[SciFiRory]

(Original post by IFondledAGibbon)
I'm very sympathetic to that worldview and I completely agree that any socialist system should guarantee a decent life for all. However, people do respond to incentives (feels dirty saying that, but it's true), and a system that encourages work is not synonymous with the capitalist 'work or die' phenomenon.

For example, I don't have huge problems with David Schweickart's system of democratic firms; full employment would be theoretically possible, but there would be people temporarily out of work. In such a case, a strong welfare system would suffice. It's not perfect but I'm not satisfied with the whole 'we don't want a blueprint' ethos, and as of yet I haven't seen a better well-defined system.

people will respond to the incentive of bettering themselves and the rest of society just as well if not better imo, they don't have the pressure or stress of the do or die crap that way, they can enjoy their work more without it and feel like they are doing something because of it's social benefit not just to survive.

[IFondledAGibbon]

(Original post by SciFiBoy)
people will respond to the incentive of bettering themselves and the rest of society just as well if not better imo, they don't have the pressure or stress of the do or die crap that way, they can enjoy their work more without it and feel like they are doing something because of it's social benefit not just to survive.

I remember saying those exact same things in this here thread. Right wingers tend to forget that motives other than monetary ones exist. I actually don't think the so called 'free rider problem' is an economy breaker. The 'economic calculation problem' is more poignant. How do we assess what everyone wants, and deliver it to them the best we can? Markets do this fairly well if everyone has equal pulling power in the market and we see every day how capitalist societies can't achieve this. Socialist ones, in theory, could. If one accepts this premise, then what sort of economy could eliminate the 'do or die crap', like you said, whilst incorporating an efficient, non bureaucratic, reliable system of resources allocation?

[internetguru]

(Original post by SciFiBoy)
people will respond to the incentive of bettering themselves and the rest of society just as well if not better imo, they don't have the pressure or stress of the do or die crap that way, they can enjoy their work more without it and feel like they are doing something because of it's social benefit not just to survive.

I wouldn't work if I didn't have to. Why bother when you can live doing stuff you actually want to do instead?

[SciFiRory]

(Original post by IFondledAGibbon)
I remember saying those exact same things in this here thread. Right wingers tend to forget that motives other than monetary ones exist. I actually don't think the so called 'free rider problem' is an economy breaker. The 'economic calculation problem' is more poignant. How do we assess what everyone wants, and deliver it to them the best we can? Markets do this fairly well if everyone has equal pulling power in the market and we see every day how capitalist societies can't achieve this. Socialist ones, in theory, could. If one accepts this premise, then what sort of economy could eliminate the 'do or die crap', like you said, whilst incorporating an efficient, non bureaucratic, reliable system of resources allocation?

I think is an interesting question, I would say that a certain standard of life should always be guaranteed, beyond that I think is open to debate how things are allocated, perhaps a system based upon the social value of labour rather than it's monetary value in the market system could work?

[IFondledAGibbon]

(Original post by SciFiBoy)
I think is an interesting question, I would say that a certain standard of life should always be guaranteed, beyond that I think is open to debate how things are allocated, perhaps a system based upon the social value of labour rather than it's monetary value in the market system could work?

You have to admit, it's a bit of a vague sentiment. The system which I keep banging on about is 'economic democracy'. Instead of capitalists exploiting the workforce though the extraction of surplus labour, we could have democratic firms, ran by workers, who take any profit they create. It isn't really based on the 'social value of labour' nor is it perfect, but it's a hell of a lot better than our current system and until I find a sound theoretical non-market system, the only intellectually honest position to take is a skeptical one.

http://en.wikipedia.org/wiki/Economic_democracy

[Classical Liberal]

(Original post by IFondledAGibbon)
You have to admit, it's a bit of a vague sentiment. The system which I keep banging on about is 'economic democracy'. Instead of capitalists exploiting the workforce though the extraction of surplus labour, we could have democratic firms, ran by workers, who take any profit they create. It isn't really based on the 'social value of labour' nor is it perfect, but it's a hell of a lot better than our current system and until I find a sound theoretical non-market system, the only intellectually honest position to take is a skeptical one.

http://en.wikipedia.org/wiki/Economic_democracy

There is nothing to stop worker run firms. Infact I know that the tax scheme is rigged up in favour of firms that have the workers also owning the company in some format., employee share schemes getting taxed at capital gains rather than income tax being a good example.

