Ludwig Von Mises on Iron Theory of Wages

**Praxus** · 01 Nov 04, 01:42

Originally Posted by barrowaj

Sure it does. Not personal wealth, but it increases the collective wealth of the population. Unfortunately the increased production was used to produce almost exclusively military and capital goods, which while making the Soviet Union a superpower, denied a standard of living comparable to any western countries.

What is wealth by your definition? According to me wealth is an object that you deam to be valuable. You can not judge wealth as such but you can measure how much money is being exchanged which only gives you a rough estimation of the average valuations of a given "peice" of wealth.

By my definition the rapid increase in production does not nessecarily equate with a rapid increase in wealth.

Russia today is not socialist. The old state owned businesses have been sold off to the public, but most of the wealth became concentrated in the hands of the few. This is the natural progression of capitalism. Its self sustaining tendancy is for the people that have a lot of money to do everything they can to keep that money. Sometimes that can be a good thing, as in creating new businesses, and sometimes a bad thing, like unfairly eliminating competition and fostering monopolies.

Russia is de facto socialist. Private Property exsists only in name. Just look at these oil companies, the Government is putting these guys in prison for supposidly not paying their taxes. There is corruption left and right all over the place, not because the Government isn't involved in the means of production but because it is, because it has so much power of the economic lives of it's citizens.

Are you aware that during the Industrial Revolution there was not a single non-government enforced monopoly. Are you also aware that the wealth distribution was roughly 30% for the "Capitalists" and 70% for the "Laborers" during the entire Industrial Revolution. Are you aware that the average purchasing power of laborers increased by over 200% in a period of 60 years of the Industrial Revolution. I mention these facts because the Industrial Revolution was the closest thing to a Laissiez faire Economy.

If, as you say, socialism provides inadequate healthcare to its citizens, then how is it that countries with socialized medicine (France, Germany) have much better infant mortality rates and life expectancies than the US? Based off of those statistics I would call the US healthcare inadequate.

ZFBoxcar adressed this.

**barrowaj** · 02 Nov 04, 07:03

Originally Posted by Praxus

What is wealth by your definition? According to me wealth is an object that you deam to be valuable. You can not judge wealth as such but you can measure how much money is being exchanged which only gives you a rough estimation of the average valuations of a given "peice" of wealth. By my definition the rapid increase in production does not nessecarily equate with a rapid increase in wealth.

I agree completely with your definition of "wealth". I think its totally subjective phenomenon. However, the best estimation of wealth in a purely *economic* sense (ie GDP) is not the exchange of money, but instead the total useful value of the material product availible to a country. In other words, according to your definition, the USSR was not a wealthy country because its citizens did not exchange very much money. However, much of what was produced (like military and capital goods) were never part of the consumer economy, but should still count as "wealth" (GDP wise) because they were useful to the society. In retrospect, I argue that the devotion of production capacity toward military goods was not in fact that useful, and was actually a drain on their economy, but that is another issue.

Originally Posted by Praxus

Russia is de facto socialist. Private Property exsists only in name. Just look at these oil companies, the Government is putting these guys in prison for supposidly not paying their taxes. There is corruption left and right all over the place, not because the Government isn't involved in the means of production but because it is, because it has so much power of the economic lives of it's citizens.

That isn't socialism at all. Its just the government meddling with the affairs of (themselves corrupt) business leaders. But the government isn't really doing that much to disturb the economy, its more focused on maintaining social control (ie. state controlled media and appointment of local governors by the president).

Originally Posted by Praxus

Are you aware that during the Industrial Revolution there was not a single non-government enforced monopoly.

What about Standard Oil?

Originally Posted by Praxus

Are you also aware that the wealth distribution was roughly 30% for the "Capitalists" and 70% for the "Laborers" during the entire Industrial Revolution.

No, I wasn't. But technology has drastically worsened that distribution over time. Since technological progress is a given, then society must evolve to adapt to it as well.

Originally Posted by Praxus

ZFBoxcar adressed this.

All ZFBoxcar said is that he attributes lower life expectancy in North America to a diet problem. However, this can't be true, as Canada, whose citizens have a diet similar to Americans, have a life expectancy of 79.96 yrs vs the US of 77.43. This is a significant difference, which can most likely be attributed to the healthcare deficiencies of the US. Furthermore, infant mortality is largely independent of diet, and the US still has one of the worst infant mortality rates of the developed world.

**Praxus** · 02 Nov 04, 23:52

Originally Posted by barrowaj

I agree completely with your definition of "wealth". I think its totally subjective phenomenon. However, the best estimation of wealth in a purely *economic* sense (ie GDP) is not the exchange of money, but instead the total useful value of the material product availible to a country. In other words, according to your definition, the USSR was not a wealthy country because its citizens did not exchange very much money. However, much of what was produced (like military and capital goods) were never part of the consumer economy, but should still count as "wealth" (GDP wise) because they were useful to the society. In retrospect, I argue that the devotion of production capacity toward military goods was not in fact that useful, and was actually a drain on their economy, but that is another issue.

How can you judge the useful value of a product to society without money which to a large degree reflects the independent valuations made by society about that product?

That isn't socialism at all. Its just the government meddling with the affairs of (themselves corrupt) business leaders. But the government isn't really doing that much to disturb the economy, its more focused on maintaining social control (ie. state controlled media and appointment of local governors by the president).

I don't know where you learned this but meddling with the affairs of business leaders very significantly disturbs the economy. State socialization of media certainly is meddling with the economy as well.

