the cynic in me says that those savings will just become profits for the companies and government through taxes and greed....so savings are relative. Also it seems to be highly dependent on solar mass adoption
Of course they will. You can thank this effect for the high standard of living we enjoy from the free market.
Read The Wealth of Nations and you will see that Adam Smith was a vociferous advocate of regulation. Because "free" was not "unregulated" in the original conception, it was rather "open to any participant, such that they have the opportunity to benefit", which as we have noted over the past 300 years of economic history requires regulation and enforcement mechanisms (funded by taxes).
> In economics, a free market is an idealized cognitive model of an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any other external authority.
Adam Smith is mentioned later on in the article though:
> For classical economists such as Adam Smith, the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities. They say this implies that economic rents, which they describe as profits generated from a lack of perfect competition, must be reduced or eliminated as much as possible through free competition.
That sounds like a great deal for everyone!
I think that's what transpired from Piketty's "Capital in the Twenty-First Century"
But if you want to extend the time horizon to 400 years (ie. to the beginning of the end of feudalism) that's still not that long in the grand scheme of things.
That said I don't really know if I buy that we're in that system anymore either; I think history books will probably eventually recognize a shift starting around the collapse of Breton Woods and that we're currently in a long and increasingly painful transitionary period that we're in denial about to something we can't yet describe.
But I Am Not An Economist (nor do I want to be one), so who knows.
In this case what we mean by capitalism loosely is a system of private property, free/open trade, market based pricing mechanisms, economic decisions being made by individual actors, etc.
So, private property was certainly there before Smith, as were individual economic decisions. But, there was a lot more price standardization and government planned trade.
So, is capitalism the same as a market economy? I feel like there are endless debates about capitalism and socialism but they are tribalized notions without clear definitions. Eg, are market regulations anticapitalist if they are government imposed or are they procapitalist if they support greater market health?
Not exactly, but that is a necessary condition. I think another necessary condition is that prices are set by the market and that the state isn't deeply involved in trade. Obviously there are grey areas, but it seems pretty clear that the export focused state trade policies of mercantilism were not capitalism.
On the other hand, the companies will be made of people, expand by hiring new people, and pay these people with those profits, so much of the money will make it to people.
Companies making lots of money is not a problem. Companies saving vast amounts of it in war chests is, IMO (depending on how they save it), as it's effectively removing it from the economy. I really hope Apple and Google's massive saving are stored by being reinvested in some way and aren't just entirely removed from the economy, because that would be a shame. I suppose even if they were just stored in a bank that would be used as capital for loans, so maybe it's not that bad.
Nobody saves money in Scrooge McDuck cash vaults. All the money is invested, all of it. Even money in a checking account is invested. (The banks invest it, that's why they offer free checking accounts. They're not a charity.)
The majority of people do invest in the stock market.
> the lower class
is not the majority. Even so, brokers like Robinhood have made it easy for anyone with a phone to invest.
Russian oligarchs invested vast amounts of money into super yahts and luzury London real estate, which sits empty 360 days a year.
Is that productive investment?
A yacht and a luxury apartment ain't worth spit in the context of the global economy. Besides, they might be good investments.
Noone has demobstrated it is beong used productively. O am illustrating that some investments are terrible for the economy.
Why do I feel like you're reading half my comments and responding to that?
> The majority of people do invest in the stock market.
You're right. A slight majority, at less than 60%, based on sourced I found.
Is that where we're at now? As long as you're part of that almost 60% then it's all good?
> brokers like Robinhood have made it easy for anyone with a phone to invest.
And my point is that many people don't have enough extra income to be able to usefully benefit from this, regardless of how much easier it's become.
Someone that can only afford $100 a month to invest will see far less benefit than someone that can afford to invest $1000 a month, yet the person than can afford $1000 a month is likely not making 10x the income.
Expecting everyone to be able to benefit equally from stock market gains is ridiculous, yet suggesting people buy stock if they are worried about too much profit being directed towards companies is suggesting the problem is solved by by that, and is thus itself ridiculous.
That's your strawman.
> many people don't have enough extra income
And yet people find the income to buy lottery tickets, go to the movies, go to the bar, etc. Investing does mean giving up some of this spending.
> Someone that can only afford $100 a month to invest will see far less benefit
Of course. But they are also seeing far more benefit than not investing.
Remember that Gamestop stock craze a year ago? Many people playing that game were very low income people, including kids. Somehow they did have money to invest, when they thought it was worthwhile.
If it's a strawman than your original statement was a non-sequitur, as I cover below.
> Of course. But they are also seeing far more benefit than not investing.
I believe your statement was that people can invest in the stock of these companies that would theoretically be getting most the profit to get "your share" of the profits, as opposed to it being slurped up by the wealthy.
This isn't about benefiting in some small way, it's about the benefit not ending up disproportionately in the hands of those that already have it. That was the context in which your statement of how you can just buy stock to get your share was made, because that's what this thread of the conversation was about.
> Remember that Gamestop stock craze a year ago? Many people playing that game were very low income people, including kids. Somehow they did have money to invest, when they thought it was worthwhile.
You mean the bunches of young people that took out loans to invest, or took their saving from living at home with their parents that they could have used to actually become independent? Is that what we're encouraging now? Because that was my take on that situation. A bunch of desperate people taking a risky gamble that happened to pay off, at least for some.
You get the benefits in exact proportion to how much you invest in it.
> You mean the
Yes. And if they used the money unwisely, they're responsible for the results. The point is, they got the money, and were able to invest it.
The same thing happens to wealthier people - if they invest the money unwisely, they lose it.
So if you started off poor, you have nothing to invest and you will be poor forever. Nice.
Are you even arguing in good faith? Do you think this encourages hard work?
You know what you are encouraging? Crime. Or a revolt.
Because thats what people do when they realise that playing fair won't let them get ahead.