The first problem with "economic democracy" that workers very often do not want to have their incomes linked directly to the success of the firms, instead they take the more risk averse strategy of taking a contract with a guaranteed income. They might not earn as much money but the income they get is less volatile.

Another problem is coordinating the firm. Democracy is a phenominally inefficient system at conveying information. Just look at democracy for governments, nobody is really able to express their desires because they have to vote for a package that is made available to them. When somebody votes for labour they have to vote for everything in the labour manifesto rather than the specific things they like.

Another fundamental problem is this obsession with the workers. Economic democracy seems to be a system designed with the interests of the producers at the heart of the system. However this system forgoes the interests of the most important person in the market, the consumer. The consumer is what matters in the end, the reason people work is so that they can cosume. Capitalism is a system that is ultimately guided by the consumer (even though it looks like the "capitalist" is in control, he is not, the capitalist is just a servant to the consumer) and in the end the workers become consumers, capitalism is a system that is controlled by the workers in end.

Another problem is just the hyprocracy of being a so called socialist/anarchist and then proposing a specific kind of capitalism. "Economic democracy" is capitalism. It still uses private property. It still uses prices. And it still uses the profit motive.

[anarchism101]

(Original post by Classical Liberal)
There is nothing to stop worker run firms. Infact I know that the tax scheme is rigged up in favour of firms that have the workers also owning the company in some format., employee share schemes getting taxed at capital gains rather than income tax being a good example.

However, the workers' lack of capital is in practice a bar to most potential worker-run firms.

The problem with shares is that they are still a detachment of labour from ownership. Otherwise there's no point in having them.

The first problem with "economic democracy" that workers very often do not want to have their incomes linked directly to the success of the firms, instead they take the more risk averse strategy of taking a contract with a guaranteed income. They might not earn as much money but the income they get is less volatile.

Workers' incomes are always linked to the success of the firms, at least to a degree. What I think you're getting at is that their income generally isn't a fixed portion of the firm's income, but there's no reason why this would necessarily be the case under a worker-run firm either. The workers can decide between themselves how to apportion revenue.

Another problem is coordinating the firm. Democracy is a phenominally inefficient system at conveying information. Just look at democracy for governments, nobody is really able to express their desires because they have to vote for a package that is made available to them. When somebody votes for labour they have to vote for everything in the labour manifesto rather than the specific things they like.

Representative democracy =/= direct participatory democracy

Especially considering what we have in the UK is a **** form even of representative 'democracy'.

Another fundamental problem is this obsession with the workers. Economic democracy seems to be a system designed with the interests of the producers at the heart of the system. However this system forgoes the interests of the most important person in the market, the consumer. The consumer is what matters in the end, the reason people work is so that they can cosume. Capitalism is a system that is ultimately guided by the consumer (even though it looks like the "capitalist" is in control, he is not, the capitalist is just a servant to the consumer) and in the end the workers become consumers, capitalism is a system that is controlled by the workers in end.

Slave plantation owners also had to satisfy their consumers. Sometimes so did feudal lords. Consumers determine whether X is produced or not, not who within the producing firm/s gets the money for it

Another problem is just the hyprocracy of being a so called socialist/anarchist and then proposing a specific kind of capitalism. "Economic democracy" is capitalism. It still uses private property. It still uses prices. And it still uses the profit motive.

For the latter two, not necessarily. It doesn't have to operate on a market economy. Though it could, and markets =/= capitalism.

As for private property, it does not, at least in the sense anarchists generally mean it:

http://anarchism.pageabode.com/afaq/secB3.html

In short, capitalism is defined by wage labour (or land rents, but that's less common).

[IFondledAGibbon]

(Original post by anarchism101)
However, the workers' lack of capital is in practice a bar to most potential worker-run firms.

The problem with shares is that they are still a detachment of labour from ownership. Otherwise there's no point in having them.



Workers' incomes are always linked to the success of the firms, at least to a degree. What I think you're getting at is that their income generally isn't a fixed portion of the firm's income, but there's no reason why this would necessarily be the case under a worker-run firm either. The workers can decide between themselves how to apportion revenue.



Representative democracy =/= direct participatory democracy

Especially considering what we have in the UK is a **** form even of representative 'democracy'.



Slave plantation owners also had to satisfy their consumers. Sometimes so did feudal lords. Consumers determine whether X is produced or not, not who within the producing firm/s gets the money for it



For the latter two, not necessarily. It doesn't have to operate on a market economy. Though it could, and markets =/= capitalism.