What about Standard Oil?

I am so glad you said this.

At the height of standard oil it controled 88% of the oil, however it decreased to roughly 64% by the time they brook Standard Oil up. Also at the time just previus to when it was broken up they had over 140 competitors and were losing market share.

During the height of Standard Oil (1869-1885) the price at which they sold a gallon of refined oil droped from 30 cents per gallon in 1869 to 8 cents per gallon in 1885.

This is not a monopoly. It never cornered the market on oil and in fact contrary to the acts of government enforced monopolies it decreased the price of it's product significantly by shear economies of scale.

No, I wasn't. But technology has drastically worsened that distribution over time. Since technological progress is a given, then society must evolve to adapt to it as well.

Why is it bad that some people get richer faster then others?

All ZFBoxcar said is that he attributes lower life expectancy in North America to a diet problem. However, this can't be true, as Canada, whose citizens have a diet similar to Americans, have a life expectancy of 79.96 yrs vs the US of 77.43. This is a significant difference, which can most likely be attributed to the healthcare deficiencies of the US. Furthermore, infant mortality is largely independent of diet, and the US still has one of the worst infant mortality rates of the developed world.

Look at the number of overweight and obese Americans and then compare that to the number of overweight and obese Canadians. I think you will see what he means.

I agree that we have healthcare defficencies but it's not because there isn't enough Government but because there is to much. Furthermore it is far more likely that the infant mortality rate is higher because of the greater parental neglect in the United States then because of our Healthcare system.

Obesity rate in the Canada is roughly 22% compared with 31% in the United States. There is a similar difference in the number of overweight people as well.

**barrowaj** · 03 Nov 04, 06:35

Originally Posted by Praxus

How can you judge the useful value of a product to society without money which to a large degree reflects the independent valuations made by society about that product?

Money never had to be exchanged to produce military equipment, capital equipment, buildings, infrastructure, space technology, etc. Just because those items were not bought doesn't mean that they are not useful. They are still part of the GDP of the country because they served a purpose to society. By including those items in the GDP, you aren't trying to estimate a useful value for them, you are first assuming that they are useful, and then determining their value based off of production cost.

For example, how does one determine the useful value of the USS Ronald Reagan? I think it costs $4 billion dollars, but I argue that its not useful. Since the government purchased it for that price, it must be useful, and therefore its value must be $4 billion.

Anyway, my original point was to demonstrate how growh in production results in a growth in GDP. You can dispute the relative valuations of the Soviet and American GDPs, but you can't dispute the fact that the Soviet GDP grew more rapidly than American GDP for most of the USSR's existance.

Originally Posted by Praxus

I don't know where you learned this but meddling with the affairs of business leaders very significantly disturbs the economy. State socialization of media certainly is meddling with the economy as well.

They aren't meddling very much. Imprisioning Khordokovsky for tax fraud is not meddling if the allegations are true. State censorship of the privately owned media is not uncapitalist, as we the US still have media censorship, just to a MUCH lesser extent.

Originally Posted by Praxus

At the height of standard oil it controled 88% of the oil, however....

This is not a monopoly. It never cornered the market on oil and in fact contrary to the acts of government enforced monopolies it decreased the price of it's product significantly by shear economies of scale.

Interesting to know. But not all monopolies are going to operate on economies of scale to lower the price to consumers. They will do whats easiest. And if that means destroying the competition in an underhanded manner, then they will do so. I don't know much about 18th century business, so I won't try to find any further examples, but I do know that we don't live in the 18th century anymore. Technological "lock in" and incompatibilities when combined with proprietary patents will make monopolies all that much easier.

For example, do you know why you can't buy a non-HP printer cartridge for your new printer? Its because HP has copyrighted software on the cartridge that is not functionally necessary for the cartridge to function, but ensures that no competitors can make cartridges for HP printers. That way HP can charge a bunch for their cartridges.

Originally Posted by Praxus

Why is it bad that some people get richer faster then others?

Its not bad if random people in the population are getting rich. However, when the same set of people is getting richer at an increasing rate, then it doesn't take long before that set of the population owns nearly all of the capital. If that group controls all of the capital, then they will be able to control just about every facet of your life. This includes the media, the democratic process, and as a result, the government to a large degree.

Originally Posted by Praxus

I agree that we have healthcare defficencies but it's not because there isn't enough Government but because there is to much. Furthermore it is far more likely that the infant mortality rate is higher because of the greater parental neglect in the United States then because of our Healthcare system.

Obesity rate in the Canada is roughly 22% compared with 31% in the United States. There is a similar difference in the number of overweight people as well.

Our healthcare deficiencies have not much to do with the government, but everything to do with unequal access to medical care. The fact that we pay four times as much as the French for medical care demonstrates that socialized medicine is not an economic drain.

Infant mortality has everything to do with the quality and availibility of medical care for infants. There is no reason to beleive that America should have a higher incidence of infant neglect than other western nations.

A 9% greater obesity rate in the US can't account for the lower life expectancy gap of 2.53 years. What I found on the web is that being obese lowers your life expectancy between 4 and 8 years. So if only 9% more Americans than Canadians are obese than we could expect the life expectancy gap to be between .36 and .72 years, not 2.53 years.

.09 * (4:8) == (.36):(.72)

There have to be other factors going on. The most obvious would be the healthcare system.

