A belief in Capitalism?

Mighty_Mouse

There has been much debate in here recently, in relation to capitalist versus socialist ideals. IMO most capitalist ideals are based on the assumption that free-market solutions are inherently better in terms of service, effectiveness, efficiency etc

I have a real problem with this given the fact that, in its purest terms, a free market doesn't even exist in today’s first world. What is the motivation when deciding whether to privatise Bus, Rail and Air services? Is the objective not to serve the best interest of the country and if so, surely a country’s best interest cannot be measured purely economic terms.

I've recently read Eric Schlosser's "Fast Food Nation" and would recommend it to all. There’s a particularly relevant chapter in his book which might promote some discussion in here.

There is nothing inevitable about the fast food nation that surrounds us - about its marketing strategies, labour policies and agricultural techniques, about its relentless drive for conformity and cheapness. The triumph of McDonalds and its imitators was by no means preordained. During the past two decades, rhetoric about the "free market" has cloaked changes in the nation’s economy that bear little relation to real competition or freedom of choice. From the airline industry to publishing business, from the railroads to telecommunications, American corporations have worked hard to avoid the rigors of the market by eliminating and absorbing their rivals. The strongest engines of American economic growth in the 1990’s – the computer, software, aerospace and satellite industries – have been heavily subsidised by the Pentagon for decades. Indeed, the U.S defence budget has long served as a form of industrial policy, a quasi-socialist system of planning that frequently yields unplanned results. The Internet at the heart of today’s “New Economy” began as the ARPANET, a military communication network created in the late 1970’s. For better or worse, legislation passed by Congress has played a far more important role in shaping the economic history of the post-war era than any free market forces.

The market is a tool, and a useful one. But the worship of this tool is a hollow faith. Far more important than any toll is what you make with it. Many of America’s greatest accomplishments stand in complete defiance of the free market: the prohibition of child labour, the establishment of a minimum wage, the creation of wilderness areas and national parks, the construction of dams, bridges, roads, churches, schools and universities. If all that mattered were the unfettered right to buy and sell, tainted food could not be kept off supermarket shelves, toxic waste could be dumped next door to elementary schools, and every American family could import an indentured servant (or two) paying them with meals instead of money.

Much like the working of the market, technology is just one means towards an end, not something to be celebrated for its own sake. The Titan II missiles built at the Lockheed Martin plant northwest of Colorado Springs were originally designed to carry nuclear warheads. Today they carry weather satellites into orbit. The missiles are equally efficient at both tasks. There is nothing inexorable about the use of such technology. Its value cannot be judged without considering its purpose and likely effects. The launch of a Titan II can be beautiful, or horrific, depending upon the aim of the missile and what it carries. No society in human history worshipped science more devoutly or more blindly that the Soviet Union, where “scientific socialism” was considered the highest truth. And no society has ever suffered so much environmental devastation on such a massive scale.

The history of the 20th century was dominated by the struggle against totalitarian systems of state power. The 21st will no doubt be marked by a struggle to curtail excessive corporate power. The great challenge now facing countries throughout the world is how to find a proper balance between the efficiency and the amorality of the market. Over the past 20 years the United States has swung too far in one direction, weakening the regulations that safe-guard workers, consumers, and the environment. An economic system promising freedom has too often become a means of denying it, as the narrow dictates of the market gain precedence over more important democratic values.

Today’s fast food industry is the culmination of those larger social and economic trends. The low price of fast food hamburgers does not reflect its real cost – and should. The profits of the fast food chains have been made possible by losses imposed on the rest of society. The annual cost of obesity alone is now twice as large as the fast food industry’s total revenues. The environmental movement has forced companies to curtail their pollution, and a similar campaign must induce the fast food chains to assume responsibility for their business practices and minimize their harmful effects.

Sand

I have a real problem with this given the fact that, in its purest terms, a free market doesn't even exist in today’s first world.

Agreed, which is a reason why we should work towards it and is a fine undermining of your criticism of free markets.

Is the objective not to serve the best interest of the country and if so, surely a country’s best interest cannot be measured purely economic terms.

No its to serve the best interests of the individuals within the economy. The country/state is useful only in so far as it serves the interests of the individuals who are citizens of it.

When you get into the best interest of the country, what you really mean is the best interests of the country as politicians see it, which really means the best interests of the country as political lobby groups see it, which really means the best interests of the country as the rather wealthy see it.

"The market is a tool, and a useful one. But the worship of this tool is a hollow faith. Far more important than any toll is what you make with it. Many of America’s greatest accomplishments stand in complete defiance of the free market: the prohibition of child labour, the establishment of a minimum wage, the creation of wilderness areas and national parks, the construction of dams, bridges, roads, churches, schools and universities. If all that mattered were the unfettered right to buy and sell, tainted food could not be kept off supermarket shelves, toxic waste could be dumped next door to elementary schools, and every American family could import an indentured servant (or two) paying them with meals instead of money."

Garbage to be honest. None of the above is dependant on government intervention, but simply on how much individuals value any of the above, and how much theyre willing to protect it.

As an example enviromentalists are trying to protect endangered regions by buying them and asserting property rights over those areas. Theyre combatting elephant poaching by locals in Africa by giving the locals property rights over the elephants so that they can farm the elephants like man has done sheep, cattle and pigs before - how many of those are dying out?

And as for government control being the solution to unfettered markets despoiling the enviroment.....

"No society in human history worshipped science more devoutly or more blindly that the Soviet Union, where “scientific socialism” was considered the highest truth. And no society has ever suffered so much environmental devastation on such a massive scale.

Ah yes, the USSR, that bastion of free markets. You know, i think they had something there with heavy government intervention in the economy, for the good of the country of course.

arcadegame2004

Okay here comes my reply to Mighty_Mouse.

While I am generally in favour of free markets, by free I do not mean free from health/safety regulations. I feel that, provided the item is not extremely dangerous, that its sale should not be prohibited. Indeed if I had been an absolutist in supporting the free-market ideology, then I would not have demanded the liquidation of the tobacco industry, which I have already done in a previous thread.

I don't believe there is such thing as a rule that always applies in all cases. I am speaking in generalities then, when I say that I believe in competition and privatisation. Generally speaking, I favour the privatisation of State companies and assets. This does NOT mean that I favour it in EVERY circumstance, e.g. I accept that it would be a bad idea in the rail-industry, simply because I cannot really see how effective competition can be introduced in that sector. The negative experience of the UK in this particular sector of industry after privatisation e.g. the various accidents, bears out what I am saying.

But at the same time, I favour the privatisation of ESB, the VHI, An Post, Aer Rianta, Bus Eireann, Bord na Mona (why is a state-owned peat company essential to the national interest, especially when we are supposed to be trying to reduce greenhouse-gas emissions?), and Aer Lingus. These are sectors of industry where it is feasible to have competition that would likely be in the consumer's interests. By in the consumer's interests I mean it is likely that the privatised semi-state companies will be far more efficient with their revenue because they will no longer be entitled to a State bailout in the event of troubled times. And because this will involve them reducing their costs, this is likely to mean that their prices will fall too, as profitability requires revenue to exceed costs, and thus lower costs means lower prices (provided there is adequate competition and no cartels).

Originally posted by Mighty_mouse[\I]
From the airline industry to publishing business, from the railroads to telecommunications, American corporations have worked hard to avoid the rigors of the market by eliminating and absorbing their rivals. The strongest engines of American economic growth in the 1990’s – the computer, software, aerospace and satellite industries – have been heavily subsidised by the Pentagon for decades. I

My response to this particular section of your post is as follows. Obviously the competition-authorities in the US have not been doing their job properly if this is true. Competition-authorities are supposed to prevent the establishment of cartels, and to break up monopolies. But I doubt such a scenario would happen in Ireland as has happened in the US with respect to some sectors of industry. In Europe including Ireland, we outlaw private-sector bribery of companies. Yet this is NOT illegal in the US, believe it or not! As such, the US becomes a far more fertile ground for kickbacks from politicians to their corporate bankrollers, than Ireland and other EU states.

A vigorous regulatory environment would help to avoid the establishment of cartels and restrictive practices. I regard your post as helping to back up my point - however unintentionally, that true competition needs to be enforced in order to ensure that the benefits of competition are made real for the consumer. The regulatory environment needs to act with vigour to ensure that competition actually happens. But it is hardly going to happen with a state-owned monopoly.

sceptre

Originally posted by arcadegame2004
Obviously the competition-authorities in the US have not been doing their job properly if this is true. Competition-authorities are supposed to prevent the establishment of cartels, and to break up monopolies.

They're essentially limited by the Sherman Act (you could say that it's the Sherman Act that gives them any power at all but it also acts as a power delimiter), which really concentrates on abuse of a monopoly position rather than the mere existence of a monopoly (or at least that's how it's been applied since it was passed).

Manach

Well I've read Eric Schlosser's "Fast Food Nation" but also as well his book "Reefer Madness". In the latter book he does describes a very effecently run capitalist business, run with classic free market principles. Pity it had to be the Porn Industry.

Seriously, Capitalism is not perfect nor does it claim to be. Again in "Reefer Madness" he highlights the awful plight of Mexican migrants, but these same people were fleeing a state which had practiced a form of state Socialist since it's revolution.

DadaKopf

In the latter book he does describes a very effecently run capitalist business, run with classic free market principles. Pity it had to be the Porn Industry.

And the porn industry is an exploitative industry, isn't it?

Schlosser may be able to say it's one of the few examples of a genuinely free market economy in America, but the point he's obviously making is a normative one: does an unrestrained market make people better off as a whole, as human beings and a society?

