Capitalism is where free men freely exchange goods, services, or information with one another to the benefit of all.
Rent seeking is where a third party steps in and demands a percentage of the transaction in return for something that may or may not be of any benefit to the others. In a good case this may be a mandatory quality standard that must be met. In a bad case it might just be a required insurance payment against accidental breakage of your kneecaps.
Crony capitalism is when the government mandates the bad case above. The law in question, proposed by the National Automobile Dealers Association would affect Elio as well as Tesla i Michigan. While it is acceptable for the states to act pretty much as they please unless the Fed.Gov objects and threatens to not give their tax monies back, this looks a lot like interference with interstate commerce and as such would be unconstitutional.
Gov. Snyder would do well to veto this.
and workshop. It's a fine workshop. Me and my assistant, Mr. Scratch.
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14 comments:
"Capitalism is where free men freely exchange goods, services, or information with one another to the benefit of all."
Anyone who has ever played the game Monopoly knows that is simply not true.
"Players move around the game-board buying, trading, or selling properties, developing their properties with houses and hotels, and collecting rent from their opponents, with the goal being to drive them all into bankruptcy, leaving one monopolist in control of the economy."
Unlike real life, Monopoly is a zero-sum game.
"to the benefit of all."
Except for those whom don't benefit.
1. lower wages for workers --> more profit for corporations --> bigger bonuses for C-level executives
2. higher wages for workers --> less profit for corporations --> workers being replaced by robots and/or jobs shipped overseas --> more profit for corporations --> bigger bonuses for C-level executives
3. more people --> more demand for housing --> higher rent and higher housing prices --> more money for investors who already own property --> people who can no longer afford to live in the area are displaced
Those all look like zero-sum, or near zero-sum, scenarios to me; i.e. one party gains at the expense of another.
If you have a better model of the economy than Monopoly, please share.
25 years ago, right-wingers were celebrating things like NAFTA, saying that international free trade would benefit everybody. * Now, it's
4. globalization --> the rest of the world's workers becomes richer at the expense of American workers.
Or, as Donald Trump likes to say, "It's a bad deal".
Do you people even listen to yourselves?!
* conversely, the libturds protesting globalization and free trade back then are now celebrating it. Go figure.
And here’s an example of how a system can be non-zero sum and still not be “to the benefit of all”:
American pretax income growth, 1980-2014
Bottom 50%: 0%
Middle 40%: 42%
Top 10%: 121%
Top 01%: 205%
Top 00.1%: 321%
Top 00.01%: 454%
Top 00.001%: 636%
https://twitter.com/ianbremmer/status/875777016917745664
Granted that much of that new wealth wasn’t real, but merely created on paper. But that’s how Capitalism rolls….
"This is one of the thousands of unregulated, unmonitored mines in the DRC [Democratic Republic of Congo]." Capitalist Utopia!
https://www.youtube.com/watch?v=JcJ8me22NVs
Too bad government regulations and minimum wage ensure that children in America will not be afforded the same opportunity to freely trade their labour in exchange for 8p a day, "to the benefit of all".
The DRC is probably more like mercantilism or an extreme case of crony capitalism that anything that Adam Smith would recognize as "free market."
For grins, take your own reported income from last years 1040 and compare it to your first years AGI. Current year is probably bigger. Now go to one of the inflation calculation web pages and see what your starting salary would be in todays dollars. Probably bigger than you're currently getting. This is what is currently being called quantitative easing in which your salary is quantitatively eased back to a lower level.
"For grins, take your own reported income from last years 1040 and compare it to your first years AGI. Current year is probably bigger. Now go to one of the inflation calculation web pages and see what your starting salary would be in todays dollars. Probably bigger than you're currently getting. This is what is currently being called quantitative easing in which your salary is quantitatively eased back to a lower level."
But aren't you and your cohorts the ones in favor of lower wages? Otherwise, your argument goes, if wages go up jobs will be outsourced to China and/or robots. Or maybe to Chinese robots.
That's how Capitalism is supposed to work, right?
see also:
"Makes the case for a minimum wage of $0.00 doesn't it?" - billll
"Capitalism and the Minimum Wage: 'I Got Mine, Screw You.'" by Fred Reed
"How Ideologues Use Grade-School Economics to Distort Minimum Wage Debates" by James Kwak
“For grins, take your own reported income from last years 1040 and compare it to your first years AGI. Current year is probably bigger. Now go to one of the inflation calculation web pages and see what your starting salary would be in todays dollars. Probably bigger than you're currently getting. This is what is currently being called quantitative easing in which your salary is quantitatively eased back to a lower level.”
Irrelevant. Your opinions about inflation do nothing to support your assertion that “Capitalism is where free men freely exchange goods, services, or information with one another to the benefit of all.”
In fact, your next sentence, “Rent seeking is where a third party steps in and demands a percentage of the transaction in return for something that may or may not be of any benefit to the others.” contradicts the prior. Rent-seeking is part of capitalism.
