@ Tantris & Ghost: This is an interesting discussion point. I think that libertarians and economic right-wingers often forget the fact that highly-skilled people, and not just unskilled labourers, face the possibility of unemployment. Sometimes, as I have found out myself, no amount of qualifications and experience can protect you from losing your job.


@spyman: "if the economy is not taxed excessively ( which discourages business activity), and if wages are a product of supply and demand and not mandated by law (I still think there is room for a minimum wage), the unemployment rate will be low and period of unemployment will be short. Those who want to find work will find work."

Then why is unemployment currently so high in many capitalist countries?

@Tantris: "One of the first jobs I had, the employer needed to cut costs and fired all of the experienced programmers, then turned around and hired people fresh out of college. Our product quality went down, but it was much cheaper for them."

While I empathize that this would have been hard on the programmers in the short term, I think this is a legitimate business decision. Maybe it is more profitable to sell a lower quality product? Some consumers are happy for the trade off between price and quality. But some consumers will always pay more for quality. And thus there is employment for the best (but more expensive) programmers.

"A lot of programming has been sent off to other countries, not because of quality(because in some, quality goes down a lot), but because of cost. "

All countries trade and we are better off for it. While a job may have been lost in your country, and job was created in a poorer country. And at home, while jobs are lost, new jobs are also created.

With respect, Ghostmaker, I think you missing the actual meaning of exploitation in the sense meant by, say, Marxists.

Firstly, none of the examples you used above were employer-employee relationships. Marxist treatises on exploitation refer to situations where the employer has absolute authority over the worker in an economic sense. In your situation, the man making the chair may choose to pursue other business opportunities without losing his source of income and his position in society.

Even in employer-employee situations your criticism may sort of apply, but their are crucial differences in the *manner* of exploitation.

To exploit a person is to treat them like a resource, something to be used and cast away when it no longer serves a use. To a certain extent then, the capitalist and the worker exploit each other. The capitalist uses the labour of the worker at a certain cost to achieve an end, while the worker uses his labour to extract small amounts of capital from the capitalist.

The difference is, as Tantris pointed out, that the bargaining position between the two 'exploiting' parties is one of something eresembling a master and a slave. The capitalist may choose to abuse, eliminate, or otherwise harm the worker with few negative consequences. These options do not exist for the worker. Thus, the power differential makes a clear disparity in the number of actions allowed to either party. The worker can only exploit the capitalist nominally.

"Then why is unemployment currently so high in many capitalist countries? "

It generally seems to be higher in those capitalist countries with higher minimum wages and greater regulation of industry (especially with respect to labor laws) and high taxation (I am thinking here of mostly of Europe). At any rate it is not permanent for most, and if you average out the periods of unemployment with the (much longer) periods of employment, people are better off than they would be in constant state controlled employment with low wages and little to spend their money on (think Soviet Russia).

FS is correct.

I'm waiting for Ghostmaker's reply to my pointing out that he is not describing a genuine employer-employee scenario.

This isn't to say I agree with you, Jamie, merely that Ghostmaker was misrepresenting the terms of the debate. :)

@ spyman: "think Soviet Russia"

One of the main reasons the standard of living in Soviet Russia was lower than it could have been was the fact that they were spending TWO THIRDS of their GDP on arms. If even 10% of that resource was put into raising living standards, things would have been very different.

In any case, people were a damn sight better off under the Soviets than they had been under the Czars.

Just because I'm better off getting one arm lopped off than two arms doesn't mean it's a good thing, Jamie....

" Just because I'm better off getting one arm lopped off than two arms doesn't mean it's a good thing, Jamie.... "

That's a really poor analogy. The point is that the policies in the first 20 or so years of "Soviet Russia" were very succesful in raising the general well being of the people of Russia.

Thanks, Xapi, but never mind the first 20, more like the first 50!

I don't consider myself knowledgeable on Russian history, so I'll take your word for it, 20 was just a number off the top of my head.

As an aside, I would be grateful if Ghostmaker would refrain from using the term 'Meritocracy' in this thread.

Thanks to Capitalism, people like Paris Hilton and Nicole Ritchie are fabulously wealthy. This has nothing to do with their 'merit'. It is certainly possible, with some skill and a great deal of luck, to get rich under capitalism. But the system also ensures that plenty of stupid people with little to offer society start out rich in the first place.

@Jamiet

But Paris Hilton is very skilled. She has the skills and know-how to get people to want to know what she's doing so she runs with the big dogs because it's good P.R. That's how the entertainment industry works - it's all a joke. Capitalism at it's finest. Meritocracy at it's finest. It's unfortunate, but the greatest skills to have in a capitalist society are those that allow exploitation...strange coincidence, eh? *sarcasm*

@ Steevo - I know you're being sarcastic, but for the record, thanks to being born into a wealthy family, Paris was obnoxiously rich well before she began appearing on TV and in gossip columns.

