to provide for my family, to enjoy the benefits of my labor. Do some people work much physically harder than me for much less than I earn? You betcha. Do some people work longer hours? Of course. Am I *lucky* because I am doing well? Only if luck means that I happened to be born with some genes that allowed me to grasp the intricacies of calculus and physics and writing. OK, I am lucky. Only if luck means that my ex suggested I take a couple of engineering classes instead of majoring in journalism. OK, I was lucky to run into him at a friend's house 32 years ago. Lucky that my parents were uneducated and lower middle class? Well, lucky that I wasn't handed my education on a platter, and had to work myself through school without loans, grants, checks from parents, or anything else but my own two hands and my wit, so I learned to work hard.

Am I greedy? If greed means wanting to earn money, yes. There is no sin in being poor, but it is no great honor, either. Money can't buy happiness, but it can keep a lot of misery at the door. I plan to be a millionaire before I retire (or, at least quit working for money), and I work very hard at it. Maybe there is a bit of luck involved, but I believe mostly I have learned to recognize opportunity and figure out ways that I can provide a service that someone else wants. Last week, I heard my boss tell his 22-year-old something that bears repeating. His son just got a degree in political science, but failed to plan on what his next step will be. For instance, he failed to take a LRE to get into law school. He chose poly-sci because it was interesting to him, not because it was lucrative, but now he is working at jobs that would not have required any degree whatsoever. His dad said "You need to find something to do that is both rare and difficult. When you find something that is rare, you will be in demand. If it is difficult, there aren't many other people doing it." I realized that is what I am doing. I do something difficult, and not many other people can/will do it. I make very good money doing it. Is that greed? Maybe. Is it evil? Of course not.

[BlackCat]

Again I suggest you read Fast Food Nation. One of the chapters talks about the food, more specifically the meat industry. There are basically three companies that control the entire food market. As a result they get to set the prices for cattle, chickens and so forth. If a rancher doesn't like their prices they can speak out about it, but at that point they are blackballed and they go bankrupt because they have cattle no one will buy. And yes these companies have been caught meeting in the past to set prices. Despite being found out they were only fined $1000 or something utterly rediculous.
All right, all right, nobody's addressed this. I read Fast Food Nation (7 years ago). I wasn't the skeptic then that I am today, but even then, the book failed to impress me.

If you want a shock piece, this is your book. It tells you pretty much what you want to hear: companies are corrupt, food is fatty and disgusting, and the people who work in the supply chain are poor pawns who can't do any better because the companies keep them down (or something like that).

What really bothered me though, was how many anecdotes are in the book, and the lack of any verifiable data. IIRC, there was no appendix with references, so I couldn't even look up where the author got his information. I have no idea if the anecdotes he told were true. How do I know that the author didn't just find what he wanted, found a few people who supported that, and disregarded everything else that didn't fit?

As for the particular anecdote that you posted, where's the evidence? You can't use the book to support it, I want another more objective study. Surely the author is not the only person looking at the industry? Others must have found the same thing he did, right?

[Ohmer]

But at the same time you have not shown how your system creates any improvements. Your assertion that the extra retained profits would go to higher wages, lower prices and improved product quality has so far been little but wishful thinking, you have not been able to demonstrate that these extra profits will go to the areas you think they will go to.

Thank you TriangleMan, you get it. I have provided a real world example of the head of a non-profit organization making stupid/unethical decisions with $12 million of his organizations money. He did not use it to raise our salaries or improve the environment or make our products better.
If that is not a counter-example I don't know what is.

[Geek Goddess]

Thank you TriangleMan, you get it. I have provided a real world example of the head of a non-profit organization making stupid/unethical decisions with $12 million of his organizations money. He did not use it to raise our salaries or improve the environment or make our products better.
If that is not a counter-example I don't know what is.

Non-profits are required to use their money to further the goals of the non-profit, and to use the money they haven't yet spent in a fiscally responsible manner. If the non-profit had $12 million in cash over what their budget required for doing whatever they do, they would be required to invest it in some way, not just let it sit in a bank or give it away. Stupid investments do happen. Markets fall.

A very large nonprofit I was associated with was required under the terms of its charter (or whatever to organizing document is called), to spend at least 10%, minimum, of its assets each year, in ways that were set out in the charter. The initial grant was made by a childless couple who had made a great deal of money developing an industry.

Overhead, such as salaries and expenses, were not counted as part of the 10%. They can spend more, but can not spend less than 10%. The directors were extremely adept businessmen, and invested the funds of the group wisely. Although there were times when the value dropped significantly, such as during the Depression, during the past 70 years of the foundation's existence, their net value has increased so much that the 10% has equated to many millions more dollars than it did in 1937. Through investing, primarily in the stock market, the amount that the foundation distributes each year is about $25 million, to areas in health and human resources, education, arts and humanities. If not for the investments, the foundation would have run out of money decades ago.

Someone at the above-mentioned non-profit made a bad investment decision, and probably the entire board, or contracted experts, should make those decisions, but in and of itself, it was not *wrong*

[tkingdoll]

Geek, it's not even worth the effort trying to address Ivor's bizarre logic, although thanks for wading in. I'd given up - this is someone who claims that doctors are better than me because they are not motivated by money, but some ivory tower ethical drive to help the human race, then claims that my surgeon, because he chooses to do half his work in the lucrative private sector, is the cause of the problems in the NHS. As both of those things can't be true, I just gave up on all of his points.

To add to your post in the general sense, though, I will borrow a quote from Gertrude Stein that sums up my attitude to the whole 'evil capitalist thing':

"I've been rich and I've been poor. Rich is better."

Of course, hubby and I are not what I'd call rich yet, but compared to how poor I've been, life is exceptionally good. I would say anyone who grew up in poverty would be motivated by a desire for them and their kids never to be there again. That other people are in poverty is not a reason not to run my marketing business. My conscience is happy with the work I do for local poverty and homelessness charities and the pro bono work my business does for skeptic organisations. But Ivor's already made his mind up, I feel ;)

[Ohmer]

Someone at the above-mentioned non-profit made a bad investment decision, and probably the entire board, or contracted experts, should make those decisions, but in and of itself, it was not *wrong*

You are correct. I should clarify that the investment was made without board approval. It was a breach of policy and he resigned. The loan was made to a company on the verge of bankruptcy. It was a huge risk that he should not have taken. He deliberately circumvented the checks that are supposed to stop such things from happening. It was a combination of bad judgment and un-ethical behavior.

It's not my intention to trash non-profits. There are good one and bad ones just like for profit companies. My point is that strict rules about profits do not necessarily lead to benevolent, ethical behavior as the OP suggests. Here are all the gory details:

http://www.wweek.com/story.php?story=4029

I'll admit I mis-remembered the amount. It was $10.5 million.

[TriangleMan]

I should clarify that the investment was made without board approval. It was a breach of policy and he resigned. The loan was made to a company on the verge of bankruptcy. It was a huge risk that he should not have taken. He deliberately circumvented the checks that are supposed to stop such things from happening.
Then you are correct, it was stupid (shaky investment decision) and unethical (circumventing the controls).

[Ivor the Engineer]

Geek, it's not even worth the effort trying to address Ivor's bizarre logic, although thanks for wading in. I'd given up - this is someone who claims that doctors are better than me because they are not motivated by money, but some ivory tower ethical drive to help the human race, then claims that my surgeon, because he chooses to do half his work in the lucrative private sector, is the cause of the problems in the NHS. As both of those things can't be true, I just gave up on all of his points.

To add to your post in the general sense, though, I will borrow a quote from Gertrude Stein that sums up my attitude to the whole 'evil capitalist thing':

"I've been rich and I've been poor. Rich is better."

Of course, hubby and I are not what I'd call rich yet, but compared to how poor I've been, life is exceptionally good. I would say anyone who grew up in poverty would be motivated by a desire for them and their kids never to be there again. That other people are in poverty is not a reason not to run my marketing business. My conscience is happy with the work I do for local poverty and homelessness charities and the pro bono work my business does for skeptic organisations. But Ivor's already made his mind up, I feel ;)

I don't think anyone is 'better' than you. I apologize for my bluntness and wish you and GG every success in your respective business ventures.

I have no problem with anybody being motivated by the desire not to be poor, or wanting to achieve financial security for their family. There's a big difference between that, though and being motivated to be rich and own lots of stuff.

[Geek Goddess]

I don't think anyone is 'better' than you. I apologize for my bluntness and wish you and GG every success in your respective business ventures. No problem!

I have no problem with anybody being motivated by the desire not to be poor, or wanting to achieve financial security for their family. There's a big difference between that, though and being motivated to be rich and own lots of stuff.
Why? What's wrong with being rich and owning lots of stuff?

[Ivor the Engineer]

Why? What's wrong with being rich and owning lots of stuff?

http://en.wikipedia.org/wiki/Economic_inequality

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

As for owning lots of stuff - stuff takes energy and resources to make and often uses lots of energy to operate. It is not sustainable.

[Geek Goddess]

http://en.wikipedia.org/wiki/Economic_inequality

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

As for owning lots of stuff - stuff takes energy and resources to make and often uses lots of energy to operate. It is not sustainable.

Those articles are about income inequality. Completely different issue. My question was: What is wrong with being rich? And before you say that if someone becomes more rich, someone else must become more poor, I might point out that the absolute wealth in the world is much higher than it was 50, 100, 1000 years ago. Wealth is not a finite thing, it is generated by creating value out of things that had low or no previous value: railroad ties out of iron ore, food from soil and water, computer chips out of sand. It is not a zero sum game. My aunt was a social/case worker for the Salvation Army for 22 years. Even the poorest people (in the US) generally have a roof over their head, electricity, access to clean water. She said, based on 22 years of surveys and home visits, nearly every one had a television. The poorest people in this country are better off than 90% of the world was 500 years ago. That means we need to work to continue to bring up the overall level of all people, not knock on those who have done well.

What defines "lots of stuff"? Is a TV too much? It's not necessary to live. What about two televisions? I have more than one pair of shoes - is that too much? I have more than one computer. Does that make me greedy and evil?

Twenty years ago, some 'rich' people were willing to spend $1000 in 1988 dollars on a 'mobile' phone that was as large as a briefcase. Their expenditure allowed the phone companies some capital to further develop more phones, and now I (and I suspect YOU) have a cell phone that cost under $100 in 2007 dollars, that will fit in the back pocket of my jeans. If those 'rich' individuals had completely shunned the technology, we likely would not have the communication network we now have. Someone had to be willing to risk capital, and someone had to be willing to fork over big bucks for unproven technology.

Twenty years ago, I came up with $400 for a programmable calculator to help me in school. It was a hardship. The company that made those, now puts even better technology into a calculator one-fourth the size for one-tenth the cost. Who all has benefitted from low-cost computer chips?

[Wolfman]

http://en.wikipedia.org/wiki/Economic_inequality

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

As for owning lots of stuff - stuff takes energy and resources to make and often uses lots of energy to operate. It is not sustainable.
Ivor,

My main problem with your arguments is that by far the majority are based on one model -- the United States. It ignores the fact that not every country that is a capitalist economy is "like the United States"...quite a few are very different, in fact.

And please, get a bit of perspective. "Capitalism" is hardly to blame for "economic inequality"; in fact, human history is a history of inequality, whether it be economic, political, social, or any other form. The fact that these problems all existed before capitalism means A) that capitalism is not "the cause", and B) that removing capitalism would not create equality.

Again, I will point out to you the the countries that have the greatest equality -- be it economic, social, political, or whatever -- are, without exception, countries that have some form of a capitalistic system (usually modified with some degree of socialism).

The way I see it, there are two approaches to this. One is to acknowledge 'greed' as a basic human motivator, and find a way to harness that greed so that it can also benefit society. The other way is to strive for some utopian (or autocratic) society where 'greed' is somehow removed as a factor...and I just don't believe that's going to happen.

Let me put this from the perspective of someone who does run a non-profit organization. Yeah, there are all sorts of people out there who "don't care much about money", and are good, noble, generous people.

The thing is, these good, noble, and generous people also have little or nothing in the way of money or resources to donate to our organization.

Then there are the rich, greedy businessmen who have more money than they know what to do with...yet who, due to tax deductions, or other reasons, nevertheless donate significant amounts of money to help us out. Over 90% of the donations that we receive are corporate donations from the very people that you would seek to get rid of. And those donations do more to promote economic equality than any other program.

