Punker

In the United States in 2002, $22 trillion was reported as income by businesses with only $3.9 trillion going to the annual payroll. [US Census Bureau, 2002 County Business Patterns and 2002 Economic Census.] According to the individualized statistics for each industry, for every dollar spent on payroll, $1.67 is spent on other business expenses. [US Census Bureau, publications EC02-21SG-1, EC02-31SG-1, EC02-23SG-1.] Total business income ($22 trillion) minus total business expenses ($10.4 trillion) equals total business profit: $11.6 trillion. Now that is a huge number. The distribution of wealth between business and labor places $11.6 trillion into the hands of a few, small business owners ,and only $3.9 trillion into the hands of the majority. The workers themselves are responsible for the production of wealth; it would be unfair to deny them a fair portion of the final product. On what account can be it argued that this distribution of wealth is a moral, logical, or practical system?

gunnut

The moral of the story is to run your own business and not work for other people.

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durtyburd

On the account that we are a capitalist country where people have a right to own property and use that property for their own maximum benefit.

If it is a privately owned company, the company owner(s) have a right to use their property to maximize the return on their investment. This means paying employees as little as possible while still paying enough to maintain an effective workforce with which to conduct operations.

If it is a publicly traded company, then the same principles still apply. The shareholders have a right to insist that the properties of which they own a share are used to maximize the return on their investment.

To attempt to redistribute this income would infringe on the fundamental capitalist right to own property.

Shek

Risk.

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"So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

Punker

Is the ideal social organization the one where every competes with each other in order to avoid the condition of wage-slavery? If there were a more just distribution of the economy's fruits, then neither the vices associated with abject poverty or extreme wealth would be present in society's members.

I'm aware of the personal rights granted under Capitalism, but all of social progress has been made in antagonism to this principle. Abolish of child labor, equal pay for the genders, the civil rights act, the eight hour work day, safe working conditions in factories, regulations to guarantee that food in grocery stores is edible, etc., etc.. Everyone of the significant advantages came when the rights of the Capitalist, under the Free Enterprise system, were sacrificed on behalf of the common good. We've already started infringing on the fundamental capitalist right when we disallow capitalists from discriminating on race, or forcing sanitary work conditions, and the like.

Punker

Why not eliminate that risk? After all, if there are less than 1% that enjoy the privileges of capitalism, and the rest are in an abject, perpetual wage-slavery, then why would we want to support this system as being ideal for maximizing human happiness?

durtyburd

You can't redistribute that income without sacrificing the fundamental right to own property. If my government decides to do away with the right to own property (with no limit on quantity or how it is dispensed), then the result will be civil war, because I would be the first to call on the army to intervene and I myself would take arms against the government.

The right to property is non-negotiable. To violate it is to, in my opinion, initiate a state of war against me.

Punker

Okay, Socialism is impossible.... because of you. That's not an argument. And the government is already started to sacrifice the fundamental rights to property. Minimum wage, anti-discrimination laws, safe conditions in mines and factories, all of this is an infringement on the right to property. Of course, I am speaking of property in an economic sense, implying private property, or more specifically, capital. It's not about being able to own personal property; it's about being able to own productive property. I am far from thinking that further widening the right to social equity is going to guarantee armed, civil conflicts, especially since this has been the trend of history's progressive movements.

Shek

Risk. Vision. Organizational skills. Returns to education. Etc.

Shek

Communism was an abject failure. Not much happiness there.

Capitalism grows the pie so that standards of living are higher for nearly everyone.

Punker

At best, we can do all we can to avoid nominal phrases. Did I say Communism? And, would you naturally associate every right stripped of the Capitalist with the USSR, Mao, Lenin, Stalin, and others? Using that reasoning, we could just about debilitate any social movement. "You want to increase wages, get better things for our people, and whenever anyone in the past has promised that, the only result has been failure." Why would anyone accept the words of a politician as the sentiment of their hearts? To believe that individuals like Stalin and Mao actually sought to improve the conditions of their country doesn't necessarily make that fact. Perhaps if discrimination on race to be allowed, you would offer the argument, "We've tried to abolish Capitalism before. If you try to strip the employing class of their right to do what they want with their property, the only result will be in chains at some dictator's doorstep." Has that happened in America, even though we have completely abolished the right of private property to choose the race of an employee, or to offer a wage below standard, or to demand harmful working conditions? Are we now the new Statist country, simply because we have modified the means by which economic exchanges occur? I examined a serious fact of America's Capitalist system, and my end conclusion was that too much wealth was diverted to too few people. On what grounds can you assert that there would be significant social turmoil with further modification of this economy?

durtyburd

Frankly, there is no cause for alarm.

