Wealth is not a zero-sum game. The whole premise that the rich make money by taking it from poor people is flawed.
This premise has been the basis for many political uprisings (e.g. Venezuela) where wealth has been destroyed instead of created.
This premise has been the basis for many political uprisings (e.g. Venezuela) where wealth has been destroyed instead of created.
By growing the size of the pie you grow the economy, but then the task becomes dividing the pie reasonably to ensure stability and reduce societal problems. In Venezuela, the economy is shafted for numerous reasons - huge concentration of the whole pie into a small elite does no good for the rest of the country, and was worsened by sanctions punishing these actions.
We don't have to choose between America and Venezuela. That's a false dichotomy.
But that aside: the top 1% got their by exploiting the surplus value of the 99% regardless of whether wealth was being created or moved, it definitely wasn’t that 1% creating or moving it.
> whatever they allocated it to did.
Machines are inanimate.
The actual value generation occurred there. Not at the capital allocation point.
Church of capitalism might have convinced to otherwise. But if I pay you to carry 10kgs up a mountain I can’t then say: “I carried 10kg up a mountain” ...
There are workers who operate the machines and there are workers who makes sure the factory exists for other people to work at.
> The actual value generation occurred there. Not at the capital allocation point.
Value is generated when a capitalist arranges capital so that he can hire people.
> But if I pay you to carry 10kgs up a mountain I can’t then say: “I carried 10kg up a mountain” ...
If you pay me and my worker’s comp insurance then you can say “we carried 10kg up the mountain” because I wouldn’t have done it for free or without insurance.
A simple measure: if you remove all the capital value CAN still be generated. If you remove all the workers value CANNOT be generated any longer. (Regardless of incentive schemes)
I’m aware that if you remove all the workers, value cannot be generated anymore. This includes the worker whose work is allocating capital. Hence all workers are entitled to the pay that they can negotiate with other market participants, including the capitalist who negotiates a rent (or other arrangement) for his capital.
However the level of productivity of workers without any sort of tools is very likely to be below survival.
Are you holding the view that productive society can’t exist without allocation of capital? Cause the 1000s of years of evidence to the contrary disagrees with you.
Value generation doesn’t require capital, or capitalist. Someone doesn’t need to OWN the results of other people’s work. Crazy I know.
Why do you believe that capital was not allocated for 1000s of years? This seems absurd, and I’m not sure how to charitably interpret this. Do you think that humans were unthinking automatons until recently? When the Egyptians built the pyramids, that was capital allocation.
> Value generation doesn’t require capital, or capitalist.
This is generally speaking, false. Value generation does indeed require capital allocation. Otherwise there would be no tools or raw materials with which to generate value.
> Someone doesn’t need to OWN the results of other people’s work.
Ownership is a social construct that determines who is entitled to use of a thing. Without that social arrangement, then people will just fight over stuff. This is why animals evolved territoriality.
> Crazy I know.
Then join us over here on the side of sanity where we do understand how ownership works.
Plenty of tools and productive work.
> No capital, no ownership (no words to even express the concept).
My understanding is that the Australian government is continuing to expropriate their land (capital). So it seems to be a basic fact that they did own it before, and that is no longer the case.
You understand that tools are capital, right?
Like I said, your position ignores a lot of history. Tools are not capital, as they pre-existed the concept of capital/ownership.
This isn’t like a scientific concept that was discovered. This is a human made dichotomy, there are a myriad of other ways to view the resources and how we consume/share/allocate things.
Yes you can put everything in terms of capital (which is what you’re attempting) but there is nothing “more valid” about your concept than any other competing concept. These aren’t laws of physics.
Thats a distinction without a difference. If you say it was wrong for the settlers to take the land, I ask you why? Either the Aborigines had the right to determine its disposition, or they did not. The right to determine its disposition is ownership rights. Therefore you’re not able to criticize the expropriation of the Aborigines without acknowledging that they held property rights in the land.
> Ownership was a concept introduced in the 1700s.
This is not true, Aborigines have (and had) ownership. When the Europeans got here, the Aborigines had things they owned and territories they excluded other Aborigines from.
> Tools are not capital, as they pre-existed the concept of capital/ownership.
This is nonsense, the concept of capital is the same as the concept of a tool. Means of production.
> This isn’t like a scientific concept that was discovered. This is a human made dichotomy,
Thats correct, ownership is a social construct. Its a social construct that has existed for thousands of years [0] and is not something that you can change unilaterally on the basis of some dogma you prefer.
> there are a myriad of other ways to view the resources and how we consume/share/allocate things.
Yes and you are well within your rights to propose any of those ways, and then other people can choose whether to adopt those ways or not. However taking a different way and forcing it on people is not the way to go, as it amounts to you claiming the right to dispose of other people’s property. Furthermore just because you can posit a concept does not make that concept logical, sensical, or coherent; and you should be prepared to justify your proposition.
> Yes you can put everything in terms of capital (which is what you’re attempting) but there is nothing “more valid” about your concept than any other competing concept. These aren’t laws of physics.
The validity is the correspondence between concept and real world behavior. Tools are capital because they are literally capital according to the basic definition of the word and we have no reason to say otherwise.
Capitalist A hires Worker X to generate some value (P) for them and they pay X: W (wage) - M (margin) (the difference being the surplus value SV). (So W+M = P, and P - W = SV) -- (Edit: Sorry to make that so confusing I could have done that better)
That is how capitalism works. I don't think you'd disagree.
Now A takes SV and hires worker Y and repeats the process and generates another lot of SV.
Why does A have rights to SV at all? The thing you are referring to as "Capital" is really just the "Right to collect others SV" -- where does that right come from?
I don’t disagree with the formula as presented.
> Why does A have rights to SV at all?
It is the wage he earned for arranging the components (factory, raw materials, worker who has agreed to work, salesman, etc.) in a way that generated SV. Many capitalists are competing to do this, and some of them are better at generating SV than others. Those capitalists make more money, and they invest in more businesses that generate SV. Some capitalists spend all their investment arranging to produce SV and they don’t make any, they lose money and lose their investment; however the worker still gets paid. The worker trades his labor for a guaranteed wage and the capitalist takes the risk of loss along with the possibility of profit.
Thats the long story, the short version is that he has a right to it because he has a right to the payment he received from the customer. It was a voluntary exchange.
> The thing you are referring to as "Capital" is really just the "Right to collect others SV" -- where does that right come from?
I disagree with this framing because “others’ SV” implies that the SV belongs to someone else. Thats something you should support if you believe it is so.
You frame “capital” as “ Right to collect others SV" but the SV came because the laborer was able to use tools that made him more productive. The only reason the capitalist got some of the SV is that he chose to buy a tool and then agreed to let a worker use the tool. This is a valuable activity and thats why it earns a reward.
Doesn't this frame of argument just lead back to the one of three scenarios:
- (a) The capitalist bought the tool from a (b) or (c) through hard earned wealth as a wage-earner (super rare)
- (b) The capitalist was born with more wealth because their parents were one of (b) or (c) therefore could be a capitalist not a worker (most common)
- (c) The capitalist just took the wealth because the opportunity presented itself. (Land grabs, resource exploitation, etc). (less common now, but the origin point for capitalism)
where else can you get "the means of production"? And thus the "right to exploit workers surplus value"?
That's for <= industrial-age capital.
In modern day information-era capital: What tool does a software company offer an employee that entitles them to SV... couldn't I just as simply frame it the opposite way: The Software Developer IS the tool, the Employer actually has no means of production themselves, but still claims that right.