The only system I am aware of that has really made a significant effort to create "economic equality" is Communism; and it did accomplish its goal, to a certain degree. It made everybody equally poor. But every country in the world that has tried that system either has become richer by rejecting that system, or else has kept that system and continued to suffer in poverty.

I like dealing in practical realities. I see countries in this world that have already achieved higher standards of economic, social, and political equality than at any previous time in human history!!! And that is one hell of an accomplishment.

So, if we're really looking for answers, why not look at those countries, and use them as a model? Instead of grossly inaccurate generalizations, combined with theoretical constructs, most of which have been tried before in one form or another, and failed every time.

[Ivor the Engineer]

What defines "lots of stuff"? Is a TV too much? It's not necessary to live. What about two televisions? I have more than one pair of shoes - is that too much? I have more than one computer. Does that make me greedy and evil?

That would depend on the energy requirements of those appliances and how you use them. For example, if the two computers you have are Cray supercomputers that need a substation to power them and you only use them for word processing and browsing the internet, then that would be unethical.

As for shoes - I’d never try to get between a woman and her shoes - I’m not that brave:D

Everyone feels greed for something. It’s just that now we’re constantly being told by the rich that it’s ok to buy all this stuff that we don’t really need.

I don’t think you are evil.

Twenty years ago, some 'rich' people were willing to spend $1000 in 1988 dollars on a 'mobile' phone that was as large as a briefcase. Their expenditure allowed the phone companies some capital to further develop more phones, and now I (and I suspect YOU) have a cell phone that cost under $100 in 2007 dollars, that will fit in the back pocket of my jeans. If those 'rich' individuals had completely shunned the technology, we likely would not have the communication network we now have. Someone had to be willing to risk capital, and someone had to be willing to fork over big bucks for unproven technology.

Well that depends how big your jeans are.

:duck:

(I own a second hand Nokia 8310).

Twenty years ago, I came up with $400 for a programmable calculator to help me in school. It was a hardship. The company that made those, now puts even better technology into a calculator one-fourth the size for one-tenth the cost. Who all has benefitted from low-cost computer chips?

Not the poor Chinese women who scrape the bits off the broken and old PCB’s over a furnace, breathing in poisonous fumes;)

[Wolfman]

Not the poor Chinese women who scrape the bits off the broken and old PCB’s over a furnace, breathing in poisonous fumes;)
Here is one of the great problems with your arguments, Ivan. Your insistence on focusing on one side of the argument, while entirely ignoring the other side.

Yes, there are companies that have exploited Chinese labor, for example. Used sweat shops, exposed workers to unsafe/dangerous working conditions, etc. And I share your sentiments in condemning such things.

But please remember -- before capitalism ever made an appearance, the same things were happening...in fact, it was worse. The exploitation of some sort of "underclass" has been the common theme at every point in history. Once again, "capitalism" cannot be blamed as the cause of this.

You seem to have difficulties understanding the concept of "cause and effect". You list various "effects" (such as economic inequality, unsafe work conditions, exploitation of labor, etc.), and state that the "cause" is capitalism. However, every single effect that you refer to existed before capitalistic systems developed, and in many cases were worse than they are now. You take a very narrow view, looking only at a very short period of history, and considering only those countries and examples that happen to fit your argument.

And you ignore everything else.

Now, here are some other facts for you in regards to "economic equality". China abolished capitalism, and strove for a system of complete economic quality, when the Communists took over the government here. Their policies led to the starvation of millions upon millions of people. Their policies led to the regression of their country's economy. Their policies led to an economic system that was disastrous, where everyone was "equal" only in terms that everyone shared the same degree of poverty.

The introduction of a "capitalistic" system has turned the country around. Companies that previously were drains on the Chinese economic system are now profitable, and continue to China's economic growth. Standards of living for all Chinese are increasing at a steady rate. It is true that there is getting to be a greater level of economic inequality between those in the city, and those in the country, but it is important to note that both groups are improving.

Investment and development by these "evil" multinational companies that you refer to has largely fueled China's growth. Who offers the best jobs in China? The foreign companies. Who offers the highest pay? The foreign companies? Who offers the safest working conditions, the highest focus on personal development, etc.? The foreign companies.

Yes, there are foreign companies that have been caught using child labor, having dangerous factories, etc. But those are the exception to the rule. In China, almost all young Chinese want to work in the foreign companies, because everyone knows they are better. Higher pay, better opportunities, better training, etc.

I do not see anywhere in your arguments that you've taken these factors into account.

Your form of argument is simple. Just keep listing all the "bad" things, and ignore or discount anything else. And of course, it is easy for you to maintain an artificial image of the superiority of your worldview if you use such a strategy -- the only problem is, your worldview has no basis in actual, pragmatic reality.

If you're going to continue with your arguments, you'll have to demonstrate how whatever system you propose offers greater benefits than the systems already in place. Not just one single system like that in the U.S., but the systems in other countries that have much higher levels of equality, yet still rely on a modified capitalistic model.

[YoPopa]

That would depend on the energy requirements of those appliances and how you use them. For example, if the two computers you have are Cray supercomputers that need a substation to power them and you only use them for word processing and browsing the internet, then that would be unethical.

Ivor, I am curious, do you personally need a bureaucrat to tell you what it is you really need and don't need? Or is it that you wish to be the bureaucrat who tells everyone else what they need or don't need?


Yo

[Ivor the Engineer]

Ivor, I am curious, do you personally need a bureaucrat to tell you what it is you really need and don't need? Or is it that you wish to be the bureaucrat who tells everyone else what they need or don't need?


Yo

Neither. It could be done through education, just as adverts and celebrity endorsements currently "educate" people that it's ok to drive around in cars that have ridiculously low mpg figures.

[YoPopa]

Neither. It could be done through education, just as adverts and celebrity endorsements currently "educate" people that it's ok to drive around in cars that have ridiculously low mpg figures.
Thanks for the quick reply but I don't think you really answered my question. The question was not meant to ask how people find out what they need, the question is who makes the call?

I'll try to re-phrase to fit with your answer.

#1. Who is in charge of establishing the curriculum for this "education"? This gets back to the question is it bureaucrats making the decision or some elite dictator?

#2. Will compliance be voluntary?

#3. Who is going to pay for this new education?

[Geek Goddess]

That would depend on the energy requirements of those appliances and how you use them. For example, if the two computers you have are Cray supercomputers that need a substation to power them and you only use them for word processing and browsing the internet, then that would be unethical. Unethical? Of course not. Unbelievably stupid on my part? Yep. I keep my thermostat high in the summer just so I can reduce my power bill.

Not the poor Chinese women who scrape the bits off the broken and old PCB’s over a furnace, breathing in poisonous fumes;)
I don't know that there is a poor Chinese woman scrape the bits off over a furnace. If so, what was she doing before she was scraping the bits off? Toiling 12 hours per day in a rice field for enough calories to let her...toil 12 hours in a rice field? Most of the people of the world, for most of history, had an existence that pretty much consisted of finding enough food to eat and a safe place to sleep at night. If there economy is robust, she can leave that job and go to one that controls these noxious fumes. The factory owner, having made a profit and wanting to expand business, will invest more safety features in order to attract the better workers.

Wolfman speaks wisely.

[Ivor the Engineer]

Thanks for the quick reply but I don't think you really answered my question. The question was not meant to ask how people find out what they need, the question is who makes the call?

I'll try to re-phrase to fit with your answer.

#1. Who is in charge of establishing the curriculum for this "education"? This gets back to the question is it bureaucrats making the decision or some elite dictator?

The same public officials who do now; elected politicians, civil servants, QANGO’s, etc. The real problem is how to give them independence from the heads of huge corporations and their associated lobby groups.

#2. Will compliance be voluntary?

That depends on what the issue is. For example, another way to get more efficient cars would be to insist all new cars sold meet minimum efficiency standards.

#3. Who is going to pay for this new education?

The same people who ultimately already do: you and me.

[tkingdoll]

Ivor - what's the label on the hat you are wearing in your avatar? How did you get to the mountain you are photographed in front of? Which company made the camera the picture was taken with, and how did it get on to the internet? What are you typing your posts on this forum on? What did you have to eat last night? Drink? Do you have a child? If yes, does it wear disposable nappies or do you wash hemp nappies you weaved yourself?

And so on.

[Ivor the Engineer]

Unethical? Of course not. Unbelievably stupid on my part? Yep. I keep my thermostat high in the summer just so I can reduce my power bill.

So owning resources that use huge amounts of energy to make and operate and are far in excess of your requirements is not unethical?

I don't know that there is a poor Chinese woman scrape the bits off over a furnace. If so, what was she doing before she was scraping the bits off? Toiling 12 hours per day in a rice field for enough calories to let her...toil 12 hours in a rice field? Most of the people of the world, for most of history, had an existence that pretty much consisted of finding enough food to eat and a safe place to sleep at night. If there economy is robust, she can leave that job and go to one that controls these noxious fumes. The factory owner, having made a profit and wanting to expand business, will invest more safety features in order to attract the better workers.

Wolfman speaks wisely.

The Chinese woman does exist and we could discuss all day if her lot has actually improved.

However, how could any factory exist where health and safety was better, if businesspeople look for the maximum return from the recycled materials of their products? What incentive do they have to make less money to give her a better life?

The only ways that might happen are if the supply of unskilled labour becomes restricted, or her government steps in and forces businesspeople to improve (i.e. spend more on) her working conditions.

[Complexity]

Animus - By what right should you or anyone else tell me with whom I can do business and how much I may be paid?

libertarian here

[Complexity]

I would ask that people please read my posts through a few times so as to understand it all. I do not appreciate having to repeat myself over and over because someone else is unwilling to take the time to read carefully.

Oh, Animus... I understand you - your position is not difficult to understand.

I do utterly disagree with you. I think that what you, Ivor, and some others advocate is evil.

[Wolfman]

The Chinese woman does exist and we could discuss all day if her lot has actually improved.

However, how could any factory exist where health and safety was better, if businesspeople look for the maximum return from the recycled materials of their products? What incentive do they have to make less money to give her a better life?

The only ways that might happen are if the supply of unskilled labour becomes restricted, or her government steps in and forces businesspeople to improve (i.e. spend more on) her working conditions.
It is quite revealing how you consistently refuse to respond to me -- perhaps because I keep referring to actual, verifiable facts, while your arguments work best if you keep things entirely in the realm of theory where you don't need to provide any substantiation for your own claims.

In regards to "that Chinese woman", I'd ask what exactly your actual experience of Chinese workers is? I can state mine quite clearly -- fourteen years in China, including setting up an NGO in one of the poorest regions of China, where some people don't even have electricity or running water, and serving on the Board of Directors of the Canada-China Business Council, promoting economic trade between Canada and China. So whether we are talking about poverty, or business, or whatever else, I feel quite confident in speaking from practical experience and knowledge of the actual situation.

Your experience of "that Chinese woman" is...what?

Your arguments are dreadfully repetitive. Here's how it goes, basically.

1) I point out real world, verifiable examples of how a modified capitalistic system works very well to promote economic and social equality.

2) You ignore that entirely, and instead use "what if" arguments that, so far as I can see, have no real life substantiation at all.

3) You throw in examples of abuses committed under capitalistic systems, all while ignoring that exactly the same abuses have existed under every other economic model ever created, and in most cases were worst; and while ignoring the fact that the examples you raise are not true of all capitalistic systems.

4) I repeat the real world examples of how this works effectively, how it has promoted economic equality, etc., and we return to the beginning of the cycle again.

If we were looking for a purely theoretical model that had no requirement to be actually applied in real life, I'm sure you'd do great at winning the debate.

However, the majority of us here are arguing based on the real world. That's why we do such annoying things as referring to real world examples.

You lost a ton of my respect when you made the quip about people not wanting the billions of dollars that Gates and Buffet have donated. To quote:
Has it ever crossed your mind that people don't want charity
This, more than anything else you've said, demonstrates how grossly disconnected you are from a little thing I like to call the real world. Because I can guarantee you 100% that AIDS victims who are dying while waiting for a cure, or inner-city kids who are desperate for a better education, are incredibly grateful for the funds that these two men have made available to help them.

And you sure as **** don't have any right to be speaking for them, or putting opinions in their mouths, any more than you do to speak about Chinese people that I doubt you've ever met or had anything to do with.