As for private property, it does not, at least in the sense anarchists generally mean it:

http://anarchism.pageabode.com/afaq/secB3.html

In short, capitalism is defined by wage labour (or land rents, but that's less common).

I haven't got much to add, quality post.

Just a couple of things.

(Original post by Classical Liberal)
Another problem is coordinating the firm. Democracy is a phenominally inefficient system at conveying information. Just look at democracy for governments, nobody is really able to express their desires because they have to vote for a package that is made available to them. When somebody votes for labour they have to vote for everything in the labour manifesto rather than the specific things they like.

Your generic critique of democracy doesn't really make sense in this context. This isn't an issue of "people expressing choices in the market" vs "people expressing choices through a planning board (or something)", we're talking about capitalist ran firms, in which the capitalist accumulates vast wealth and has incentives to squeeze the workers for all their worth vs worker ran firms, in which workers take a greater slice of the pie, perhaps along with managers, who would be democratically accountable and have interests in line with the firm's workers. There's no reason to suppose this system would be any more inefficient. Indeed worker ran firms have been shown to match and in some cases better capitalist firms in terms of efficiency.

Another fundamental problem is this obsession with the workers. Economic democracy seems to be a system designed with the interests of the producers at the heart of the system. However this system forgoes the interests of the most important person in the market, the consumer. The consumer is what matters in the end, the reason people work is so that they can cosume. Capitalism is a system that is ultimately guided by the consumer (even though it looks like the "capitalist" is in control, he is not, the capitalist is just a servant to the consumer) and in the end the workers become consumers, capitalism is a system that is controlled by the workers in end.

So when someone advocates a more egalitarian and utilitarian system via producers taking a greater proportion of the wealth they create, you perceive this as an obsession with the workers and thus a problem? Not to mention the meaningless conclusion of that paragraph "capitalists are servants of consumers, consumers are workers, therefore workers run capitalism". Semantics can't justify massive wealth inequality ecological destruction and crisis' inherent in the capitalist system.

[Classical Liberal]

(Original post by IFondledAGibbon)
There's no reason to suppose this system would be any more inefficient. Indeed worker ran firms have been shown to match and in some cases better capitalist firms in terms of efficiency.

Just think about reality for just a second. Do you really think it would be efficient if McDonalds was run democratically by the workers? Do you really think that a bunch of kids could actually get McDonalds to operate efficiently using a democratic model?

There is nothing to stop these democratic firms in the law. The thing that stops them is that democratically run firms would be crap and they would destroy peoples incentives to ever build firms. My Dad would be pretty irate if the firm that he built up was all of a sudden taken hostage by his employees. Do you think that would really be just? And don't you think that such eventualities would destroy all incentive to build firms?

But yeah my Dad is a filthy capitalist and has contributed nothing to the production of the end product................except all his know how, and his savings.

So when someone advocates a more egalitarian and utilitarian system via producers taking a greater proportion of the wealth they create, you perceive this as an obsession with the workers and thus a problem?

The problem is that you are suggesting employees created all of the wealth. They simply did not. The labour theory of value is complete claptrap.

[prog2djent]

(Original post by Classical Liberal)
My Dad would be pretty irate if the firm that he built up was all of a sudden taken hostage by his employees. Do you think that would really be just?.

That's what socialists and anarchists want. To sacrifice everyone for a so-called working class in this country. Despite the fact most people aren't working class (shock horror, by perception and by objective measurement) and the whole workers running firms gets kind of silly when you remind yourself this isn't the 19the century and we are now a service, finance, and technological economy.

[IFondledAGibbon]

(Original post by Classical Liberal)
Just think about reality for just a second. Do you really think it would be efficient if McDonalds was run democratically by the workers? Do you really think that a bunch of kids could actually get McDonalds to operate efficiently using a democratic model?

Firstly McDonalds is a huge multinational cooperation that wouldn't exist at its size if profits were tied to worker numbers, since there would be no incentives for an exponential increase in firm size because bigger size = more workers = increased sharing of profits.