@Ghost:I know the argument was sarcastic but that is (basically) my argument against capitalism. Everyone exploits everyone, especially the rich exploiting the poor.

...and the unions exploit the corporations (blue collar/poor exploiting white collar/rich).

@Draug: But unions are more socialistic than capitalistic. And they don't exploit the rich, they get the rich to exploit the poor less.

“@Ghostmaker: "any employment of anyone in any capacity is capitalism"

This statement is factually wrong, for two reasons:

Firstly, this is not 'employment'. When the banker calls the carpenter in to repair his chair, the carpenter does not become his employee in any real sense. The carpenter does not sign a contract of employment with the banker, the banker does not become liable to pay national insurance contributions for the carpenter, etc. He is simply purchasing a one-off service from him.

Secondly, in a socialist system, you could still speak of the state 'employing' workers, but this would, by definition, NOT be capitalism.”

Okay, regarding point 2, I was being lax with my words, and should have said “any private employment of anyone by the volition of both parties, exchanging goods which they privately own in any capacity is capitalism” if I was to be precise.

Regarding point 1, my dictionary defines employ as, “provide work in return for money”, which puts my use of English as better than yours in this case.

“Your example does not properly demonstrate the exploitation of an employer by an employee, because the banker is not the carpenter's employer. When I walk into a cobbler's shop, and give him a pair of shoes to repair, I do NOT become his employer.”

See the above. Buying a service is a very small scale form of employment.

“@TGM:
Actually, I didn't say any of that. I said the employer has power over the employee. They can also force much lower pay on thee employee, unless there is some force pushing back. Until minimum wage laws existed, you had people working for pennies, in bad conditions.”

And you still do, only now its either people working criminally, because no legal work is on offer (priced out of the market by the minimum wage), or working for free as “work experience”, because they need it to justify a minimum wage.

But I don’t want to have that debate again, since it isn’t the important issue of the thread.

“But, let us ignore the unskilled person, let's look at the skilled person. A programmer for instance. They are just as replaceable as anyone else. One of the first jobs I had, the employer needed to cut costs and fired all of the experienced programmers, then turned around and hired people fresh out of college. Our product quality went down, but it was much cheaper for them. Are you saying programming is unskilled labor? What exactly is skilled labor? A lot of programming has been sent off to other countries, not because of quality(because in some, quality goes down a lot), but because of cost. Do you believe the employee has power in this situation?”

I think the employer was being exploited by those greedy experience programmers, who were taking from him more money than he could afford. Okay, I don’t, but you see the issue here? I’m sure that the employer didn’t enjoy making a worse product for the consumer, or firing employees, but he was left with no choice either- he could see his company become unprofitable, and fail in his duty to the stockholders, or he could cut costs.

“So, let us examine your statement again. There is a pipe fitter in the south that treats their employees horribly, and pays horribly. There is no other real employer in the town. Now, the employees could get some power by unionizing, but other than that they have none.”

Until I know the details of the case, it is very difficult for me to comment, though with more information I would gladly comment.

“I guess CEO's are the most skilled people in America. They may make horrid mistakes, but they get paid the same as hundreds of their employees upon being fired.

In a capitalist system, connections and money matter more than skills. Our society no longer honors the skilled producer but the ones that control the companies and the people that loan out money.”

Well, CEOs’ greed and pay is a huge red herring. I won’t go into detail, but CEOs of companies with only a few shareholders are paid as much as CEOs of similar companies with many. This indicates that the pay of a CEO is at a competitive rate, since the few shareholders will be very careful about who they appoint.

@Jamiet “@spyman: "if the economy is not taxed excessively ( which discourages business activity), and if wages are a product of supply and demand and not mandated by law (I still think there is room for a minimum wage), the unemployment rate will be low and period of unemployment will be short. Those who want to find work will find work."

Then why is unemployment currently so high in many capitalist countries?”

Because they are taxed excessively, wages are mandated by law..... there are very few capitalist countries.

@FS “With respect, Ghostmaker, I think you missing the actual meaning of exploitation in the sense meant by, say, Marxists.

Firstly, none of the examples you used above were employer-employee relationships. Marxist treatises on exploitation refer to situations where the employer has absolute authority over the worker in an economic sense. In your situation, the man making the chair may choose to pursue other business opportunities without losing his source of income and his position in society.

Even in employer-employee situations your criticism may sort of apply, but their are crucial differences in the *manner* of exploitation.

To exploit a person is to treat them like a resource, something to be used and cast away when it no longer serves a use. To a certain extent then, the capitalist and the worker exploit each other. The capitalist uses the labour of the worker at a certain cost to achieve an end, while the worker uses his labour to extract small amounts of capital from the capitalist.