[Ivor the Engineer]

Ivor - what's the label on the hat you are wearing in your avatar?

TOG24.

How did you get to the mountain you are photographed in front of?

Inghams Skiing holiday in the Dolomites (Selva-Val-Gardena). Very beautiful region.

Which company made the camera the picture was taken with, and how did it get on to the internet?

That would be my brother-in-law's camera, which IIRC, is made by Sony. It got on the internet because it was better than the photo of me on my communist party membership card:D

What are you typing your posts on this forum on?

Acer TravelMate 800 laptop today, Dell PC at work and my home PVR PC in the evenings.

What did you have to eat last night?

A vegetarian risotto.

Drink?

A Glass of Merlot.

Do you have a child?

Not to my knowledge.

If yes, does it wear disposable nappies or do you wash hemp nappies you weaved yourself?

LOL!:D

And so on.

And next week I’m flying to Vegas, then onto Niagara Falls, Boston and New York.

Are you claiming that all these things would be impossible if individuals could not expect to have personal fortunes measured in millions or billions?

[Geek Goddess]

Today, at lunch, i started reading a book called Old Twentieth by Joe Haldeman, published in 2005. He's a science fiction writer, winner of the Hugo and Nebula awards. I've read only 11 pages, but the quote below, which I have typed out, reminded me of this conversation. The premise of the book is a time in the future. Everyone is immortal, because a couple hundred years previously someone had invented a pill that makes you immortal. It was outrageously expensive, such that not even one person in a thousand could afford it, and it started a world war which led to a situation in which 97% of the population died. Like I said, I'm only on page 11.

"But the world was even less rational then than now, and it became common knowledge, among the ignorant, that the pill cost only pennies to manufacture - so the obscenely rich were becoming even richer, withholding life from ordinary people. Populist politicians and fundamentalist religious leaders made that a cause celebre, and they had access to all the tools of the science that were not called 'mind control' only because, in advertising, it sold products for industry and policies for government.

The paradox is that if there actually had been a conspiracy among the rich, and they had agreed to keep (the drug) secret, war might have been averted. Keep the stuff underground until the per-unit cost came down to where most people could afford it. But the price couldn't come down until a lot of people bought it at the obscenely high rate, financing the company's research and development and production facilities. So it was heavily advertised and propagandized, until there wasn't one person on the planet who didn't know that millionaires and movie stars and grafting politicians could all buy a pill that gave them life everlasting.

It was only a small step from there to "they're withholding it from us" and another small step to "let's go get it." Even though when war broke out, there wasn't enough to treat one person in a thousand."

Hmm. Reminds me again of medicines and operations, MRIs and CT-scans, Henry Ford's automobiles and the Wright Brother's airplanes, televisions and mass-produced clothings (until the mid 1800s only the extremely wealthy had more than one pair of clothes, and people who started as menders of used clothing - aka 'ragpickers' - grew business that became some of our largest clothiers). my contact lenses and my orthodontic braces that were once only the rich could have. My friend's artificial knees and her partner's dialysis machines. All more or less affordable, or at least POSSIBLE, due to the profit motive. It sucks.

[Ivor the Engineer]

It is quite revealing how you consistently refuse to respond to me -- perhaps because I keep referring to actual, verifiable facts, while your arguments work best if you keep things entirely in the realm of theory where you don't need to provide any substantiation for your own claims.

In regards to "that Chinese woman", I'd ask what exactly your actual experience of Chinese workers is? I can state mine quite clearly -- fourteen years in China, including setting up an NGO in one of the poorest regions of China, where some people don't even have electricity or running water, and serving on the Board of Directors of the Canada-China Business Council, promoting economic trade between Canada and China. So whether we are talking about poverty, or business, or whatever else, I feel quite confident in speaking from practical experience and knowledge of the actual situation.

Your experience of "that Chinese woman" is...what?

Your arguments are dreadfully repetitive. Here's how it goes, basically.

1) I point out real world, verifiable examples of how a modified capitalistic system works very well to promote economic and social equality.

2) You ignore that entirely, and instead use "what if" arguments that, so far as I can see, have no real life substantiation at all.

3) You throw in examples of abuses committed under capitalistic systems, all while ignoring that exactly the same abuses have existed under every other economic model ever created, and in most cases were worst; and while ignoring the fact that the examples you raise are not true of all capitalistic systems.

4) I repeat the real world examples of how this works effectively, how it has promoted economic equality, etc., and we return to the beginning of the cycle again.

If we were looking for a purely theoretical model that had no requirement to be actually applied in real life, I'm sure you'd do great at winning the debate.

However, the majority of us here are arguing based on the real world. That's why we do such annoying things as referring to real world examples.

Here's (http://www.crra.com/ewaste/ttrash2/ttrash2/#hazardous) a photo of her, about 2/5th's the way down the page.

You lost a ton of my respect when you made the quip about people not wanting the billions of dollars that Gates and Buffet have donated. To quote:

This, more than anything else you've said, demonstrates how grossly disconnected you are from a little thing I like to call the real world. Because I can guarantee you 100% that AIDS victims who are dying while waiting for a cure, or inner-city kids who are desperate for a better education, are incredibly grateful for the funds that these two men have made available to help them.

And you sure as **** don't have any right to be speaking for them, or putting opinions in their mouths, any more than you do to speak about Chinese people that I doubt you've ever met or had anything to do with.

I think you have misunderstood my point, which was most people want a chance to be able to survive without charity, not that they are ungrateful for it.

I'm not anti-capitalism. I presented some ideas about how I thought some of the flaws (excessive wealth and power inequality) that it does not address (or makes worse) could be improved.

You think the ideas I put forward are unrealistic. Do you think excessive personal wealth and power is a problem that needs to be fixed? If so, what alterations would you suggest to address them?

[Ivor the Engineer]

Today, at lunch, i started reading a book called Old Twentieth by Joe Haldeman, published in 2005. He's a science fiction writer, winner of the Hugo and Nebula awards. I've read only 11 pages, but the quote below, which I have typed out, reminded me of this conversation. The premise of the book is a time in the future. Everyone is immortal, because a couple hundred years previously someone had invented a pill that makes you immortal. It was outrageously expensive, such that not even one person in a thousand could afford it, and it started a world war which led to a situation in which 97% of the population died. Like I said, I'm only on page 11.

"But the world was even less rational then than now, and it became common knowledge, among the ignorant, that the pill cost only pennies to manufacture - so the obscenely rich were becoming even richer, withholding life from ordinary people. Populist politicians and fundamentalist religious leaders made that a cause celebre, and they had access to all the tools of the science that were not called 'mind control' only because, in advertising, it sold products for industry and policies for government.

The paradox is that if there actually had been a conspiracy among the rich, and they had agreed to keep (the drug) secret, war might have been averted. Keep the stuff underground until the per-unit cost came down to where most people could afford it. But the price couldn't come down until a lot of people bought it at the obscenely high rate, financing the company's research and development and production facilities. So it was heavily advertised and propagandized, until there wasn't one person on the planet who didn't know that millionaires and movie stars and grafting politicians could all buy a pill that gave them life everlasting.

It was only a small step from there to "they're withholding it from us" and another small step to "let's go get it." Even though when war broke out, there wasn't enough to treat one person in a thousand."

Hmm. Reminds me again of medicines and operations, MRIs and CT-scans, Henry Ford's automobiles and the Wright Brother's airplanes, televisions and mass-produced clothings (until the mid 1800s only the extremely wealthy had more than one pair of clothes, and people who started as menders of used clothing - aka 'ragpickers' - grew business that became some of our largest clothiers). my contact lenses and my orthodontic braces that were once only the rich could have. My friend's artificial knees and her partner's dialysis machines. All more or less affordable, or at least POSSIBLE, due to the profit motive. It sucks.

So you are saying that people would not have been motivated or been able to create affordable medical and other technology without the possibility of have personal fortunes of millions or billions of pounds.

Ever heard of the Free Software Foundation (http://www.fsf.org/)?

[Geek Goddess]

So you are saying that people would not have been motivated or been able to create affordable medical and other technology without the possibility of have personal fortunes of millions or billions of pounds.

Ever heard of the Free Software Foundation (http://www.fsf.org/)?

Or merely tens of thousands of pounds. Or dollars. There are very very few billionaires.

Yes, I have heard of them.

What do you consider 'excess' wealth? In absolute figures, not "ten times as much as the lowest paid worker" but actually cash in the bank, or annual salary. How much does Ivor think is sufficient but not excess? I can look up the conversion factors and I am generally familiar with the cost of living in the UK, so pounds will work.

[Wolfman]

Here's (http://www.crra.com/ewaste/ttrash2/ttrash2/#hazardous) a photo of her, about 2/5th's the way down the page.
Thank you very much for finally making some sort of response...how about responding to all the other comments I made regarding Chinese workers? And again -- what is your experience or knowledge of Chinese people or China, outside of things you read on the internet?
I think you have misunderstood my point, which was most people want a chance to be able to survive without charity, not that they are ungrateful for it.
And again -- try asking any AIDS victim how they feel about that particular comment. You make gross generalizations with nothing to support it, beyond your own personal opinion.
I'm not anti-capitalism. I presented some ideas about how I thought some of the flaws (excessive wealth and power inequality) that it does not address (or makes worse) could be improved.

You think the ideas I put forward are unrealistic. Do you think excessive personal wealth and power is a problem that needs to be fixed? If so, what alterations would you suggest to address them?
Do I think there are problems in the world that need to be addressed? Yes, certainly.

But dude...as I've pointed out time and time and time and time and time again, "too much money" and "too much power" are not the "fault" of capitalism. My god, man, study a little history, would you?!?!

Every culture, every country, every economic system, every political system in the world that has reached an industrialized level of development has these exact same problems. How can you blame "capitalism" for a problem that clearly is a function of all societies?

Again, you need to understand the concept of "cause and effect".

If you are going to demonstrate that "A" is caused by "B", then you must prove two things: 1) In the presence of "B", "A" always happens, and 2) in the absence of "B", "A" doesn't happen, or at least happens to a significantly lesser degree. So, let's examine that.

1) In the presence of "capitalism", does excessive wealth and power always happen? As I've argued above, not necessarily -- the countries with the highest standards of living, and the greatest levels of equality, are all based on capitalist models.

2) In the absence of "capitalism", do we have lower levels of excessive wealth or power? Absolutely not. Even the most cursory study of human history, or the present day, will reveal that pretty much every economic system has exactly the same problems (the exception being those countries that are so impoverished that there is no money to be hoarded...but even in those countries there are still those with excessive power).

You want to argue for "equality", and that is great. I'm all for equality, too.

The problem I have is that while you argue for "equality" and "freedom", you propose strategies in which the only way they could be implemented would be through non-democratic imposition by an autocratic government.

You posit all your arguments on "what if" statements, and consistently reach conclusions based on your own personal perspectives, naively assuming that the rest of the world agrees with you. Yes, the rest of the world wants greater equality and freedom; but very few of them want their government telling them how much money they can make, or penalizing them for success.

[The_Animus]

http://www.wider.unu.edu/research/2006-2007/2006-2007-1/wider-wdhw-launch-5-12-2006/wider-wdhw-press-release-5-12-2006.htm

The richest 2% of adults in the world own more than half of global household wealth according to a path-breaking study released today by the Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER).


The most comprehensive study of personal wealth ever undertaken also reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.

[TriangleMan]

http://www.wider.unu.edu/research/2006-2007/2006-2007-1/wider-wdhw-launch-5-12-2006/wider-wdhw-press-release-5-12-2006.htm


The research finds that assets of $2,200 per adult placed a household in the top half of the world wealth distribution in the year 2000. To be among the richest 10% of adults in the world required $61,000 in assets, and more than $500,000 was needed to belong to the richest 1%, a group which — with 37 million members worldwide — is far from an exclusive club.
So where are you at Animus? Top 10%?

[latent aaaack]

Where is Ivor blaming capitalism for inequality compared to other systems? Offering a possible improvement to capitalism doesn't equal condemning it or agreeing with other kinds of systems he doesn't even mention.

I would like to know as well why the idea of an earnings cut off past a certain level of wealth wouldn't work, because I don't see why people necessarily could need more than $100,000-500,000 a year. I agree that the point where it gets complicated would be the lack of capital from which market development and innovation can feed off of, as in the cell phone example and how charitable donations would be made by the wealthy if they weren't allowed to earn more than a certain level. However the capital would still be generated while the earners are making $100-500k a year, it would just be used for something other than personal purchases. So the question would be how to make them give the extra wealth to charities which is where it starts getting closer to too autocratic.