**Praxus** · 04 Nov 04, 02:54

Originally Posted by barrowaj

Money never had to be exchanged to produce military equipment, capital equipment, buildings, infrastructure, space technology, etc. Just because those items were not bought doesn't mean that they are not useful. They are still part of the GDP of the country because they served a purpose to society. By including those items in the GDP, you aren't trying to estimate a useful value for them, you are first assuming that they are useful, and then determining their value based off of production cost.

This is my point, if no money is being exchanged you can not measure how much economic growth is happening.

For example, how does one determine the useful value of the USS Ronald Reagan? I think it costs $4 billion dollars, but I argue that its not useful. Since the government purchased it for that price, it must be useful, and therefore its value must be $4 billion.

You are confusing price with value. Value can not be measured in absolute dollar terms, it can only be estimated.

They aren't meddling very much. Imprisioning Khordokovsky for tax fraud is not meddling if the allegations are true. State censorship of the privately owned media is not uncapitalist, as we the US still have media censorship, just to a MUCH lesser extent.

Yes it is, it is very uncapitalist. The system of Laisiez Faire does not mean "Let Alone, until you hear something that might offend someone", it means "LET ALONE" PERIOD.

Interesting to know. But not all monopolies are going to operate on economies of scale to lower the price to consumers. They will do whats easiest. And if that means destroying the competition in an underhanded manner, then they will do so. I don't know much about 18th century business, so I won't try to find any further examples, but I do know that we don't live in the 18th century anymore. Technological "lock in" and incompatibilities when combined with proprietary patents will make monopolies all that much easier.

Did you just stick your hands over your eyes and ignore what I wrote? Standard Oil was not a monopoly!

For example, do you know why you can't buy a non-HP printer cartridge for your new printer? Its because HP has copyrighted software on the cartridge that is not functionally necessary for the cartridge to function, but ensures that no competitors can make cartridges for HP printers. That way HP can charge a bunch for their cartridges.

Look at the price of a printer + ink cartridges relitive to income and compare that to the price of a printer + ink cartridges relitive to income just 10 years ago.

Its not bad if random people in the population are getting rich. However, when the same set of people is getting richer at an increasing rate, then it doesn't take long before that set of the population owns nearly all of the capital. If that group controls all of the capital, then they will be able to control just about every facet of your life. This includes the media, the democratic process, and as a result, the government to a large degree.

What you ignore is that "this same set of people" is changing all the time. People move all around the "three classes" all the time.

Our healthcare deficiencies have not much to do with the government, but everything to do with unequal access to medical care. The fact that we pay four times as much as the French for medical care demonstrates that socialized medicine is not an economic drain.

Lawsuites and government regulations drive up the prices of our healthcare. If they weren't there the prices would be significantly lower. Furthermore you are ignoring that healthcare is significantly better in the United States then any other country.

Infant mortality has everything to do with the quality and availibility of medical care for infants. There is no reason to beleive that America should have a higher incidence of infant neglect than other western nations.

A 9% greater obesity rate in the US can't account for the lower life expectancy gap of 2.53 years. What I found on the web is that being obese lowers your life expectancy between 4 and 8 years. So if only 9% more Americans than Canadians are obese than we could expect the life expectancy gap to be between .36 and .72 years, not 2.53 years.

.09 * (4:8) == (.36):(.72)

There have to be other factors going on. The most obvious would be the healthcare system.

As much as you would like to think this simple equation explains everything, it doesn't. It does not take into account the fact that many more people are overweight and not nessecarily obese. It also does not take into account just how obese or overweight they are. Further more it ignores the dietary habits of even the non-overweight people.

**barrowaj** · 06 Nov 04, 20:30

Originally Posted by Praxus

This is my point, if no money is being exchanged you can not measure how much economic growth is happening.

This assertion is ridiculous. If you beleive this, then you can infer that it is impossible to measure economic growth until money was invented. That's simply not true. If the production of a society increases 10%, and that production is consumed, then the society has seen a 10% growth in their economy.

Originally Posted by Praxus

Did you just stick your hands over your eyes and ignore what I wrote? Standard Oil was not a monopoly!

I acknowledged what you said. Sure, Standard Oil had competitors, that doesn't mean that they didn't try to corner the market by buying out their competitors or bullying them.

Originally Posted by Praxus

Look at the price of a printer + ink cartridges relitive to income and compare that to the price of a printer + ink cartridges relitive to income just 10 years ago.

This isn't relavant to what I said. Sure, printers are cheaper now days than 10 years ago. Cartridges however, are not. The increase in price of cartridges can't be attributed to improvements in their design or capacity, because other companies could produce them much more cheaply than HP. But due to technological "lock in" and an enforced monopoly, they are not allowed to.

Originally Posted by Praxus

What you ignore is that "this same set of people" is changing all the time. People move all around the "three classes" all the time.

That is ********. You like to think that anyone can become a millionare, because sometimes it happens. And sometimes millionares loose their shirt and go bankrupt. But the far more common trend is for the millionares to ensure through influencing the government and coercing the public to grow richer.

Originally Posted by Praxus

Lawsuites and government regulations drive up the prices of our healthcare. If they weren't there the prices would be significantly lower. Furthermore you are ignoring that healthcare is significantly better in the United States then any other country.