“Capitalism is where free men freely exchange goods, services, or information with one another to the benefit of all.”
The ultra-wealthy are able to buy multiple properties, often paying cash. Since they can only live in one home at at a time, their extra properties are either rented out (investment properties), or remain vacant as seasonal or vacation homes.
This results in a smaller pool of available housing, driving up the price of housing.
The buyers and sellers of the properties benefit in these free-market capitalistic transactions. But the middle class is simply unable to compete with the ultra-wealthy who can pay cash for house, and are worse off for it.
Explain how this is “to the benefit of all”.
Latest:
By analogy, the sale of 3 Rolls-Royces to Jeff Bezos should be adversely affecting the availability of Toyota Corollas to the rest of us. Sorry, but I'm not seeing it.
"Capitalism is where free men freely exchange goods, services, or information with one another to the benefit of all."
“Unlike real life, Monopoly is a zero-sum game.”
”By analogy, the sale of 3 Rolls-Royces to Jeff Bezos should be adversely affecting the availability of Toyota Corollas to the rest of us. Sorry, but I'm not seeing it.”
While manufacturers can increase capacity to meet demand for certain goods and services, such as cars, shoes, televisions, computers, internet access, etc., some critical assets are in limited supply and increasingly out of reach of the lower and middle class due to increasing inequality. Desirable real estate is one of them. If some Wall Street or Chinese banker can pay cash for 3 houses in downtown San Francisco, New York, Denver, Portland, etc., that's 3 less houses for middle class workers in those cities.
see http://evonomics.com/inequality-fracturing-democracy-killing-prosperity-david-alexander/
The first misconception relates to the blind spot that economists have regarding competition. That blind spot is itself the result of one of the foundational assumptions of modern economics, the Pareto principle, which holds that if a government policy improves the spending power of one group, we should assume zero impairment to other groups providing their absolute position does not go backward.
The significance of the Pareto principle to economics has been enormous: Because inequality is regarded as irrelevant by definition, the policies that economists judge “efficient” naturally tend to be those that widen the gap between higher- and lower-wealth citizens. Over recent decades, the zero-impairment assumption employed by economists has been central to many major policies that entailed expanding inequality, and will indeed be central to changes that might cause the same in the future.
Economists accept the zero-impairment assumption because they think in terms of goods and services such as furniture, food, and haircuts: If the spending power of one group is increased, this doesn’t impair the ability of others to compete for these goods — producers can simply increase supply. (Indeed, economists sometimes cite the consumption of these assets to argue that concerns about rising inequality are irrational.)
The logical flaw in this theory is that there is a range of other critically important assets, ignored by economists, of which the supply is limited. For these assets in limited supply, spending power is bidding power, meaning that higher inequality diminishes the ability of less wealthy people to compete for them.
- - and - -
The combined effects of these assets obviously have profound impacts on people’s life opportunities, impacts that are in turn passed down to subsequent generations. Economists have long been baffled by concerns about rising inequality — “they have more TVs than ever!” — but as we consider the loss of bidding power for such elemental assets as mates, territory, and occupations, this frustration is entirely predictable. People with relatively less wealth have lost the ability to compete for things that matter.
"the sale of 3 Rolls-Royces to Jeff Bezos"
Since you brought up Jeff Bezos, one of first investors in Amazon, billionaire capitalist Nick Hanauer, addressed this:
https://www.youtube.com/watch?v=iIhOXCgSunc
"An ordinary consumer is more of a job creator than a capitalist like me"
-- and --
"Another reason that this idea is so wrong-headed is that there can never be enough super-rich people to power a great economy. Somebody like me makes hundreds or thousands of times as much as the median American. But I don't buy hundreds or thousands of times as much stuff. My family owns three cars, not three thousand. I buy a few pairs of pants and shirts a year, like most American men. Occasionally, we go out to eat with friends. I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new cars, any clothes, or enjoy any meals out. Nor can I make up for the falling consumption of the vast majority of middle-class families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages."
> "Unlike real life, Monopoly is a zero-sum game."
. . . When the value of a house goes up, the total productive capacity of the economy is unchanged because nothing new has been produced: it merely constitutes an increase in the value of the land underneath. We have known since the days of Adam Smith and David Ricardo that land is not a source of wealth but of economic rent — a means of extracting wealth from others. Or as Joseph Stiglitz puts it “getting a larger share of the pie rather than increasing the size of the pie”. The truth is that much of the wealth accumulated in recent decades has been gained at the expense of those who will see more of their incomes eaten up by higher rents and larger mortgage payments. This wealth hasn’t been ‘created’ – it has been stolen from future generations. . . .
- "Most ‘Wealth’ Isn’t the Result of Hard Work. It Has Been Accumulated by Being Idle and Unproductive." at evonomics.com/unproductive-rent-housing-macfarlane/
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