[QatzelOk]

I'm not sure if it's even possible to tax the rich anymore. They own governments, so whatever new tax regime that is devised, they will be informed on how to escape through a loophole.

Perhaps the only suggestion to surplus labor and the misery it produces, is to destroy the elites and start over with a fairer economic system that recognizes the public uselessness of private capital concentrations.

[ThereBeDragons]

You still need somebody to fill that role, and if it's not private business it will be the State. And you remember how good that worked out in the USSR, right?

Centralization to an excessive level is harmful, we can agree on that.

Also, you need investors to accumulate a lot of money incentive or no incentive because that money is what turns into more investments, and indeed the bulk of capital investments come from people that are already rich.

A lot of this investment happens through financial companies - and many of the people working in said companies who are doing the actual investing aren't necessarily the ones who own the money. People respond to billion-dollar incentives, but people respond to hundred-thousand-dollar incentives as well. Incentivization is required, but having a people own all that money isn't a prereq for having incentivization in the investors.

[Athanas]

Whatever it seems like such a moot issue and point. Let the rich become richer until the discrepancy between social classes rises to the level of feudalism. Forget that anyone suggested that someone with billions of dollars doesnt NEED a new yacht or another summer home. Let the people just organize a new movement in a few decades, after all then everybody can have their precious communism.

Again no one is saying no one should be rich just that in the cases of obscene wealth no one is in need of such wealth unless they NEED another yacht or home. Its not punishment if your assets are still rising, your wealth in the top 5%, and you happen to sacrifice the more absurd luxuries in order for somebody else to afford sustenance.

[Dr House]

The big difference between capitalism and feudalism, Athanas, is not the level of inequality. The big difference between capitalism and feudalism is the level of social mobility. Regardless of how steep quintiles are, in capitalism everyone has a legal right to try to reach a higher one. Feudalism was based on the well-connected being granted the land the State owned, and everyone else getting screwed. There were no equal property rights, and stratification was aided, abetted and enforced by the State and the Holy Church. Nowadays, two-thirds of millionaires are self-made people born poor or middle-class, and a bottom-quintile person has about 75% odds of making it into a higher quintile.

[Meistro1]

Sadly, taxing the rich drives down wage rates for the poor. Wage rates are increased only through productivity increases - as a result of capital accumulation. Capital accumulation comes about as a result of savings. The people who save most in the economy are the rich. When you tax them at a higher rate they have less money to save.

[Dr House]

You're missing a link in the chain, Meistro.

Savings > Capital Accumulation > Capital investment > Growth > Additional jobs and wages.

[Pleb]

Savings > Capital Accumulation > Capital investment > Growth > Additional jobs and wages.

Is that one of your iron rules?

Capital accumulation is nicespeak for wage exploitation. I can accept that, but what happens when accumulated capital is spent overseas on luxury goods? Imported art and the like. Who told you that savings always leads to invstment?

[Dr House]

Capital accumulation is nicespeak for wage exploitation.

There's no such thing as wage exploitation. Salary work is nothing more than buying future production at an agreed-upon price. It fits in quite nicely with labour theory of property. It doesn't fit with Labour Theory if Value, but LVT is bullshit anyway.

[QatzelOk]

Wage rates are increased only through productivity increases - as a result of capital accumulation.

Economics is full of lies like this.

It's just a bunch of stories that are invented to justify income disparity and the priveleged position of people who are born into capital.

It's pretty sad that rich countries don't invest more in education so that something workable can replace our current system of rich-pillaging-the-earth-and-all-its-people.

[Dr House]

Economics is full of lies like this.

No it isn't. Meistro is just parroting bullshit he read from the Mises institute, AnCaps are generally as bad with economics as your average socialist.

The reality is that wage hikes are a result of market forces acting on them. Economic growth results in firms being created or expanded and needing more employees. If there are not enough employees with a certain skill set available companies will have to compete for them which causes wages to rise. Wage rises are generally about two-thirds of real GDP per capita growth.

It's just a bunch of stories that are invented to justify income disparity and the priveleged position of people who are born into capital.

Now that's just bullshit Qatz. Capitalism doesn't maintain millionaires, it creates them. Only a third of the millionaires on this earth were born into their position, the rest are self-made. Feudalism is the system that maintained dynastic privileged lordships by means of coercive state enforcement and unequal property rights.

