[NT] Why does so many people fail to get rich?

[Provoker]

Explain

If capitalism favor self interest and equal opportunity for all, why does so many people fail to get rich?

Because the harder one works, the more profit made by the capitalist. So even if the worker gets wealthier the capitalist gets so much wealthier that the standard for what constitutes "rich" is raised. In this sense, unless there is a redistribution of wealth there will always be a gap between the haves and have nots because this is the logic built into strict captalism. Two main solutions have been tried historically to remedy this shortcoming: Keynesian policy and socialism. Keynesian policy operates within the confines of capitalism but has the state (which in a democracy is theoretically supposed to represent the will of the people) intervene and foster the development of certain industries and so forth. The other solution that has been tried is socialism whereby the working class own the means of production. The Soviet Union is a classical example of having a vibrant welfare state that protected its citizens from cradle to grave and was the bedrock of Soviet socialism. As the moment, as a result of the financial crisis which is rooted in the shortcomings of free market fundamentalism, Keynesian economics is back in vogue which was largely responsible for the Golden Age of capitalism in the 50s and 60s, and was the underlying economic logic of Roosevelt's New Deal, the Marshall Plan, and the reconstruction of Europe. Indeed, the recent stimulus packages are based on the argument made by Keynes in the General Theory of Employment, Interest, and Money which was published back in 1936. Still, captialism does not by definition provide equal opportunities for all--that's just pure Walt Disney. Adopting a Keynesian policy and/or a more equitable distribution of wealth is not being pro-communist as pundits will sometimes claim. It has nothing to do with communism--that's just political jargon to embrace the status quo. It is about democracy. That is, giving the people a say in how their resources are used. Without this, political institutions are merely a facade that merely serve the interests of the property class. And when political institutions don't properly represent the interests of the bulk of a population, that is called a democratic deficit. The deeper the democratic deficit, the more people view common solutions as politically impossible. In some places, this is to such an extent that people are even apathetic about voting and abstain from politics completely. Yet, the system depends on the obedience of millions of people who are given small rewards to keep going. If they stop obeying, the system fails. On that note, in many countries in Latin American including Ecuador and Bolivia, we've seen people turn to activism and engage in social mobilization in the form of protests, riots, marches, and so on. This has become a new way of making public policy in Latin America. This demonstrates that the status quo is not cast in concrete as the wealthy class wants workers to believe but can be politically challenged if the will power is there.

In summary, capitalism by definition does not amount to equal opportunity for all, and in most cases is unequal. As a result, different solutions have been tried historically such as Keynesian policy (which is still within the confines of capitalism but involves a bigger role for the welfare state) which was the economic groundwork for one of the best periods of growth in history, as well as socialism which has had mixed results. Solving some of the shortcomings of capitalism is not tantamount to communism, but (I'm not supposed to say this) is really about increasing the quality of democracy.

 

[Antimony]

Having talents/being gifted, and having the ability to apply such such things are what gets people rich.

Oh, that and having a rocking body I suppose. But still, a lot of people do not have the will power to apply themselves, assuming they have what it takes.

 

[yenom]

The answer is only one: because resources are not unlimited.

resource is unlimited when enough people want it and spend money on it.
People would find any way to replicate and produce that resource, or even go to outer space for it, if they knew it was profitable.

Supply and demand of resources does not work in real life, unless you are talking about water and electricity. in the real world, you manufacture a product and have to beg people to buy it. It is called selling. only then can you build a market out of that product.

 

[The_Liquid_Laser]

Explain

If capitalism favor self interest and equal opportunity for all, why does so many people fail to get rich?

If you compare the citizens in capitalist countries with the citizens of other countries you will see that the capitalist citizens on average have a lot more wealth. Logically if you are going to weigh the merits of capitalism you must compare it to economic systems which are not capitalist. When it comes to wealth and standard of living capitalist countries kick ass. There are a lot of people in capitalist countries getting rich.

However, most people in capitalist societies don't describe themselves as rich, because they are comparing themselves to other capitalist citizens. In this case both citizens have the advantage of a capitalist system, so then the relative success of each person has to do with other attributes.

Aside: I wouldn't really describe equal opportunity as part of capitalism. "Fairness" is not really an attribute of capitalism. Efficiency is the most important attribute of capitalism. In many cases efficiency is at odds with fairness. (In fact communism is much more fair than capitalism is. It's horribly inefficient, but hey at least it's fair.)

 

[Nocapszy]

because if they did, we couldn't call it rich.
now could we?

 

[onemoretime]

If you compare the citizens in capitalist countries with the citizens of other countries you will see that the capitalist citizens on average have a lot more wealth. Logically if you are going to weigh the merits of capitalism you must compare it to economic systems which are not capitalist. When it comes to wealth and standard of living capitalist countries kick ass. There are a lot of people in capitalist countries getting rich.