[Ivor the Engineer]

Or merely tens of thousands of pounds. Or dollars. There are very very few billionaires.

Yes, I have heard of them.

What do you consider 'excess' wealth? In absolute figures, not "ten times as much as the lowest paid worker" but actually cash in the bank, or annual salary. How much does Ivor think is sufficient but not excess? I can look up the conversion factors and I am generally familiar with the cost of living in the UK, so pounds will work.

I can’t put an absolute figure on it; it depends on the economy you live in. The way I would work it out would be to look at the median (not mean, as this is affected by outliers) income in an economy and then set a personal income cap of N times above it, based on something like standard deviation, but avoiding sensitivity to outliers.

The way the cap would work could be in a number of different ways, not all of them having the individual loosing control of the excess money, merely being limited in what they can use it for. For example, the excess money would not be able to be used to bankroll politicians’ election campaigns.

[Ivor the Engineer]

Thank you very much for finally making some sort of response...how about responding to all the other comments I made regarding Chinese workers? And again -- what is your experience or knowledge of Chinese people or China, outside of things you read on the internet?

What does my knowledge of Chinese workers have to do with this discussion?

And again -- try asking any AIDS victim how they feel about that particular comment. You make gross generalizations with nothing to support it, beyond your own personal opinion.

But shouldn’t we give the AIDS victims the full story first? The one about how the governments in the West have supported terrible regimes and dictators in their countries so that the companies and the economy in the west can grow?

Or don’t you believe war, poverty and lack of education are important factors in the explosion of HIV in places such as Africa?

Do I think there are problems in the world that need to be addressed? Yes, certainly.

But dude...as I've pointed out time and time and time and time and time again, "too much money" and "too much power" are not the "fault" of capitalism. My god, man, study a little history, would you?!?!

Every culture, every country, every economic system, every political system in the world that has reached an industrialized level of development has these exact same problems. How can you blame "capitalism" for a problem that clearly is a function of all societies?

Again, you need to understand the concept of "cause and effect".

If you are going to demonstrate that "A" is caused by "B", then you must prove two things: 1) In the presence of "B", "A" always happens, and 2) in the absence of "B", "A" doesn't happen, or at least happens to a significantly lesser degree. So, let's examine that.

1) In the presence of "capitalism", does excessive wealth and power always happen? As I've argued above, not necessarily -- the countries with the highest standards of living, and the greatest levels of equality, are all based on capitalist models.

2) In the absence of "capitalism", do we have lower levels of excessive wealth or power? Absolutely not. Even the most cursory study of human history, or the present day, will reveal that pretty much every economic system has exactly the same problems (the exception being those countries that are so impoverished that there is no money to be hoarded...but even in those countries there are still those with excessive power).

You want to argue for "equality", and that is great. I'm all for equality, too.

The problem I have is that while you argue for "equality" and "freedom", you propose strategies in which the only way they could be implemented would be through non-democratic imposition by an autocratic government.

You posit all your arguments on "what if" statements, and consistently reach conclusions based on your own personal perspectives, naively assuming that the rest of the world agrees with you. Yes, the rest of the world wants greater equality and freedom; but very few of them want their government telling them how much money they can make, or penalizing them for success.

Canada is a “model” society? Really?

http://policyalternatives.ca/index.cfm?act=news&call=419&do=article&pA=BB736455

"Our federal and provincial governments," says Kerstetter, "would do well to rethink their policies--particularly their tax policies--that have conferred huge benefits on Canada's wealthiest people: the ones who need government aid the least. These favoured few have been further enriched at the expense of the great masses of Canadians who have been able to scrape together only a tiny portion of the country's personal wealth."

[YoPopa]

So the question would be how to make them give the extra wealth to charities which is where it starts getting closer to too autocratic.
The question is whether making someone do a particular thing with their money is moral. The answer is that it is not, charity or no charity (as if being a charity was some indication that a group was doing needed or "good" work).

People are only free when they own themselves and the products of their labor, ie. their property. To the degree that someone else decides what is OK to do with your property you have become their slave.

[YoPopa]

But shouldn’t we give the AIDS victims the full story first? The one about how the governments in the West have supported terrible regimes and dictators in their countries so that the companies and the economy in the west can grow?You are confusing government systems with economic systems. There is nothing about a democracy that guarantees that its' economic system will be capitalistic or that all its' policies will support capitalism.

[Geek Goddess]

I can’t put an absolute figure on it; it depends on the economy you live in. The way I would work it out would be to look at the median (not mean, as this is affected by outliers) income in an economy and then set a personal income cap of N times above it, based on something like standard deviation, but avoiding sensitivity to outliers. Are you avoiding my question, or did you not understand it? I asked what YOU, Ivor the Engineer, personally, would consider excess wealth. Ok, in YOUR economy. Where you live, in your country, in 2007, what is YOUR definition of too much money, or what you call excess wealth. An actual number. I am curious.

The way the cap would work could be in a number of different ways, not all of them having the individual loosing control of the excess money, merely being limited in what they can use it for. For example, the excess money would not be able to be used to bankroll politicians’ election campaigns.

So, if I understand correctly, whatever this excess amount is (which you are going to provide for me by way of example), anything above that that someone is allowed to earn, she would be restricted on the way in which she could spend it? I would be interested in hearing how you might overcome the disincentives to grow a business, develop new products, and hire more people, knowing that once you reach a certain level of wealth, all the incremental work you might do, would not bring you an additional reward.

This is not a rhetorical question. In your current job, would you personally be willing to work about 50% more hours , if you could double your output of useful work? I am assuming you work for wages, and do not own your own business. Would you do this for no additional salary, this doubling of your output? Thats a yes or no.

Second, if the particular project you are working on turned out to be a failure, not through a lack of your engineering skills, but because the customer wanted something different and it had to be redone, or the market changed so that the work you did was not longer a valuable commodity, would you personally be willing to take a hit on your salary or wages to make up for the lost? If you make X, and the market for X fails, or the government things X is unsafe, would you be willing to continue to do your work if you know had to the the same job for half your salary? You share the downside as well as the rewards, is what I am asking. Yes or no?

So where are you at Animus? Top 10%?

I guess I am in the top 10%. I might even be in the top 5%. At one time I was close to the 50% line.

[balrog666]

The Chinese woman does exist and we could discuss all day if her lot has actually improved.

Why not simply ask her?

[Ivor the Engineer]

Are you avoiding my question, or did you not understand it? I asked what YOU, Ivor the Engineer, personally, would consider excess wealth. Ok, in YOUR economy. Where you live, in your country, in 2007, what is YOUR definition of too much money, or what you call excess wealth. An actual number. I am curious.

As far as income (as opposed to wealth), I’ve calculated from ONS (http://www.statistics.gov.uk/downloads/theme_social/Social_Trends36/Social_Trends_36.pdf) data the mean disposable income per week is £408 with a standard deviation of about £270. Using a cap of 3 standard deviations above the mean, allowing for tax and NI, this would put it at about £100,000 per year. This could be larger since I haven’t taken into account mortgage, food and energy costs. For sake of argument, say somewhere between £100,000 and £200,000 per year.

So, if I understand correctly, whatever this excess amount is (which you are going to provide for me by way of example), anything above that that someone is allowed to earn, she would be restricted on the way in which she could spend it?

Yes, though they could still have control over it.

I would be interested in hearing how you might overcome the disincentives to grow a business, develop new products, and hire more people, knowing that once you reach a certain level of wealth, all the incremental work you might do, would not bring you an additional reward.

Why would there be no additional reward? If you employ more people and pay them more then your income goes up too.

This is not a rhetorical question. In your current job, would you personally be willing to work about 50% more hours , if you could double your output of useful work? I am assuming you work for wages, and do not own your own business. Would you do this for no additional salary, this doubling of your output? Thats a yes or no.

Short-term yes, long-term no.

Second, if the particular project you are working on turned out to be a failure, not through a lack of your engineering skills, but because the customer wanted something different and it had to be redone, or the market changed so that the work you did was not longer a valuable commodity, would you personally be willing to take a hit on your salary or wages to make up for the lost?

It would depend on the size of the hit, what could be done to mitigate it, how long it would last, etc.

If you make X, and the market for X fails, or the government things X is unsafe, would you be willing to continue to do your work if you know had to the the same job for half your salary? You share the downside as well as the rewards, is what I am asking. Yes or no?

Yes, with the caveat above.

[Ivor the Engineer]

You are confusing government systems with economic systems. There is nothing about a democracy that guarantees that its' economic system will be capitalistic or that all its' policies will support capitalism.

No, I'm not. Think weapons sales to Saudi Arabia, support of corrupt regimes in Africa and elsewhere to secure access to natural resources, etc.

Decisions taken by government to support the interests of big business.

[Ivor the Engineer]

The question is whether making someone do a particular thing with their money is moral. The answer is that it is not, charity or no charity (as if being a charity was some indication that a group was doing needed or "good" work).

People are only free when they own themselves and the products of their labor, ie. their property. To the degree that someone else decides what is OK to do with your property you have become their slave.

Huh? There are many restrictions on what you can spend your money on already. Do I need to list a few?

[latent aaaack]

The question is whether making someone do a particular thing with their money is moral. The answer is that it is not, charity or no charity (as if being a charity was some indication that a group was doing needed or "good" work).

People are only free when they own themselves and the products of their labor, ie. their property. To the degree that someone else decides what is OK to do with your property you have become their slave.

I'm not 20% a slave because I'm forced to give 20% of my earnings to the government because that still leaves me with more than enough money for myself and I recognize the need for some of my income to go to the public good. Except in the case of taxes it's not even necessarily disposable income, it may be income I badly need but I have to give it to the government anyway. I don't see how you can call a mild extension of that applied to the most disposable income of the rich 'slavery.'

The biggest problem I see is that investment in developing new areas like cell phones in the 80s would have to change drastically if investors didn't reap the rewards and such development was done by the state or organizations that didn't directly benefit and that might involve too many of the drawbacks of communism.

[YoPopa]

No, I'm not. Think weapons sales to Saudi Arabia, support of corrupt regimes in Africa and elsewhere to secure access to natural resources, etc.

Decisions taken by government to support the interests of big business.
You are still confusing government systems with economic systems. Going to war has nothing to do with capitalism. If your conspiracy theory has merit then it is the result of a corrupt relationship between the big business & the government.

[Ivor the Engineer]

You are still confusing government systems with economic systems. Going to war has nothing to do with capitalism. If your conspiracy theory has merit then it is the result of a corrupt relationship between the big business & the government.

Going to war? What does that have do with selling weapons or supporting corrupt regimes so big companies can gain access to countries’ natural resources?

It is not a theory, it has happened time and time again in my lifetime. The last one was British Aerospace giving kickbacks to a member of the Saudi royal family.

http://www.corpwatch.org/article.php?id=9008

It sounds like the stuff of pulp fiction: The UK's largest armaments producer running a £20 million ($33.4 million) slush fund to finance prostitutes, gambling trips, yachts, sports cars, and more for its most important clients the Saudi royal family and their intermediaries, greasing the wheels of the largest business deal in UK history. These are the accusations made last month by a former employee of weapons giant BAE Systems. And evidence has surfaced that members of the British government were aware of the bribe arrangement, but looked the other way.

[YoPopa]

Going to war? What does that have do with selling weapons or supporting corrupt regimes so big companies can gain access to countries’ natural resources?

It is not a theory, it has happened time and time again in my lifetime. The last one was British Aerospace giving kickbacks to a member of the Saudi royal family.

http://www.corpwatch.org/article.php?id=9008
Sounds like a few people broke some laws? Enforce the laws you have. This is no reason to restrict the freedoms of people who have broken no laws.

[YoPopa]

I'm not 20% a slave because I'm forced to give 20% of my earnings to the government because that still leaves me with more than enough money for myself and I recognize the need for some of my income to go to the public good. Except in the case of taxes it's not even necessarily disposable income, it may be income I badly need but I have to give it to the government anyway. I don't see how you can call a mild extension of that applied to the most disposable income of the rich 'slavery.'

