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  1. #21
    Cheeseburgers freeeekyyy's Avatar
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    Quote Originally Posted by Not_Me View Post
    Untrue. Inflation does not increase your purchasing power.
    Apparently you didn't catch the sarcasm in my post. Increasing wages without increasing productivity is inflation. Minimum wage contributes to that.
    You lose.

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  2. #22
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    Quote Originally Posted by freeeekyyy View Post
    Apparently you didn't catch the sarcasm in my post. Increasing wages without increasing productivity is inflation. Minimum wage contributes to that.
    Not nearly as much as printing trillions of dollars to bail out Wall Street.

    Obviously, the price of food and basic goods would be lower if many people don't earn enough to enough to afford it. But inflation is not one of the more important considerations when implementing social policy.

  3. #23
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    Same opening as always.

    Define capitalism. Suggest an alternative.

    EDIT: For that matter, what is success in this context?
    I think that's the most important thing, people generally confuse economy per se with capitalism and "is" with "successful".

  4. #24
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by Thisica View Post
    I'm sorry in being vague...see, I'm learning about this so far, and to be frank, even the lecturer admits it's hard to understand

    But to put it shortly: it's an economic system which depends on the interaction of labour and capitalists [who own the means of production] to produce goods and services which are sold on the market. For this, profit is generated for the businesses involved, and thus this profit can be used to expand them. This analysis can be generalised over to national and international trade. The classical view of capitalism, espoused by Adam Smith, is one of self-interest which allows economic prosperity to occur in nations. It's this appeal to self-interest which allows individuals to participate in this market, and thus "get what they deserve".
    I think that's a good definition actually but dont agree with the bit I've highlighted, that sounds very much like a value judgement, there is no guarantee at all that a market will value and individuals participation in line with dessert, its much more likely to be cost which is the factor.

    Self-interest is important in the economic calculations which markets make to establish prices and costs, although I would strongly argue that elite power and collective bargaining can be just as important.

    Smith's supposed espousal of self-interest was qualified, he wrote an entire book about altruism and reciprocity or moral sentiments as those things were considered, he also was being very optimistic in his assessment that individual selfishness could be made to serve the common good or social need. His quote that "it is not from benefice..." that the butcher, baker, candlestick maker provide their service to others is persuasive and appealing in its simplicity though.

  5. #25
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    Quote Originally Posted by Lark View Post
    I think that's the most important thing, people generally confuse economy per se with capitalism and "is" with "successful".
    Define "success". Wall street executives were able to game the financial system for personal gain. The global banking system ended up in dire straits. Under pure capitalism, the global banking system would have been allowed to collapse since that would have been the natural consequences of irresponsible management. But the perpetrators would not be have been the ones suffering. It would be the general population.

  6. #26
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by Not_Me View Post
    Define "success". Wall street executives were able to game the financial system for personal gain. The global banking system ended up in dire straits. Under pure capitalism, the global banking system would have been allowed to collapse since that would have been the natural consequences of irresponsible management. But the perpetrators would not be have been the ones suffering. It would be the general population.
    Yeah, well, that was my point. Its the definitions that matter, natural consequences are mitigated by money, that's been true from day dot and year one but most free market fundamentalists think that permitting crisis to run their course will improve things eventually and make natural consequences a reality.

    Although to me that's about as likely as the USSR having successfully "whithered away" the state.

  7. #27
    Senior Member Thisica's Avatar
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    Quote Originally Posted by Lark View Post
    I think that's a good definition actually but dont agree with the bit I've highlighted, that sounds very much like a value judgement, there is no guarantee at all that a market will value and individuals participation in line with dessert, its much more likely to be cost which is the factor.

    Self-interest is important in the economic calculations which markets make to establish prices and costs, although I would strongly argue that elite power and collective bargaining can be just as important.

    Smith's supposed espousal of self-interest was qualified, he wrote an entire book about altruism and reciprocity or moral sentiments as those things were considered, he also was being very optimistic in his assessment that individual selfishness could be made to serve the common good or social need. His quote that "it is not from benefice..." that the butcher, baker, candlestick maker provide their service to others is persuasive and appealing in its simplicity though.
    Oops. I should have written there, in my definition, an indication of value judgment in the highlighted passage...I remember Adam Smith's quote on that. But it seems that a lot of people [me included ] have misunderstood that passage. Of course he wasn't suggesting that we are all selfish, but for the purposes of the functioning of the market, the producers and the people who buy stuff get something out of the transaction. That could be Milton Freedman's text "Free to Choose" speaking here, though, as he did mention that Smith's quote was misunderstood.