Lawsuits and government regulations are not the only reason why healthcare is expensive in the US. Regulations especially may actually decrease the cost of healthcare in that they ensure a certain degree of preventative care, such as immunizing infants so they don't get sick later on. And its simply not true that the healthcare in the US is better than in any other country. Its only better if you have the money to pay for the care. And even then, France comes pretty close in terms of the availibilty of high end procedures. In fact, many of the European countries have more extensive tests for congenital abnormalities (hemophilia, for example) that are performed in infants.

Originally Posted by Praxus

As much as you would like to think this simple equation explains everything, it doesn't. It does not take into account the fact that many more people are overweight and not nessecarily obese. It also does not take into account just how obese or overweight they are. Further more it ignores the dietary habits of even the non-overweight people.

Of course it doesn't explain everything. The points that you bring up are valid. However, its rational to assume that the distribution of body weight should follow a Gaussian curve, so you can make some assumptions about it. Since obesity is a much larger factor than simply being overweight, then it should account for the bulk of the problem. And since the numbers that I gave you show that the decrease in life expectancy due to obesity should be relatively small, then being overweight or obese can't account completely for the difference in life expectancies. I don't beleive that the differences in lifestyles between Canadians and Americans can account for that difference. A deficiency in American healthcare is more likely the cause, escpecially since infant mortality correlates in the same direction.

In the end, you can always try to come up with anectodal evidence, or objections which are not supported by any data to explain the gap. But infant neglect, and a minor difference in obesity are not beleivable or sufficient enough to cover that difference.

**Praxus** · 06 Nov 04, 21:54

Originally Posted by barrowaj

This assertion is ridiculous. If you beleive this, then you can infer that it is impossible to measure economic growth until money was invented. That's simply not true. If the production of a society increases 10%, and that production is consumed, then the society has seen a 10% growth in their economy.

Goods cost different in different parts of the world, you can't simply apply the money value of an object in the United States or Europe to a similar product in a Socialist Country. Now sure production and consumption could increase by 10% but that does not mean that the money value of the new products being consumed is equal to 10% of the market. Furthermore it is impossible to acurately find out the GDP of said nation for the same reason.

A 10% increase in production is just that an increase in production, nothing more.

I acknowledged what you said. Sure, Standard Oil had competitors, that doesn't mean that they didn't try to corner the market by buying out their competitors or bullying them.

No, they had 140 competitors and had lost 15% of the market share from their peak to when the anti-trust suit was leveled against them. The whole case against Standard Oil was written by the daughter of a man who Standard Oil put out of buisness because he could not compete with Standard Oil. Standard Oil droped the price of oil at an extrordinary rate, contrary to the actions of a monopoly.

Define what you mean by bullying.

This isn't relavant to what I said. Sure, printers are cheaper now days than 10 years ago. Cartridges however, are not. The increase in price of cartridges can't be attributed to improvements in their design or capacity, because other companies could produce them much more cheaply than HP. But due to technological "lock in" and an enforced monopoly, they are not allowed to.

I don't think you understood me, I was trying to tell you that it is cheaper to print then it was 10 years ago.

That is ********. You like to think that anyone can become a millionare, because sometimes it happens. And sometimes millionares loose their shirt and go bankrupt. But the far more common trend is for the millionares to ensure through influencing the government and coercing the public to grow richer.

Anyone can become a milionare (that is to say no one, at least in a free market can be physicaly stoped through force from being a millionare), that does not mean that everyone will become a millionare.

As for millionares "coercing the public to grow richer". This is true to a degree, but it's not because of the free market, but because the Government has the power to grant monopolies and favors to companies on a whim when amoral corrupt corporations pay them off, in a mixed economy. I'm not saying there would be no corruption if you got rid of these powers, it would however be reduced drasticly.

Lawsuits and government regulations are not the only reason why healthcare is expensive in the US. Regulations especially may actually decrease the cost of healthcare in that they ensure a certain degree of preventative care, such as immunizing infants so they don't get sick later on. And its simply not true that the healthcare in the US is better than in any other country. Its only better if you have the money to pay for the care. And even then, France comes pretty close in terms of the availibilty of high end procedures. In fact, many of the European countries have more extensive tests for congenital abnormalities (hemophilia, for example) that are performed in infants.

You simply declaring that Lawsuites and Government Regulations don't make healthcare more exspensive does not make it true. Every single other instance of Government Regulation talks to the contrary. Just compare the Corrupt Union Pacific with James J. Hills Railroad company. The first was a true monopoly that had the power through the Government to destroy competitors and therefor did not need to drop prices to stay competitive. James J. Hill on the other hand competed on the free market and droped prices significantly. Every single Government manipulated and/or supsidised companies in the history of the United States has had higher prices then the completly private ones in the same Industry.

So I would now collect what I said. The increased prices is the result of government regulation, law suites, and eating/lifestyle habits.

Of course it doesn't explain everything. The points that you bring up are valid. However, its rational to assume that the distribution of body weight should follow a Gaussian curve, so you can make some assumptions about it. Since obesity is a much larger factor than simply being overweight, then it should account for the bulk of the problem. And since the numbers that I gave you show that the decrease in life expectancy due to obesity should be relatively small, then being overweight or obese can't account completely for the difference in life expectancies. I don't beleive that the differences in lifestyles between Canadians and Americans can account for that difference. A deficiency in American healthcare is more likely the cause, escpecially since infant mortality correlates in the same direction.

In the end, you can always try to come up with anectodal evidence, or objections which are not supported by any data to explain the gap. But infant neglect, and a minor difference in obesity are not beleivable or sufficient enough to cover that difference.