How is McDonalds currently ran? Each individual "restaurant" is primarily ran by the local managers (with company policy made by the people at the top). You could retain this manager system, except the managers would be democratically accountable to the workers. Their interests would be aligned with workers to achieve the optimal efficiency in relation to how hard and how long the workers want to work. It’s reasonable to assume most firms would be fairly small, as there wouldn’t be any strong incentives for firms to grow exponentially since for a firm to grow, more workers have to be hired and this means profits are more divided. So firms would meet demand up until a point, if demand continues to increase then new firms would emerge. This was shown by the Mondragon cooperatives.

http://en.wikipedia.org/wiki/Mondragon_Corporation

Admittedly, there may still be a number of larger firms, for these firms you could still have people with strong business knowledge at the head of a company, they just wouldn’t be paid extraordinary amounts. Their pay would depend on the profits of the firm, like everyone else’s. The managers would be probably be elected by the workers, resulting in an alignment of interests i.e. for the workforce to be efficient, but not overworked or exploited. Workers want more money, they can work harder, but they don’t have to (unlike capitalist firms, in which managers and company owners are incentivised to overwork workers regardless, to fill their own pockets. And I’ll say it again, there's no evidence that democratic firms are less efficient than capitalist ones.

There is nothing to stop these democratic firms in the law. The thing that stops them is that democratically run firms would be crap and they would destroy peoples incentives to ever build firms. My Dad would be pretty irate if the firm that he built up was all of a sudden taken hostage by his employees. Do you think that would really be just? And don't you think that such eventualities would destroy all incentive to build firms?

But yeah my Dad is a filthy capitalist and has contributed nothing to the production of the end product................except all his know how, and his savings.

OK, let’s start with your straw man argument. Socialists and Marxists in particular argue that the capitalist contributes nothing to the value of a commodity in his role as a capitalist i.e. privately owning the means of production and hiring workers. Often capitalists have multiple socially necessary and highly valuable roles such as entrepreneurship and being managers.

I’ve already discussed how individuals with strong managerial skills could still lead, so I won’t repeat myself. As for entrepreneurship, this is a pretty controversial subject and the exact role of entrepreneurs in an economically democratic society would be determined through trial and error. In David Schweickart’s model, he suggests small time capitalists would be allowed by law. They could start a business and hire workers, taking the majority of the profits (just as capitalists do now). The difference is that capitalists can only sell their firms to the state (should they choose to); the company would then be turned over to the employees to be ran democratically. He argues that this wouldn’t threaten the institutions of economic democracy, as most firms would be democratic so capitalists would have offer “nice” working conditions or workers would find work within a democratic firm. I’m a little sceptical, and I think it would depend on empirical evidence regarding innovation figures and so on.

So just to be clear, your Dad wouldn’t be suddenly “taken hostage by his employees” for being a “filthy capitalist” that “has contributed nothing to the production of the end product”.

(Original post by Classical Liberal)
The problem is that you are suggesting employees created all of the wealth. They simply did not. The labour theory of value is complete claptrap.

Like I said, I believe capitalists don’t contribute to the creation of wealth in their role as a capitalist. Although, they often contribute in other roles.

(Original post by prog2djent)
That's what socialists and anarchists want. To sacrifice everyone for a so-called working class in this country. Despite the fact most people aren't working class (shock horror, by perception and by objective measurement) and the whole workers running firms gets kind of silly when you remind yourself this isn't the 19the century and we are now a service, finance, and technological economy.

LOL at the ban. Anyway, most people are employees rather than employers, which is what I mean by “working class”.

[anarchism101]

(Original post by prog2djent)
Despite the fact most people aren't working class

*******s. Working class doesn't just mean manual jobs.

[Classical Liberal]

(Original post by IFondledAGibbon)
Firstly McDonalds is a huge multinational cooperation that wouldn't exist at its size if profits were tied to worker numbers, since there would be no incentives for an exponential increase in firm size because bigger size = more workers = increased sharing of profits.

You are not thinking clearly. If we are to take the statement seriously, the ideal number of workers in any firm would be one. Because that one worker would take all of the profits. Intuitively this seems like nonsense, because it is.

The profits of a firm earns would be, in part, a function of the number of workers. Increasing the number of workers may increase profits. If the extra profit that a worker produces is greater than the proportion of total profit they worker would take, then that worker will be employed and increase the profit that each other worker gets.

Say for example a firm has 4 workers, and they all take an equal share of the profit, and the firm has a profit of £100. Thus each worker gets £25. Another worker joins the firm and increases profits to £150. All the workers take an equal share, so the five workers now get £30. The firm will add workers as long as the profit that the new worker gets, is less than the extra profit that he creates. Or to use economics jargon, where marginal revenue is greater than marginal cost.

Hopefully you get that, I know Marxists struggle with marginal analysis.


