Topic: Solution to poverty - Socialism or Capitalism? - page 31. (Read 30796 times)

You are describing a business structure called a co-op.

Its not an economic ideology like Communism or Capitalism

To those who favor Socialism, please help me understand what the incentive is (under Socialism) for one person to produce more or better than their neighbor?

Survival of the Fittest is the law of nature. Capitalism is the economic version of this law of nature. There will always be at least one person who has less than everyone else, which by definition would make him/here "the poor". But Capitalism allows anyone to pull themselves out of that poor state, Socialism doesn't have that mechanism. Socialism doesn't have mobility. The freedom of mobility while poor is more valuable than not having the freedom of mobility and being middle class.

Additionally, business breeds business, capitalism success for one results in capitalism success for others...

Everything in moderation.  It's not good to have a purely capitalistic society, and it's not good to have pure socialism.  Both have advantages and disadvantages.  Capitalism generally leads to innovation and incentive to work hard.  But it's important to have some socialistic policies/programs like Social Security and unemployment insurance.  Putting morals aside, it's not good for society or the economy if people don't have a means to stay afloat if they lose their job, for example.  Risk of default would increase significantly.  Taking it to an extreme where people stay on it for years is not good.  But it can be very helpful to get you through a couple tough months.

Except that communism is defined as the proletariat taking ownership of the means of production, which is what I'm talking about. So yes, it is capitalism. But yes, it is also socialism.

that is capitalism...

In the twenty first century socialism vs capitalism is a false dichotomy - they are both flawed.

The solution is prosumerism - consumers taking control of the means of production and participating in the process of production via various processes and channels, including revenue sharing, crypto-equities (coins as shares etc), collaborative open source development, 3D printing and other home manufacturing, decentralization in general and ultimately the creation of customer owned DACs.

When someone is unemployed they have very limited resources. It is very rare that someone will not consume anything at all (only use stockpiles of food, ect) but it does happen.

With interest rate of 0, investments will be totally random, productivity will go down and everyone's children will grow up with hunger, sickness, and ignorance.

There is always powerful support for the politican that can offer new money at zero interest.

Don't know much abut history, do you?

A person is a consumer AND a worker.  What I said is lower prices help consumers but not workers.  This is the reality.  Offshoring jobs to lower cost labor markets lower price of consumer goods but along w this you lose jobs.  When you lose jobs you lose consumers.  Then you have viscous  downward spiral when instead you want a virtuous upward spiral

Why is that hard to understand?  If I'm a garment worker what do I care that I can buy a shirt for $5 instead of $20 if I only buy few shirts a year?  I'd rather pay $20 and still have a job.  Even though everyone consumes without jobs they consume LESS!  That is the point.  When given a choice or jobs or prices, policy makers should prioritize jobs because thats what drives the economy

The problem w your way of thinking is that its isolated.  The reality is that corporations off shore jobs so that they can get higher profit margin.  I know this because I did it in my own business.  The off shore labor receive some benefit and consumers receive some benefit.  Owners also get more profit.  Taken as isolated cases sounds like win-win-win.  However, looking at it from a macro perspective everyone loses in the long term.  If the middle class erodes we lose the consumer base which drives the economy.  


Its not a moral issue its an economics issue.  Here is the paradox.  Corporations are forced to lower prices to meet consumer demand.  The easiest way to lower COGS is to cut labor costs. The Chinese workers work for cheap but they still can't consume US products until their wages become almost equal to ours.  But once their wages get close to ours the labor market would shift again to a cheaper place like Vietnam or Bangladesh.  Pretty soon instead of inequality being a local issue it will be a global issue.  Once it becomes a global issue economies will destabilize and in turn society will destabilize

I'm not even saying globalism is bad and maybe it is a necessary step in capitalism's evolution.  Just saying you can't ignore issues of inequality.  The last time we had this much inequality gap was right before Great Depression.  Inequality AND Globalism is a hot topic in economics right now.  Its not clear cut as what you make it out to be.  Part of what you say is true.  Globalism has helped industrialized certain economies but its also destabilized others

1) So long as you're eating / consuming electricity / using gas / drinking water / etc... you ARE a consumer and will benefit from lower prices. Its literally that simple. So stop BSing about terminology here.