For what reason do you believe it follows a Gaussian Curve?

Have you bothered to look up the difference in infant neglect and overweightedness as compared to Europe.

**barrowaj** · 09 Nov 04, 06:22

Originally Posted by Praxus

Goods cost different in different parts of the world, you can't simply apply the money value of an object in the United States or Europe to a similar product in a Socialist Country. Now sure production and consumption could increase by 10% but that does not mean that the money value of the new products being consumed is equal to 10% of the market. Furthermore it is impossible to acurately find out the GDP of said nation for the same reason.

It doesn't matter what the value of the USSR's goods were in comparison to the US. That has no effect on the intrinsic rate of growth that is relative to only the USSR. You can calculate the GDP by determining what the cost value of the goods are, and if you have the values and growths of each sector, you can then calculate an aggregate growth for the entire economy.

Originally Posted by Praxus

Now sure production and consumption could increase by 10% but that does not mean that the money value of the new products being consumed is equal to 10% of the market.

Sure it does. It just doesn't mean that the money value that US consumers would pay for the goods increases by 10%. But even that would still be a good approximation, because you would assume that if consumption is increasing 10% then there is sufficient demand.

Originally Posted by Praxus

Standard Oil droped the price of oil at an extrordinary rate, contrary to the actions of a monopoly.

Look that's fine. I don't know much about Standard Oil, but I do know that we don't live in the 19th century anymore. The playing field is completely different. Take the DeBoers company for an example of a better monopoly.

Originally Posted by Praxus

I don't think you understood me, I was trying to tell you that it is cheaper to print then it was 10 years ago.

I don't know how I can go about calculating that because you would have to estimate the lifetime and maintenance costs of the printer. It doesn't matter whether that is true or not, its not relevant. What matters is that printer companies purposely sell their cartridges at inflated prices, and use "lock out" to prevent competition. Its simply what any company would do if given the chance. They look out for their own interests.

Originally Posted by Praxus

As for millionares "coercing the public to grow richer". This is true to a degree, but it's not because of the free market, but because the Government has the power to grant monopolies and favors to companies on a whim when amoral corrupt corporations pay them off, in a mixed economy. I'm not saying there would be no corruption if you got rid of these powers, it would however be reduced drasticly.

The point is not to get rid of governmental powers, but to change the way business and government interact. For instance, if the government needs a road built, ideally they would get bids and give the contract to the overall best proposal. But when politics come into play, that doesn't always happen. But if you could make it illegal for businesses to give money/gifts to government or politicians, the corruption would improve a lot.

I still think that in the absence of government, if they control the media and advertising, then they are still manipulating people to get richer.

Originally Posted by Praxus

You simply declaring that Lawsuites and Government Regulations don't make healthcare more exspensive does not make it true. Every single other instance of Government Regulation talks to the contrary. Just compare the Corrupt Union Pacific with James J. Hills Railroad company. The first was a true monopoly that had the power through the Government to destroy competitors and therefor did not need to drop prices to stay competitive. James J. Hill on the other hand competed on the free market and droped prices significantly. Every single Government manipulated and/or supsidised companies in the history of the United States has had higher prices then the completly private ones in the same Industry.

So I would now collect what I said. The increased prices is the result of government regulation, law suites, and eating/lifestyle habits.

That is a good example of where government regulations increase the cost to consumers. However, healthcare is a different than a railroad company, because in a free market healthcare system, consumers will not purchase the required amount of healthcare. Regulations are improtant for preventative healthcare, which costs much less than the catastrophic results of having no prevention. Many countries that rank better than the US have more regulations than us, but still the cost of their healthcare is less.

Originally Posted by Praxus

For what reason do you believe it follows a Gaussian Curve?

Have you bothered to look up the difference in infant neglect and overweightedness as compared to Europe.

I would assume that weight distrubution is approximately Gaussian because it is a biological system. In fact, I read on Wikipedia that really the log of the weight of biological systems is Gaussian. This shouldn't really affect my assumption though. My point is that it is REALLY a stretch to say that a 9% difference in obesity rate accounts for the life expectancy gap. Differences in eating habits should be negligible.

No, I think that infant neglect would be a difficult statistic to measure or compare. It doesn't matter how you cut it, our healthcare system does a worse job of providing healthcare for our citizens and costs 4x more than the socialized systems of comparable western countries.

**Praxus** · 09 Nov 04, 21:29

I'll concede the rest of the points for now excluding the following because I need to do more research...

The point is not to get rid of governmental powers, but to change the way business and government interact. For instance, if the government needs a road built, ideally they would get bids and give the contract to the overall best proposal. But when politics come into play, that doesn't always happen. But if you could make it illegal for businesses to give money/gifts to government or politicians, the corruption would improve a lot.

How can you beleive that, that will stop corruption? All it will due is make the payments go under the table. It won't even make it harder.

I still think that in the absence of government, if they control the media and advertising, then they are still manipulating people to get richer.p

Do you mean they're lieing? If they are, then that is not allowed in Capitalism.

**barrowaj** · 10 Nov 04, 05:47

Originally Posted by Praxus

I'll concede the rest of the points for now excluding the following because I need to do more research...

Thanks for sharing your perspective on my comments. I learned a lot from your posts, including the original Von Mises article. You have shown me that I don't really know much about the economics during the industrial revolution, or about Standard Oil.

Also, take in mind that sometimes I like to play devil's advocate...