Raskolnikov

Many of America’s greatest accomplishments stand in complete defiance of the free market: the prohibition of child labour, the establishment of a minimum wage, the creation of wilderness areas and national parks, the construction of dams, bridges, roads, churches, schools and universities.

Prohibition of child labour a defiance of free market principles? Laughable, a more trained and educated work force is one that can produce greater economic wealth.

The establishment of a minimum wage is hardly one of America's greatest achievements, it's simply served to increase unemployment and promote the labour black economy.

Schlosser then throws in a few more untruths based on faulty logic that no one can possibly disagree with.

Meh

Originally posted by DadaKopf
Schlosser may be able to say it's one of the few examples of a genuinely free market economy in America, but the point he's obviously making is a normative one: does an unrestrained market make people better off as a whole, as human beings and a society?

This is a classic fallacy. A free market does not mean a market without any rules or laws. In fact, free markets require government-enforced laws to function properly.

Look at the US stock market; it's the ultimate achievement of free-market capitalism. If that market isn't free, then what market is? Yet the SEC regulations governing its operation are nearly two thousand pages long.

P.S. the porn industry is certainly regulated by the government -- child porn laws, obscenity laws, government-enforced contracts...

shotamoose

Originally posted by Sand
Garbage to be honest. None of the above is dependant on government intervention, but simply on how much individuals value any of the above, and how much theyre willing to protect it.

Individuals can't set a minimum wage for the economy, and can't set health and safety standards for foods. If they want those things they have to band together with other people and set up a body which has full administrative capability over the territory and the monopoly of force and law-making. They may even call this body 'government'.

Theyre combatting elephant poaching by locals in Africa by giving the locals property rights over the elephants so that they can farm the elephants like man has done sheep, cattle and pigs before - how many of those are dying out?

How many of those are prized for their ivory tusks? Also, have you ever tried elephant meat? One of the reaons elephants are dying out is that they're hard to farm and offer high rewards to anyone who manages to just shoot one and have its tusks off. Nevertheless, property rights are one way of solving this particular problem. But property rights don't mean anything unless you can enforce them. Say someone kills your elephant - standing there saying "what about my property rights????" won't accomplish much. Only with police to police and judges to adjudicate do property rights actually start to mean anything, and for them you need nasty old government. Similarly, property rights over natural resources mean zilch without people to assess infringements, assign monetary values to the losses and ensure charges are paid. Government again.

And as for government control being the solution to unfettered markets despoiling the enviroment.....

"No society in human history worshipped science more devoutly or more blindly that the Soviet Union, where “scientific socialism” was considered the highest truth. And no society has ever suffered so much environmental devastation on such a massive scale.

Ah yes, the USSR, that bastion of free markets. You know, i think they had something there with heavy government intervention in the economy, for the good of the country of course. [/B]

It was the absence of fair government that ensured environmental devastation in the USSR - ordinary people had no way of seeking redress when the state or someone else chose to damage their local environment or plunder natural resources. Exactly the same thing would happen in a free market system where there was no government to fairly represent the interests of the powerless. In fact, that's precisely what did happen during Augusto Pinochet's capitalist dictatorship in Chile - environmental damage and plunder of natural resources.

Without interventionist and democratic government, a capitalist system would have no trouble doing as much damage as the commies.

Sand

Individuals can't set a minimum wage for the economy, and can't set health and safety standards for foods. If they want those things they have to band together with other people and set up a body which has full administrative capability over the territory and the monopoly of force and law-making. They may even call this body 'government'.

Yes they can. They can take better paying jobs so that the lower paying ones have to raise their wages to get in quality employees. They can refuse to buy food that they dont consider to be safe or healthy, forcing manufacturers to improve their standards to compete.

But property rights don't mean anything unless you can enforce them. Say someone kills your elephant - standing there saying "what about my property rights????" won't accomplish much. Only with police to police and judges to adjudicate do property rights actually start to mean anything, and for them you need nasty old government.

Only semi wrong. The governments have been trying the old "police and judges" route to stop poaching and have failed miserably. The fact is, its the locals who were doing the poaching and then selling it off to dealers.

Now the locals have property rights, so *they* protect those property rights themselves, with force if neccessary - and where government fails property rights and self interest succeeds. Which is nice when youre talking about a police beat the size of leinster in many cases.

The same works for gorillas, with locals being convinced that more gorillas=more tourists=more local jobs and investment=more wealth and development for locals. Damn their greed and self interest. Why couldnt they do it for the good of the country?

Similarly, property rights over natural resources mean zilch without people to assess infringements, assign monetary values to the losses and ensure charges are paid. Government again.

No that requires, A) A free market, and A system of law. It doesnt require much else.

Zombrex

Originally posted by Sand
Yes they can. They can take better paying jobs so that the lower paying ones have to raise their wages to get in quality employees.

I think you will find it works in the opposite way Sand, employeers see their rivals lowering wages, increasing profits, and follow suit, downsizing and lowering wages. The workers are then force to take the lower wage, or be unemployed, and with every company in the market downsizing, there is little chance of getting a better paid job.

You statement assumes that there is a market value in paying your employees better than your rivals. There are very very few industries where that is true (possibly some areas of the IT industry). In the vast majority of industries the employeer wants to pay their employees as little as possible to increase profits.

Originally posted by Sand
They can refuse to buy food that they dont consider to be safe or healthy, forcing manufacturers to improve their standards to compete.

But with little government intervention, how do you know that the food is unsafe?

It is assumed that if a company is allowed sell a product, then it has been approve to be safe by the government. But there are plenty of cases where a company has sold a product they know to be unsafe, and the government have missed the danger (cigiretts, and a range of faulty cars, for example). Without any form of government regulation, the consumer will be constantly being sold dangerous products.

Meh

Originally posted by Wicknight
I think you will find it works in the opposite way Sand, employeers see their rivals lowering wages, increasing profits, and follow suit, downsizing and lowering wages. The workers are then force to take the lower wage, or be unemployed, and with every company in the market downsizing, there is little chance of getting a better paid job.

If this argument were true, the vast majority of workers would be on the minimum wage. Instead, the vast majority of workers earn more than minimum wage.

Your statement assumes that there is a market value in paying your employees better than your rivals.

There's quite a lot of value in having lower staff turnover. Ask any supermarket manager.

But with little government intervention, how do you know that the food is unsafe?

The same way Jews know food is kosher. You have a privately owned food standards board test the food, charge the manufacturers €0.02 per item to use their special trademarked/copyrighted "Approved by the Private Food Standards Board" logo. If you get food poisoning after eating food with that logo, you stop buying food with that logo on it, and the PFSB goes out of business. (Disclaimer: I don't think this is necessarily a better way of handling food safety than government intervention. But a system like this has been proven to work on a large scale.)

Sparks

Originally posted by Meh
You have a privately owned food standards board test the food, charge the manufacturers €0.02 per item to use their special trademarked/copyrighted "Approved by the Private Food Standards Board" logo.

And then a second food standards board with a lower service charge is started by a major food manufacturer, with lower standards for food contamination and with "independent" studies showing that their standards are perfectly acceptable. They get a large following because of the lower cost and though they initially make a loss, they're funded by BigFoodCo and so don't mind. Pretty soon, because of their lower cost, they're the dominant quality mark. Now food is produced to a lower quality, but anyone who tries to sue the company for certifying unhealthy food faces an enormous problem with sueing BigFoodCo's legal team who also represent NotBigFoodCoQualityBoardHonest, by a freak coincidence. And since HonestFoodQualityBoard has now gone out of business, you've no way of knowing what food is healthy and what food isn't.

And that's not dystopic speculation, that's just what taking what happened in the software industry and applying it to the food industry.

DadaKopf

No that requires, A) A free market, and A system of law. It doesnt require much else.

Except people. How do you suppose a 'system of law' can operate without some kind of regime of power that with significant legitimacy backing it up?

In your definition, people aren't even involved in the process, it's all about the abstract mechanisms of the market and robotic structures of governance.

Meh

Originally posted by Sparks
And since HonestFoodQualityBoard has now gone out of business, you've no way of knowing what food is healthy and what food isn't.

Why doesn't another honest food certification board start up to compete? If people are unhappy with the current food standards boards, there'll definitely be a gap in the market. And if some food manufacturers get together in a cartel and refuse to use the new honest food standards board, consumers will move to manufacturers who do.

And that's not dystopic speculation, that's just what taking what happened in the software industry and applying it to the food industry.

So why hasn't anything like this happened in the kosher food certification industry? Software and food are very different businesses.

bonkey

Originally posted by Sand
Agreed, which is a reason why we should work towards it and is a fine undermining of your criticism of free markets.

I don't understand this...

You admit we don't have any free markets. I'm pretty sure you'll also admit there never really have been any free markets in the past either.

So exactly why should we be looking for them? What evidence is there to show that free markets are anywhere near as good a thing as we make them out to be?

In fact, surely the opposite is true? Surely, the more we look at the successful markets, the more we see that "somewhat free" is a far better balance, where the market is constrained by laws which take more than the market and capitalism itself as the prime constraints.

None of the above is dependant on government intervention, but simply on how much individuals value any of the above, and how much theyre willing to protect it

So what you're ultimately saying is that we don't need government intervention to stop people doing nasty things...we just need enough people to actually care about others and the well-being of others instead of looking out for themselves and their own gain only.

Strangely, such a logic is the basis behind communism, Sand - that if enough people actually cared enough about the general well-being, that we would all work towards the common good, and not permit the abuses of others (and by others) to take hold.

