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    (Original post by nikdc5)
    Not really because there wouldn't be markets in socialism and there would be no private banking groups to bail out. Only capitalism could have a system so absurd that the institutions which control the flow of capital - ie the most important commodity in a capitalist society - would through the following of the profit motive near on destroy themselves. If the government hadn't bailed out the banks then we wouldn't have capitalism anymore as there wouldn't be any banks to look after anyone's money.
    or a capitalist would argue that as the banks became un profitable new institutions would see the new gap in the market for money handlers and they would seize on this and new markets would be created. where there is demand the services would be created. it's called the invisible hand from adam smith and it's the reason why many capitalist mps in the uk and senators and congressman in the states were against bailouts....plus the fact it commits the taxpayer to a hell of a lot which only serves to make government an ever bigger evil than it needs to be
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    (Original post by usainlightning)
    Socialism does create poverty. Under thatcher all incomes increased.
    Not for the millions who lost their jobs...
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    (Original post by nikdc5)
    Not for the millions who lost their jobs...
    the jobs were outsourced. so your point is only a bad thing if you take a nation centric view. capitalism is a global thing and it benefits more people when it is global. this encourages that the lowest costs of production be pursued and therefore the economy is more efficient
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    (Original post by PAPAdawg)
    or a capitalist would argue that as the banks became un profitable new institutions would see the new gap in the market for money handlers and they would seize on this and new markets would be created. where there is demand the services would be created. it's called the invisible hand from adam smith and it's the reason why many capitalist mps in the uk and senators and congressman in the states were against bailouts....plus the fact it commits the taxpayer to a hell of a lot which only serves to make government an ever bigger evil than it needs to be
    The consequences of letting the banks fail would have been disastrous. Yes, maybe new banks would have emerged, but not overnight. The economy could have been destroyed for a decade if not more. The banks are so interconnected with each other and with business, and everyone's mortgages are tied up with them, so even for one major bank to collapse would be a catastrophe, and it would certainly bring down other institutions, including businesses whose only mistake was to bank with the wrong bank. Really not worth it. And, if the banks recover, the taxpayer will get the investment back somewhere down the road.
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    (Original post by PAPAdawg)
    the jobs were outsourced. so your point is only a bad thing if you take a nation centric view. capitalism is a global thing and it benefits more people when it is global. this encourages that the lowest costs of production be pursued and therefore the economy is more efficient
    Jobs were outsources to countries where wages and labour conditions were worse, in order to save money, so that is clearly an example of incomes going down under Thatcher.
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    (Original post by nikdc5)
    Jobs were outsources to countries where wages and labour conditions were worse, in order to save money, so that is clearly an example of incomes going down under Thatcher.
    but is that a bad thing if it means businesses make much larger, proportionately, margins. after all these profits are not just left to rot in some safe...they are spent and with a bigger multiplier than worker's wages. the economic consequences can be better. also, if jobs are lost it means there labour is nor required...they are economic deadwood...this is why socialism is a denial of common sense...why keep unnecessary labour on on unnecessarily high wages?

    capitalism can breed inequality. i know this and my family is possibly a victim. but i dont believe in any fairytale utopia...inequalities will exist in any system but under socialism not only would they be more pronounced but i also would not have the freedom to emancipate myself from them and additonally the government would probably become totalitarian
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    (Original post by nikdc5)
    The consequences of letting the banks fail would have been disastrous. Yes, maybe new banks would have emerged, but not overnight. The economy could have been destroyed for a decade if not more. The banks are so interconnected with each other and with business, and everyone's mortgages are tied up with them, so even for one major bank to collapse would be a catastrophe, and it would certainly bring down other institutions, including businesses whose only mistake was to bank with the wrong bank. Really not worth it. And, if the banks recover, the taxpayer will get the investment back somewhere down the road.
    it would have indeed being disastrous. that may even be an understatement. but, boom and bust is a normal part of capitalism...that is a problem with it....it is not perfect. but it would have highlighted which markets were destructive and they would be less likely tio be entered because of the bust. this is why capitalism encourages innovation. with an economic flatline (socialism) where there is no boom or bust there would be less innovation because there would be no incentive to innovate because there is no boom phase. the bust is just an inevitable side effect.

    socialism would be worse than just a bust every decade or two. where would you rather be; the uk with it's little credit crunch after 16m years of high economic growth or cuba with it's economic flatline where civil liberties are all but non existent and you're centuries behind the rest of the world?
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    (Original post by PAPAdawg)
    My view as an economics student, shared by the vast majority of fellow students i know, is that the overwhelming majority of socialists are totally economically uneducated and most people tend to become more capitalist the more they learn about economics. So, sorry but i honestly think that, although they might not be thick, the majority of socialists, when it comes to economics, are totally flawed
    Well the majority of the economics students at my college are boarderline communists, so perhaps you should open your mind a little.
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    Capitalism = social mobility
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    Laissez-faire capitalist.
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    (Original post by PAPAdawg)
    but is that a bad thing if it means businesses make much larger, proportionately, margins. after all these profits are not just left to rot in some safe...they are spent and with a bigger multiplier than worker's wages. the economic consequences can be better. also, if jobs are lost it means there labour is nor required...they are economic deadwood...this is why socialism is a denial of common sense...why keep unnecessary labour on on unnecessarily high wages?