Another issue which you really are not taking into account is that workers for the most part do not want their incomes tied to profits. Profits are volatile they can go negative. Workers tend not to want to expose themselves to the volatility of profits and the risk of losses. Instead workers decide to take a wage instead. I am sure the business owner would prefer to pay his workers as a function of profits, because that means the business owner would only have to pay people if the business was doing well, however this is an arrangement the workers rarely want. For example, I certainly do not want my income linked directly the profits of the firm I work for, we missed our sales targets by £500,000 so far . But no matter, I still get paid.

Indeed, if a firm was to start losing money, how do you think your democratic model would perform. I can bet you that it would cause a lot of upset as everyone would turn on each other, rather than the capitalist carrying the burden of losses.

OK, let’s start with your straw man argument. Socialists and Marxists in particular argue that the capitalist contributes nothing to the value of a commodity in his role as a capitalist i.e. privately owning the means of production and hiring workers. Often capitalists have multiple socially necessary and highly valuable roles such as entrepreneurship and being managers.

This is technically wrong. The capitalist provides capital. Where do you think capital comes from? The tooth fairy?

Capital comes from saving. To create capital, one must forgo consumption in the present to use the unconsumed resources to create capital. The capitalist suffers in the present, by not consuming, to allow for more consumption in the future deriving from the increase in output due to extra capital. When a capitalist puts money into a firm, he cannot use that money to buy a car, or a meal. He delays consumption in the present.




I am all for new ways of developing capitalism, but stuff that is based on Marxist is not worth the time of day. Forgodsake learn some actual economics.

[anarchism101]

(Original post by Classical Liberal)
This is technically wrong. The capitalist provides capital.

So in other words, they should get money as a reward for spending money?

Capital comes from saving. To create capital, one must forgo consumption in the present to use the unconsumed resources to create capital. The capitalist suffers in the present, by not consuming, to allow for more consumption in the future deriving from the increase in output due to extra capital. When a capitalist puts money into a firm, he cannot use that money to buy a car, or a meal. He delays consumption in the present.

The extent that you are able to 'forgo consumption' is dependent on your socioeconomic position. The rich can afford to save a lot more, hence why most saving is done by the rich.

"[The capitalist] does not deprive himself. . . of the capital which be lends. He lends it, on the contrary, precisely because the loan is not a deprivation to him; he lends it because he has no use for it himself, being sufficiently provided with capital without it; be lends it, finally, because he neither intends nor is able to make it valuable to him personally, -- because, if he should keep it in his own hands, this capital, sterile by nature, would remain sterile, whereas, by its loan and the resulting interest, it yields a profit which enables the capitalist to live without working. Now, to live without working is, in political as well as moral economy, a contradictory proposition, an impossible thing."

- Pierre-Joseph Proudhon

[Classical Liberal]

(Original post by anarchism101)
So in other words, they should get money as a reward for spending money?

The point is that if it was not for a capitalist, somewhere, actually forgoing consumption and using their resources for investment, there would be no capital, and thus no increase in productive capacity of the workers, and thus less output for all people to consume.

The extent that you are able to 'forgo consumption' is dependent on your socioeconomic position. The rich can afford to save a lot more, hence why most saving is done by the rich.

That is probably true, but is also irrelevant.

"[The capitalist] does not deprive himself. . . of the capital which be lends. He lends it, on the contrary, precisely because the loan is not a deprivation to him; he lends it because he has no use for it himself, being sufficiently provided with capital without it; be lends it, finally, because he neither intends nor is able to make it valuable to him personally, -- because, if he should keep it in his own hands, this capital, sterile by nature, would remain sterile, whereas, by its loan and the resulting interest, it yields a profit which enables the capitalist to live without working. Now, to live without working is, in political as well as moral economy, a contradictory proposition, an impossible thing."


- Pierre-Joseph Proudhon

Proudhon has a remarkable capacity to make a simple concept complicated. He has in essence said "There is no point just holding onto money, you might as well lend it out" - Which is true, to a point. Holding onto money is just storing value in the now, for consumption in the future. Lending money is forgoing consumption in the now, in the expectation of extra consumption in the future.

The capitalist forgoes consumption in the present and trades it off with investment, which will hopefully lead to more potential consumption in the future.

It is a very good thing that people can earn more money than they need, this is because the extra income that they earn, can be used for investment into capital, which allows for more output for everybody. It would be terrible if everyone only had enough income to finance their immediate consumption, because without the extra income, capital cannot be formed.

[IFondledAGibbon]

(Original post by Classical Liberal)
You are not thinking clearly. If we are to take the statement seriously, the ideal number of workers in any firm would be one. Because that one worker would take all of the profits. Intuitively this seems like nonsense, because it is.