Funny to see it being used by you as an excuse as to why capitalism doesn't require government intervention, when I'm pretty sure you'll also quite happily point out that the non-existance of such a caring attitude is one of prime reasons why communism is such a non-starter as a realistic idea.

jc

Zombrex

Originally posted by Meh
If this argument were true, the vast majority of workers would be on the minimum wage. Instead, the vast majority of workers earn more than minimum wage.

I am talking about companies within the same market (ie the same skill base).

How many employees earn a lot more than others in the same industry doing the same job. Tescos don't pay a lot more than Superquinn, because they don't care if you leave and go to the other supermarket (or at least the don't care enough to sacrifice their profits). If you work for Ford you probably make pretty much the same as if you did the same job if you work for Toyota.

If Sands argument were true, everyone would be making huge amounts of money because employee migration over the last 50 years, would force employers to raise pay to stop all the employees leave to go to a better paid job doing the same thing. That is certainly not the case.

Employers keep the wages of their employees at the lowest they can while still attracting staff. For high skilled jobs that is indeed a lot higher than minimun wage, but they keep it a the minimum wage for the particaluar industry or skill base.

Originally posted by Meh
There's quite a lot of value in having lower staff turnover. Ask any supermarket manager.

But they don't attempt to stop staff turn over with high pay, they do it with other incentives. The only time pay was used to stop turn over was during the middle of the dot.com boom, and we all know what happened to that.

The point of my post, is that the eutopian free market view that Sands has is not a real world model. It ironically has the same problem exteme socialist models, such as communism, have, in that it assumes things about human nature that aren't present in the real world (ie that employeers will forsake profit for the sake of improving employees pay).

Sparks

Originally posted by Meh
Why doesn't another honest food certification board start up to compete?

Because it's a private service, not a public one, and the defining characteristic of a private company is that it has to make money because if it doesn't, noone else will give it aid and thus it will cease trading.
And if your competition can afford to make a loss for a long period of time just to drive you out of business, because they have another source of income, then you're just not going to be successful.

If people are unhappy with the current food standards boards, there'll definitely be a gap in the market.

That sure sounds sensible. But then again, people still eat fast food, drink alcohol and smoke tobacco...

And if some food manufacturers get together in a cartel and refuse to use the new honest food standards board, consumers will move to manufacturers who do.

Will they? Even if the food costs twice the price because the cartel benefits so much from the economies of scale? I mean, we know that homemade brown bread is healthier for you than processed white bread, and it tastes better, but I don't see Johnson Mooney and O'Brien going out of business anytime soon...
And cartels are often difficult to oppose - I don't know of anyone but De Beers that you can get diamonds from, for example, and OPEC's history speaks for itself, really.

So why hasn't anything like this happened in the kosher food certification industry? Software and food are very different businesses.

Kosher food? You mean a product whose existance depends on religious practises? I mean, you eat a bad burger, you throw up. You eat ham as a hasidic jew and it violates your religious beliefs. People tend to take the latter more seriously, and so all it takes is one message from the pulpit and your company is out of business - and that means that the church is acting as a regulatory body for the market, doens't it?

Meh

Originally posted by Wicknight
If Sands argument were true, everyone would be making huge amounts of money because employee migration over the last 50 years, would force employers to raise pay to stop all the employees leave to go to a better paid job doing the same thing. That is certainly not the case.

Employers keep the wages of their employees at the lowest they can while still attracting staff. For high skilled jobs that is indeed a lot higher than minimun wage, but they keep it a the minimum wage for the particaluar industry or skill base.

And how did the "minimum wage" for that particular industry/skill set get decided? Because if you offered employees less than that, they'd quit. QED.

An employer has to strike a balance between too low wages (can't get any employees to work for them) and too high wages (company goes out of business).

But they don't attempt to stop staff turn over with high pay, they do it with other incentives.

This is absurd. Employers use higher pay as an incentive all the time. Are you telling me you'd never quit your job to move to one with twice the pay?

(ie that employeers will forsake profit for the sake of improving employees pay).

Employers aren't going to be making much profit if they can't find any employees because their wages are too low, now are they?

Originally posted by Sparks:

Because it's a private service, not a public one, and the defining characteristic of a private company is that it has to make money because if it doesn't, noone else will give it aid and thus it will cease trading.
And if your competition can afford to make a loss for a long period of time just to drive you out of business, because they have another source of income, then you're just not going to be successful.

No company can afford to make a loss forever. And people are willing to pay more for food that doesn't give them food poisoning, so any new competitor won't have to compete on price.

Will they? Even if the food costs twice the price because the cartel benefits so much from the economies of scale?

Read my original post. We're talking about a cost of a few cents per item. Food safety certification is not going to double the price of a loaf of bread.

I mean, we know that homemade brown bread is healthier for you than processed white bread, and it tastes better, but I don't see Johnson Mooney and O'Brien going out of business anytime soon...

Irrelevant. White bread is not "unsafe" food -- our existing government food standards board doesn't stop anyone selling it.

Kosher food? You mean a product whose existance depends on religious practises? I mean, you eat a bad burger, you throw up. You eat ham as a hasidic jew and it violates your religious beliefs. People tend to take the latter more seriously, and so all it takes is one message from the pulpit and your company is out of business - and that means that the church is acting as a regulatory body for the market, doens't it?

I don't know about you, but I really don't enjoy food poisoning, and if I eat food from a source that makes me sick, I'm not going to eat from there again. I guess that means my stomach is acting as a regulatory body for the market?

Sparks

Originally posted by Meh
No company can afford to make a loss forever.

Of course not. But you don't have to make a loss forever, just long enough to drive your competitors under. Witness, of course, the "browser wars" in the software world.

And people are willing to pay more for food that doesn't give them food poisoning, so any new competitor won't have to compete on price.

People are assuredly not going to eat food they know will make them sick. However, if you maintain your quality standards while making a loss in your food certification company, at least until your drive your competitors out of business, then you have not only become the only company on the market, you've also captured the "mindshare" in the market and now you can drop your quality standards without fear of competition.

Read my original post. We're talking about a cost of a few cents per item. Food safety certification is not going to double the price of a loaf of bread.

And read my post - I didn't say that certification would double the cost of food, I said that because you're going to smaller manufacturers, who have higher overheads both proportionately because of their size and absolutely because of their higher standards.

Irrelevant. White bread is not "unsafe" food -- our existing government food standards board doesn't stop anyone selling it.

No, it won't kill you. But yes, it is less healthy than homemade brown bread - it has less fibre, more artifical preservatives and other addatives, and it definitely tastes more bland and boring than homemade bread.
And yet, people keep on buying it, because it's cheap and easy compared to baking your own. And it's that principle - buying an inferior product because it's cheaper and more convienent - that's the fly in the ointment of self-regulating markets.

I don't know about you, but I really don't enjoy food poisoning, and if I eat food from a source that makes me sick, I'm not going to eat from there again. I guess that means my stomach is acting as a regulatory body for the market?

Nope, it's operating as a regulatory body for you alone. You have one bad burger and never eat at the hypothetical fast food restaurant McD's again. They lose one occasional customer, total value approximately 70 euros per annum.
Now imagine KosherFoodCertificationCo. They let standards slip and certify a sausage roll which uses pork sausage. The rabbi announces this in the synagoge that saturday and the next thing you know, they've lost all their customers from that synagoge, and then more when the story is repeated in other synagogues. Total value, approximately everything - all from one group's statements.
That's the difference between your stomach and a market's regulatory body ...

Meh

Originally posted by Sparks
Of course not. But you don't have to make a loss forever, just long enough to drive your competitors under. Witness, of course, the "browser wars" in the software world.

Again, software and food are very different markets. I can't copyright a loaf of bread. I can't bake a cake that can only be iced with my special own-brand cream.

People are assuredly not going to eat food they know will make them sick. However, if you maintain your quality standards while making a loss in your food certification company, at least until your drive your competitors out of business, then you have not only become the only company on the market, you've also captured the "mindshare" in the market and now you can drop your quality standards without fear of competition.

How? Once I've driven my competition out of business then dropped my standards, what exactly is stopping a new honest food certification company from starting up? Mindshare doesn't count for anything -- once my logo has become associated with poor-quality food, it's not worth much any more.

And read my post - I didn't say that certification would double the cost of food, I said that because you're going to smaller manufacturers, who have higher overheads both proportionately because of their size and absolutely because of their higher standards.

Once they start producing safer food that consumers want but can't get elsewhere, they won't be small for long. And you'll get large manufacturer switching to the new honest food board as well, for the competitive advantage.

No, it won't kill you. But yes, it is less healthy than homemade brown bread - it has less fibre, more artifical preservatives and other addatives, and it definitely tastes more bland and boring than homemade bread.

Taste is a matter of, well, taste. I prefer brown bread too, but there are people in the world who *gasp* prefer the taste white bread. And that doesn't make them bad, or stupid, or irresponsible.

And yet, people keep on buying it, because it's cheap and easy compared to baking your own. And it's that principle - buying an inferior product because it's cheaper and more convienent - that's the fly in the ointment of self-regulating markets.

So you're saying the government should ban white processed bread?

Nope, it's operating as a regulatory body for you alone. You have one bad burger and never eat at the hypothetical fast food restaurant McD's again. They lose one occasional customer, total value approximately 70 euros per annum.
Now imagine KosherFoodCertificationCo. They let standards slip and certify a sausage roll which uses pork sausage. The rabbi announces this in the synagoge that saturday and the next thing you know, they've lost all their customers from that synagoge, and then more when the story is repeated in other synagogues. Total value, approximately everything - all from one group's statements.
That's the difference between your stomach and a market's regulatory body ...