You are are not a 20% slave because only your income is being taxed at 20%. Do you have any property? Any family heirlooms, a car, a collection of fossils, retirement savings, etc. Add up the total value of all your property, tax that at your current rate and get back to me about how you feel. Most people would feel like a frog that has been thrown into boiling water instead of one that has been in the water while the temp. was slowly raised.

Let's imagine that you are a movie star or a national league athlete and you have a contract that says you're going to earn $5,000,000.00 this year. Ivor wants to take about $4,600,000.00. How would you feel about that?

BTW..I understand and agree with the need of governments to raise funds through taxes in order to do the things that only governments can do.

[Wolfman]

But shouldn’t we give the AIDS victims the full story first? The one about how the governments in the West have supported terrible regimes and dictators in their countries so that the companies and the economy in the west can grow?
Dude, I want to introduce you to what may be a novel concept.

REALITY.

It exists in a place called "THE REAL WORLD".

I'd strongly suggest that you acquaint yourself with it.

Now, let's say I do exactly what you said. I tell AIDS victims about all the terrible things ever done by their government.

I then tell those people, "Okay, we have this guy named Bill Gates who has donated billions of dollars to find treatments and cures for the diseases that are currently killing you. He is not, and has never been, a member of government, and in fact has spoken up publicly against some of his government's foreign policies."

"Do you want his money? And if we find a cure, do you want to use that cure?"

"Or, would you prefer to stay laying in your bed, dying slowly, and tell Bill Gates to take that money and shove it up his rectal cavity?"

Now, in this place I like to call THE REAL WORLD, almost every single one of them would opt for accepting that money, almost every single one of them would agree 100% with using that money to find a cure, almost every single one of them would accept any medications which came as a result of that research.

Again, your assertion that "people don't want charity" or otherwise do not want or value the donations made by people like Bill Gates and Warren Buffet may be valid somewhere within whatever world you live in. But not in THE REAL WORLD.

Who is the one who is being cold-hearted and calloused here? Who is the one demonstrating a complete disregard for individuals in order to support his own political agenda?

The people who are donating billions of dollars that are really helping the people who most need help?

Or the guy sitting in his easy chair, with a comfortable job, arguing that these contributions have no value, that the people giving them should be condemned, and that the people who would be the recipients of this aid should be denied it because of your personal world view?

[Ivor the Engineer]

Dude, I want to introduce you to what may be a novel concept.

REALITY.

It exists in a place called "THE REAL WORLD".

I'd strongly suggest that you acquaint yourself with it.

Now, let's say I do exactly what you said. I tell AIDS victims about all the terrible things ever done by their government.

I then tell those people, "Okay, we have this guy named Bill Gates who has donated billions of dollars to find treatments and cures for the diseases that are currently killing you. He is not, and has never been, a member of government, and in fact has spoken up publicly against some of his government's foreign policies."

"Do you want his money? And if we find a cure, do you want to use that cure?"

"Or, would you prefer to stay laying in your bed, dying slowly, and tell Bill Gates to take that money and shove it up his rectal cavity?"

Now, in this place I like to call THE REAL WORLD, almost every single one of them would opt for accepting that money, almost every single one of them would agree 100% with using that money to find a cure, almost every single one of them would accept any medications which came as a result of that research.

Again, your assertion that "people don't want charity" or otherwise do not want or value the donations made by people like Bill Gates and Warren Buffet may be valid somewhere within whatever world you live in. But not in THE REAL WORLD.

Who is the one who is being cold-hearted and calloused here? Who is the one demonstrating a complete disregard for individuals in order to support his own political agenda?

The people who are donating billions of dollars that are really helping the people who most need help?

Or the guy sitting in his easy chair, with a comfortable job, arguing that these contributions have no value, that the people giving them should be condemned, and that the people who would be the recipients of this aid should be denied it because of your personal world view?

Please quote where I said that I "condemned" either Bill Gates or Warren Buffet for their charity work.

Please quote where I said that people on the receiving end of their donations to charity do not appreciate it.

Please quote where I said that people on the receiving end of their donations should be denied because of "my personal world view?"

See, I do live in the real world, and despite explicitly explaining to you what I meant by my comment, you continue to misrepresent what I have said, or now just appear to be making stuff up and attribute it to me.

I do not have a political agenda; I have an opinion which I think is remarkably close to your own, but you can't or don't want to see the large overlap in our points of view, just the differences.

[Lucifuge Rofocale]

I'm libertarian but for the sake of argument I'd like to propose a system just as a tought experiment to see if the motives of Yvor are just envy.

Let's work from the other end....the poor people. Let's assume they need US$ 15,000 a year to account for their basic needs. Now cut all government programs to help poor people. Then set taxes in a way that everybody would make at least 15,000 a year and everybody making more than that would have the same tax percentage cut. (there are rough ends that makes this impossible, like people who wouldn't want to work at all and families who have child after child to get the 15,000, but this is just a tought experiment). Do not put any upper limit on salaries and profits, in fact encourage them to be as high as possible to raise more taxes.
Wouldn't that be better than the proposed systems? What would be the evil in this system?

[balrog666]

I'm libertarian but for the sake of argument I'd like to propose a system just as a tought experiment to see if the motives of Yvor are just envy.

Let's work from the other end....the poor people. Let's assume they need US$ 15,000 a year to account for their basic needs. Now cut all government programs to help poor people. Then set taxes in a way that everybody would make at least 15,000 a year and everybody making more than that would have the same tax percentage cut. (there are rough ends that makes this impossible, like people who wouldn't want to work at all and families who have child after child to get the 15,000, but this is just a tought experiment). Do not put any upper limit on salaries and profits, in fact encourage them to be as high as possible to raise more taxes.
Wouldn't that be better than the proposed systems? What would be the evil in this system?

You're allowing people to spend their own after-tax money any way they want and not forcing people to spend their money stupidly at the point of a gun?

Well, all the bleeding-heart liberals would hate it and lobby to move the percentage up every year while increasing the dole at the same time.

[The_Animus]

Let's imagine that you are a movie star or a national league athlete and you have a contract that says you're going to earn $5,000,000.00 this year. Ivor wants to take about $4,600,000.00. How would you feel about that?

Sounds pretty good to me. It's not like you need more than the $400,000 you are getting.

[Geek Goddess]

Sounds pretty good to me. It's not like you need more than the $400,000 you are getting.

If someone thinks your talents are worth enough to pay you $5 MM to start with, that person or company must expect a return on their investment. If I spend $5 MM to hire an actor for a movie role, it means that I expect the movie to make enough money to pay for the salary. That would mean that I, as a producer, think that actor has earned that. Or baseball player.

Or paying a petroleum engineer that graduated three months ago, $80.000. They don't know anything, but the company must believe that they are going to get a return on their investment. They are not spending money for the fun of it, they are analyzing their needs.

We can put aside the question of whether or not actors or baseball players are *worth* anything, as that is a different topic. In any market, the price of something is what the buyer is willing to pay and the seller willing to sell. If a baseball team owner is willing to pay $5 MM for a particular service, then who are YOU to regulate what he can pay, or what someone can sell, their services for?

Why on earth would I bust my butt for a goal, and have someone decide I don't "need" what I have worked for? If I knew my earnings would be capped, or confiscated, at a certain level no matter how much harder I worked, I would lose incentive.

Methinks these people who cry the most about 'excess wealth' or who say 'you don't *need* more than X" are ones who are unable to figure out how to generate wealth. It smacks of resentment, class envy, and jealousy.

[Ivor the Engineer]

I'm libertarian but for the sake of argument I'd like to propose a system just as a tought experiment to see if the motives of Yvor are just envy.

Let's work from the other end....the poor people. Let's assume they need US$ 15,000 a year to account for their basic needs. Now cut all government programs to help poor people. Then set taxes in a way that everybody would make at least 15,000 a year and everybody making more than that would have the same tax percentage cut. (there are rough ends that makes this impossible, like people who wouldn't want to work at all and families who have child after child to get the 15,000, but this is just a tought experiment). Do not put any upper limit on salaries and profits, in fact encourage them to be as high as possible to raise more taxes.
Wouldn't that be better than the proposed systems? What would be the evil in this system?

Actually, I think the low income end is a more interesting and difficult problem to solve than the high income one.

As you have said, just giving people money will lead to a significant proportion not working at all. One possible idea would be to give the long-term unemployed (without a valid reason, such as illness) non-transferable vouchers for their needs, rather than money.

[Ivor the Engineer]

Methinks these people who cry the most about 'excess wealth' or who say 'you don't *need* more than X" are ones who are unable to figure out how to generate wealth. It smacks of resentment, class envy, and jealousy.

That must be it! What other motives could I possibly have?

[tkingdoll]

Actually, I think the low income end is a more interesting and difficult problem to solve than the high income one.

As you have said, just giving people money will lead to a significant proportion not working at all. One possible idea would be to give the long-term unemployed (without a valid reason, such as illness) non-transferable vouchers for their needs, rather than money.

Thereby creating an entirely new underclass of people who are not only living close to the poverty line, but are looked down on by the rest of society. Building more class barriers? Just what the UK needs, brilliant.

Your idea seems to include zero understanding of human nature. Giving people vouchers for their needs to stop them spending them on things you deem unnecessary, is to rob people of their dignity and basic right to personal choice and a free life.

This very thing has been trialled in the UK with asylum seekers. It's a pretty disgusting way to treat human beings if you ask me.

Please define, to the letter, what the "needs" are that you are providing vouchers for. Just food, drink and amenities? Including fast food? Excluding edible-but-non-nutritious items? What about a TV licence? Is that a basic need? I assume under your regime, smoking is not provided for? Nightclub entry fees? Day out in Blackpool?

Oh, but it's OK, if I'm lucky enough to be ill, I can spend the money on what I like! No incentive for faking illness there, then.

[Ivor the Engineer]

Thereby creating an entirely new underclass of people who are not only living close to the poverty line, but are looked down on by the rest of society. Building more class barriers? Just what the UK needs, brilliant.

Your idea seems to include zero understanding of human nature. Giving people vouchers for their needs to stop them spending them on things you deem unnecessary, is to rob people of their dignity and basic right to personal choice and a free life.

This very thing has been trialled in the UK with asylum seekers. It's a pretty disgusting way to treat human beings if you ask me.

Please define, to the letter, what the "needs" are that you are providing vouchers for. Just food, drink and amenities? Including fast food? Excluding edible-but-non-nutritious items? What about a TV licence? Is that a basic need? I assume under your regime, smoking is not provided for? Nightclub entry fees? Day out in Blackpool?

Oh, but it's OK, if I'm lucky enough to be ill, I can spend the money on what I like! No incentive for faking illness there, then.

You appear to have missed the long-term caveat I put in. No one would start out being given vouchers, they would be given money. But for those that decided a job was not for them, then I have no problem limiting their choice of what to spend my and your tax on.

I would limit it to food, drink and amenities. I would also provide free education and training for anyone who wanted it.

What excuse does someone have, other than chronic illness, for being unemployed long-term?

[tkingdoll]

You appear to have missed the long-term caveat I put in. No one would start out being given vouchers, they would be given money. But for those that decided a job was not for them, then I have no problem limiting their choice of what to spend my and your tax on.

I would limit it to food, drink and amenities. I would also provide free education and training for anyone who wanted it.

What excuse does someone have, other than chronic illness, for being unemployed long-term?

Yay, the Ivor Regime is going to guarantee a suitable, skill-matched job for everyone in the country within travelling distance of their home, for life! If they choose not to take it, then they get vouchers for baked beans!

But I can spend all of my vouchers on vodka if I want to, right?

Where do I sign?

[jimlintott]

I'll buy your vouchers for fifty cents on the dollar so you can buy meth and I can get groceries for half price.

Yay.

[YoPopa]

Yay, the Ivor Regime is going to guarantee a suitable, skill-matched job for everyone in the country within travelling distance of their home, for life! If they choose not to take it, then they get vouchers for baked beans!Yep, in Ivortopia no one will be allowed to fail. It's not charity mind you, no one wants charity, it's vouchers, a totally different thing.

[Ivor the Engineer]

Yay, the Ivor Regime is going to guarantee a suitable, skill-matched job for everyone in the country within travelling distance of their home, for life! If they choose not to take it, then they get vouchers for baked beans!

Huh? What part of the expression "long-term unemployed" do you not understand?

But I can spend all of my vouchers on vodka if I want to, right?

Where do I sign?