Originally Posted by Praxus

How can you beleive that, that will stop corruption? All it will due is make the payments go under the table. It won't even make it harder.

Well, I can't guarantee that it would stop corruption. But it seems to me like a politician would have a difficult time explaining anonymous sums of money showing up in his bank account.

Originally Posted by Praxus

Do you mean they're lieing? If they are, then that is not allowed in Capitalism.

Not even lying, but simply misleading people. As much as we like to think that all people are rational objective beings, we are all influenced by advertising and the news media. Just today I was watching a show on some skin cream that was touted as helping with wrinkles, but was actually ineffective (after 2 weeks of use) in reality. I know that's a weak argument, but basically I'm trying to say that our goals and expectations in life are definitely influenced by the media.

Tell me what you think about the ideas I have below...
I don't think that capitalism is wrong, I just think it is important that if we put such emphasis on individuality, then each individual should get a level playing field. This means that parents shouldn't be able to get their children into their alma mater college by donating money, and that there should be an estate death tax of 100%.

Also, I would try to curb immigration, as we already have enough problems keeping our current population employed.

Corporations should lobby with reason, not money, and politicians shouldn't be influenced by money either.

Finally, the cost of a product should incorporate all negative externalities that soceity must bear. For example, the price of the computer you buy should also include the cost of recycling it, so that it doesn't end up polluting the ground from some landfill. If we could implement changes like above, capitalism would be more sustainable.

**Praxus** · 10 Nov 04, 23:50

Originally Posted by barrowaj

Well, I can't guarantee that it would stop corruption. But it seems to me like a politician would have a difficult time explaining anonymous sums of money showing up in his bank account.

It would have to go into their bank account, it would just be held in a seperate bank unassociated with him until he retires or is out of office. Another option is that he could pay off the people who would moniter said banks.

Not even lying, but simply misleading people. As much as we like to think that all people are rational objective beings, we are all influenced by advertising and the news media. Just today I was watching a show on some skin cream that was touted as helping with wrinkles, but was actually ineffective (after 2 weeks of use) in reality. I know that's a weak argument, but basically I'm trying to say that our goals and expectations in life are definitely influenced by the media.

If you say that it was effective in 2 weeks and it isn't, then that is lying.

I don't think that capitalism is wrong, I just think it is important that if we put such emphasis on individuality, then each individual should get a level playing field. This means that parents shouldn't be able to get their children into their alma mater college by donating money, and that there should be an estate death tax of 100%.

Then you do think Capitalism to some extent is wrong. When someone donates to their alma mater what is wrong with them getting their child into the college. One person volunteerally gives money, and the college of their own free will allows that child to come in. There is absolutely not coercian in here, physical or otherwise. What you are suggesting is in effect that the Government should be allowed to point a gun at these people who did not innitiate the use of force or threaten the use of force. You turn a peaceful volunteerily exchange into something to be attacked by force. Same goes for the estate. An honest person gains their wealth through productive work, mental, or physical. They do not violate anyone's rights (initiate force). You agree I assume that they have a right to spend that as they please as long as they violate no one's rights. What is so fundamentally different from passing on wealth via a will to your children, from exchanging money through any other contract?

Also, I would try to curb immigration, as we already have enough problems keeping our current population employed.

Again I will use the 19th Century as an example, as there was a large rate of immigration. During this time period there was next to no unemployment. Pretty much everyone had a job. They were willing to work at menial and sometimes terrible working conditions, but compared to what they had in their old country this was great. They come in and eventually move up the economic latter, some even reaching the highest levels. In the end everyone was better off because it decreased the price of goods because it increased the shear productive power of the Industries. The problem now is that the Unions make labor so expensive that they can't afford to higher new workers, and minimum wage makes it impossible for immigrants to get started working at low paying jobs.

Corporations should lobby with reason, not money, and politicians shouldn't be influenced by money either.

No disagreement here.

Finally, the cost of a product should incorporate all negative externalities that soceity must bear. For example, the price of the computer you buy should also include the cost of recycling it, so that it doesn't end up polluting the ground from some landfill. If we could implement changes like above, capitalism would be more sustainable.

I would just like to mention that all this pollution is a result not of Capitalism but of it's antithesis. It is because the lakes and the rivers and all the other places are owned by the Government. The Companies dumping don't have anything to discourage them from doing this. If price companies and individuals owned it they could not dump on their porperty without their permission and quite frankley no one would want to have waste dumped on their property.

How is Capitalism not sustainable?

**barrowaj** · 13 Nov 04, 04:04

Originally Posted by Praxus

It would have to go into their bank account, it would just be held in a seperate bank unassociated with him until he retires or is out of office. Another option is that he could pay off the people who would moniter said banks.

As soon as he wanted to access that clandestine bank account and use the assets, they would have to be registered in his name, and would then not be "under the radar." I think that since the people monitoring the bank information would be anonymous, it would be hard to bribe them.

Originally Posted by Praxus

If you say that it was effective in 2 weeks and it isn't, then that is lying.

While I agree with you here, the point I'm trying to make is that there is a fine line between lying and misleading. Advertising gives people false hopes about what they expect they will get from a particular product. For example, the skin cream was just advertised as saying that it helps reduce the appearance of wrinkles.

Originally Posted by Praxus

Then you do think Capitalism to some extent is wrong. When someone donates to their alma mater what is wrong with them getting their child into the college. One person volunteerally gives money, and the college of their own free will allows that child to come in. There is absolutely not coercian in here, physical or otherwise. What you are suggesting is in effect that the Government should be allowed to point a gun at these people who did not innitiate the use of force or threaten the use of force. You turn a peaceful volunteerily exchange into something to be attacked by force.