That's not the way the current government regulatory system works. You will not be put out of business if you sell one dodgy sandwich alone.

Sparks

Originally posted by Meh
And you'll get large manufacturer switching to the new honest food board as well, for the competitive advantage.

Just like Ford fixed the problem with the Impala for the competitive advantage that came with building cars that didn't explode on impact?
Just like Microsoft fixed the problems with IE and Windows for the competitive advantage that came with having the best and most reliable software?

Large corporations, Meh, don't tend to do what you expect them to do, unless you expect them to maximise their profit margins in short and then long term views. And they don't tend to put their customers first because their legally defined job is to put their shareholders first.

Victor

You can't have a free market. There can never be "one" set of trading rules. There will always be sentiment.

Over-liberalisation of the market ultimately leads to the position where private power (whether though lawyers or guns) takes over. Private power tends towards the extremes, with no counter balance other than other private power, at which point you end up with cartels that corrupt the market.

One needs to find a balance between capitalism and socialism. That balance will vary from place to place.

Originally posted by bonkey
You admit we don't have any free markets. I'm pretty sure you'll also admit there never really have been any free markets in the past either.

The nearest thing to a "free" market is a wartime black market (the bigger and more oppressive the war, the freer the market is to set prices). Sentiment means nothing. Goods and means of exchange everything.

bonkey

Originally posted by Meh
And how did the "minimum wage" for that particular industry/skill set get decided? Because if you offered employees less than that, they'd quit. QED.

In an employer's market (more worker's than jobs), then the employer will always find someone to work for hem until they reach the point where being unemployed is a perferable option to being employed.

I would point you at - keeping with Schosser's books - the meat-preparation industry în the US in general and the fruit (notably strawberry) industry in California. Here we have two industries where your logic was defeated by finding people from a nearby poorer economy which had even fewer social benefits, and basically paying these people just enough to survive on. The level of subsistence involves living conditions which are often comparable to third-world economies (I believe in Reefer Madness, there is reference to strawberry workers who live in caves.

This is the "natural level" that many markets will sink to given the freedom to do so. Employees will leave, as long as there is somewhere better to go, and typically there isn't. As time progresses, they get paid less and less (in real or just in inflation-adjusted terms), but have no better options. The minimum wage is - in all reality - as little as is needed to pay to keep people alive in the most basic condition of subsistence possible.

An employer has to strike a balance between too low wages (can't get any employees to work for them) and too high wages (company goes out of business).

Sure they do when we look at a nice closed environment like - say - a shop-worker in a shop on a street in Dublin. Bu

t when we disucss something like capitalism, we cannot simply take a single nation with a developed economy as a basis for our logic. In this age of globalisation, issues such as outsourcing, etc. must be considered.

It may be cheaper, for example, to have your material goods produced in China than in Ireland, so the "balance" the employer can reach is based on nothing so simplistic as the wages he charges. He/she must also choose the impact to sales of where their workforce is based, the total-cost-to-point-of-sale (as opposed to just the wage cost), as well as a number of other factors.

And look at what we're seeing... Nike et al led the way in using cheap foreign labour in order to maximise profits. They found a new balance point by ceasing to think about the balance point in national terms. Now, we are seeing a similar possibilty emerging in more skilled markets - software development and its outsourcing, the major automotive manufacturers falling over each other to establish factories in China (initially for the Chinese market, but with a mind to exporting within 5-10 years) and so on.

So, really what we're seeing is - to a large extent - that the minimum wage in many industries is closely related to how little it costs to keep someone alive, plus paying a small surcharge for a particular skillset as we move into more skilled industries.

This model is - of course - unsustainable. As the jobs are stripped from teh western markets, a new challenge will arise - there will be less people able to afford the products. Big business is quite happy to take jobs from the developed markets and replace them with jobs in the developing / undeveloped ones, until such a time as there has been so much displacement that the developed markets can no longer afford their products.

Employers use higher pay as an incentive all the time.

In some markets, and in some industries, yes. But where you have a surplus of menial labour available, then you use higher pay as a means to keep hold of that very low percentage that you want to take on more responsibilty, and you simply rotate through the pool for the rest. Given that comparable industry members have comparable costs in many cases, and have comparable goals (i.e. maximising profit), then often their labour costs reach a balance point - particularly in unskilled markets - which means that there is little attraction in moving to another company in the same industry, and even if the individual changes industry, there are still more workers than jobs, so their position will be filled by someone willing to work for the same pittance from teh unemployed pool.

Are you telling me you'd never quit your job to move to one with twice the pay?

And are you telling me that if there was a surplus of people capable of doing your job for the money you were doing it for that your employer would make a counter-offer to keep you at a higher cost when he could replace you for the same cost as you were at, or possibly less?

A better job may be available to the individual, but it is the ratio of workers to jobs which ultimtely has more relevance to the situation of where the wage-balance-point is across the industry.

Employers aren't going to be making much profit if they can't find any employees because their wages are too low, now are they?

And what are the complaints about migrant workers coming from poorer economies about, if not a direct refutation of the apparent truth of this point. You're right in that they must reach a balance point eventually, but where that balance point in an unregulated system would be is far, far lower than many of us woulf be willing to accept....until such times (as I've already mentioned) as the market is so affected that it can no longer afford to purchse the products, and no new market has emerged in its place.

And people are willing to pay more for food that doesn't give them food poisoning, so any new competitor won't have to compete on price.

I suggest you read Fast Food Nation if you haven't already done so, as it raises many points which seem to show that this is simply not the case.

The public are willing to pay more for food if they can be assured - in the simplest terms possible - that they can have better than what they currently have for a minimum of cost. The thing is that those who supply the "at present" will do their damndest to cast FUD (Fear, Uncertainty and Doubt) on just how better things are that the extra cost is paying for.

The US recently found its first BSE case. The industry tried to say that because they finally found a case, its proof that the system works and how the meat that got through was obviously safe. I hope I don't need to point out how stupid that logic is? Going further - as a result of this case - they decided to take an unprecedented step in safety, and declare that animals which are so ill that they are incapable of walking are no longer to be cxonsidered suitable for human consumption. Look at the measures they required from foreign meat producers in the wake of health scares in those markets and tell me that the consumer is who is being protected here?

The simple truth is that the meat packers are now such a small cartel that the consumer can't even get their "2c for safer beef" option. They'll need a supplier willing to produce meat safely. They'll need producers and other intermediaries willing to use these safer producers. They'll need shops willing to stock from them. And lets remember...as soon as they start doing this, the big players will strong-arm the market and do their utmost to economically wipe out these "safer options" whilst running a parallel marketing strategy to FUD every single reason these people have for claiming to be better.

In the end, even if they get slapped for uunfair competition etc., they will continue to run the market with such a stranglehold that for the consumer to choose a different path will not be a simple "couple of cents" argument, but rather a significant hike in the old shopping bill.

jc

Victor

Originally posted by bonkey
Big business is quite happy to take jobs from the developed markets and replace them with jobs in the developing / undeveloped ones, until such a time as there has been so much displacement that the developed markets can no longer afford their products.

Hmmm, to coin a phrase the undeveloping world.

DadaKopf

I prefer 'maldeveloping world'.

bonkey

[QUOUTE]Once I've driven my competition out of business then dropped my standards, what exactly is stopping a new honest food certification company from starting up? [/B][/QUOTE]

The fact that there's no competition to you? Who, exactly, are they going to provide their certification to in order to yhow you up, if not this competition you've wiped out?

And when they do, whats to stop you wiping this new competition out too? Take a short-term hit - hell, even improve your quality to the required level but without passing on the 2c surcharge, get rid of the competition again, and then stop paying for the certification, let it go out of business, and drop your standards again.

Doesn't sound too difficult to me.

The more interesting cases are when you look at groups like KFC in the states. Animal Rights activists are showing that improving the conditions on their chicken farms, and even offering better terms to those running them could - within two to four years - apparently increase their profits, or at least be profit-neutral.

So why not do it? Simple, because they don't need to. Profits would take a hit for 2 to 4 years, and they have no need to do that right now, and the increased profitability isn't really guaranteed, just probable. They may even make a tiny loss, which would be bad.

But, it gives them a plan that - should they ever need it - they can use to keep their top-dog spot, but there's no point in implementing that now as that would be a tacit admission that things are being done wrong, which could have all sorts of consequences.

So you're saying the government should ban white processed bread?

It never fails to amaze me how people are incapable of understand what an analagy is about.....

The government should ban white bread, or take steps to intervene in bread production if and when the quality of what is available on the market falls below levels which are considered acceptable, and where this is tied to dominant players abusing their dominant position to decrease quality in order to maximise profits.

Look at the Fast Food industry in Ireland. Already, our govt. has started making noises about how "fatty foods" require intervention, because when left to the public, they clearly don't act in their best collective or individual interests. Should we just continue to follow the US trend of obesity becoming more and more prevalent (and costing more and more to the state, and, and, and) or should we accept that there is a problem somewhere that requires attention and external intervention of some sort.

Such external intervention was required to make it necessary to provide nutritional information on foods in the first place, or do you think that this too was a bad idea? We shouldn't make it obligatory to provide nutritional content, we should just let the public decide not to buy the half-as-expensive product who's manufacturers assure us is every bit as healthy as that other one which does print nutritional information.

Sure, there may be some highfalutin studies that those in the upper echelons of society pay attention to which say otherwise, but for the average Joe Bloggs, there will be two sides, saying two different things, and it will impossible to know which is the real honest one....so I'll make up my own mind. And look - this one is half the price.