    The market economy is relatively easy to understand, since there are two major players, the producers and the consumers acting within the system. In this model, the government is not much involved. I think that's what gets people into a hissy fit about the lack of morality in the market. Adam Smith's goal, however, was to understand the nature and causes of the wealth of nations, not provide economic advice.

    The confusion between valuation and understanding in economic thinking has got us into a mess.
    “To explain all nature is too difficult a task for any one man or even for any one age. 'Tis much better to do a little with certainty, & leave the rest for others that come after you, than to explain all things by conjecture without making sure of any thing.”—Statement from unpublished notes for the Preface to the Opticks (1704) by Newton.

    What do you think about me? And for the darker side, here.

  8. #28
    Cheeseburgers freeeekyyy's Avatar
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    Quote Originally Posted by Not_Me View Post
    Not nearly as much as printing trillions of dollars to bail out Wall Street.

    Obviously, the price of food and basic goods would be lower if many people don't earn enough to enough to afford it. But inflation is not one of the more important considerations when implementing social policy.
    Not surprisingly, you're still missing the point, and are intent on demonizing me rather than understanding the argument. One, I don't favor bailouts. Two, the value of money is determined by how much is out there. If people are earning less for the same amount of productivity, their dollars have greater value. It's a fact. Minimum wage doesn't help anybody, it just means a business will be less likely to hire somebody who doesn't meet the necessary amount of productivity to be worth the minimum wage.
    You lose.

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  9. #29
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by Thisica View Post
    Oops. I should have written there, in my definition, an indication of value judgment in the highlighted passage...I remember Adam Smith's quote on that. But it seems that a lot of people [me included ] have misunderstood that passage. Of course he wasn't suggesting that we are all selfish, but for the purposes of the functioning of the market, the producers and the people who buy stuff get something out of the transaction. That could be Milton Freedman's text "Free to Choose" speaking here, though, as he did mention that Smith's quote was misunderstood.
    Ha! No, I wasnt saying selfish in any prejorative sense, I just meant self-interest, which I think is legitimate.

    The market economy is relatively easy to understand, since there are two major players, the producers and the consumers acting within the system. In this model, the government is not much involved. I think that's what gets people into a hissy fit about the lack of morality in the market. Adam Smith's goal, however, was to understand the nature and causes of the wealth of nations, not provide economic advice.
    The state in reality is a major producer and consumer, it was as true Adam Smith's day as it is today, it was Keynes who really investigated and evaluted it as a major agency in economic processes though. Its still significant, even if private firms like transglobal corporations are often as big as governments or have similar circulations of cash going on.

    Governments are no arbitrators of morality anyway or shouldnt necessarily be, the classical liberals were pretty sure about that and it was that tradition which he was writing in, on the other hand there was a definite moral agenda in Smith's writing, and its full of advice, it wasnt simply a sociological investigation.

    One of my favourite quotes from Smith is that no economy can be prospering in which the greater number or impoverished, I'm paraphrasing but that's pretty close, it could be mistaken for Marx!

    Smith's conclusions were, like a lot of economists left and right, that distribution is not the crux of poverty but production, the question was how to max out production and the way to do that he outlined in classical economic terms, ie minimal political interference, legal contractualism, although having read him I suspect that he'd be more favourable to collective bargaining or competition legislation than Friedmann or any other capitalist theorist.

    The confusion between valuation and understanding in economic thinking has got us into a mess.
    I agree, however perhaps for different reasons, and economics is not objective science, nor is it likely to be and that brings us back to the elite power aspect, Smith doesnt consider it that much besides suggesting that any time a group of suppliers meet it generally results in a conspiracy against the public, ie consumers, but Marx did and there are a lot of successful investors or billionaires betting on Marx more than Smith these days.

  10. #30
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by freeeekyyy View Post
    Not surprisingly, you're still missing the point, and are intent on demonizing me rather than understanding the argument. One, I don't favor bailouts. Two, the value of money is determined by how much is out there. If people are earning less for the same amount of productivity, their dollars have greater value. It's a fact. Minimum wage doesn't help anybody, it just means a business will be less likely to hire somebody who doesn't meet the necessary amount of productivity to be worth the minimum wage.
    Minimum wages provide a wage floor which grants needed friction against the deflationary spiral you're describing.

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