[Pleb]

There's no such thing as wage exploitation. Salary work is nothing more than buying future production at an agreed-upon price

Ok, we're all free to enter wage agreements, I get it, but you didn't answer the question I actually asked. The justification made for extracting profit from the gap between wages and sales price is reinvestment. Profit is extracted so it cn be reinvested into the economy to create more wealth

What happens when the profit made in production is invested outside of the developing economy? What happens when it's used to import goods made in the developed world?

[Dr House]

The justification made for extracting profit from the gap between wages and sales price is reinvestment. Profit is extracted so it cn be reinvested into the economy to create more wealth

Profits are the difference between the wholesale price of a product at the point of manufacture, which includes the perk of cost-free manufacturing, and the retail price of the final product at the point of sale. If I work, get my paycheck, buy concert tickets at the window for $50 with the money and re-sell them for $110, that is legitimate. Same goes for any kind of profit. In order to make a profit from an enterprise you must sink money into it, and in order to sink money into an enterprise you must have worked to obtain it.

[Pleb]

If I need a definition for profit, I'll look up wikipedia. Read my question again before you parrot stock phrases.

You assume that all profit extraction is good because it's reinvested within the economy to create wealth and the very existence of profit encourages more wealth creation.

I asked what happens when profit is transfered outside of the economy.

A factory owner for example. Instead of reinvesting his profit or saving it to create more credit, he imports a tractor lawnmower and a picasso painting. How does that contribute to growth in a developing economy? It's a transfer of wealth out of the economy.

Who told you that savings = reinvestment?

[Dr House]

It's not Savings = Re-investment. it's Savings > Re-investment.

Savings do not automatically lead to investment, but they are a requirement to it.

Besides, what I was saying is that regardless of profit being good for the economy or not they are perfectly justifiable under labour theory of property, which is the basis of my philosophy.

Besides, profits transferred outside the economy are good for the economies they are transferred to. I believe using national borders to justify anything is stupid.

[Pleb]

This is how I see your argument.
Capital extraction from labour is necessary to create savings. Savings are necessary for investment. Investment is necessary for growth. Growth raises living standards and benefits the worker whose surplus production value has been taken at the start of this paragraph.

So if savings don't create investment, what's the moral justification for surplus extraction to create the savings in the first place?

Besides, profits transferred outside the economy are good for the economies they are transferred to. I believe using national borders to justify anything is stupid.

Globalist beliefs are lovely but some people in the developing world would be a little more nationalist, and when growth strategies rely on wage exploitation, the least the workers could hope for is that the wealth they create doesn't emmigrate

[Dr House]

So if savings don't create investment, what's the moral justification for surplus extraction to create the savings in the first place?

That, as I have explained already, it isn't surplus extraction. It's just a time preference for purchasing future goods that happens because it is more efficient that way.

EDIT = Savings also do mostly result in investment, it's just not automatic. Just like wage rises aren't an automatic result of GDP/capita growth, but they're closely linked because of the way the market operates.

[Meistro1]

No it isn't. Meistro is just parroting bullshit he read from the Mises institute,

QFT

[QatzelOk]

It's just a time preference for purchasing future goods that happens because it is more efficient that way.

In what ways is this more efficient for everyone involved?

What is the nature of this efficiency?

[Dr House]

In what ways is this more efficient for everyone involved?

What is the nature of this efficiency?

The workers benefit from not having to purchase the machinery they're using (which was built by other workers that were also compensated for the trade), and from being protected from the possibility that what they are producing might not sell in the future. The investors benefit from buying products on a large scale at a fixed bulk price from the workers, which benefits them if they are able to sell said products individually on a more convenient locale to end-users at a higher price, which nets them profit. The profit or loss is the difference between the revenue of goods sold to end-users and goods bought from workers. Investors are betting their own money on that that difference will be positive for them, but it isn't always.

[QatzelOk]

The workers benefit from not having to purchase the machinery they're using (which was built by other workers that were also compensated for the trade), and from being protected from the possibility that what they are producing might not sell in the future.

Very funny. The workers "benefit" from not owning the machinery they need to do their jobs?

The same way a prostitute "benefits" from not having to decide whether she wants to have sex.