Why is capitalism considered greedy and selfish? Let me rephrase the question: Why are mutually beneficient transactions considered greedy and selfish?
Lyle:Why is capitalism considered greedy and selfish? Let me rephrase the question: Why are mutually beneficient transactions considered greedy and selfish?
They're considered greedy and selfish by those who 1) weren't party to the transactions, but 2) want one or both of the things that were exchanged in them. On one level, this can simply be a ploy by the latter people to get stuff without having to earn it. But on the other hand, people have all too often become wealthy through fraudulent or worse means. For such people to then appeal to the right to keep what they "own" is rightly seen as ridiculous, IMO.
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I thought this was covered pretty well in the thread I already directed you to. They are considered "greedy and selfish" because we say the person who received the medium of exchange (what we call "the seller") has made a "profit". People who don't understand basic economics (read: most people) think of life as a zero-sum game...and that profit is evidence of that...that if one man gains it means another man has lost.
Stossel covers this quite well...
Lyle:Praetyre: But I thought capitalism represented the constrained vision, not the unconstrained vision. And I thought socialism represented the unconstrained vision, not the constrained vision. (According to Thomas Sowell's exposition of the two camps in "A Conflict of Visions.") Is there something wrong with the logic here? I guess the question I should be asking is: Is a Natural Order possible so long as we look at mankind in a constrained vision? Or possible this question: Isn't a Natural Order only possible of a selfless and generous mankind?
I still don't get what your issue is. What is "Natural Order"?
Lyle:Praetyre: But I thought capitalism represented the constrained vision, not the unconstrained vision. And I thought socialism represented the unconstrained vision, not the constrained vision. (According to Thomas Sowell's exposition of the two camps in "A Conflict of Visions.") Is there something wrong with the logic here?
Pace Sowell, I don't think it's so cut-and-dried. The earliest socialist movements, from what I understand, concerned the preservation of traditional property rights in land and other natural resources. The apparent fact that these property rights were held jointly by entire communities is immaterial.
However, later socialist movements took a much less constrained view, and it's these that Sowell surely has in mind. These movements equated scarcity in general with deprivation - i.e., if you own or possess something that I want, you're depriving me of it. Such a mentality is popular with people who see other people as "insufficiently" valuing what they want them to value (typically something the former want to do or are doing).
Lyle:I guess the question I should be asking is: Is a Natural Order possible so long as we look at mankind in a constrained vision? Or possible this question: Isn't a Natural Order only possible of a selfless and generous mankind?
Or possible this question: Isn't a Natural Order only possible of a selfless and generous mankind?
It really depends on how you're defining "Natural Order". On the other hand, mankind can never be truly selfless. Even when one person helps another "out of the goodness of his heart", he's still deriving some kind of benefit from it. Otherwise, he wouldn't do it at all.
The real question you ought to be asking is why is it "greed" to want to keep one's own property, and yet not "greed" to demand the property of another.
Praetyre: But I thought capitalism represented the constrained vision, not the unconstrained vision. And I thought socialism represented the unconstrained vision, not the constrained vision. (According to Thomas Sowell's exposition of the two camps in "A Conflict of Visions.") Is there something wrong with the logic here?
I guess the question I should be asking is: Is a Natural Order possible so long as we look at mankind in a constrained vision?
A friend of mine asked me why capitalists shouldn't have to share their profits with their laborers. I told him because it is the capitalist that fronts all the capital and takes all the risk. The laborer gets paid up front, even when no profits have yet, if ever, been made. He didn't follow. So I asked him a simple question: Should laborers reimburse capitalists when they take losses?
Because if you want profit then the benefits for others are an unintended consequence, and collectivists do not understand unintended consequences. Only intentions matter. If you wish to benefit yourself then it is impossible for that action to benefit others because intention equals result.
No, the opposite is the case. If mankind was selfless and generous then the incentives to create a natural order could not function. If people weren't greedy we would all starve.
Lyle:A friend of mine asked me why capitalists shouldn't have to share their profits with their laborers. I told him because it is the capitalist that fronts all the capital and takes all the risk. The laborer gets paid up front, even when no profits have yet, if ever, been made. He didn't follow. So I asked him a simple question: Should laborers reimburse capitalists when they take losses?
Capitalists shouldn't share profits with workers because both workers and capitalists are paid according to supply and demand. Saying that workers in any way 'share' the profits of an enterprise shows complete misunderstanding of modern economic theory.
EmperorNero:Capitalists shouldn't share profits with workers because both workers and capitalists are paid according to supply and demand. Saying that workers in any way 'share' the profits of an enterprise shows complete misunderstanding of modern economic theory.
I think you're both missing the much more basic point. In a free market there is no such thing as a "profit system"...it is a "profit and loss" system. Anyone who says "workers are the reason the business owner has profits, so they should share the profts" also needs to be in favor of the workers sharing the the losses. If the company comes out in the red for the year, these workers who get to share in the profits should have to take a pay cut, or even put in some free hours.
And what's more, a lot of employees do share in the profits of the companies they work for. Hasn't anyone ever heard of "profit-sharing"? It's in the damn name. Not to mention, anyone can buy a share of a publicly traded business and share in the profits. In fact, most employees do own shares of companies and share in the profits...and most of them are sharing in profits of companies they don't even work for. This argument is just one more in thousands of example of people who don't have the first clue of what they're talking about. As I pointed out a while back...People bitch about ExxonMobil and "record profts" during times of high gas prices...