Q - as so many people seem to erroneously say, so I might as well join them - ED.

jc

Sparks

Kindof funny that, in the middle of a thread on food safety, I notice a fingernail clipping in the middle of my chocolate digestive...
*yuch*

Meh

Originally posted by bonkey
The fact that there's no competition to you? Who, exactly, are they going to provide their certification to in order to yhow you up, if not this competition you've wiped out?

And when they do, whats to stop you wiping this new competition out too? Take a short-term hit - hell, even improve your quality to the required level but without passing on the 2c surcharge, get rid of the competition again, and then stop paying for the certification, let it go out of business, and drop your standards again.

So if I'm perpetually making a loss in order to drive out competition, how do I avoid going bust myself? Also remember that a significant number of people are prepared to pay a premium for high-quality food -- see the success of the organic market. So it would actually be quite easy for a higher-priced upstart to grab a chunk of the market.

I would point you at - keeping with Schosser's books - the meat-preparation industry în the US in general and the fruit (notably strawberry) industry in California. Here we have two industries where your logic was defeated by finding people from a nearby poorer economy which had even fewer social benefits, and basically paying these people just enough to survive on. The level of subsistence involves living conditions which are often comparable to third-world economies (I believe in Reefer Madness, there is reference to strawberry workers who live in caves.

This is the "natural level" that many markets will sink to given the freedom to do so.

Your example is anything but a free market. These employees are illegal immigrants who are legally barred from employment. So it's no surprise that they have to take the worst jobs available, because the government has forbidden employers to hire them.

Zombrex

Originally posted by Meh
And how did the "minimum wage" for that particular industry/skill set get decided? Because if you offered employees less than that, they'd quit

No ... the minimum wage is a standard set by government/society of what is the bear minimum need to survive. You might remember that before the wage people worked for a lot less. If the companies set a liviable pay then the minimum wage wouldn't be needed in the first place. The minimum wage forces employers up to a certain standard, that they would otherwise be far below in a non-regulated, "free market" society.

And in countries that have a minimun wage you find companies leaving to start production in non-minimum wage countries. Nike don't pay their workers in Asia enough to live on, but I don't see them all leaving to work for Adidas.

Originally posted by Meh
An employer has to strike a balance between too low wages (can't get any employees to work for them) and too high wages (company goes out of business).

There is no balance

In a free market system the employer will choose the lowest wage that they can get workers at. By the very notion of capitalism, it would be wrong to do otherwise. If Nike can get workers for 50c an hour then they will pay 50c an hour, nothing more. Nike could still be producing its shoes in North America, but they left there because they wanted to pay wages less than it legal in the US. The move didn't damage the company, but it certainly damaged the workers.

Market forces drive wages down, not up. A company to increase its profits will continuously be looking to downsize staff and reduce wages.

Originally posted by Meh
This is absurd. Employers use higher pay as an incentive all the time. Are you telling me you'd never quit your job to move to one with twice the pay?

Yeah I am always moving to a job that pays twice as much :rolleyes:

Very very very rarely is employee retention handled with and increase in pay. The only areas I can think of is in very highly skilled industries which are currently experiencing a boom (like the dot.com boom).

In any company I have worked or heard about for that matter, employee retention is handled in a group manner, with company unique "benefits" being the method to keep employees (eg. good quality staff canteen, discounts on products, improving working enviornment). Why do this? Because group schemes are a hell of a lot cheaper than increasing everyones pay cheque just to keep them at the company. The cost of training new staff is offset against the cost of group retention schemes. They want you to stay, so they don't have to train new staff, but they don't want you to stay that much that they will pay you noticably more than what you would get anywhere else.

Meh

Originally posted by Wicknight
No ... the minimum wage is a standard set by government/society of what is the bear minimum need to survive. You might remember that before the wage people worked for a lot less. If the companies set a liviable pay then the minimum wage wouldn't be needed in the first place. The minimum wage forces employers up to a certain standard, that they would otherwise be far below in a non-regulated, "free market" society.

Now you've changed your mind, in your original post you were talking about some sort of minimum wage level for each skillset/industry. So why do the majority of workers get paid more than the minimum wage? The miniumum wage was only introduced in this country quite recently, why weren't all the workers starving before then?

Market forces drive wages down, not up.

I really can't believe I'm having to explain this, this is absolutely basic economics. The labour market obeys the laws of supply and demand, like every other market. Employees sell labour to their employers. A lower supply of labour (i.e. fewer employees) results in higher prices for labour (i.e. wages increasing) until the market reaches equilibrium. A surplus of labour (i.e. more jobseekers than jobs) results in lower prices for labour (i.e. wages decreasing) until the market reaches equilibrium. I don't mean to be condescending, but it's pretty clear that you've never read even a first-year economics textbook. This is probably a good starting point if you're interested.

A company to increase its profits will continuously be looking to downsize staff and reduce wages.

And its employees will constantly be seeking to increase their wages.

Yeah I am always moving to a job that pays twice as much :rolleyes:

That wasn't what I asked.

In any company I have worked or heard about for that matter, employee retention is handled in a group manner, with company unique "benefits" being the method to keep employees (eg. good quality staff canteen, discounts on products, improving working enviornment). Why do this? Because group schemes are a hell of a lot cheaper than increasing everyones pay cheque just to keep them at the company. The cost of training new staff is offset against the cost of group retention schemes. They want you to stay, so they don't have to train new staff, but they don't want you to stay that much that they will pay you noticably more than what you would get anywhere else.

Higher pay doesn't always have to be in the form of extra cash. Benefit-in-kind like you're describing counts too.

Victor

Originally posted by Meh
The miniumum wage was only introduced in this country quite recently, why weren't all the workers starving before then?

(a) food was cheaper, but this has been eroded by monertary inflation (b) social expectation was lower, but this has been eroded by specification inflation.

Earthhorse

Originally posted by Meh
So if I'm perpetually making a loss in order to drive out competition, how do I avoid going bust myself?

But you aren't perpetually making a loss. You're only making a loss long enough to drive your competitor out of business. Then you put prices back up to profit making levels. If another competitor comes along you do the same thing. Moreover if another person does consider going into competition with you they will see what happened to the last guy and more than likely not bother with the venture.

With regard to the minimum wage argument. Most economists agree that in the long run an economy won't sustain full employment and full employment is largely regarded as approximately 95% of the workforce employed. So, and again this is in the long run, there's a surplus of employees over positions. This gives the employers a big bargaining chip especially when looking for unskilled labour. It is precisely those employees that a minimum wage is introduced to protect and not people in skilled positions where it really has little or no effect.

As for the original poster's question; a belief in capitalism? No. It's not a religion. I'm confident of it's superiority as means of distributing goods and services (capital I should say). Should this efficiency be untempered by a moral or legislative body? Absolutely not and the justification for the existence of such bodies has little or nothing to do with economics.

I agree that some posters on this thread could do with brushing up on first principles. Others might consider making that leap to the second year textbook now!

bonkey

Originally posted by Meh
So if I'm perpetually making a loss in order to drive out competition, how do I avoid going bust myself?

Nope. When you own most of the market, it takes a long, long time for competition to be anything more than a bug you can ignore, during which time you can make enormous profit. Only after a certain point is reached do you have to do anything, and then the pressure is on to do it as quickly as possible.

Look how the model for Starbucks works. Move into an area. Super-saturate the market to force all other players out of business because no store can make money. Then, when the competition goes, close some of your own stores, until those who remain are profitable.

Such tactics are the first most effective thing stopping a competitor starting up - they know that Starbucks will do the same to them if they open up and become more than a bit player, or if too many bit players arrive. Starbucks, on the other hand, know that their approach is profitable and that competition doesn't arrive often enough and significantly enough to cause them a problem.

The only way the cycle can realistically be broken without government intervention is when another giant comes in and is willing to go head-to-head. And what does this result in? Well, look at Pepsi and Coke and you'll get an idea. Wherever possible, they still set about being the only player (exclusivity deals), and where not possible, they charge a common price, so that whilst the consumer can choose, there is no competition.

Oh, I should mention that Wal Mart et al also employ similar tactics - lowering prices until the competition is gone, then raising them again.

If it doesn't work, then why have these companies been so succcessful? The latter of the two tops the Fortune500, unless I'm mistaken.

Also remember that a significant number of people are prepared to pay a premium for high-quality food

Err, completely untrue. A small number of people are prepared to pay a premium. Again, take the meat market in the US. Something like 6 packers produce around 90% of the meat in the entire country. Do they care about the other 10% of the market? Not at all - thats for those rich enough to import grass-fed steak from Argentina, or whatever they're in to. Tney've never had that demographic in their market, and never will. They don't care about it.

see the success of the organic market.

Success? What success? I don't see it taking more than a couple of percent of the market at most - a figure which is of no concern whatsoever to the major produce producers.

So it would actually be quite easy for a higher-priced upstart to grab a chunk of the market.

Until such times as the large companies decided to deal with it. If you can't fight on cost (which is the case with organic - its more expensive anyway), then you go with FUD. You go with informing retailers that they have to sign exclusivity deals. You go with head-hunting, or otherwise nullifying the staff. You exercise lobbying pressure on government to put more stringent controls on those weirdo's who don't use properly certified chemicals and industrial processes to ensure that what they sell is of a high enough quantity. In short, you fight dirty.

Your example is anything but a free market.

I've already posited that there is no such thing as a free market, but thats not the point here. Allow me to explain.....

These employees are illegal immigrants who are legally barred from employment. So it's no surprise that they have to take the worst jobs available, because the government has forbidden employers to hire them.

But if the government wasn't regulating the market - if the market as free - then these people would be eligible to work there, and there is no reason to believe the end result would be any different.