What I was referring to is the problem of nepotism. To explain I will make a parallel to the problem of the congresman we discussed earlier. If the congressman accepts a gift from the company, then the company is expecting that the congressman will vote as the company is lobbying him to. There is no coercion in that case either. However, I think that this is corrupt because there is an expectation that the congressman will do as the company asks him to do, regardless of whether the decision is just or not. Similarly, a university who accepts a student who is not academically qualified simply because his parents are donors, are wealthy famous, etc. is doing an injustice to all the other qualified students who have applied.

Originally Posted by Praxus

Same goes for the estate. An honest person gains their wealth through productive work, mental, or physical. They do not violate anyone's rights (initiate force). You agree I assume that they have a right to spend that as they please as long as they violate no one's rights. What is so fundamentally different from passing on wealth via a will to your children, from exchanging money through any other contract?

Not all people who get rich do it honestly, or especially though mental or physical work. People who own capital in the first place don't have to do any work to charge rent on property or receive interest on investments. In normal contracts, money is exchanged based on goods or services rendered. When you give money to your children, you simply pass down your wealth to them without exchange for them actually doing any work. Therefore giving them money is not a productive aspect of the economy, and is not just because the child himself did not actually do any honest work to earn that money.

Originally Posted by Praxus

Again I will use the 19th Century as an example, as there was a large rate of immigration. During this time period there was next to no unemployment. Pretty much everyone had a job. They were willing to work at menial and sometimes terrible working conditions, but compared to what they had in their old country this was great. They come in and eventually move up the economic latter, some even reaching the highest levels. In the end everyone was better off because it decreased the price of goods because it increased the shear productive power of the Industries. The problem now is that the Unions make labor so expensive that they can't afford to higher new workers, and minimum wage makes it impossible for immigrants to get started working at low paying jobs.

The immigrant who works for less than minimum wage actually costs you more money than he saves you because he consumes public services like healthcare, transportation, water, etc. that you help pay for.

Originally Posted by Praxus

I would just like to mention that all this pollution is a result not of Capitalism but of it's antithesis. It is because the lakes and the rivers and all the other places are owned by the Government. The Companies dumping don't have anything to discourage them from doing this. If price companies and individuals owned it they could not dump on their porperty without their permission and quite frankley no one would want to have waste dumped on their property.

A lot of land that is owned by companies is utilized wastefully in the interest of short term profit. Good examples of this are strip mining and landfills. In both cases, a company owns the rights to the property, but still does not look out for its long term interests, because they know that they can simply buy more land with the profits that they make from destroying the current peice of land. While you might say that businessmen have an interest in protecting the air, water, and soil because it affects their own health, this is not true for two reasons. Since the air, water, and soil are common resources that we all share, it is in the best interest of the businessman to extract from those resources the most marginal gain for himself. By doing so he destroys those resources for others to use. The second reason is that the lifetimes of human beings is transient, and therefore they are more concerned about the way their actions will affect them personally, and not the generations of the future. In the case of global warming, the effects of todays cummulative emissions will not be felt until decades into the future.

Originally Posted by Praxus

How is Capitalism not sustainable?

Capitalism is not sustainable from both a social standpoint and an environmental standpoint. It isn't sustainable from a social standpoint because as the income gap between the rich and poor keeps expanding, the ratio of capital owned by the rich continues to increase. Since ownership of wealth is proportional to power, it can be said that the rich will have increasing power over everyone else, resulting in a virtual oligopoly of power. I can't see that concentration in power as sustainable. Secondly, capitalism is driven by (over) consumption made possible by the destruction of natural environmental resources. I already described the conditions that allow this to happen above. At some point of environmental breakdown, either many people will not be able to afford clean air and water, or there will be huge economic losses and decay as a result of this environmental stress.

**Praxus** · 13 Nov 04, 21:49

While I agree with you here, the point I'm trying to make is that there is a fine line between lying and misleading. Advertising gives people false hopes about what they expect they will get from a particular product. For example, the skin cream was just advertised as saying that it helps reduce the appearance of wrinkles.

But that is a lie, it's not simply misleading it's an outright lie.

What I was referring to is the problem of nepotism. To explain I will make a parallel to the problem of the congresman we discussed earlier. If the congressman accepts a gift from the company, then the company is expecting that the congressman will vote as the company is lobbying him to. There is no coercion in that case either. However, I think that this is corrupt because there is an expectation that the congressman will do as the company asks him to do, regardless of whether the decision is just or not. Similarly, a university who accepts a student who is not academically qualified simply because his parents are donors, are wealthy famous, etc. is doing an injustice to all the other qualified students who have applied.

But let's examine this. When you give money to a hitman, it is a volunteery transaction, yet it is still illegal. You may not be coercing the hitman and he may not be coercing you but he the hit man is coercing/killing a man and you openly sanctioned it. This applys to what your saying because when he gives money to the politician he is giving it under the pretext of the politician passing a law that coerces his compitition or the consumers.

I agree that it is an injustice to take a less qualified person over a more qualified person. But this is mainly because of the pragmatic view points of many people today. They don't look at the long term consaqeunces of such actions. It would seem to me keeping the standards up and not allowing stupid people in will in the long run be better in terms of profit then accepting X ammount of money in the short term.