The profits of a firm earns would be, in part, a function of the number of workers. Increasing the number of workers may increase profits. If the extra profit that a worker produces is greater than the proportion of total profit they worker would take, then that worker will be employed and increase the profit that each other worker gets.

Say for example a firm has 4 workers, and they all take an equal share of the profit, and the firm has a profit of £100. Thus each worker gets £25. Another worker joins the firm and increases profits to £150. All the workers take an equal share, so the five workers now get £30. The firm will add workers as long as the profit that the new worker gets, is less than the extra profit that he creates. Or to use economics jargon, where marginal revenue is greater than marginal cost.

You don't seem to understand the difference between incentives to grow up until a point, and incentives to grow exponentially. The key point is this: Capitalist firms aim to increase total profit, whereas democratic firms aim to increase profit per worker. Let’s take your example, and I’ll start with the capitalist version:

You’ve got 4 workers each earning a wage of £20. The company makes £100 pounds profit. The capitalist sees that demand for his product is on the rise and considers hiring 4 more workers. Assuming he’s right about demand, if he doubled his production, profits would come to £200. Does he expand? Damn right, that’s twice as much money in his pocket.

Now let’s consider the democratic situation under the exact same economic circumstances. The firm has 4 workers who allocate themselves a wage of £20 plus the extra £25 they would take from the £100 profit. The workers then see that the demand for their product is on the rise so they ask themselves, should we double our production and take on 4 more workers? Again, assuming they’re right about demand, their new profits with 8 workers would come to £200. Should they expand? Why should they? £200 divided by 8 workers is still £25. They are in the exact situation they were before. Why grow?

You’re technically wrong when you say “the ideal number of workers in any firm would be one. Because that one worker would take all of the profits”. Since one person taking “all of the profits” would have the same share as two people taking “all of the profits” because a firm twice the size would have twice the profit (assuming there would be no difference in technology and work intensity). However, you rightly pointed out that democratic firms would still grow due to the economies of scale involved. My point is that democratic firms don’t possess the same expansionary and monopolistic dynamics as capitalist ones and this is completely uncontroversial.

Another issue which you really are not taking into account is that workers for the most part do not want their incomes tied to profits. Profits are volatile they can go negative. Workers tend not to want to expose themselves to the volatility of profits and the risk of losses. Instead workers decide to take a wage instead. I am sure the business owner would prefer to pay his workers as a function of profits, because that means the business owner would only have to pay people if the business was doing well, however this is an arrangement the workers rarely want. For example, I certainly do not want my income linked directly the profits of the firm I work for, we missed our sales targets by £500,000 so far . But no matter, I still get paid.

I’ve already pointed out why this is nonsense (I think Anarchism101 did as well in another post). There’s no reason why a firm’s workers couldn’t allocate themselves a stable wage and then every month divide the profit generated between them. Let’s scale up the previous example and make it slightly more realistic; say workers in the capitalist firm earn £20,000 per year and the company makes £100,000 profit. Much of that profit would go to the shareholders (rich few), whilst the workers stay on a stable £20K. Under the same economic conditions workers (imagine there’s ten of them) could decide that they want a stable £20K per year salary. If the company then makes £100K profit, they would then divide that that extra cash up so they get £10k each. The workers in the second firm are a third better off, with no loss of stability. It’s a win, slightly more or less win situation.

Indeed, if a firm was to start losing money, how do you think your democratic model would perform. I can bet you that it would cause a lot of upset as everyone would turn on each other, rather than the capitalist carrying the burden of losses.

Evidence suggests that workers tend to group together and collectively bare the brunt of any losses. There’s no evidence to suggest workers would “turn on each other”, what does that even mean?

This is technically wrong. The capitalist provides capital. Where do you think capital comes from? The tooth fairy?

Capital comes from saving. To create capital, one must forgo consumption in the present to use the unconsumed resources to create capital. The capitalist suffers in the present, by not consuming, to allow for more consumption in the future deriving from the increase in output due to extra capital. When a capitalist puts money into a firm, he cannot use that money to buy a car, or a meal. He delays consumption in the present.

This is essentially semantics; you could argue that the capitalist here is acting as an investor (which is socially necessary in capitalist societies) which is separate from the capitalist’s role as a capitalist. It’s essentially irrelevant, and in economic democracy, investment funds are generated through a capital assets tax on all enterprises. The animal spirits of private investors play a part in all economic crises. As I’ve discussed in previous posts.