IN other words, the example I gave was of a market with regulation which is not being enforced. That is closer to a free market than one with regulation. In a free market, those employees would not be illegal.

I find it interesting, though, that you're now arguing that the flaw in my example is that the regulation isn't being adhered to, rather than that there is no need for regulation. Does this mean that you're now agreeing with the stance that allowing the market to find its own level is flawed, and that regulation is necessary???

If not, then what relevance that these people are illegal workers? They're only illegal because of regulation you are saying isn't needed. Remove the regulation, and what changes??? The only way it would change for the better is if there were more jobs - globally - than people. This is not the case, nor can it ever realistically be.

jc

Zombrex

Originally posted by Meh
Now you've changed your mind, in your original post you were talking about some sort of minimum wage level for each skillset/industry.

Apologies ... I miss read your post.

Yes their are certain "minimum wage" for different industry levels and skill levels. My point was exactly this, that employers will pay the very minimum necessary that they have to for the staff and not anything more. No company will pay more than necessary for an employee unless they are forced to, and forcing them too goes against the principles of "free market."

If Nike can pay workers in Asia or Mexico 50c per hour they aren't going to pay workers in the US $5.00 an hour to do the same job.

Ironically Sands idea that workers can bargain for better pay by threating to go to a rival company, wouldn't work because of the "Free Market". Free market economics harms workers because their will always be someone willing to work for less than you, some where in the world.

Originally posted by Meh
So why do the majority of workers get paid more than the minimum wage? The miniumum wage was only introduced in this country quite recently, why weren't all the workers starving before then?

They were, that is why minimum wage was introduced. People could not live on the wages they were being paid.

Meh, if what Sand said were true, minimum wage wouldn't need to exist. The very fact that it does exist shows that his idea does not hold true in the real world.

Originally posted by Meh
I really can't believe I'm having to explain this, this is absolutely basic economics. The labour market obeys the laws of supply and demand, like every other market. Employees sell labour to their employers.

If you were a company would you "buy" labour from someone selling it at 50c or would you "buy" the same labour from someone selling it at €6.50? No company in the world buys something, be it labour or goods, for more than they have to pay.

Now say you are a small shop selling milk at €2 a litre. You have to sell it at that price because it is the only price you can make a living on. And you have to live.

Now say a supermarket opens up selling milk at €1. Naturally people are going to go to the supermarket and buy the milk at a cheaper value.

You are now out of business. Or if it was your labour you were selling you are now unemployed, unless you want to work for money you cannot live on.

Now in this model Sands solution would be to sell your €2 milk to someone else, rather than the supermarket customers how will only pay €1. But who in the world would pay more for milk than they have to at the supermarket. It would make any sense. Likewise, what company is not going to take on staff that cost more to that they have to pay.

Sands idea only works in a closed system where their are a limited number of possible employees, less that the number of positions needing to be filled. There are very very very few industries where this is the case, and the freer the market gets, the more globisation takes place, the smaller the number of these industries.

We used to think IT was one such "safe" industry, until India came along with a work force 10 times ours that will work for half the wage. Suddenly there are 10 supermarkets charging only €1 per litre of milk, and the price of milk is dropping all the time.

Originally posted by Meh
Higher pay doesn't always have to be in the form of extra cash. Benefit-in-kind like you're describing counts too.

Hey I never said these weren't benefits. They are something the employees, including myself, look for in a company. And given the choice between two companies that pay the same wage I would go to the one that has the best benenfits (which is the whole point of them).

What I am saying is that companies compete with other companies for staff retention with group wide benefits, not with larger salaries, because it is a lot lot cheaper to invest in employee benefit schemes than it is to raise salaries.

Zombrex

Originally posted by Meh
.And its employees will constantly be seeking to increase their wages.

But it harms the employee to be unemployeed a lot more than it harms the company to be without the employee. If I leave a bank it is easier for them to replace me than it is for me to get another job.

The power is with the company, where as the staff, especially indivdually (and unions are a free market no-no) have little power, because, like I said, there is always someone else who could do your job. And the freer the market the more people who are waiting to take over your job, for less money.

Time Magazine

My two cents worth:

Steering from the current debate and focusing on the crux of the matter for a moment. Nobody in their right mind doubts capitalism is flawed. It does have problems. However it fundamentally works. With regard "free market", that's a very loose term changeable as we see fit. I think everyone here is against a total laissez-faire approach, that e.g. polluting companies should be fined/shut down etc. We all agree with that. I do think also that we agree that although the distribution of wealth in capitalism is un-even, it is more even than is socialism. It's a paradox before you reply promptly. We all know that the lads in Clongowes who know the secret hand-shake have an upper-hand in capitalism, however I'd rather that than someone with a first-class masters in economics earning the same wage as Jimmy the lazy bus-driver. To quote Churchill, if you're not a communist at 18 you have no heart, if you're still a communist at 30 you have no brain. A relaxed free-market system is better than the ridiculous alternatives history has shown us. I agree there is awful social problems in America enforced by its strong captialist system, but people start to assume that it's only due to capitalism. Capitalism with compassion would be far better imho.

With regard freedom of firms. Well, I agree they must be controlled. Food control is essential, hence we have HACCP. I think pollution control is essential. However I agree with no trade barriers and low corpo taxes. With regard enforcing fair employee rights and fearing about the future, look no further than the HUGE advances in labour rights in the last 100 years. Think of the situation before the Lock-out and compare them to today. Admittedly this is due in no small part to socialist groups but it all occured within the capitalist framework.

Now to the employees' wages decreasing etc. Well, I don't see this happening. There are a few reasons for this. Firstly, labour is employed because it is profitable to do so. Assuming employees accept wages that are reasonable they will continue to be employed as they remain profitable. There are strict rules governing lowering wages and redundancies so it is very difficult to do so. There is also economic theory behind the reason why this won't happen.

Do not think about a single firm but think nationally/internationally. If firms start dropping off employee wages their disposable income falls. As income falls so does demand. When applied on a large scale firms suffer from the fall in demand. Hence it will never happen that machines replace labour because, very simply, nobody will buy goods then. Far more economically achievable is the increase of employees' output to further profit than lowering wages. This can be achieved, for example, through education and training. Having capital work with labour helps too. As output increases, the entrepreneur gets more profit. He doesn't sit on a pile of money, he spends it. As he spends it more wealth is created and you have a multiplier effect.

With regard governments funding corporations, this is mostly done in line of Keynesian economic theory, as roughly outlined above - that as more wealth is produced/injected, an even greater amount of wealth is produced.

I know that socialism hasn't really been discussed here but it is an alternative to the admittedly bad failures of capitalism, and is enivitably going to arise in this debate. I agree capitalism has major problems. I agree there should be medium restrictions on firms. How and ever, history has shown that capitalism tends to improve the lot of the average worker. Socialism's history is not as positive (or perhaps less negative, depending on how you see it).

Zombrex

Originally posted by Angry Banana
I'd rather that than someone with a first-class masters in economics earning the same wage as Jimmy the lazy bus-driver.

There is an assumption, shared by many of the people I know who would hold a capitalist view, that those who have a high level of education (normally themselves), and as such are employed in higher paying jobs, deserve this higher wage because they have worked harder than others who have lesser qualifications and lower wages.

I feel this view point is not only flawed, I think it is inheriently dangerous.

The entire captialist ideal is founded on a moral justification that the system is fair and open to everyone. Everyone starts at the same point. Everyone can make money, and those who do make money deserve this because they are working harder than everyone else, or that they are smarter, more adventurous, more skilled that everyone else. Those who have low paying jobs, who do not have high incomes, who are unskilled and uneducated, are not in that position through bad luck or through fault of society, but rather through their own laziness and weakness.

This idea of "hard-working vs lazy" is used to justify the winner-takes-all attitude of capitalism, that idea that it is not "my" fault you don't have money, it is your fault because you do not work as hard as me.

In the real world this is a nonsense idea in the same way that the Communist ideal is nonsense idea. The most probably reason the person in the quote has a first class honours degree and the bus driver doesnt, is because his/her parents could afford good schooling while the bus drivers parents couldn't. And it is highly likely that the economics student will go on to a very highly paid job where he does a tenth of the actually work a bus driver does each day.

The "system" is not open to everyone. Enviormental factors, social factors and just plan luck, effect the system in millions of unknown ways. To assume the system is fair and open to all, when it is actually not, is a very dangerous assumption, as it leaves open the justification for refusal to help others in society. It justifies the idea that those less off than you do not deserve help from you as they could improve their lives (or had the chance too) but refused to through fault of their own.

Time Magazine

I never assumed that. Read the Clongowes bit again. And when I mentioned the Masters I was making reference to those who create more wealth, not necessarily those with a rich daddy. "Enviormental factors, social factors and just plan luck, effect the system in millions of unknown ways." Ditto to just about everything. And I never said those who are unemployed are unemployed due to laziness and thus they should suffer. I agree with what you are saying, it just appears to don't see it .

bonkey

Originally posted by Angry Banana
I do think also that we agree that although the distribution of wealth in capitalism is un-even, it is more even than is socialism.

I'm pretty sure that this is most definately not something that everyone here is going to agree with.

IN fact, you continue on to show that apparently you don't agree with it, when you say that :

I'd rather that than someone with a first-class masters in economics earning the same wage as Jimmy the lazy bus-driver

OK - maybe you're thinking exclusively of communism, but a properly implemented socialist system would vastly reduce - if not entirely remove - this wage-difference as well.

A relaxed free-market system is better than the ridiculous alternatives history has shown us.