No, the vouchers would not pay for alcohol. They would pay for contraception though.

So Teek, how would you tackle the long-term, healthy but unemployed? You have plenty of criticism to heap on my idea but don't seem to be presenting any of your own.

[Ivor the Engineer]

I'll buy your vouchers for fifty cents on the dollar so you can buy meth and I can get groceries for half price.

Yay.

That would not work. The vouchers would be non-transferable. You have provide ID to use them.

[tkingdoll]

Huh? What part of the expression "long-term unemployed" do you not understand?



No, the vouchers would not pay for alcohol. They would pay for contraception though.

So Teek, how would you tackle the long-term, healthy but unemployed? You have plenty of criticism to heap on my idea but don't seem to be presenting any of your own.

I don't have a problem with the long-term, healthy unemployed, that's why. They are not damaging the economy, we live in a fantastically rich country. Deliberately unemployed, lazy people (I assume those are the stereotype you are railing against) are in the minority.

I'm amused that you think there can't be any other reasons for being long-term unemployed though. Let's imagine you worked in a coal mine from age 16, for 30 years, and live in the mining town which was previously entirely supported by the economy based on local employment, almost all of which was in the coal mine. You dig coal. That's it. Then the pit closes. Now what?

You can replace coal mine with call centre if you want a more current equivalent.

Have you been unemployed under the current system? You do realise you can't actually spend 20 years on the dole, right?

[Ivor the Engineer]

Yep, in Ivortopia no one will be allowed to fail. It's not charity mind you, no one wants charity, it's vouchers, a totally different thing.

In Ivortopia, fewer will be able to milk the system at the expense of everyone else. Those that wish not to pay their way can live a basic life with none of the luxuries paid for by other people.

[tkingdoll]

In Ivortopia, fewer will be able to milk the system at the expense of everyone else. Those that wish not to pay their way can live a basic life with none of the luxuries paid for by other people.

To do this you would have to guarantee an appropriate job for anyone who wants one.

[YoPopa]

I'll buy your vouchers for fifty cents on the dollar so you can buy meth and I can get groceries for half price.

Yay.
No Jim, you won't be able to do that because it will be set up like the food stamp program. :rolleyes:

[Ivor the Engineer]

I don't have a problem with the long-term, healthy unemployed, that's why. They are not damaging the economy, we live in a fantastically rich country. Deliberately unemployed, lazy people (I assume those are the stereotype you are railing against) are in the minority.

So my scheme would not affect many people then, would it? It would precisely target the people it is intended to motivate.

I'm amused that you think there can't be any other reasons for being long-term unemployed though. Let's imagine you worked in a coal mine from age 16, for 30 years, and live in the mining town which was previously entirely supported by the economy based on local employment, almost all of which was in the coal mine. You dig coal. That's it. Then the pit closes. Now what?

You can replace coal mine with call centre if you want a more current equivalent.

That is why I would provide free education and training. Long-term to me means 5-10 years with no employment in that period.

Have you been unemployed under the current system? You do realise you can't actually spend 20 years on the dole, right?

Oh, so what happens to people if they don't find work now then? Is it nicer than my idea?

BTW, I know somebody who has managed just this very thing, so clearly he knows something you don't.

[Ivor the Engineer]

To do this you would have to guarantee an appropriate job for anyone who wants one.

No, you would set the length of unemployment to such a ridiculously long period such that it would be nigh-on impossible to not find work in that period if you were trying.

[jimlintott]

That would not work. The vouchers would be non-transferable. You have provide ID to use them.

I'm sure that no one will ever figure out a way around that.

If you want to create jobs for people you have to create a business friendly environment. Maybe give bonuses to CEOs who create new jobs.

[YoPopa]

So my scheme would not affect many people then, would it? It would precisely target the people it is intended to motivate.
The problem with this welfare scheme as with all welfare (AKA charity) schemes is that it starts out targeting a relatively small number of "deserving poor" and in reality creates by its' very existence greater numbers of these poor. Why would anyone work for relatively low wages in any industry when they could have their basic needs met while going to school for free?

[Ivor the Engineer]

The problem with this welfare scheme as with all welfare (AKA charity) schemes is that it starts out targeting a relatively small number of "deserving poor" and in reality creates by its' very existence greater numbers of these poor.

Perhaps you're not familiar with the UK, but we have a much more generous system at present. My idea is a slight modification to provide a kick up the ass for those that refuse to work.

Why would anyone work for relatively low wages in any industry when they could have their basic needs met while going to school for free?

So what are you proposing? Workhouses?

[YoPopa]

Perhaps you're not familiar with the UK, but we have a much more generous system at present. My idea is a slight modification to provide a kick up the ass for those that refuse to work.
So what are you proposing? Workhouses?I am proposing that we dance with the lady what brung us. The lady is capitalism.

There is no reason to require anyone to work in a work house nor to cap the upper limit of rewards which they can acquire.

[tkingdoll]

So my scheme would not affect many people then, would it? It would precisely target the people it is intended to motivate.



That is why I would provide free education and training. Long-term to me means 5-10 years with no employment in that period.



Oh, so what happens to people if they don't find work now then? Is it nicer than my idea?

BTW, I know somebody who has managed just this very thing, so clearly he knows something you don't.

Yes, he knows how to play the system. Just like people will know how to play your system (which to me sounds equally complex as the existing one in terms of deciding entitlement, organising ID checks, etc). I seriously doubt he has very much money though.

You think that lazy people will just disappear under your system? No, they will find a way to fool it. By, for example, feigning illness. People do that now. You know how easy it is to get signed off work with 'stress'?

Under your system, how are artists funded? Private sponsorship, or state?

[Ivor the Engineer]

Yes, he knows how to play the system. Just like people will know how to play your system (which to me sounds equally complex as the existing one in terms of deciding entitlement, organising ID checks, etc). I seriously doubt he has very much money though.

The thing is, he knows that he has wasted his life.

You think that lazy people will just disappear under your system? No, they will find a way to fool it. By, for example, feigning illness. People do that now. You know how easy it is to get signed off work with 'stress'?

For 5 years!?

Under your system, how are artists funded? Private sponsorship, or state?

I don't understand your question. Could you elaborate, please?

[balrog666]

That would not work. The vouchers would be non-transferable. You have provide ID to use them.

So what?
So you swap them for cash with your own ID.
Just like people do today with food stamps.
And then buy whatever booze, meth, hookers, and cigarettes you want.

How can you really think that no one will ever want to make an extra buck anywhere, anytime? If they were all that stupid^H^H^H^H^H^H "moral" at the beginning, you wouldn't need any asinine social-control programs.

[Ivor the Engineer]

So what?
So you swap them for cash with your own ID.
Just like people do today with food stamps.
And then buy whatever booze, meth, hookers, and cigarettes you want.

How can you really think that no one will ever want to make an extra buck anywhere, anytime? If they were all that stupid^H^H^H^H^H^H "moral" at the beginning, you wouldn't need any asinine social-control programs.

We're getting biometric ID cards in the UK soon. The vouchers would have no value unless the individual could prove their identity.

[Hokulele]

Hmm, Ivor and Animus have described capping salaries, but it doesn't sound like they have touched on gift, capital gains or estate taxes. I wonder how that would work . . .

[Ivor the Engineer]

Hmm, Ivor and Animus have described capping salaries, but it doesn't sound like they have touched on gift, capital gains or estate taxes. I wonder how that would work . . .

Now you're talking about wealth as opposed to income.

My solution would be to limit the amount an individual can inherit.

[YoPopa]

We're getting biometric ID cards in the UK soon. The vouchers would have no value unless the individual could prove their identity.Proving your identity is not the issue with this type of fraud. Most small neighbor hood grocery or convenience stores know who it is they are dealing with. They are struggling to stay afloat in the increasingly hostile socialistic environment. Out of necessity they take the vouchers and give the patron whatever the patron wants. Or, in the case of the more honest stores, they give the patron food, patron takes food and trades it for whatever it is that the patron really wants. There is no way to ever stop this fraud. Layabouts have all the time in the world to figure out another dodge.

[YoPopa]

Does anyone else find it deliciously ironic that Ivor is now explaining needed reforms for Socialist programs and somehow we are to believe that this is part of the justification to hobble Capitalism? :confused:

[Lucifuge Rofocale]

Actually, I think the low income end is a more interesting and difficult problem to solve than the high income one.

As you have said, just giving people money will lead to a significant proportion not working at all. One possible idea would be to give the long-term unemployed (without a valid reason, such as illness) non-transferable vouchers for their needs, rather than money.

But the high income is not a problem for you, giving that the low income problem is solved?

[The_Animus]

Methinks these people who cry the most about 'excess wealth' or who say 'you don't *need* more than X" are ones who are unable to figure out how to generate wealth. It smacks of resentment, class envy, and jealousy.That's an interesting take. Your want of excess wealth far above what is even remotely needed smacks of greed.

greed (grēd)
n. An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth.



Please explain to me why you need more than $400,000 in a year. Not want. Need.

[Ivor the Engineer]

But the high income is not a problem for you, giving that the low income problem is solved?

You'll have to explain your idea further. Is it a minimum wage you're talking about?

There is still a problem with high income (or more precisely, wealth), since huge wealth provides large amounts of influence and power. E.g., it costs $1 billion to run to become president of the United States.

[Marquis de Carabas]

That's an interesting take. Your want of excess wealth far above what is even remotely needed smacks of greed.

greed (grēd)
n. An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth.

Please explain to me why you need more than $400,000 in a year. Not want. Need.
I see you conveniently ignore the or deserves part of the definition. Someone may not need more than $400k/year, but if they do work that others value at greater rate than $400k/yr, why should they not accept it?

[YoPopa]

Please explain to me why you need more than $400,000 in a year. Not want. Need.

Please explain why need is so important a criteria for you. Does it have something to do with "To each according to his need."? How did that work out?

Anyone in the world today could meet their basic needs with a poverty level income for the US. Why don't we just limit wealth to poverty level and share the rest of the wealth with the rest of the world? :rolleyes:

[Complexity]

Ivor and other socialist critters:

Do you think you have a right to my intellectual property?

Do you think that I should be expected to surrender it to the state for 'the greater good'?

[Ivor the Engineer]

Does anyone else find it deliciously ironic that Ivor is now explaining needed reforms for Socialist programs and somehow we are to believe that this is part of the justification to hobble Capitalism? :confused:

Whatever gave you that idea? I thought I was answering a question put by Lucifuge Rofocale about giving people $15,000 per year for doing nothing, but from his latest reply that is not what he was after.:confused:

[tkingdoll]

I don't understand your question. Could you elaborate, please?

It's not a difficult one. Under your system, does taxpayer money fund the creation of art, arts festivals, etc?

[Lucifuge Rofocale]

Again:

The idea is to be sure that everybody has at least $15,000.

If somebody does not make that much then the goverment gives she the difference, even is she isn't working.

To accomplish that, you set a tax on every salary and capital gain in excess of $15,000.

The tax percentage is fixed for all, let's say 20%.

Also, you cut all government programs to help the poors, since there will not be more poors.

I said that this program would be almost impossible to do, but other plans here ("All bussinesses convert to non-profit and salary plans") are much more difficult than this.



You'll have to explain your idea further. Is it a minimum wage you're talking about?

There is still a problem with high income (or more precisely, wealth), since huge wealth provides large amounts of influence and power. E.g., it costs $1 billion to run to become president of the United States.

[Ivor the Engineer]

It's not a difficult one. Under your system, does taxpayer money fund the creation of art, arts festivals, etc?

Under my system the only art would be iron statues of me gazing into the distance:D

Seriously, I see no reason why both private and public funding could not be used for art. I would expect that if public money was used that it would be accessible to all.

However, I sense a trap!:eek:

[tkingdoll]

Under my system the only art would be iron statues of me gazing into the distance:D

Seriously, I see no reason why both private and public funding could not be used for art. I would expect that if public money was used that it would be accessible to all.

However, I sense a trap!:eek:

A trap? Heaven forfend! :D

OK, next question. How will you control the price of art in the private market? That goes for new art and existing art.

[Ivor the Engineer]

Again:

The idea is to be sure that everybody has at least $15,000.

If somebody does not make that much then the goverment gives she the difference, even is she isn't working.

To accomplish that, you set a tax on every salary and capital gain in excess of $15,000.

The tax percentage is fixed for all, let's say 20%.