Better than 52 percent of Exxon-Mobil's stock is owned by fund investors such as mutual and pension funds...much of which is the "working class" firefighters, teachers and other government employees that everyone seems to invoke when they want to seem philanthropic.
The whole thing is just one more example of utter ignorance. They don't even know what stock they own...I doubt we can expect them to understand basic economics.
Here's a great response to an ass-hat who made that same claim. (And here's the followup.)
Another question to ask your friend is what entitles laborers to any share of the capitalist's profits. The fact that the capitalist fronts all the capital and takes all the risk is actually irrelevant here. What's relevant is that the laborer has entered into an agreement with the capitalist to be paid a certain amount in exchange for a certain labor. Any subsequent profits made by the capitalist are entirely outside of the scope of that agreement. It does mean, however, that until the laborer is paid, he stands as a creditor to the capitalist - i.e., the capitalist owes him the agreed-upon payment.
The notion that a laborer is entitled to "the full product of his labor" is a throwback to the preindustrial days when most people were self-employed. In those days, a person who made a product did so entirely on his own. He had to provide his own materials, labor, and know-how. As a result, he received the full amount paid for the product (assuming it was sold at all).
The Industrial Revolution changed this. Mechanized manufacturing meant more product could be made with the same or even less effort. Obviously the people who owned the machines were the ones who benefited. In Britain, where the Industrial Revolution began, existing patent law was rather successful at preventing non-inventors from copying the new machines. Had patent law not existed in Britain at that time, there probably would've been less resistance from traditional workers, as it would've been much easier for them to simply adopt the new machines as their own.
John James:I think you're both missing the much more basic point. In a free market there is no such thing as a "profit system"...it is a "profit and loss" system. Anyone who says "workers are the reason the business owner has profits, so they should share the profts" also needs to be in favor of the workers sharing the the losses. If the company comes out in the red for the year, these workers who get to share in the profits should have to take a pay cut, or even put in some free hours.
Even asking the question what 'share' of profits the workers should receive is implicitly conceding that workers receive a share of a factories profits. Which is just not how a market economy works. Workers are paid according to supply and demand, as I explain throughout the thread I linked above. The argument you make, "if workers should get a share of the profits, should they also get a share of the losses", is accurate. But even arguing that workers should receive a lower share of profits still implies that we are talking about objective value of labor, not marginal utility. Remember that we are dealing with people here who think in terms of objective value. They basically think of a factory as a place where workers do the work and capitalists get a cut for owning the machinery. The notion that workers work for a market wage and that the product of that work is owned by the capitalist, is lost to them. And if you respond that capitalists are also entitled to a share of the profits, because they did the coordination or bear the risk or such, you implicitly concede the notion that profits are 'distributed' among workers and capitalists. Wages are not a share of profits, workers receive a market wage to do a job for the capitalist. And what that product is worth for the capitalist is none of their business.
Which is more greedy and selfish:
1. Wanting to make a profit.
2. Wanting to dictate every action of every person on Earth (i.e., Lenin).
Some people would say the former. Funny, isn't it?
Lyle: Praetyre: But I thought capitalism represented the constrained vision, not the unconstrained vision. And I thought socialism represented the unconstrained vision, not the constrained vision. (According to Thomas Sowell's exposition of the two camps in "A Conflict of Visions.") Is there something wrong with the logic here? I guess the question I should be asking is: Is a Natural Order possible so long as we look at mankind in a constrained vision? Or possible this question: Isn't a Natural Order only possible of a selfless and generous mankind?
Small (but important note): if you read Conflict of Visions carefully; you will notice that Sowell uses example of 2 thinkers to illustrate each vision (the constrained and the unconstrained). He uses a pro capitalist and a pro socialist in both. Marx and Hayek are the two examples he uses to illustrate the 'constrained' vision; and you can hardly call Marx pro capitalism, now can you?
The point of Sowell was thus not to 'proof' that socialists have an unconstrained vision; but that these visions are all across the board.
The state is not the enemy. The idea of the state is.
Lyle: Why is capitalism considered greedy and selfish? Let me rephrase the question: Why are mutually beneficient transactions considered greedy and selfish?
Because most people don't understand that values are subjective. If one's world is filled with entities (property, labor) carrying objective values (typically stemming from some version of the Labor Theory of Value) it's easy to conclude that most exchanges must produce (1) a stupid sucker who ended up with the objectively lesser valued item and (2) a selfish/greedy capitalist who ended up with the higher valued item after the exchange. In such a world, even voluntary exchanges are inherently exploitative -- each of which increases the capitalist's profits at the expense of the suckers on the other (losing) side of the exchange (workers, customers).
Viewed this way, and in a zero-sum fashion, voluntary exchanges do not create wealth but merely take it away from the suckers and transfer it to the selfish/greedy capitalists whose profits are seen as nothing more than proof for the extent of their exploitative/greedy actions. Hence, there's nothing wrong with curtailing voluntary exchanges through regulation which "protects the small guy". Once one's "Eureka" moment about the subjectivity of values leads to the inevitable realization that voluntary exchanges are mutually beneficial and that each of them actually creates wealth for both sides, the selfishness/greediness/exploitativeness critique of capitalism collapses, and you've got yourself a freedom convert encouraging as many voluntary exchanges as possible.
Subjectivity of values and the above chain of reasoning has been the quickest shortcut to a leftist heart and mind, in my experience.