True, but does that mean that it is better than anything we are capable of producing, or that it is in any way an acceptable endpoint?

I could just as easily use that same logic to say that beacause the Toyota Prius is less pollutant than any alternative car that history has shown us, therefore it is not possible to have a less polluting car than the Prius.

Capitalism with compassion would be far better imho.

Yes, but therein lies the problem.

Under capitalism, not only should the Nike's of this world move their production lines to the scummiest, cheapest sweat-shops on the planet, but under the concept of due diligence that they are wrong not to do so if the option is the most profitable.

So, compassionate capitalism would seem to be an entirely different fish to capitalism. The compassion either requires an entirely seperate system to evolve, for those with a say (i.e. the shareholders) all to arrive at a higher set of common moral values (i.e. that they all won't fault a CEO / company owner for taking a less profitable but more humane option), or that we legislate to require that the compassion exists.

Child labour is illegal. Why is it illegal? Because child labour would otherwise be exercised by some (many?)companies. There are - I would imagine - very few people here who would suggest we shouldn't make child labour illegal and instead just trust in the moral goodness of all employers not to employ children.

Now to the employees' wages decreasing etc. Well, I don't see this happening.

Are you aware that in large swathes of industries across the United States this has been happening. I believe in DDN, Schlosser points out that in real terms, the service industry's wages have been decreasing steadily since (from memory) the 60s. I vaguely recall that this trend is actually quite prevalent in many industries in the US, as small business gets replaced by big global conglomerate, wages are steadily falling.

There are strict rules governing lowering wages and redundancies so it is very difficult to do so.

Aha! So you are saying that the reason it won't happen is because there are already controls in place to prevent it happening. The argument for a free employent market says that these rules aren't necessary.....so why do we have them?

There is also economic theory behind the reason why this won't happen.

And if that economic theory was sound, we'd have no need for protective legislation which we have. Did this legislation just get created because someone was bored on a Friday afternoon and decided that for a lark they'd create a legal system to cover a situation where there was no problem anyway????

Do not think about a single firm but think nationally/internationally.

Do indeed. Think internationally and the rules and regulations you say are in place start to disappear, as they are not implemented uniformly in every nation in the world. Also, the available worker pool vastly outstrips the available work, which means that there is always a pool of unemployed people who would dearly love a job, and of whom, some will be willing to work for less than a currently-employed person if it gets them a job.

If firms start dropping off employee wages their disposable income falls. As income falls so does demand.

Yup, but until that point is reached, there's no reason not to avail of the savings to be made. And we haven't quite reached that point....after all, we have families living in poverty who still feel obliged to go and spend €100+ on a pair of branded jeans or footwear for their kid. And with China's "one child" policy, is it no wonder that western economies are falling over themselves to get in there? You'll have an entire generation of children each with two parents and four grandparents who have only a single family member to lavish their attention on.....which leads to available finance for more expensive products than their incomes would notionally suggest.

When applied on a large scale firms suffer from the fall in demand.

Over a long enough period, yes. But until we get to that point, companies have two choices - to be the ones trying to hold off that day by accepting higher costs, or to be the ones trying to take advantage of those holding off that day by making use of the strategy to increase profit.

Not every company will necessarily be in teh latter group...just the ones with a competitive edge. And the rest of the industry (whatever industry it is) - the ones behaving more like we'd like them to - are simply going to help these abusers to continue in their unsustainable model for longer.

Socialism's history is not as positive (or perhaps less negative, depending on how you see it).

As a matter of interest...has a socialist / communist nation ever existed where its capitalist neighbours didn't strive to destroy it from day 1 because of its ideology?

This is what I can never understand. If socialism and communism are such bad ideas, why are they so feared?

jc

Earthhorse

I dunno bonkey what do you want us to do? Mount a defence of every act a capitalist nation has taken against a communist one? I don't know that any of us were privy to their motivations. Reagan, for one, genuinely seemed to believe that people suffered under communism and you know what, he wasn't too far wrong.

Under communist Russia, and indeed any communist state, control of the flow of capital is handed over to the government. They say, "Hey, you elected us right? So we'll take care of everything from here and if we don't you can vote us out in five years time." Only they don't because what was previously in the hands of the many is now in the hands of the few and they simply don't have the time or tenacity, even if they do have the will, to make the best decisions. The other classic mistake communist states seem to make is to focus on a symptom of inequality rather than the root problem. So they set wages equal for everyone across the board and imagine that this somehow creates an equal and even society. But it doesn't because they've taken away everyone's power.

The real beauty of capitalism is how well it's mechanisms seem to underpin democracy. I'd be lying if I said my vote every five years at the ballot box is, in my eyes, the greatest influence I have over the world around me. In between voting for largely similar and unintellectual parties I can exert influence in the way I employ my capital; it sounds crazy but it's true. I can shop in Body Shop rather than Brown Thomas, I can take a reduction in pay and work for a charity, I can do pro bono work (as many capitalist firms do even though they seemingly have no motivation to), I can rent out a room to a friend who's fallen on hard times, I can invest in firms with strong ethical policies. So even if I'm not earning big bucks I can make a difference whereas under communism no one's earning big bucks and even if they were they'd have to shop at The Big Fat Generic Government Food and Clothes Store thus dampening the power their money has.

I suppose the closest we have to socialist states are the Scandinavian countries but I am unaware of how significant the difference between a socialist and capitalist system are. The primary mechanism by which socialism seems to operate is control of capital by the workers. Sorry, but under capitalism isn't that exactly where control of capital is?

You'll note that I'm not defending a pure capitalist model (anyone who defends a pure model in practice is, in my opinion, a little naïve) but I will say that I doubt we've refined it in practice to it's best point and there may very well be an alternative out there that no one's thought of, though I can't even begin to imagine what it might be.

bonkey

Originally posted by Earthhorse
I dunno bonkey what do you want us to do? Mount a defence of every act a capitalist nation has taken against a communist one?

Not at all. I'm just curious as to why - when communism and socialism are systems which we're constantly told don't, won't and can't work has the capitalist world felt the need to assist the downfall of every single socialist and communist system from the moment of its inception.....and then point at the failure that they helped instigate as evidence that they were right in saying its not a viable model.

Hell, you could do the same to democracy / capitalism - undermine and corrupt it from the start, and then point at the efffects of this undermining and corruption and say that it proves that the system is fundamentally unworkable.

The real beauty of capitalism is how well it's mechanisms seem to underpin democracy.

You think so? You think its a beauty that big business, with its big money to throw around, carries a disproportionate influence on the government compared to the actual workers who make that company successful and theoretically vote for the individuals and parties who get into power?

I don't see that as a beauty at all - I see the underpinning of democracy with capitalism as one of the biggest flaws we have today.

I suppose the closest we have to socialist states are the Scandinavian countries but I am unaware of how significant the difference between a socialist and capitalist system are.

I would have said tha the Scandinavian nations represent a closer-to-my-ideal-than-most system, where my ideal is based on capitalism and democracy, but with a genuine social conscience enforced by government. Switzerland is another passable example. None are without their many faults, but in my experience they have gotten it more right than others.


The primary mechanism by which socialism seems to operate is control of capital by the workers. Sorry, but under capitalism isn't that exactly where control of capital is?

You'll note that I'm not defending a pure capitalist model (anyone who defends a pure model in practice is, in my opinion, a little naïve) but I will say that I doubt we've refined it in practice to it's best point and there may very well be an alternative out there that no one's thought of, though I can't even begin to imagine what it might be.

I agree with you....I'm not saying that I believe Communism or Socialism are any better as models. I was just curious (in passing) as to why we see so many people pointing to the history of socialism/communism as reasons why the ideology is flawed, when history never seems to have given the ideology a genuine chance. Ever. I'm not saying that every single Socialist/Communist state which was founded would have been a good thing....I'm saying that none of them were ever given the chance to become one, so saying that they failed is proof of their unviability seems a bit suspect.

jc

pork99

Originally posted by Angry Banana
My two cents worth:

Steering from the current debate and focusing on the crux of the matter for a moment. Nobody in their right mind doubts capitalism is flawed. It does have problems. However it fundamentally works. With regard "free market", that's a very loose term changeable as we see fit. I think everyone here is against a total laissez-faire approach, that e.g. polluting companies should be fined/shut down etc. We all agree with that. I do think also that we agree that although the distribution of wealth in capitalism is un-even, it is more even than is socialism.

I agree.

As I see it the fundamental flaw in theories of the free market is the fallacy of the "rational economic man" - the assumption that everyone makes economic decisions in their own self interest. People tend to but this assumes that people have pefect information about where their best interests lie and never make decision which actually harm them. Maybe the free market model makes more sense if we replace the rational economic man with the irrational economic man?


However Socialist economic ideas are based on a much bigger fallacy - the perfectly rational all-knowing state. The idea that the state knows exactly who should do what labour for what reward in pursuit of some pre-ordained destiny e.g. the emergence of the classless society. The anthropologist Alan Fiske catagorised 4 fundamental "intuitive" psychological models for economic activity:

1. Communal Sharing - all goods shared equally among all members of society. This is the aim of Communism but historically has only ever occured in the most basic hunter-gatherer societies. When attempted in the modern world it invariably leads to no. 2;
2. Authority Ranking - wealth is distributed based on social status e.g. the priests and kings in a Bronze Age society simply confiscate wealth from lower ranking members of society. The Soviet Union was an updated version of this, wealth was awarded not on the basis of ones participation in producing it but on one's rank in the political system.
3. Equality Matching - this is the most intuitive one. THe belief of each individual that they should receive an exact equivalent for what one inputs into the market. Barter would be the perfect example but in everyones mind there is the idea that no matter what they do they are worth generous recompense whether market conditions allow it or not.
4. Market Pricing - this is complicated and counter-intuitive involving a high level of abstraction with banking, currency and middle-men but the only way a modern sophisticated economy can work.
   