Also, you cut all government programs to help the poors, since there will not be more poors.

I said that this program would be almost impossible to do, but other plans here ("All bussinesses convert to non-profit and salary plans") are much more difficult than this.

Ok, I understand now. It's an income support plus program, the plus being it doesn't matter how little you do, you always receive a minimum of $15,000 per year.

How is that different, except perhaps in magnitude, to what many welfare states (such as in the UK) provide at the moment?

The main problem with it is it does nothing to tackle the inequality in power that exists between the super rich and everyone else.

There was a report on BBC radio 4 the other morning that stated that CEO's typically receive renumeration 67 (yes, sixty-seven) times their average employees pay.

[Ivor the Engineer]

A trap? Heaven forfend! :D

OK, next question. How will you control the price of art in the private market? That goes for new art and existing art.

Why would I have to control the price? No one earns any more than £200,000 per year in Ivortopia. The price of new art would reflect that.

As for existing art, it gets re-valued based on what people can afford to pay for it. I.e. the owner most likely looses money because no one is prepared to pay millions of pounds for some squiggles of paint on a canvas.

[Lucifuge Rofocale]

Now I get it. The problem is not the poors, but the envy a great benefit generates, no matter if the poors don't exist.
Now, given that there are no poors, no children starving, no children in forced labor, no eldreds dying on the streets, no single working mothers crying for not being able to feed their children and so on, what's the problem with succesfull people making money?



Ok, I understand now. It's an income support plus program, the plus being it doesn't matter how little you do, you always receive a minimum of $15,000 per year.

How is that different, except perhaps in magnitude, to what many welfare states (such as in the UK) provide at the moment?

The main problem with it is it does nothing to tackle the inequality in power that exists between the super rich and everyone else.

There was a report on BBC radio 4 the other morning that stated that CEO's typically receive renumeration 67 (yes, sixty-seven) times their average employees pay.

[Complexity]

Ivor - I'm still waiting for answers to my questions...

[ZirconBlue]

Under my system the only art would be iron statues of me gazing into the distance:D

Seriously, I see no reason why both private and public funding could not be used for art. I would expect that if public money was used that it would be accessible to all.

However, I sense a trap!:eek:

Sorry for joining the thread late, but I have read the whole thread.

Ivor: I strongly disagree with your position. (Mostly because I don't believe there really is such a thing as "excessive" or "too much" wealth, as long as it was attained legally and ethically.) But I really respect that you answered Teek's question, even though you "sensed a trap". There are others on this forum who rarely answer a straight question at all, let alone when they think they might be being led into a "trap".

[tkingdoll]

Sorry for joining the thread late, but I have read the whole thread.

Ivor: I strongly disagree with your position. (Mostly because I don't believe there really is such a thing as "excessive" or "too much" wealth, as long as it was attained legally and ethically.) But I really respect that you answered Teek's question, even though you "sensed a trap". There are others on this forum who rarely answer a straight question at all, let alone when they think they might be being led into a "trap".

I agree, it was a bold thing to do. And interestingly, there isn't particularly a trap, although it was sort of a leading question in that I wanted to get Ivor's opinion on the value of art, and figured this would be as good a way as any to demonstrate the sort of differences restricted incomes would create (between the status quo and the Ivoregime).

Having said that, unless I've read it horribly wrongly, I'm pretty sure Ivor is posting with as much a British sense of humour as I am. It is possible to have heated debates, even strong disagreements on a topic, and still banter. No-one here is a bad person.

But I'm not moving to Ivor Island any time soon...

[ZirconBlue]

No-one here is a bad person.


Speak for yourself! :p

[tkingdoll]

Speak for yourself! :p

Sorry, I mis-punctuated. I was referring to you as 'No-one', that's my pet name for you. As a warning to everyone else in the thread, it should have read:

No-one, here, is a bad person.

Carry on!

[ZirconBlue]

Sorry, I mis-punctuated. I was referring to you as 'No-one', that's my pet name for you. As a warning to everyone else in the thread, it should have read:

No-one, here, is a bad person.

Carry on!


Well played!

(Of course, you realize you're going to have to keep calling me "No-one" from now on?)

[Ivor the Engineer]

Ivor and other socialist critters:

Do you think you have a right to my intellectual property?

I think I have a right to your intellectual property if you give or sell it to me.

I.e., I get all the information in an unencrypted form that I can modify as I see fit without having to pay you again.

Do you think that I should be expected to surrender it to the state for 'the greater good'?

No, I think you deserve a fair reward for your contribution to society.

[Geek Goddess]

greedNow you're talking about wealth as opposed to income.

My solution would be to limit the amount an individual can inherit.

Hey, they did that in the USSR! More reason to live for today! Worked great. Supplied even more disincentive to work very very hard - you can't leave the fruits of your efforts to your offspring! Why improve your farm, if it's going to go to strangers? One of the reasons the farming productivity in old Russia was so very very low, compared to farmers in Europe, was that the strip system used in the peasant villages meant that the land was re-allocated every 10 years or so, according to family size. If you knew that your assigned plots were going to be gone in less than 10 years, there was no incentive to improve the soil with the applications of expensive (in terms of labor as much as cash) fertilizer. The only fertile pieces of land in the heavily farmed areas were the individual plots located adjacent to peasants' homes, which they knew they would be keeping forever and leaving to their children. This practice was continued into the Stalin-era collectivization. The peasants had to contribute certain amounts of time to the collective fields, but received their compensation in the form of grain or meat based on what the local authority determined they needed. Harder work did not get you more food. (There goes that 'greed' thing again). Machinery belonged to the collective, so there was little reason to take care of it. It wasn't YOUR machinery! The people starved. And if you were some *rich greedy* kulak, which was often defined as have one more horse than your neighbor, or having enough "excess" wealth to hire your neighbors to work your personal plot, you were rounded up and carted off, for exploitation and greed. This is all well documented.

If I can't leave my portfolio to my sons, I should spend it all now rather than have it confiscated by the government.

One of the reasons the Catholic Church finally dictated celibacy (after centuries of going back and forth on the issue) was to make sure than men entering the priesthood would leave all their worldly possessions to the Church instead of to their children. Poor women were not allowed to become nuns in an older time. The Church demanded a rather high dowry, so the regiment of nuns consisted largely of unmarriageable daughters of wealthy nobility.

That's an interesting take. Your want of excess wealth far above what is even remotely needed smacks of greed.

greed (grēd)
n. An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth.


Please explain to me why you need more than $400,000 in a year. Not want. Need. What means 'excessive'? I read 'excessive desire' to mean that it is an all-consuming desire, that it blocks out everything else. I agree, that is greed. My dogs are greedy for their food and will push each other out of the way to eat. My alcoholic uncle was greedy for his bourbon - getting it consumed his life. Working very hard for high rewards is not 'greed'.

No, I do not need $400K per year. However, if I am ever able to earn that much, it's not like I would spend every bit of it on Prada shoes. People who earn this type of money frequently have employees. Now, granted, those employees might be service providers such as a gardener and a housekeeper, but they do provide income to other people.

One of my very best friends received a $300K bonus one year, for bringing millions of dollars of new business to his company. He showed me the stub. $23,000 for social security taxes, about $135,000 in federal income taxes. His $300K became $142K.


I see you conveniently ignore the or deserves part of the definition. Someone may not need more than $400k/year, but if they do work that others value at greater rate than $400k/yr, why should they not accept it? What Marquis said. This goes back to the baseball player analogy. If a team owner is willing to pay a player $5 MM, that means he sees there will be a return in his investment in higher ticket sales, more branded merchandise, higher fees for commercial air time, and so on. And yet not one of the people going to the games or buying the Astros jersey is forced to do so. So, that player has earned his $5 MM. Why should he turn it down? Why does that make him *greedy* if he accepts it and doesn't turn it down to play ball for a different team at $400K?

[Complexity]

I think I have a right to your intellectual property if you give or sell it to me.

I.e., I get all the information in an unencrypted form that I can modify as I see fit without having to pay you again.


I'd more likely license it to you, which would require regular payments from you to me, and the market would set the price, or I'd refuse to participate.


No, I think you deserve a fair reward for your contribution to society.


Who would decide what is 'fair'?

I always reserve the right not to share something that I have created, regardless of how much it might benefit society.

Any attempt to force me to share my intellectual property or to force me to sign rights to it to others would result in its destruction.

If someone came up with a cure for AIDS or cancer, or discovered a path to productive fusion, or something equally wonderful, and it was that person's work and intellectual property, I would fully support that person's decision not to release it to the world. Otherwise, property has no meaning.

[Ivor the Engineer]

greed

Hey, they did that in the USSR! More reason to live for today! Worked great. Supplied even more disincentive to work very very hard - you can't leave the fruits of your efforts to your offspring! Why improve your farm, if it's going to go to strangers? One of the reasons the farming productivity in old Russia was so very very low, compared to farmers in Europe, was that the strip system used in the peasant villages meant that the land was re-allocated every 10 years or so, according to family size. If you knew that your assigned plots were going to be gone in less than 10 years, there was no incentive to improve the soil with the applications of expensive (in terms of labor as much as cash) fertilizer. The only fertile pieces of land in the heavily farmed areas were the individual plots located adjacent to peasants' homes, which they knew they would be keeping forever and leaving to their children. This practice was continued into the Stalin-era collectivization. The peasants had to contribute certain amounts of time to the collective fields, but received their compensation in the form of grain or meat based on what the local authority determined they needed. Harder work did not get you more food. (There goes that 'greed' thing again). Machinery belonged to the collective, so there was little reason to take care of it. It wasn't YOUR machinery! The people starved. And if you were some *rich greedy* kulak, which was often defined as have one more horse than your neighbor, or having enough "excess" wealth to hire your neighbors to work your personal plot, you were rounded up and carted off, for exploitation and greed. This is all well documented.

If I can't leave my portfolio to my sons, I should spend it all now rather than have it confiscated by the government.

One of the reasons the Catholic Church finally dictated celibacy (after centuries of going back and forth on the issue) was to make sure than men entering the priesthood would leave all their worldly possessions to the Church instead of to their children. Poor women were not allowed to become nuns in an older time. The Church demanded a rather high dowry, so the regiment of nuns consisted largely of unmarriageable daughters of wealthy nobility.

Thank you for the interesting pieces of history;) I don't know what the situation is in the US, but in the UK farmers are not generally among the wealthiest people in society, so I don't think they would be affected by a cap on inheritance. How many people it would affect would depend on the threshold too. Would you like me to work one out? In Ivortopia it would probably be about £5million per beneficiary. How many people do you think would be demotivated by a cap of that limit?

What Marquis said. This goes back to the baseball player analogy. If a team owner is willing to pay a player $5 MM, that means he sees there will be a return in his investment in higher ticket sales, more branded merchandise, higher fees for commercial air time, and so on. And yet not one of the people going to the games or buying the Astros jersey is forced to do so. So, that player has earned his $5 MM. Why should he turn it down? Why does that make him *greedy* if he accepts it and doesn't turn it down to play ball for a different team at $400K?

This is a really interesting point and I think it is another where I will disagree with most people here:D

I think the price of a product or service should depend on the demand for it, but only up to a point. People are not rational. Your baseball player example is evidence of it. In the UK, premiership football proves it. Business men that run football clubs or baseball teams are exploiting peoples' irrational value of the product they offer.

The ideas I put forward were an attempt to remove the effects of peoples' irrational desires for products and the exploitation of them.

[Ivor the Engineer]

I'd more likely license it to you, which would require regular payments from you to me, and the market would set the price, or I'd refuse to participate.

That would be the capitalist way to do it.

Who would decide what is 'fair'?

I haven't worked out all the details yet, but it would be a complex function based on the estimated market for the product your idea was used in, your current wealth, the value of the product, etc.

I always reserve the right not to share something that I have created, regardless of how much it might benefit society.

Any attempt to force me to share my intellectual property or to force me to sign rights to it to others would result in its destruction.

If someone came up with a cure for AIDS or cancer, or discovered a path to productive fusion, or something equally wonderful, and it was that person's work and intellectual property, I would fully support that person's decision not to release it to the world. Otherwise, property has no meaning.

And that is what I think is wrong with the world and why humanity is doomed.

[YoPopa]

The ideas I put forward were an attempt to remove the effects of peoples' irrational desires for products and the exploitation of them.