I am all for new ways of developing capitalism, but stuff that is based on Marxist is not worth the time of day. Forgodsake learn some actual economics.

All socialist economic systems are based on the idea that humanity can do better than an economic system that ruins our environment, leaves millions in poverty and is prone to crisis. The system I’ve been talking about here praises the role of the market in delivering goods and services to consumers, but criticises the role of wage labour and private investment in inequality and crisis. Whether or not I’m a Marxist isn’t important. However, if there’s one thing I know it’s that “actual economics” hasn’t and never will solve the inherent problems with capitalism.

Oh, and if you think that video has any merit, you really don’t understand the labour theory of value especially how individual value =/= social value.

[Classical Liberal]

(Original post by IFondledAGibbon)
You don't seem to understand the difference between incentives to grow up until a point, and incentives to grow exponentially.

That is absolute tosh. There is no incentive for firms to grow exponentially. They have an incentive to maximise profits, not grow indefinitely.

The exponential growth demand comes from the monetary system not from capitalism itself.

Now let’s consider the democratic situation under the exact same economic circumstances. The firm has 4 workers who allocate themselves a wage of £20 plus the extra £25 they would take from the £100 profit. The workers then see that the demand for their product is on the rise so they ask themselves, should we double our production and take on 4 more workers? Again, assuming they’re right about demand, their new profits with 8 workers would come to £200. Should they expand? Why should they? £200 divided by 8 workers is still £25. They are in the exact situation they were before. Why grow?

Hang on, so you deliberately want there to be less produced than could be supplied? So you deliberately want to jack up prices and reduce the real purchasing power of peoples wages? You actually deliberately want a system that makes people poorer?

I’ve already pointed out why this is nonsense (I think Anarchism101 did as well in another post). There’s no reason why a firm’s workers couldn’t allocate themselves a stable wage and then every month divide the profit generated between them. Let’s scale up the previous example and make it slightly more realistic; say workers in the capitalist firm earn £20,000 per year and the company makes £100,000 profit. Much of that profit would go to the shareholders (rich few), whilst the workers stay on a stable £20K.

Do you know who the main share holders are for FTSE 100 companies?

Turns out it is pensions funds. So that share holders that you decry, are basically normal people and their pensions. Now what is your system going to do about pensions ehhh?

Evidence suggests that workers tend to group together and collectively bare the brunt of any losses. There’s no evidence to suggest workers would “turn on each other”, what does that even mean?

I am saying that the workers are going to have to put up their own money if the firm starts losing money. Now because the firm is run democratically I have a strong suspscion the workers might start to get pissed off with each other. Because after all, the other workers made the decisions, rather than some capitalist.

I actually have a job, and actually work with people, and I can be pretty sure that everyone would end up turning on each other in the end. I can think of a few characters right now who would be right dicks.

This is essentially semantics; you could argue that the capitalist here is acting as an investor (which is socially necessary in capitalist societies) which is separate from the capitalist’s role as a capitalist.

That is what the capitalist is, an investor. Jesus christ.

Whether or not I’m a Marxist isn’t important.

It makes all the difference. Because Marxists will always be wrong, because the technical underpinning of their ideas is complete bull****. Thus any ideas that flow from a basic faulty understanding of the market economy, are going to be bad ideas.

It is like a mathematician trying to do vector calculus, but the mathematician does not understand basic addition.

[IFondledAGibbon]

(Original post by Classical Liberal)
That is absolute tosh. There is no incentive for firms to grow exponentially. They have an incentive to maximise profits, not grow indefinitely.

The exponential growth demand comes from the monetary system not from capitalism itself.

Hang on, so you deliberately want there to be less produced than could be supplied? So you deliberately want to jack up prices and reduce the real purchasing power of peoples wages? You actually deliberately want a system that makes people poorer?

Complete straw man. I want to get rid of the capitalist “grow or die” expansionary dynamic so that we wouldn’t have aggressive competition and monopolies. Firms are incentivised to drive competitors out of business and buy up their market share. The example showed that firms can be content with no growth, but that isn’t say firms wouldn’t grow or “produce less than could be supplied” - Which you’d know if you read the next paragraph.