    capitalism can breed inequality. i know this and my family is possibly a victim. but i dont believe in any fairytale utopia...inequalities will exist in any system but under socialism not only would they be more pronounced but i also would not have the freedom to emancipate myself from them and additonally the government would probably become totalitarian
    The profits aren't really spent so much on research and development and investment though. A PLC's first duty is to return profits to the shareholders, so this is where the biggest chunk will go. Then they give bonuses to staff, most of which goes on staff who are already amongst the highest paid in.. well the whole world.

    So larger profit margins means a redistribution of wealth from the poor to the richest. And as any student of economics should know, poorer people are more efficient converters of capital into utility. Give £60 is enough to double the weekly income of someone on JSA. But to someone on £100,000 a year, it is just a light lunch or a bottle of wine - i.e. can easily be done without.
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    Socialist, sometimes wavering towards Communism.
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    (Original post by nikdc5)
    The profits aren't really spent so much on research and development and investment though. A PLC's first duty is to return profits to the shareholders, so this is where the biggest chunk will go. Then they give bonuses to staff, most of which goes on staff who are already amongst the highest paid in.. well the whole world.

    So larger profit margins means a redistribution of wealth from the poor to the richest. And as any student of economics should know, poorer people are more efficient converters of capital into utility. Give £60 is enough to double the weekly income of someone on JSA. But to someone on £100,000 a year, it is just a light lunch or a bottle of wine - i.e. can easily be done without.
    even when the profits are passed to the shareholders that is money that is going to be spent at some stage. and they may convert to utility less efficently but this can be a check against the inflation that you'll get if you divide the profit by the amount of poor people and give the each a chunk of it. either way...i refuse to beleive huge profits are a bad thing regardless of who recieves then...either way money is being generated in the economy. and plcs are a fantastic capitalist invention of bringing people into the economy...an example of how business benefits us all by allowing cheap purchase of shares without holding a gun to peoples head and forcing wealth redisitriution like a socialist government would
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    (Original post by nikdc5)
    The consequences of letting the banks fail would have been disastrous. Yes, maybe new banks would have emerged, but not overnight. The economy could have been destroyed for a decade if not more. The banks are so interconnected with each other and with business, and everyone's mortgages are tied up with them, so even for one major bank to collapse would be a catastrophe, and it would certainly bring down other institutions, including businesses whose only mistake was to bank with the wrong bank. Really not worth it. And, if the banks recover, the taxpayer will get the investment back somewhere down the road.
    I do wonder why this argument isn't applied more widely. For instance, when MG Rover went bankrupt, why didn't we run out of cars (or, at least, experience a temporary shortage or price rise?). It seems absurd, doesn't it? Surely if the Phoenix Four had advanced such an argument, they would be regarded as crooks trying to scam the taxpayer for billions of pounds? And in fact when the US car industry when bankrupt just recently, no one argued this - the bailout was openly presented as a welfare payment to the auto workers union. The mystique surrounding banks and the financial system more generally, unfortunately, seems to beffudle the public into accepting ordinarily stupid arguments. Not many of the usually leftist people who support the bailout would ordinarily support a welfare payment for investment bank employees.

    Take this from the very basics. What happens when a business goes bankrupt? First, its creditors argue for primacy. Then, when an order of repayment has been decided, the business's assets are given to the creditors. Their liabilities are now either met or will never be paid (a risk of lending), and the company is liquidated. The banks were not universally unprofitable. Some areas of their business were in fact profitable. These departments will either be operated by the creditors, or sold on to people who are willing to pay for them. What will close down are the departments that were involved in sub-prime, which are now known to be unprofitable. This is a good thing.

    The bailout differs from this somewhat. In the first place, the losses are transferred from those who consented to the risk of losses to those who did not, ie. the general public. This is immoral, and also creates perverse incentives. It means that in a society where this is done, large institutions know that they can take risks that will be met by other people if they go wrong, but for which they keep the profits if it goes right. The incentive is to take normally unjustified risks in future. Secondly, many staff and departments are retained that should not be. Finally, taxpayer money is almost always followed by formal or informal state control. The banking system no longer responds to the market based on voluntary agreements, but to political pressures that often have little to do with merely providing a profitable service to customers.