So a huge portion of income is concentrated in those with the means, know-how, and entrepreneurship with which to garner ever-increasing profits. So what? What's wrong with that?

As long as there is still enough money left over for the rest of the population to remain housed, fed, and clothed, then everything is fine.

You are working off of the assumption that all individuals deserve the same share of the pie. This is an unfounded assumption. There is no reason to believe that an unskilled and unmotivated individual deserves just as much of the pie as someone who has the skills and motivation to both increase the overall size of the pie and carve out a larger portion.

Look at it this way. If everyone got the same share of the pie, then there would be no motivation to make the pie bigger. Right now, an entrepreneur is motivated to make the pie bigger because he can exponentially increase his own personal profit. The entrepreneur can increase the size of the pie by 1% and then personally take 95% of that increase. Even though the bulk of pie growth has ended up in the pockets of the entrepreneur, a small portion of that increase has nonetheless became available for the rest of the population. If the profit were equally distributed, then the same entrepreneur who increases the size of the pie by 1% will walk away with the same meager increase in per capita share that the rest of the population gets. This would put a serious damper on entrepreneurship because the rewards for being an entrepreneur would be too small to merit the effort involved.

Why would someone strive to create new wealth if he's just going to get as much of it as everyone else? It just wouldn't be worth the effort to create new wealth. If the person who strives to create new wealth gets just as much of it as someone who doesn't strive at all, then everyone would quite striving to create wealth and merely hope that others create it out of the kindness of their hearts.

Basically, everyone would become a charity case.

Result: stagnation

Julie

The laborers could be in the unemployment line.

durtyburd

Why would I start a small firm...say, an accounting firm with 3 employees, if I had to split the profits equally between the four of us (the 3 employees and myself)?

What would be the incentive for me to start a small firm if I could garner just as much wealth by working for someone else's small firm?

It's a fact that in order for new wealth to be created, business must be created and grow. It is also a fact that for business to grow effectively, those who create, own, and manage business must garner a much larger portion of the profits than the employees that work for the business.

If those who create, own, and manage business made just as much money as the hirelings who work for the business, then business creation and growth would cease because there would be no incentive to create, own, or manage business.

Ironduke

Punker,

Your statistics are extremely flawed. I'm shocked that nobody has questioned them and assumed them to be correct.

Revenues and profits of the 10 largest US companies (in billions):

1. ExxonMobil
Revenues: $339.9
Profits: $36.1 (10.6%)

2. Walmart
Revenues: $315.7
Profits: $11.2 (3.6%)

3. General Motors
Revenues: $192.6
Profits: -$10.6 (-5.5%)

4. Chevron
Revenues: $189.5
Profits: $14.1 (7.4%)

5. Ford Motor Co.
Revenues: $177.2
Profits: $2 (1.1%)

6. ConocoPhillips
Revenues: $166.7
Profits: $13.5 (8.4%)

7. General Electric
Revenues: $157.2
Profits: $16.4 (10.4%)

8. CitiGroup
Revenues: $131
Profits: $24.6 (18.8%)

9. AIG
Revenues: $108.9
Profits: $10.5 (9.6%)

10. IBM
Revenues: $91.1
Profits: $7.9 (8.7%)

Total Revenues: $1.87 trillion
Total Profits: $125.7 billion
Total Profits (%): 6.7%

There you have it... the 10 largest companies in the US put together earned a profit of 6.7% in 2006. You're claiming total business profits in the US are 52.7%! Where are you cooking up these false statistics from?

I don't take kindly to people telling lies on this board.

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