The difference is, as Tantris pointed out, that the bargaining position between the two 'exploiting' parties is one of something eresembling a master and a slave. The capitalist may choose to abuse, eliminate, or otherwise harm the worker with few negative consequences. These options do not exist for the worker. Thus, the power differential makes a clear disparity in the number of actions allowed to either party. The worker can only exploit the capitalist nominally.”

Firstly, situations where one person has total control over another are non-existent fiction in any significantly sized free-market economy. You need a central government for that kind of control to exist.

Regarding the final paragraph, you seem to be talking about things that would constitute criminal activity, so I would reject the idea that they are allowed under capitalism.

Besides, I like to use a dictionary for my definitions, and exploitation is clearly defined as “to make use for one’s own ends” in mine.

“@ spyman: "think Soviet Russia"

One of the main reasons the standard of living in Soviet Russia was lower than it could have been was the fact that they were spending TWO THIRDS of their GDP on arms. If even 10% of that resource was put into raising living standards, things would have been very different.

In any case, people were a damn sight better off under the Soviets than they had been under the Czars.”

You don’t get out of it like that.

Firstly, any strong government will want to reaffirm its strength, if not to the same extent, to a great degree. The issue with communism is not that you had the right or wrong people. It’s that the people in the system acted in the manner that made sense. It was so perverse a monster that people would murder and steal without batting an eyelid. The idea of an all powerful government, as demanded by your economics, is flawed.

Secondly, the Czars weren’t capitalist either.

Just because your parents or grandparents were good, smart, members of society and decided to give a large amount of money to someone who is un-deserving of that money doesn't make capitalism a bad system.

The thing with Capitalism v. Socialism is that with Capitalism everyone interacts and does their own thing but a working economy is created. With socialism, *people* have to plan each and every part of the economy that under capitalism happens naturally or even by accident. Due to the fact that humans have an innate ability to mess things up, the plans are never expansive or perfect enough and so the economy has trouble, not to mention the fact that the government has *all* compared to capitalism where the companies and the government share all the power. Since under socialism that power isn't shared, as soon as you get a nasty person in charge of the gov't things become a mess (Stalin, anyone?).

However I will give you this Jamie that if humans were perfect and entirely unselfish, then socialism would undoubtedly be the perfect form of government.

“As an aside, I would be grateful if Ghostmaker would refrain from using the term 'Meritocracy' in this thread.”

Let’s do a deal, eh? If you (plural) stop misusing words like employ, exploit and contract (as in social contract), I’ll avoid using the term or idea of meritocracy.

“Thanks to Capitalism, people like Paris Hilton and Nicole Ritchie are fabulously wealthy. This has nothing to do with their 'merit'. It is certainly possible, with some skill and a great deal of luck, to get rich under capitalism. But the system also ensures that plenty of stupid people with little to offer society start out rich in the first place. “

They have merit. I am not a fan of people’s tastes either, but if they want to be influenced by Paris Hilton and pay for her, who am I to judge them on their preferences and demand that they change them?

Regarding inheritance, I view it as a right of people when they die to choose how their worldly possessions are dealt with. I think we agree that the keeping of Kafka’s priceless manuscripts against his will was a disgrace, but so to, in my view, would be doing other than he wished for them had he wished something different.

“However I will give you this Jamie that if humans were perfect and entirely unselfish, then socialism would undoubtedly be the perfect form of government.”

Even altruists need a price mechanism, since it is impossible to generate enough information about people’s needs without one (see the Spontaneous Order tradition)

Finished!

@CM - in principal yes, unions reduce the rich's exploitations of the poor. In practice, unions exploit everyone. Try working in a union shop in a right to work state and not be a union member or try crossing a union picket line to go to work. You'll find just how much the unions terrorize and victimize the non-union worker (or scab as they call them) and you'll see in non-right to work states just how much unions love to force people to pay dues and support causes the members don't personally believe in (talk about exploitation). As a union member, you have no freedom to follow your conscience and must follow what the union says. It's exploitation at it's finest.

And the unions exploit the companies when they make demands that no court would uphold (like demanding pay raises and not being willing to make concessions when the economy is in the tank and the employer is about to shut their doors for good).

And since when do athletes and movie stars need a union?

@Draug: In my system, there wouldn't be unions.

Ghostmaker, the mere fact that serious exploitation is sometimes limited by the law in no way absolves capitalism of its harmful premises. Furthermore, would you not see regulation dictating employer-employee relationships and the organising power of key capitalists as interfering with the flow of free enterprise?

Please tell me you have a better defense than "ooh but the state prevents abuse".

Firstly because it often doesn't (see central America) and secondly because the defense doesn't address the essence of capitalist relations.

Also; tired yet? ;)