Rugoz wrote:Jeez. You accused me of making an "ethical argument", yet I talked about the capitalist's contribution to the economy. That's not reducible to an "ethical claim" either.
"to the extent they are". We would have to determine then to what extent it's deserved and to what extent not. The risk-free real interest rate is basically zero, so you have to take at least some risk to get a return.
Well the distribution of business success is highly unequal, which has to do with entrepreneurial talent but also a lot with luck and chance no doubt. Of course profits (beyond paying the rentiers) are based on market power. At the same time some degree of market power is essential for innovation to occurr. At best though an individual entrepreneur can make an innovation happen somewhat earlier than it would have happened without him, but he gets rewarded for more than that marginal benefit. He's bit like the winner of a game or a sports event. The reward he gets is necessary for the game to be played, but it's not really deserved.
Well my point is thus far that the profit towards the capitalist isn't actually explained, as so it seems only like a justification. Because if it isn't elaborated upon it becomes the capitalist reaps profits because they assume risk. But I am emphasizing that risk is inherent to many things and doesn't automatically show how one is rewarded, it's left rather vague when it comes to the property relations within productions which would divide up the 'reward'.
So if there is an innovation created by a team of people in the R&D department and it really puts the company ahead, you would assume they'd be paid well for it perhaps, but their reward wouldn't be directly tied to the product as much as the decision of their employer to compensate them as such. The reaping of the rewards could still largely go to the capitalist.
But what seems to be implied is more the story of the small business man who strikes it rich because of an innovative idea that fulfills a great need and they're launched to the big leagues of business.
'How risky a business venture is in terms of actual sacrifice and potential harm to the investor, the "cost" that supposedly requires remuneration in the form of profit, is relative to the size of the rest of the investor's non-invested income. Starting a company is much riskier for your middle class entrepreneur than your billionaire capitalist, even (especially!) if the investment is the same size. The fact that the former doesn't make more profit than the latter shows that profit is not proportional to real risk.'
If we end up with a focus on the description of some real scenario and the relations of capital, then we're entering into (political) economics naturally. The point being that there is a kind of ethical standard of the economy, it's just one that many do not like because it can be brutal. The earliest works of political economy were ethical treatise.
Even with socialists who imagine the capitalist not existing would still assume some or all of the possible risks, although presumably not for the pursuit of profit, that the capitalist would. So what is in question I think becomes the relations of production if we're not simply to fall back on that the capitalist naturally is owed such and such for some unspecified risk, which typically relates to risk in the form of the investment of capital which can be picked apart further for how someone has such wealth in the first place.
I'm just saying that risk needs to be fleshed out if it is to truly be a descriptive thing but it then raises questions about an accurate reflection of economic scenarios and actors. Otherwise it becomes what is typical that capitalists are owed as much due to their risk and assumes a normative quality. Which I guess is totally justified from the perspective of a capitalist system in itself and not from a critical position.
“ However necessary and justified capitalists' revenue may be within the system of capitalism, that is hardly relevant when the issue is whether that whole system should continue or be superseded by a different system. A king may play a vital role in a system of monarchy, but that is irrelevant when debating the relative merits of monarchies versus republics. ” - Thomas Sowell
And while a critique of capitalism has an ethical element, if it isn’t to be a mere assertion than it requires the descriptive analysis to criticize how as a whole the system is essentially problematic.
-For Ethical Politics