When people have different ideas about which of these four models of interacting applies to a current relationship, the result can range from blank incomprehension to acute discomfort or outright hostility... Misunderstandings in which one person thinks in terms of Equality Matching and another thinks in terms of Market Pricing are even more pervasive and can be even more dangerous. They tap into very different psychologies, one of them universal and intuitive, the other rarified and learned and clashes between them have been common in economic history.

"The Blank Slate" Stephen Pinker

As I see it this left v right argument is based the clash of 2 psychological models. It's also interesting that redistrivbutive socialist economics models are almost never espoused by people engaged in wealth creating activities but by academics, students and those who have lost out/are excluded. In the former caase I think it's the "ivory tower" syndrome. They can have time on their hands and can be a bit isolated from some hard economic truths. In the latter case there is probably a certain amount of envy - Socialism is a means of punishing the successful.

Personally I'm probably in that category - I have to struggle to find work and what little I find is badly paid. However I would not benefit in the slightest from a system which confiscated wealth and property - see the Authority Ranking model above. My freedom to work and make money is the same as Tony O'Reilly's or Michael Smurfit's.

The property which every man has in his own labour; as it is the original foundation of all other property, so it is the most sacred and inviolable… To hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbour is a plain violation of this most sacred property.

Adam Smith

Marxist parties always put themselves forward as the champions of the poor and oppressed. Unfortunately this is always a mask, a tool to gain power and wield it over their fellow man and deprive you of your liberty. It's a very uncomfortable fact for Marxists that conditions for the poorest classes in developed Capitalist economies, which officialy do not give a flying feck about the lowest classes, are far better than in Socialist economies which are supposed to be organised for their benefit of those classes but which in fact are organised to benefit a political elite.

I'm not a Monetarist right-winger, I think the best economic system invented was Keynsianism - free markets but regulated - "Without Law there is no Liberty". I'm free to trade but must do so within a framework of law and regulation. I can understand people's anti-capitalism in the context of opposition to overbearing ammoral muti-national companies but the answer to this is not to overthrow Capitalism but to put in place international laws to regulate those companies's behaviour.

ionapaul

Great post, pork99

I would say that even if I didn't agree with almost everything you wrote!

Earthhorse

Historically speaking I think the reasons various capitalist states have hampered communist ones are too many and various to enumerate. But mostly they seem to have been paranoid of the concept just as communist governments seemed paranoid of their people. There doesn't seem to be any sound reasoning as to where this paranoia sprung from.

For the record I don’t think it's beautiful that big corporations have a disproportionate influence on government. I do think it's beautiful (or at least less ugly) that you can do more about it under capitalism by withdrawing your labour, your custom or your capital from said corporations. It doesn't work perfectly in practice but it's the clincher for capitalism every time.

The Scandinavian nations do seem to have a very communal attitude. I don't know that such an attitude can be reproduced systemically.

bonkey

Originally posted by pork99
Authority Ranking - wealth is distributed based on social status e.g. the priests and kings in a Bronze Age society simply confiscate wealth from lower ranking members of society. The Soviet Union was an updated version of this, wealth was awarded not on the basis of ones participation in producing it but on one's rank in the political system.

I'm curious as to how people see this as significantly different to how our current system of capitalism works, where the vast majority of the wealth is owned by a tiny minority, and as wealth changes hands, it typically (when viewed at a macro scale) flows towards the rich.

We hear, for example, about "trickle-down" economics which espouses keeping the poor poor and making the rich richer because sooner or later the richness will "trickle down" and make the poor better off, but itsn't that just a Authority Ranking wolf in a capitalist sheep's clothing?

Our entire system seems to be designed to benefit the rich more than the poor - just like the socialist and communist systems tried to date have turned out to be. The only difference is the mechanism we have behind the inequality which sustains it. We have capitalism keeping the rich rich. The Chinese have communism. In both, there is an unfair system designed to favour those at the top far more than anyone else.

Again, it would seem that we have something that is portrayed as a critical flaw in Socialism/Communism but which doesn't seem as simple as that when you look at it closer. Capitalism would seem to have the same flaw, but apparently it is not worth being condemned for...but the other systems are.

jc

Earthhorse

Capitalism has the same flaw but not to the same extent. There's a far larger proportion in the middle class in capitalist as opposed to communist countries. As has been pointed out elsewhere on this thread the poorest in capitalist nations are generally better off than those in communist nations as well. So it could be a critical flaw under communism and a non critical flaw, but still a flaw, under capitalism.

Zombrex

Originally posted by Earthhorse
As has been pointed out elsewhere on this thread the poorest in capitalist nations are generally better off than those in communist nations as well.

That is not true at all (unless when you say "poor" you are speaking only in exact capital income). The poorest people in Cuba are far far better off than the poorest people in the U.S.A. They are provided with world class health care and world class education.

Originally posted by Earthhorse
I do think it's beautiful (or at least less ugly) that you can do more about it under capitalism by withdrawing your labour, your custom or your capital from said corporations.

But that doesn't work in the real world, because all the corporations are doing the same thing. That is why you are having this discussion with people who feel the entire system has failed. If it was as simple as just buying a different more "nice" product, then you wouldn't need the protests, the demonstrations, the riots that we have seen in the last 10 years. The capitalist system is failing the people, and the problem is their is very very little they can do about it.

Look how hard it is to get the universities to stop selling Coke or Nestle. Look how long it took to get McDonalds to introduce Salads (which as still unhealthy). Have Nike stopped using sweat shops? Has Microsoft stopped abusing its Monopoly?

The captialist safe guards that you seem to think protect us from bad corporations (ie consumer choice) don't really exist in the modern world, and where they do exist they work far to slowly and the companies fight them every step of the way.

The consumer told the record companies that they wanted to power to share music, for free, over the internet. Instead of this having an effect, the companies simple went to their politicions and made this even more illegal. I can't choose to by my REM CDs from another more friendly corporation, I am forced to use Time Warner.

Zombrex

Originally posted by pork99
In the latter case there is probably a certain amount of envy - Socialism is a means of punishing the successful.

:rolleyes:

And capitalism is a means of punishing the less fortunate

Originally posted by pork99
free markets but regulated

There is no such thing as a free regulated market. That is an oxymoron.

A regulated market is a socialist idea not a capitalist one. In capitalism there is no notion of anti-free market laws that still help society, so regulating the markets for the good of society is a bad thing in capitalism.

What you are talking about is actually social democracy, not capitalism (ie you are free to do what you want, but laws and regulations will protect society as a whole).

Earthhorse

Well Wicknight you've refuted my generalisation with a specific example. I could equally say the poorest in Ireland are better off than the poorest in China. It doesn't prove anything. The general case is that the poorer in capitalist countries are better off.

I specifically said that diversion of capital to influence corporate behaviour didn't work perfectly in the real world so you don't really need to tell me again. I simply said it was preferable to no influence whatsoever.

I don't especially want universities to stop selling Coke or Nestle. I want you, if you have a problem with the corporation, to stop buying their produce. You'll forgive me if the existence of McDonalds and Microsoft's monopoly doesn't keep me awake at night either. There are bigger things to worry about in my opinion.

I'm also interested in how the record companies made an already illegal act, "even more illegal"! I do appreciate what you're saying but I regard the ownership of a musical recording as a luxury and the consumer's wish to make this product free carries little currency with me.

Zombrex

Originally posted by Earthhorse
Well Wicknight you've refuted my generalisation with a specific example. I could equally say the poorest in Ireland are better off than the poorest in China. It doesn't prove anything.

My point exactly. There are about 5 communist countries in the world. Saying poor people in 3 of these countries are worse off than poor people than some random country in the rest of the world, proves nothing about the nature of communism or the nature of captialism. As I have pointed out, poor people can be better off in a communist country than in a capitalist country, and there isn't enough communist countries to enable you to make a generalisation about the nature of communism.

Originally posted by Earthhorse
I don't especially want universities to stop selling Coke or Nestle. I want you, if you have a problem with the corporation, to stop buying their produce.

And what exactly would me stopping buying Coke force Coke to change? The only way to force companies to change is to convince large groups such as universities, to stop supporting the companies. Microsoft only started taking notice of Open Source when governments and large corportations started switching. Are you against this type of thing?

Originally posted by Earthhorse
You'll forgive me if the existence of McDonalds and Microsoft's monopoly doesn't keep me awake at night either. There are bigger things to worry about in my opinion.

Well you live in a well off western country with health care and social security, so what else do you have to worry about? Al Queda :rolleyes:

Originally posted by Earthhorse
I'm also interested in how the record companies made an already illegal act, "even more illegal"!

Through the DMCA and the equivilent EU acts, which limit even fair use activities. It actually wasn't illegal until it was made illegal (have a guess by whom).

Originally posted by Earthhorse
I do appreciate what you're saying but I regard the ownership of a musical recording as a luxury and the consumer's wish to make this product free carries little currency with me.

Why? It the ownship of culture. Why does everything have to be owned. You now have to pay to experience culture. And you cannot share that culture with anyone else unless they too pay.

It used to be that patrons paid artist to produce art because they wanted the art to exist, not because they wanted to make even more money after the art had been produced. The idea that every single individual has to pay for every single piece of art they view is a relatively new idea, going back less than a 100 years. You should read up on some of the pre 20th century ideas of copyright, you will find them very different that what we currently have.