However, most people in capitalist societies don't describe themselves as rich, because they are comparing themselves to other capitalist citizens. In this case both citizens have the advantage of a capitalist system, so then the relative success of each person has to do with other attributes.

Aside: I wouldn't really describe equal opportunity as part of capitalism. "Fairness" is not really an attribute of capitalism. Efficiency is the most important attribute of capitalism. In many cases efficiency is at odds with fairness. (In fact communism is much more fair than capitalism is. It's horribly inefficient, but hey at least it's fair.)

Is that a function of capitalism being inherently better, or is it a function of capitalist states tending to have access to resources in high demand? Adam Smith didn't invent capitalism, he just described it in a nascent form. Why did it start in England and Scotland? Was it because of the inherent goodness of the people (laughable), or was it something else, perhaps the access to water combined with large coal deposits, along with the individuating effects of enclosure combined with Protestant Christianity that led to a highly individualistic, market-based economy? Might it have been those coal deposits leading to Great Britain's early industrialization and subsequent empire that led to capitalist nations having control over most of the world's valued resources (as the rest of Europe sought to follow the British model)?

 

[Provoker]

When it comes to wealth and standard of living capitalist countries kick ass.

First of all, you've muddled up wealth and standard of living in the same sentence. When it comes to standard of living, and eveyone agrees on this, the northern European countries enjoy a higher standard of living than their captialist counterparts. And these countries, (such as Sweden, for example) are considered social democracies. Secondly, if one is only interested in measuring sheer wealth, then there were points in history where the USSR outperformed the United States (1960s). Thus, both components of your statement are false. The wealth and standard of living were created not by capitalism per se, but by modernization. And modernization can be pursued in different ways. There is no evidence that capitalism is the best way, and more evidence that some sort of social democracy has been more effective historically as far as standard of living is concerned. As far as pure wealth generation is concerned, captitalism has been effective. But this did not necessarily result in a better quality of life for most of the people unless it was coupled with a Keynesian fiscal policy and welfare state.

 

[Alwar]

Do you mean which are most likely to admit to cheating?

And are you implying that the other majors arent going to use their degrees to make money? I get sick of the "businessmen are evil" tirade.

Why be reluctant about something that is viewed as legitimate? They are more likely to cheat because of that (as mentioned in the study). Also a willingness to cheat, whether derived from callousness or self-deception, is overall beneficial in business as I and others have stated both in our direct experience and observed examples. These examples are common knowledge. It does not say that all business majors are shit, or that in some cases cheating won't backfire on the cheater (Bernie Madoff), it indicates they have the highest concentration of cheats.

Cheating as legitimate practice in business makes sense given the underlying legal corporate structure in the US--to make profit over all else. A famous example of this is when Henry Ford I believe, was sued by investors because he decided to pay the factory workers higher wages, and improve their working conditions. He finally lost when the supreme court ruled that corporations exist to make profit, not to benefit society. There is no tirade about it, profit over human needs or benefit is written in our law.

 

[The Decline]

What is the graph from? I read a few years ago a study that showed that most wealth in the United States is inherited and only a fraction made it themselves..

From this fun site: Graphic Sociology

 

[yenom]

Because the harder one works, the more profit made by the capitalist. So even if the worker gets wealthier the capitalist gets so much wealthier that the standard for what constitutes "rich" is raised.

Explain this? How is harder one works relate to how much money one earns?

 

[Valuable_Money]

Dont have time to sift through all the posts, dont know if this has been posted yet.

By definition the "rich" are considered above the majority. If you live in america and make minimuim wage you are considered part of the richest 1% of the world, inless your homeless or something but considering you made this post I doubt it. So yeah you are rich, just because you dont have a flat screen TV and a Sports Car doesnt mean that capitalism has failed if thats what your impllying. So yeah, for all you Che Guevara-hat wearers out there, you cant overthrow the burgouise becaue you ARE the burgouise, instead of bitching about the system why dont you sell all your RATM CDs and give the money to UNICEF or somthing. /rant

 

[The_Liquid_Laser]

Is that a function of capitalism being inherently better, or is it a function of capitalist states tending to have access to resources in high demand? Adam Smith didn't invent capitalism, he just described it in a nascent form. Why did it start in England and Scotland? Was it because of the inherent goodness of the people (laughable), or was it something else, perhaps the access to water combined with large coal deposits, along with the individuating effects of enclosure combined with Protestant Christianity that led to a highly individualistic, market-based economy? Might it have been those coal deposits leading to Great Britain's early industrialization and subsequent empire that led to capitalist nations having control over most of the world's valued resources (as the rest of Europe sought to follow the British model)?