Not all people who get rich do it honestly, or especially though mental or physical work. People who own capital in the first place don't have to do any work to charge rent on property or receive interest on investments. In normal contracts, money is exchanged based on goods or services rendered. When you give money to your children, you simply pass down your wealth to them without exchange for them actually doing any work. Therefore giving them money is not a productive aspect of the economy, and is not just because the child himself did not actually do any honest work to earn that money.

Of course they don't have to do any work, but the fact remains that his father did earn that money, and because it is his property he has the sole right to do whatever he wants with it. If he wants to fling it into the wind as almes to the poor, he has that right. If he wants to collect it all and burn it, it's his right. Just as long as he does not innitiate force on anyone then he is perfectly within his rights to dispose of his wealth by any means nessecary.

The immigrant who works for less than minimum wage actually costs you more money than he saves you because he consumes public services like healthcare, transportation, water, etc. that you help pay for.

If your talking in the context of the modern mixed economy, then you are absolutely right. But if you are talking about a [pure] Capitalist society or at least one real close to it, this is not the case because healthcare, transportation, and water would be run by private enterprise.

A lot of land that is owned by companies is utilized wastefully in the interest of short term profit. Good examples of this are strip mining and landfills. In both cases, a company owns the rights to the property, but still does not look out for its long term interests, because they know that they can simply buy more land with the profits that they make from destroying the current peice of land. While you might say that businessmen have an interest in protecting the air, water, and soil because it affects their own health, this is not true for two reasons. Since the air, water, and soil are common resources that we all share, it is in the best interest of the businessman to extract from those resources the most marginal gain for himself. By doing so he destroys those resources for others to use. The second reason is that the lifetimes of human beings is transient, and therefore they are more concerned about the way their actions will affect them personally, and not the generations of the future. In the case of global warming, the effects of todays cummulative emissions will not be felt until decades into the future.

I think we have a misunderstanding. In a Capitalist economy if you can prove that the Co2 emmisions or the other things being released into the air are hurting you or your property, then you have every right to level a law suite on the company, or for the Government to do so.

Capitalism is not sustainable from both a social standpoint and an environmental standpoint. It isn't sustainable from a social standpoint because as the income gap between the rich and poor keeps expanding, the ratio of capital owned by the rich continues to increase. Since ownership of wealth is proportional to power, it can be said that the rich will have increasing power over everyone else, resulting in a virtual oligopoly of power. I can't see that concentration in power as sustainable. Secondly, capitalism is driven by (over) consumption made possible by the destruction of natural environmental resources. I already described the conditions that allow this to happen above. At some point of environmental breakdown, either many people will not be able to afford clean air and water, or there will be huge economic losses and decay as a result of this environmental stress.

You are confusing political power (the power of force and coercian) with that of economic power, the power to exchange good for good.

**barrowaj** · 15 Nov 04, 07:48

Originally Posted by Praxus

I agree that it is an injustice to take a less qualified person over a more qualified person. But this is mainly because of the pragmatic view points of many people today. They don't look at the long term consaqeunces of such actions. It would seem to me keeping the standards up and not allowing stupid people in will in the long run be better in terms of profit then accepting X ammount of money in the short term

I think it makes perfect sense for the school to take a less qualified person in exchange for a large sum of money. It really doesn't hurt them that much to take a few marginal students.

Originally Posted by Praxus

Of course they don't have to do any work, but the fact remains that his father did earn that money, and because it is his property he has the sole right to do whatever he wants with it. Just as long as he does not innitiate force on anyone then he is perfectly within his rights to dispose of his wealth by any means nessecary.

Not true. You CAN'T do whatever you want with your property. And any situation where you could do whatever you want to would morally wrong, even if you don't directly infringe on another's rights. For example, if burning it releases noxious fumes into the air and people get sick because of it, then you shouldn't be able to do that. Or polluting your own personal ground could contaminate the soil. I see preferential admissions as a similar kind of injustice, where the rich can perpetuate their riches though their progeny. If you are going to argue for a sustainable capitalism, then this cannot be allowed.

Originally Posted by Praxus

If your talking in the context of the modern mixed economy, then you are absolutely right. But if you are talking about a [pure] Capitalist society or at least one real close to it, this is not the case because healthcare, transportation, and water would be run by private enterprise.

That's still not true. Because what would happen is that people that barely earned any money (assuming minimum wage was eliminated) could not afford to sustain themselves in the short run. They would barely be able to afford food, let alone healthcare. How can an immigrant who has to earn money for his family compete with a 16 year old kid whose parents already pay for his food, housing, and transportation?

Originally Posted by Praxus

I think we have a misunderstanding. In a Capitalist economy if you can prove that the Co2 emmisions or the other things being released into the air are hurting you or your property, then you have every right to level a law suite on the company, or for the Government to do so.

What you are saying is fine, but the damage will already have been done. In many environmental situations and in the case of global warming especially there can be no specifically assignable blame. And finally, since the environment is a feedback system with a time constant much greater than that of a human life, the damage will already have been done by the time anyone decides to do anything about it.

Originally Posted by Praxus

You are confusing political power (the power of force and coercian) with that of economic power, the power to exchange good for good.

In our country economic power begets political power. This is why politcal campaigns are run by donors. The best example of this is the "Swift boat veterans" ads (propaganda). And if your daddy can buy you into Yale, you are bound to have better chances at meeting the right people to give you a leg up on politics.

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