2) Yes, except the guy overseas who took your job (A) is willing to accept lower wages thus is a more worthy candidate than that job than you and (B) he lives among more poor people and therefore is in a much worse situation than you are when unemployed. And (C) hiring the other worker results in everyone else benefiting from lower prices. Of course from YOUR perspective you want the job over your competition. But in what economic/moral/logical way does that make ANY SENSE whatsoever? The answer is it doesn't.

You can't be a consumer if you are unemployed.  Would you rather have a job and pay higher prices or have your job off-shored and pay lower prices?

It raises inequality, but in the process raises everyone's wealth. The question is basically, "You can either accept $0, in which case everyone else gets $0, or you  can accept $1 in which case everyone else gets $10." You'd be stupid not to accept the $1.

Also, just a quick checkup, all workers are consumers. EVERYBODY is a consumer. If you eat food, you're a consumer. When prices go down without the quality of the product being hit, and no aggregate jobs are lost (although jobs might shift around from point A to point B) net poverty decreases. This is what happens when you open up borders (to exports and imports, that is. not necessarily to immigration because then there's whole other deals that get involved).

Not necessarily as you need to be somewhat qualified in order to get a work visa to another country.

Sure, if we're looking to go from 1 to 1. What about 1 to n? What's going to be post-globalization?

I think if you really thought about moving humanity beyond 'poverty', you need 1 to n.

You are correct but this increases inequality gap.   Which can be destabilizing to economies

Its a tough issue and we in uncharted territory

Also I don't agree that lower prices help the worker.   It helps consumers.   But I'd rather have job stabilitity than lower prices

There are other social programs in Spain and throughout Europe then just "welfare". Unemployment is a big one as people will receive money just for not working. Most of Europe also makes it very difficult for a company to fire someone so an employee can slack off at work, not doing their best and have few ramifications at work.

Look at it logically. The primary cause of poverty, other than the variety caused by mental conditions, is generally lack of investment in labor efficiency, in economics terms "capital." The average worker in America, for example, benefits from quite a bit of capital. Worst case scenario you go to work in say Walmart. That's even if you come to the table with extremely low amounts of human capital (i.e, education). In walmart you benefit from easy access to food (during a lunch break you can get food served to you in a number of minutes), there are machines that aid you in your work letting you get more done faster, work that would otherwise need to be occurring in many different locations is now centralized into one hub. Result? You get a lot more done faster. Obviously, the owners of Walmart are also taking a huge amount of profit from the improved efficiency, but the worker also benefits. The reason is that with a greater profit margin, there is a greater room for companies to lower prices. With the lowered prices, comes greater quantity demanded. With greater quantity demanded, comes more demand for labor. That ups the price of labor, otherwise known as wages.

So, what will help solve poverty (it won't solve inequality, but actual poverty) is a greater and more even spread of the capital available to workers. What can help this? Globalization.  Not necessarily capitalism or socialism, although people must be motivated by capitalism in order for it to work. The more efficiently "stuff" can be moved around the planet, the more it makes sense for companies to  take advantage of low labor costs overseas. In order to take advantage of that cheap labor, they have to send capital there, thereby improving those people's productivity, so they in turn can demand more. The vast majority of poverty in the world is caused merely by special gaps meaning that some people are valued more as workers merely because of where they happen to have been born. This will naturally go away as the costs associated with remote labor are reduced due to things like the internet, more efficient transportation, etc.

There's local poverty too, poverty of people living right alongside loads of capital, but all things said this accounts for a very small portion of poverty on the planet. This type of poverty may be a growing pain associated with globalization as capital flows to overseas locations, there is reduced demand for labor in the industrialized nations. However, as the people overseas lower their saturation of poverty to that in developed nations, then this element goes away.

If governments want to lower poverty, there are two steps:
1) Encourage firms to invest in capital.
2) Allow workers EVERYWHERE to make use of that capital.

There's also a third thing, that should be obvious but I won't get into right now:
3) Encourage/allow individuals to invest in education, i.e, human capital.

Once you have this baseline understood by everyone involved, then you can actually discuss whether socialism or capitalism more adequately meets these goals.

EDIT: note, this post is specifically addressing "how to reduce poverty" not "how to increase the average wealth per capita.

Can always vote with your feet and go elsewhere if you are young and ambitious.