I have some convincing reasons, mostly based on the idea that competition in a free-market is a rivalrous, dynamic, and entrepreneurial process. Basically, markets lead to specialization rather than centralization, and just one technological innovation can radically switch the distribution of wealth and make certain products and services completely obsolete.
But besides that, my argument is kinda bare. Any help would be appreciated, as I'm currently in a debate with my professor and some students.
Oh, and one more thing. I said that, even if wealth centralization did occur, giving a ton of power to another centralized monopoly doesn't exactly seem like a solution to that problem. Sounds like a fair point, right?
All you need to say, really, is that governments only exacerbate this problem, if it really is a problem, rather than help to solve it.
It's not clear exactly what position you are taking. Are you debating about whether a free market would have less wealth centralization than now, or that it doesn't matter, what?
My problem with this kind of debate is that we often find ourselves fighting on their terms. I think we need to insist on our own.
Our terms should be thus: The outcome of the distribution of wealth is irrelevant. It is the process that matters. If the process is just, the outcome must be accepted. If the process is unjust, then the outcome cannot be accepted.
Rather than try to predict what the distribution of wealth would be in a free market - and it seems to be the case that there is a constant rotation of wealth earners at the very top - try examining the flaws in the current system and show how this is anti-free market and how things would work differently.
This might earn you some points from them. You can then burn these point by showing how their preferred outcome - assuming they have stated what that would be - might require unjust methods to achieve, and therefore should be avoided.
Every decent man is ashamed of the government he lives under - Mencken
When a business fails, it's because the consumers have decided that they don't want their products enough. This is called creative destruction.
Why not apply the same consumer-based thinking to businesses that succeed? The customers pick the kings.
Hence, any business that provides superior products will succeed.
The only problem comes into play when you have very large barriers to entry. This creates so-called natural monopolies. Natural monopolies which are in fact a myth. Evil monopolies only exist when the government creates and enforces them with exclusive privileges.
Sears was taken down, as was US Steel. When AT&T's patents ran out they were flooded with competition. Microsoft's power is being eroded and collective action (more accurately, aggregate action) is pushing GoDaddy to change its SOPA stance. Netflix was brought to its knees by its consumers.
Just a few examples. Not proof, but a tad bit of support.
Wealth centralization in itself is not a bad thing, especially when it signifies that a company is adequately satisfying its customers.
If a "society" opposes wealth centralization "it" should "decide" not to buy from a certain company to reduce its power.
And yes, Proco Rosso's point is spot on.
Definitely correct. I was planning on writing such a reply, but I decided to go another route. The process idea is quite nice.
1. "The singular tendency of capitalism is to provide for individuals the satisfaction of their wants according to the extent of their contribution to the satisfaction of the wants of others." -- Daniel Sanchez in "Why Capitalism?"
2. Even if wealth centralization was somehow found to be undesirable by "society", why would "society" then desire the power centralization that is necessary to eliminate it?
Not to sound contrarian for the sake of sounding contrarian, but the thing is, a lot of people are biased when it comes to judging the fairness or justness of a process. If the process rewards them, they're more likely to consider it fair or just. If the process fails to reward them (let alone if it punishes them), they're more likely to consider it unfair or unjust.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
This "markets centralize wealth" nonsense is a vestige of century-old Hilferdingian Marxism, that is so wrong that it's funny. It's typical early 20th century Progressive thought: The strong must be getting stronger and the weak must perish. Clearly. In reality it's actually very difficult to concentrate wealth in a free market because incumbent producers have to compete for their market shares. In a free market there's always some newcomer around who can do things a little more efficient or has a new idea. And with access to developed financial markets, anyone can finance their endeavors, not just those who already are rich. It's actually very hard to stay on top unless you constantly innovate to stay ahead of your competitors. But even then it's difficult because incumbents usually become lazy and risk-adverse while newcomers are lean, motivated and willing to work hard. Just the falling marginal utility of money implies that those who have less are willing to do the same job cheaper than those who have more. Wealth flows to the bottom first, like water. The natural tendency therefore (in a free market) is for the rich to lose their wealth and for the poor to gain it until they meet in the middle, and not for the rich to grow richer.
