h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

You know, I just checked out the "socialism" entry, and it's miserable. Does the guide allow "upgrades" or replacements?

By the way, with regard to the current discussion; the reason Sweden's economy "was in shambles" is because it was forced to compete on a global level, against strongly capitalist nations (namely, N. America, the rest of Europe and Asia). A system which rips those who are slightly less efficient to shreds will always beat one that tries to keep everybody fed in brute production numbers and keeping prices very, very low. Therein lies the reason socialism "hasn't worked." Just as the soviets discovered, "socialism in one country" eventually becomes very unworkable- socialism was originally, and still should be, percieved as an internationalist and cosmopolitan system. Right now, too many countries remain capitalist for it to operate; any revolution or reform must be worldwide. Unrealistic? Maybe. Just don't go saying socialism is unworkable- it's sort of akin to saying flying cars are unworkable.

Cowzilla

What a brilliant idea! Let's all pay over 50% of our wages in taxes! Let's pay it so the government can pay out incentives for people *not* to work! Let's ruin production worldwide, so that the price of a ball-point pen costs what a VCR costs right now!

Let's be a bit more realistic.

I think you're missing the point; you're assuming a truly worldwide socialist government would operate under the same laws as a capitalist one does. A socialist society would be truly democratic, in both a political and economic way. There would be nobobody plling profits off workers. Think about it- profits for capitalists can only come from two places (in an operating economy). One, some sort of technological innovation that allows a corporation to produce goods cheaper than his competitor (this advantage will quickly be discovered by the competitors, so don't count on it working for long), and two, ripping off workers. If I produce videocameras that cost $200, let's say $150 goes into initial capital (i.e. starting materials, machines, ect.); $50 is for labor. Now, unless I have some amazing technological feat that lowers the initial capital price, I am unable to pay less that $150 for materials and whatnot (supposing I do have an advancement, others will soon figure it out anyways). So, I sell my camera for $200, pay $150 for materials, pay my workers $50, and have exchanged equals; I've made no money. I could raise the price to, say $210, but in a capitalist economy, other producers of cameras would still pay 150 and 50 for materials and labor, and would of course sell quite a few more cameras if their cameras are $10 cheaper. I think we all know from the markets that an individual producer of goods doesn't really conrol their price. So, how do folks get rich? Drop wages! If I only pay my workers $30, I make a $20 profit and can still sell my camera at market prices. This is obviously a highly simplified example. Still, it serves a purpose.

Cowzilla

You've got it all wrong. A manufacturer pays $150 for materials and $50 for labor, he sells the camera for $400. Another manufacturer comes along and does the same, but cuts his sale price to $385. The price war continues until they reach the point where they want to maintain their profit margin, so this will never get below $300. The workers still get their $50.

What happens if the company decides to cut wages? First of all, if the workers are unionised, they can negotiate, or, failing that, go on strike. Now the manufacturer isn't selling anything. If they're non-union, or if the union takes no action (labor unions are often more useless than they want to believe), then you have employee attrition, as they all go work for the other guy paying better wages. Skilled labor falls to the hands of untrained new hires who agreed to work for less money, and quality falls. The public notice the trend, and they buy cameras from the other guy... who is opening new factories to deal with increasing demand. Soon enough, company A owns the entire market share of company B, who is now bankrupt. Meanwhile, company C is clawing their way into the market with new gadgets, and company D, with a lifelong reputation for making fantastic toasters, is venturing into the camera market.

Capitalism isn't about cutting the throat of the competition any more than natural selection is. It's about finding a niche. If you can carve out a section of the market that will become your own, you make profits. If thirteen other companies make the same product, and sell it at the same price, but don't do business in your area, or don't carry the name recognition, or some other factor, the business does well. And incidentally, labor is a valuable resource, and capitalism powers the cost of labor just as much as anything else. If your skills are widely available, you're going to get a crummy wage. If you possess skills that are highly desired, you can literally auction yourself off to the highest bidder. Thus, people have just as much motivation to improve themselves as companies do.

Colonel Sellers, who doesn't want to live in a world without motivation.

Out of curiosity, what do you think about the current employment situation? Specifically, the fact that although unemployment is dropping, the new jobs are very low-paying. There's plenty of jobs in the US, as long as you don't mind getting paid minimum wage - which is not a livable wage. I personally feel somewhat lucky because I have a job making about the average yearly salary. Realizing that I'm getting paid what the average person does I wonder how people make ends meet (they don't, that's how people end up so far in debt). I see pure capitalism as a meatgrinder, but I also see pure socialism as unworkable.

I find the current job market totally acceptable to myself. I work in IT, the fastest growing sector of the job market, and it's an employees' market. I've wasted some time on proprietary systems with limited opportunities outside those particular employers, but I'm gaining in experience and skills, and I'll be moving into the technologies I want soon enough, I suppose. Meanwhile, I'm not making a fantastic wage, but I'm certainly making enough.

Anyway, I believe I've pointed out several times before that pure capitalism is just as unworkable as socialism in any form. Capitalism requires regulation. I've never even seen a partial socialism that works well.

Where exactly do you live? Where I come from business owners have very little option in how goods are priced, due to the free market. You can't tell me that you believe that the first two companies metioned would be able to keep out some upstart cutting prices for long. Eventually, they would have to reduce artificial overhead cost to nil. From there, how does the capitalist make money? He can't lower the prices of the input capital, so he lowers wages, thereby profiting.

Your definition for "carving out a niche" sounds a lot like a monopoly; the only profits derrived are from keeping out other competitors and subsequently gouging consumers. How is this any better that the "socialist" systems you decry, where there exists a state run monopoly?

Cowzilla, who thinks that circumstance drives people, not money

You are assuming that the upstart company has no overhead, which is rediculous. If there were ways to produce the product without overhead, the other companies already engaged in the market would be doing it. Startup companies don't come into the market making nil profits, because they're already in debt, and need to start repaying their investors.

As for carving out a niche: let's go with a metaphor here... the African savannas. Let's make the grass eating animals like antelope, giraffes, monkeys, zebras, etc. the customers, and the meat-eating animals as the companies starved for their business. Lions and tigers are massive corporations with eager appetites, and they go after the large game. However, there is plenty of large game to go after, and so they both eat, as well as the panthers. The hyenas are smaller companies that cannot possibly compete with the lions directly... so they go after what the lions won't... smaller game, and customers that the lions have already dealt with. There are many more of them, but they require much less sustenance, and so they also flourish. Then there's the vultures, targeting the absolute bottom of the market... their product isn't very good quality, but everyone can afford it.

See... all these companies after the same thing, and each of them doing well. You can choose to go with the more expensive, better quality lion diet, you can go with the rotting carcass the vultures carry, or several degrees in between. The end result is healthy competition (we don't want too many lions any more than we want too many vultures) and a broad range of choice. If you centralized their business, then you would essentially be killing off every predator except one. That predator would soon become fat and lazy due to the glut of prey. They can't meet the demand all by themselves, and so the customers get to be too many, and begin killing themselves off due to lack of food. Meanwhile, the predator still takes only the choicest meals, and so the smaller ones go completely ignored.

Please quit with the Natural Selection comparison.
I've gone over this before and as stated before
Darwinism is relegated to evolution not a life style, or model for society.

Time for a new line Truth