    (Original post by nikdc5)
    Jobs were outsources to countries where wages and labour conditions were worse, in order to save money, so that is clearly an example of incomes going down under Thatcher.
    Incomes went up under Thatcher, which might seem strange, except when you consider that outsourcing manufacturing to where labour is cheaper makes products cheaper, thereby increasing everyones' real wages. Attempts to stop outsourcing benefits a small group of well paid British workers, at the expense both of far less well paid foreign workers, and the general populace of this country.
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    I put a nice little burn on an older friend of mine (the brother of one of my best mates) who is socialist by nature. He said of my capitalist outlook:

    'So you want to have money out of daddy's pocket?'

    To which I responded:

    'And you want money out of other daddies' pockets?'
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    (Original post by Entangled)
    I put a nice little burn on an older friend of mine (the brother of one of my best mates) who is socialist by nature. He said of my capitalist outlook:

    'So you want to have money out of daddy's pocket?'

    To which I responded:

    'And you want money out of other daddies' pockets?'
    nice one. sums socialism up nicely
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    (Original post by favh)
    I do wonder why this argument isn't applied more widely. For instance, when MG Rover went bankrupt, why didn't we run out of cars (or, at least, experience a temporary shortage or price rise?). It seems absurd, doesn't it? Surely if the Phoenix Four had advanced such an argument, they would be regarded as crooks trying to scam the taxpayer for billions of pounds? And in fact when the US car industry when bankrupt just recently, no one argued this - the bailout was openly presented as a welfare payment to the auto workers union. The mystique surrounding banks and the financial system more generally, unfortunately, seems to beffudle the public into accepting ordinarily stupid arguments. Not many of the usually leftist people who support the bailout would ordinarily support a welfare payment for investment bank employees.

    Take this from the very basics. What happens when a business goes bankrupt? First, its creditors argue for primacy. Then, when an order of repayment has been decided, the business's assets are given to the creditors. Their liabilities are now either met or will never be paid (a risk of lending), and the company is liquidated. The banks were not universally unprofitable. Some areas of their business were in fact profitable. These departments will either be operated by the creditors, or sold on to people who are willing to pay for them. What will close down are the departments that were involved in sub-prime, which are now known to be unprofitable. This is a good thing.

    The bailout differs from this somewhat. In the first place, the losses are transferred from those who consented to the risk of losses to those who did not, ie. the general public. This is immoral, and also creates perverse incentives. It means that in a society where this is done, large institutions know that they can take risks that will be met by other people if they go wrong, but for which they keep the profits if it goes right. The incentive is to take normally unjustified risks in future. Secondly, many staff and departments are retained that should not be. Finally, taxpayer money is almost always followed by formal or informal state control. The banking system no longer responds to the market based on voluntary agreements, but to political pressures that often have little to do with merely providing a profitable service to customers.


    Incomes went up under Thatcher, which might seem strange, except when you consider that outsourcing manufacturing to where labour is cheaper makes products cheaper, thereby increasing everyones' real wages. Attempts to stop outsourcing benefits a small group of well paid British workers, at the expense both of far less well paid foreign workers, and the general populace of this country.
    Well, first the effects of a car manufacturing company collapsing are less drastic than a bank because car companies don't hold the deeds to millions of mortgages or hold accounts that businesses need to continue operating. If the bank goes bust and can't honour all its deposits, all of the companies that lost their money also go bust, people lose their jobs, all security is lost.

    And although I supported government intervention in the financial sector, it wasn't done how I would have done it, which would have been to take all the troubled banks out of the private sector.

    And on thatcher- no, not all incomes went up. Some went up. Incomes went up during the same period in social democratic Sweden. So what? The dramatic increase in unemployment under Thatcher was harmful. Unemployment was 3 million officially, and there were many more moved onto incapacity benefit, mainly to massage the figures. A lot of these people never worked again, and now twenty years later them and their offspring are living in ghettos where unemployment stands at over 50%. Essentially, this long term disregard for the unemployed reinforces itself, and the problem grows over time. We are going to have to deal with it some day, and the longer its left the harder it is going to be. Free market capitalism will never fix it.
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    (Original post by PAPAdawg)
    nice one. sums socialism up nicely
    Nonsense. No socialist has ever marched for the right to steal from others. All the working class have ever fought for is the right to work in decent conditions for decent money.
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    (Original post by nikdc5)
    Nonsense. No socialist has ever marched for the right to steal from others. All the working class have ever fought for is the right to work in decent conditions for decent money.
    i take nozick's view. in my view any forced redistribution of fairly acquired property against the will of the owner is basically legalized theft.

    And socialist have never, ever advocated the redistribution of wealth now have they :rolleyes:
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    TBH, my views fit in with neither of the two definitions. I'm not a socialist, as I believe more in meritocracy, but at the same time, I think capitalists place too much emphasis on money. There doesn't seem to be an inbetween definition though
 
 
 
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