How about you first get to work on some people's irrational belief that they can change human nature just by confiscating the property of others?

GG just did an awesome job explaining the principle behind the tragedy of the commons. You completely missed the point because you have the hubris to think you can fine tune theft.

[jimlintott]

Thank you for the interesting pieces of history;) I don't know what the situation is in the US, but in the UK farmers are not generally among the wealthiest people in society, so I don't think they would be affected by a cap on inheritance. How many people it would affect would depend on the threshold too. Would you like me to work one out? In Ivortopia it would probably be about £5million per beneficiary. How many people do you think would be demotivated by a cap of that limit?

I know more about Canadian farmers but I don't think the USA is much different. Farmers are often asset rich but cash poor. Lot's of land, equipment, buildings and such but small bank accounts. Although where I live their are some very wealthy farmers. Some own parcels of land larger than some small nations. Land value fluctuations have a huge impact on their balance sheet.



This is a really interesting point and I think it is another where I will disagree with most people here:D

I think the price of a product or service should depend on the demand for it, but only up to a point. People are not rational. Your baseball player example is evidence of it. In the UK, premiership football proves it. Business men that run football clubs or baseball teams are exploiting peoples' irrational value of the product they offer.

The ideas I put forward were an attempt to remove the effects of peoples' irrational desires for products and the exploitation of them.

I tend to agree that this irrationality needs to be curbed sometimes but I feel you want to attack the wrong end. Business basically give consumers what they want. Instead of making it more difficult to obtain wealth I think we should re-educate consumers into wanting to consume less. The supply isn't the problem, the demand is.

[Complexity]

That would be the capitalist way to do it.


That's the only way I'd consider just and honorable.


I haven't worked out all the details yet, but it would be a complex function based on the estimated market for the product your idea was used in, your current wealth, the value of the product, etc.


And who are you, again, to decided what it (intellectual property) is worth? Let the market decide.

Also, you leave unspoken something despicable: You would feel justified taking it from me by force if I didn't accept your 'offer'.


And that is what I think is wrong with the world and why humanity is doomed.


So it is wrong that the fruits of a man's labor, vision, and imagination are his property, to do with as he chooses?

[quixotecoyote]

Complexity: (http://forums.randi.org/member.php?u=6626)

I think intellectual property is a bit tangential to this thread, but I'd be happy to take con in a debate on another thread. PM me if you create one.

[balrog666]

We're getting biometric ID cards in the UK soon. The vouchers would have no value unless the individual could prove their identity.

Are you really this oblivious in real life?

The RECIPIENTS trade in their own vouchers for cash at a legitimate business at a steep discount. They do it now with food stamps! What part of such a simple transaction don't you understand (excepting the obvious, human nature)??

[Ivor the Engineer]

Are you really this oblivious in real life?

The RECIPIENTS trade in their own vouchers for cash at a legitimate business at a steep discount. They do it now with food stamps! What part of such a simple transaction don't you understand (excepting the obvious, human nature)??

Didn't I say the vouchers would only be able to used at large retailers*, where the person serving you has no interest in helping you commit fraud?

For extra security the vouchers could be electronic and checked against the purchased items once they had gone through the scanner at the till. All non-food items would have those little strips that set off an alarm if you walk through the door without them being deactivated. Deactivation would be part of the scanning routine.

(*) Tesco and Asda. We don't want that kind of person in Sainsbury's or M&S.

[tkingdoll]

Didn't I say the vouchers would only be able to used at large retailers*, where the person serving you has no interest in helping you commit fraud?

For extra security the vouchers could be electronic and checked against the purchased items once they had gone through the scanner at the till. All non-food items would have those little strips that set off an alarm if you walk through the door without them being deactivated. Deactivation would be part of the scanning routine.

(*) Tesco and Asda. We don't want that kind of person in Sainsbury's or M&S.

Pffft. I shop at Waitrose, dear.

So you don't agree that the voucher scheme robs people of dignity? Or do you agree it does, but believe they don't deserve any?

[Ivor the Engineer]

Pffft. I shop at Waitrose, dear.

No wonder you need all those millions of pounds.

So you don't agree that the voucher scheme robs people of dignity?

I agree that it does...

Or do you agree it does, but believe they don't deserve any?

...but if they have managed to avoid employment after being provided with free money, training and education for 10 years, do they have any to loose?

[Complexity]

Complexity: (http://forums.randi.org/member.php?u=6626)

I think intellectual property is a bit tangential to this thread, but I'd be happy to take con in a debate on another thread. PM me if you create one.


Don't see how its tangential - I think the same applies to all property. I think the issues are most clearly seen with intellectual property, but that's just me being me.

I doubt I'll create a thread on it. I've had far too many discussions on these topics, they wear on me.

Ivor got me... miffed; against my better judgement, I chimed in.

[Hokulele]

Didn't I say the vouchers would only be able to used at large retailers*, where the person serving you has no interest in helping you commit fraud?

For extra security the vouchers could be electronic and checked against the purchased items once they had gone through the scanner at the till. All non-food items would have those little strips that set off an alarm if you walk through the door without them being deactivated. Deactivation would be part of the scanning routine.

(*) Tesco and Asda. We don't want that kind of person in Sainsbury's or M&S.


I can use the vouchers, pick up a week's worth of groceries, then trade them to the corner drug-dealer for my fix. Fraud can happen well after the transaction.

[tkingdoll]

...but if they have managed to avoid employment after being provided with free money, training and education for 10 years, do they have any to loose?

Dunno. What if no-one will give me a job because I'm a black disabled lesbian asylum-seeking jew with a heavily pierced face?

[Geek Goddess]

I think the price of a product or service should depend on the demand for it, but only up to a point. People are not rational. Your baseball player example is evidence of it. In the UK, premiership football proves it. Business men that run football clubs or baseball teams are exploiting peoples' irrational value of the product they offer.
The ideas I put forward were an attempt to remove the effects of peoples' irrational desires for products and the exploitation of them.

Personally, I think being a fan of professional sports is irrational :D However, I will defend anyone's right to spend their own money on following footballers or baseball teams or what ever else they want. I also think 'celebrity entertainment' is irrational. WTF cares about what Madonna or Tom Cruise thinks or does or wears? Not I. I don't, however, think that owning a computer in my home and using it for primarily entertainment purposes is irrational. Of course, that's because I want one.

You are throwing words around. How is a businessman exploiting someone by offering up his own investment dollars in an entertainment business? Irrational value of a product??? You must think the great majority of people are stupid, mindless robots, incapable of making decisions. I don't. I think most people, in a free society, make their own choices.

I personally have an irrational desire for electricity. I mean, I could live in the dark, and it's not like I would die if the 100 F, 90% humidity summer weather where I live was also inside my house. But I really really really love electricity and all the things it does for me.

Now that I look back on this, I find that your viewpoints are irrational. I don't think you should be allowed to have them. I really believe that people with beliefs like yours need to be re-educated on economics, human abilities and desires, how incentives work, and how theft of labor and confiscation of private property creates poverty for the majority, not wealth or prosperity.

M&S is Marks and Spencers, correct? I shopped there on my last visit to London. It was a little corner store, across from my hotel. Quaint.

[YoPopa]

Didn't I say the vouchers would only be able to used at large retailers*, where the person serving you has no interest in helping you commit fraud? Only large retailers? The kind of business that you are going to curtail with confiscatory economics you are also going to subsidize at the expense of the tiny Mom & Pop shops.

I have immediate family who have worked at or managed 4 different neighborhood convenience stores. Low income people need these small stores because they often lack transportation. The small stores need every customer they can get just to stay in business. You're going to screw both of them and they are the little people you are trying to protect?

[YoPopa]

I'm sure you have a magic formula that will explain why this scheme of yours is not going to trigger a massive crisis in confidence in the money supply and cause a world wide depression, so we can ignore that for now. I have every confidence that an engineer can figure that one out. Train engineer?

Something that no one has mentioned yet AFAIK. What happens to your plan to confiscate property based on the value of the property when that value plummets in a deflationary spiral?

Example: When the government announces that they are going to take a property through eminent domain the market value of that property suddenly disappears. No one is willing to buy a property that the government is going to seize. This is well documented as it has happened time and time again.

When the government of Ivortopia seizes a few properties because the inheritance was going to be over 5,000,000 then there will cease to be a market for properties in that price range. Values will fall so fast that you'll spend years crawling back up to reach bottom.

[balrog666]

Didn't I say the vouchers would only be able to used at large retailers*, where the person serving you has no interest in helping you commit fraud?

For extra security the vouchers could be electronic and checked against the purchased items once they had gone through the scanner at the till. All non-food items would have those little strips that set off an alarm if you walk through the door without them being deactivated. Deactivation would be part of the scanning routine.

(*) Tesco and Asda. We don't want that kind of person in Sainsbury's or M&S.

So you would prohibit all people from shopping at their neighborhood grocery while subsidizing the security measures at the "anointed" retailers???

Do you have the foggiest notion of just how stupid and short-sighted that is? Will only retailers blessed by the sacred Ivanov-bureaucracy be allowed to sell food? Or cigarettes? Or booze? And how will you control access to hookers and illegal drugs? Will you now implant monitoring chips in every citizen you suspect of thinking for themselves??

If you simply can't trust people to manage their own money to their own needs and desires, what can you trust them with? Can you trust them with children? Or medicine? Or their own education? Well, gee, how about voting then?

Do you have the slightest idea of how stupid this whole idea is yet?

[YoPopa]

Do you have the slightest idea of how stupid this whole idea is yet?

I am going to predict not. To be fair to Ivor, I have to concede that there are similar lame ideas that float around our "Capitalist" US from time to time. In 1990 the congress critters imposed a 30 percent federal luxury tax on jewelry, furs and yachts. Because no one needs these things right?

The luxury tax was repealed one year later when it was discovered that the federal government had to pay $7 million more in unemployment benefits to boating industry workers who lost their jobs than the additional tax revenue collected.

So congress must have learned by now how stupid this kind of idea is? Hmmmm, maybe not. They are now proposing a 6,000% increase in the tax on cigars. From $.05 to $3.00 /cigar. Now might be a good time for entrepreneurs to start buying Cigarette (irony) boats from cocaine smugglers.

[Complexity]

Frankly, Ivor, I'm really disappointed in you.

[Geek Goddess]

I am going to predict not. To be fair to Ivor, I have to concede that there are similar lame ideas that float around our "Capitalist" US from time to time. In 1990 the congress critters imposed a 30 percent federal luxury tax on jewelry, furs and yachts. Because no one needs these things right?

The luxury tax was repealed one year later when it was discovered that the federal government had to pay $7 million more in unemployment benefits to boating industry workers who lost their jobs than the additional tax revenue collected.

So congress must have learned by now how stupid this kind of idea is? Hmmmm, maybe not. They are now proposing a 6,000% increase in the tax on cigars. From $.05 to $3.00 /cigar. Now might be a good time for entrepreneurs to start buying Cigarette (irony) boats from cocaine smugglers. Sales of those luxury items plummeted. The sales tax receipts for yachts is a sizable amount of income to the state in places like Florida.

Social taxing doesn't seem to work to well - trying to control what people do by the tax rates. One of my friends is convinced that, because SHE doesn't like SUVs, anyone who buys one should pay extra tax for pollution. I point out that they already do, in a sense, because the cars get worse gas mileage. They have to buy more gas, which is heavily taxed...

[tkingdoll]

Sales of those luxury items plummeted. The sales tax receipts for yachts is a sizable amount of income to the state in places like Florida.

Social taxing doesn't seem to work to well - trying to control what people do by the tax rates. One of my friends is convinced that, because SHE doesn't like SUVs, anyone who buys one should pay extra tax for pollution. I point out that they already do, in a sense, because the cars get worse gas mileage. They have to buy more gas, which is heavily taxed...

I have some sympathy for the notion that heavier vehicles should pay more road tax though, as they contribute more wear and tear to the roads. Many British roads in particular suffer from this, as they were never built for heavy vehicles en masse.

I wonder what the Ivoregime tax policy will do to public morale? My husband pays 40% income tax (well, 40% after the threshold) and I admit it is painful to see nearly half of the money he worked his rear end off to earn disappear. I can't imagine what motivation would be like if people were capped. I think people would just think "what's the point" and spend the ten years being educated, trained and paid for doing nothing on Ivor's pre-voucher unemployment scheme.