I know economists don’t like empiricism but bear with me and consider the evidence. There have been many experiments showing that democratic firms are completely possible and as efficient as capitalist ones. Look at the Mondragon cooperatives, a large democratic firm comparable in size to a multinational cooperation with a democratic set up that was more than able to compete with capitalist firms. It’s the seventh largest Spanish company in terms of asset turnover! Hundreds of studies have been conducted the vast majority finding that worker participation increases productivity in comparison to capitalist firms.

http://home.comcast.net/~romccain/productivity.html

To quote Henry Levin:

“There exist both personal and collective incentives in cooperatives that are likely to lead to higher productivity. The specific consequences of these incentives are that the workers in cooperatives will tend to work harder and in a more flexible manner than those in capitalist firms; they will have a lower turnover rate and absenteeism; and they will take better care of plant and equipment. In addition, producer cooperatives function with relatively few unskilled workers and middle managers, experience fewer bottlenecks in production and have more efficient training programs than do capitalist firms.”

Do you know who the main share holders are for FTSE 100 companies?

Turns out it is pensions funds. So that share holders that you decry, are basically normal people and their pensions. Now what is your system going to do about pensions ehhh?

This doesn’t change the fact that the bosses of the FTSE 100 companies are obscenely rich in comparison to their workers.

http://www.bbc.co.uk/news/business-18035125

Economic democracy would reduce this inequality without worrying about scaring away investors by taxing them.

I am saying that the workers are going to have to put up their own money if the firm starts losing money. Now because the firm is run democratically I have a strong suspscion the workers might start to get pissed off with each other. Because after all, the other workers made the decisions, rather than some capitalist.

I actually have a job, and actually work with people, and I can be pretty sure that everyone would end up turning on each other in the end. I can think of a few characters right now who would be right dicks.

There’s absolutely no evidence that this happens in democratic firms. Capitalist firms tend lower labour costs when they’re losing money by laying-off or de-skilling workers. Democratic firms have no incentives for this since those costs are tied directly to the income of the workforce. Studies show that workers tend to collectively bear the brunt of the losses though voluntary departures, retirements and collectively putting up their own wages. Obviously if demand for the cooperative’s product is so low that they have to go bust, then unfortunately, in a competitive economy they would do so. However, workers would be more likely to find a new job in an economically democratic economy because there’s no inherent need for “an army of the unemployed” to drive down wages. Full employment is theoretically possible.

It makes all the difference. Because Marxists will always be wrong, because the technical underpinning of their ideas is complete bull****. Thus any ideas that flow from a basic faulty understanding of the market economy, are going to be bad ideas.

It is like a mathematician trying to do vector calculus, but the mathematician does not understand basic addition.

You don’t have to be a Marxist to realise that capitalism is flawed and that a better system is possible. Economic democracy isn’t “technically underpinned” by Marxism. Some people come to it through an understanding of Marx’s critique of capitalism, but that doesn’t necessarily mean the ideas of workplace democracy and investment control are Marxist ones. Indeed most Marxists reject the vision I’ve been talking about.

[anarchism101]

(Original post by Classical Liberal)
The point is that if it was not for a capitalist, somewhere, actually forgoing consumption and using their resources for investment, there would be no capital, and thus no increase in productive capacity of the workers, and thus less output for all people to consume.

That is probably true, but is also irrelevant.

You could say in just about any situation in any system that Y wouldn't happen but for X. It doesn't indicate anything other than that the system is set up that way.

If you get money for 'forgoing consumption', and the ability to do that is dependent on how rich you are, you basically have a system which rewards the rich for being rich and punished the poor for being poor.

And the 'if it wasn't for the capitalist' stuff is garbage. If it wasn't for the capitalist then the workers would never have been in the position of being unable to 'forgo consumption' in the first place.

Proudhon has a remarkable capacity to make a simple concept complicated. He has in essence said "There is no point just holding onto money, you might as well lend it out" - Which is true, to a point. Holding onto money is just storing value in the now, for consumption in the future. Lending money is forgoing consumption in the now, in the expectation of extra consumption in the future.

You're just being descriptive there, what's your point?

It is a very good thing that people can earn more money than they need, this is because the extra income that they earn, can be used for investment into capital, which allows for more output for everybody. It would be terrible if everyone only had enough income to finance their immediate consumption, because without the extra income, capital cannot be formed.

There's a difference between earning more than you need and a minority of people earning far more than they need at the expense of everyone else (especially when what that minority are earning generally comes from everyone else).

[Kiss]

Just so I'm in the right place, Libertarians are against censorship even for very radical views that are racist/homophobic/sexist etc. whilst the left wing/liberals are for censorship and Political Correctness?

Or am I way off?