At what point on the spectrum do we say wealth has become centralized vs. decentralized? I mean, even if 1% controls 99% of the wealth, thats less centralized than .01% controlling 99.99%, and thats less centralized than .001% controlling 99.999%, and so on. These are comparative qualities we're dealing with, so everything kind of needs to be in context of "compared to what?"
Also, there's a tendency to look at the given distribution of wealth and think that it could be made more equitable by just shifting it, and that it would somehow keep the same form. The reality is, the distribution of wealth is wrapped up in its structure, and it isn't really possible to change one without effecting the other. If I owned a factory, that wealth can't just be quantitavely altered without qualitatively altering it as well.
I guess what I'm trying to say is that the whole question of wealth centralization is dumb, and whatever reasons one opposes it can be addressed on their own.
they said we would have an unfair fun advantage
As others have mentioned its important to be aware of the differences between rich and poor individuals, and the statistical categories of rich and poor (which may contain changing members over time).
Also it should be obvious that there will be those whose work receive renumeration multiples greater than others in a free society, such as neurosurgeons to data-inputters , or factory managers overseeing the work of hundreds of staff to shelf stacker...not to mention the comparison between employed and unemployed.
Final point to consider,Compare two people on equivalent annual incomes. Individuals who are older and have earned their income for longer, and therefore could have saved more over the period will have a multiple of the wealth of others who have laboured less for the same wage rate.
E.g. An older person who has earned $40k over 50 years could without stretching plausability easily have 50 times the accumulated net-wealth of a younger person that has only earned $40k on his first year out in the jobmarket.
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
Thanks, guys. They're all great answers.
Thanks for the idea. I sometimes take that approach, but neglected it in this instance.
The one kid insists it's "Economics 101" that people who have large amounts of capital will only further monopolize the means of production, until there are only a few people who control the whole of the economy. They're kind of big on Marx >.<
One more question. So, historically natural monopolies are certainly a myth. But what is the underlying theory behind this? Why are industries which require large, initial capital inputs subject to competition in the same way other indistries are?
Sorry for the elementary type questions; I just wanna make sure I'm on point against these guys.
1) I am not sure how large these startup costs are. Even if the costs are in the millions, if a monopoly is making large profits, then there is incentive for venture capitalists to enter the market even given the high costs - especially because of the negative PR the evil monopoly currently gets.
2) Substitute goods - sure, a monopoly could control a good, but there are other substitutes which can replace this good. For example, if an evil monopoly takes oil production, that is just a greater incentive to invest in alternative energy.
3) To have a total monopoly you either have to have met 100% of the needs of your customers (Good Job!) or have 100% of a resources taken over. The latter is not likely in a free society due to a) the sheer size of the world b) the amount of money it would take to acquire all the resources c) The increasing incentive sellers would have to not sell to you (because they know that there are global fears of your monopoly, which increases the value of their non-monopolized holdings).
NonAntiAnarchist:The one kid insists it's "Economics 101" that people who have large amounts of capital will only further monopolize the means of production, until there are only a few people who control the whole of the economy.
If they are thieves, they might somehow steal that much wealth. In a free market, everyone must trade to gain that kind of wealth. In a just trade, both sides expect to gain, and usually do. How could wealth accrue in the hands of only a few if it takes trade after trade after trade to get wealthy?
NonAntiAnarchist:But what is the underlying theory behind this?
A lot of the problem comes with defining a monopoly. I have a monopoly on a particular Toyota Camry, but is that in any real sense a monopoly? And what if I had every Camry? Are there not other cars? And what if I had every car? Are there not motorcycles, trucks, buses, boats, planes and bicycles? And what if I had every consumer product every made? Is there any way I could stop someone from making his own and competing?
If there are no artificial barriers to entry, it doesn't really make much sense, academically, to talk about monopolies.
NonAntiAnarchist:Why are industries which require large, initial capital inputs subject to competition in the same way other indistries are?
The start up costs, in a market, are pretty much the same for everyone. If one group can put together a plan to, say, generate electricity - something that I would expect to have large start up costs - so can another.
Anything is possible in free markets. Specially "centralization" or "monopolies". They are the most wealthy of any type of organizations. Lets not even mention private armies.
Corporatism is using state means to enhance market share and
profitability of a few favored firms, at the expense of the citizen.