Heh lots of questions of here and few statements. I'm not sure if you have a point in there or are just playing devil's advocate. Let me throw this out there though. Kuwait has the largest per capita income in the world (or at least it did last I checked a few years ago), so it's true that natural resources play a factor. Do you think that they will maintain this level of economic productivity when they run low on oil?

First of all, you've muddled up wealth and standard of living in the same sentence. When it comes to standard of living, and eveyone agrees on this, the northern European countries enjoy a higher standard of living than their captialist counterparts. And these countries, (such as Sweden, for example) are considered social democracies.

I don't make much distinction between socialist democracies and capitalist democracies, because neither one exist in a pure form. All modern countries exist on a continuum for capitalism/socialism. Generally a country gets wealthy using capitalist practices and then realizes, "Hey we're generating a lot of wealth, but most people aren't seeing it." Then some degree of socialist policies are instituted. All of these modern capitalist/socialist countries are actually pretty similar and are all much more effective at generating wealth that the rest of the world.

Secondly, if one is only interested in measuring sheer wealth, then there were points in history where the USSR outperformed the United States (1960s).

You can point out tiny slivers in time, but these are basically meaningless. The USSR has proven to be an unsustainable economy. This is like saying two guys ran a marathon and guy B was ahead for 1/2 a mile, then guy A dramatically outdistanced him for the rest of the 26 miles. Command economies like in the former USSR are much less efficient than capitalist ones, and history has proven this is true.

 

[onemoretime]

Heh lots of questions of here and few statements. I'm not sure if you have a point in there or are just playing devil's advocate. Let me throw this out there though. Kuwait has the largest per capita income in the world (or at least it did last I checked a few years ago), so it's true that natural resources play a factor. Do you think that they will maintain this level of economic productivity when they run low on oil?

Come on, as a fellow ENTP, you should know that we make our best points without ever coming up with a direct statement.

Did Kuwait ever industrialize in a complete sense? Have they developed any sort of industrialized trade beyond that of resource extraction? Is there any sort of manufacturing done in Kuwait? Those are the more important questions.

 

[INTJ123]

Explain this? How is harder one works relate to how much money one earns?

He's saying the employer is getting rich off using employee slave labor.

 

[FDG]

resource is unlimited when enough people want it and spend money on it.

This is unbelievable...is the mass of the earth infinite?

People would find any way to replicate and produce that resource

Yes, we all know that every family has a replicator, such as those seen in Star Trek, at their disposal in the kitchen.

or even go to outer space for it, if they knew it was profitable.

Then you don't know the difference between "resource" and "stock". The latter is simply something that exists, the former is something you can extract and make money from. To put it simply, if you need more money to extract something that what you can get, then it's not a resource anymore, since the net expenditure of resources will be negative. Which means, that for the time being outer space cannot be considered as a resource.

Supply and demand of resources does not work in real life, unless you are talking about water and electricity. in the real world, you manufacture a product and have to beg people to buy it. It is called selling. only then can you build a market out of that product.

Sigh. Why do you think people have to be begged to buy something? Because they lack unlimited resources, thus they need to allocate their money wisely, so we are back at the only possible reason of why not everybody is rich: there are not enough resources.

 

[FDG]

Do you mean which are most likely to admit to cheating?

And are you implying that the other majors arent going to use their degrees to make money? I get sick of the "businessmen are evil" tirade.

You don't need to equate business majors with businessmen. In fact, the greatest majority of nowadays' successful businessmen are not business majors.

 

[Nocapszy]

i don't uh...
i don't know why this thread is still going on.
unless there are extra questions that my browser won't display, the OP is fully answered.

it's a matter of semantics.
cloud, do you care to revise your question or is this entire thread just retarded?

 

[yenom]

This is unbelievable...is the mass of the earth infinite?

No but the universe is infinite.

Ad for your replicator mockery, people will die to produce any type of resource that can create profit. That is why we still haven't starve to death despite the Malthus prediction.

 

[yenom]

Originally Posted by FDG
I still think that it will not be impossible for everybody to reach a decent standard of living, but I cannot envision a future with limitless resources, so that everybody would be able to get rich.

By definition of rich, I mean you do not have to work for your food. I think this is possible.

In today's society, the standard of rich is the people who gets lunch and the minimum without working, while the poor has to use their wage to pay for food and other necessities for survivial.

 

[INTJ123]

No but the universe is infinite.

Ad for your replicator mockery, people will die to produce any type of resource that can create profit. That is why we still haven't starve to death despite the Malthus prediction.

As much as I don't really like entjs, he did have a point. Natural Resources only occur naturally, and if we comsume it faster than it is produced in nature, then it is very limited. And until we start using magnetic propulsion for space flight, it won't be cost effective to go out there to mine resources.