Capitalism Guarantees Rising Inequality

[Toddsterpatriot]

Any family and I do mean any family in this country can amass great wealth in just a few generations.

All that is needed is the will and the discipline to do so.

If I told you that any married couple starting at age 25 could start their family on the road to great wealth would you believe it?

Or are you so convinced that it is impossible you can't even consider it?

Not only is it true but it can be done for the same amount of money as an average car payment.

Let's say a reasonable monthly payment for a car is 350 a month.

If at the age of 25 a couple puts that 350 a month into an investment portfolio earning say 7.5% (a conservative estimate since the stock market averages over 10% in the long term)

By the time that couple is 80 they will have amassed nearly 3.4 million.

For simplification let's say this couple has twins at age 30 and at age 21 both the twins started investing 175 each into the family trust portfolio by the time those kids were 71 the trust would be worth almost 5.7 million

Now let's say the twins get married at 25 like their parents did and each couple invested 350 a month into the family trust.

Do you see where this is going yet?

We're not even three generations into the process yet.

All for the cost of a new car payment per couple. Do you think it's worth it to drive used cars for your entire life if the payout is this big?

The very idea that capitalism is the cause of inequality is horse puckey. Without capitalism everyone would be less wealth and the country would not have the prosperity to fund the social programs for the needy and disabled.

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

When the rate of return on capital exceeds the rate of growth and output in the economy, capitalism automatically generates the sort of wealth concentration that makes Democracy as significant as a "choice" between Republican OR Democrat.

Thomas Piketty On Capitalism And Inequality | On Point with Tom Ashbrook

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

Exactly! Just look at all the millionaires in China 40 years ago and compare that to the much smaller number of Chinese millionaires today.

 

[georgephillip]

The very idea that capitalism is the cause of inequality is horse puckey. Without capitalism everyone would be less wealth and the country would not have the prosperity to fund the social programs for the needy and disabled.

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

When the rate of return on capital exceeds the rate of growth and output in the economy, capitalism automatically generates the sort of wealth concentration that makes Democracy as significant as a "choice" between Republican OR Democrat.

Thomas Piketty On Capitalism And Inequality | On Point with Tom Ashbrook

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

Exactly! Just look at all the millionaires in China 40 years ago and compare that to the much smaller number of Chinese millionaires today.

Look at all those Walton billionaires in the US 40 years ago and compare them to the much fewer Walton billionaires today

 

[Andylusion]

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

When the rate of return on capital exceeds the rate of growth and output in the economy, capitalism automatically generates the sort of wealth concentration that makes Democracy as significant as a "choice" between Republican OR Democrat.

Thomas Piketty On Capitalism And Inequality | On Point with Tom Ashbrook

Um... The problem we're having is the claim that Capitalism 'causes' inequality.

Capitalism in and of itself, does not 'cause' inequality.

Choice causes inequality. Capitals is built on freedom of choice.

Socialism promotes equality, by denying choice.

Say you have two people, and one likes to sit around drinking beer, smoking, and watching biggest loser on TV. The other likes to go out and be productive, and invest into things that generate more wealth.

In a Capitalist system, where each man can do as he pleases, the guy who is a go-getter investing in new projects and working to earn more money, will grow and be wealthy. The other who consumes his income in beer and smokes, and sitting around watching cable TV, will remain low income, assuming he works at all.

In a socialized system, the go-getter can't. Without the ability to create business, and bring products to market, he's stuck with the drinker smoker biggest loser watcher.

The socialized system promotes equality.... namely equally poor. The Capitalist system promotes freedom, and thus a concentration of wealth to the one who chooses and acts wisely.

Robertson could have simply remained a drunk, and would have remained poor like his drunk friends. Instead he produced a product that people wanted, and sold it. Now he's a multi-millionaire.

That's how Socialism promotes impoverishment on the individual side. There is also an effect on the corporate / market side.

For example I'm in the process of buying shocks for my car.

There are Monroe Shocks for my car, and there are KYB shocks for my car. I'm planning on purchasing the KYB shocks, even though they are $20 per shock, more expensive.

Why? Because they are better shocks. Better design, better quality, smoother ride.

In a Capitalist system, KYB and it's investors, put money into the research and design, the over all investment of producing a better quality product. As a result they can charge a higher price, and have higher sales. Thus KYB gets more money, than Monroe, for what is essentially the exact same product. Therefore there is a concentration of wealth at one company over the other.

Alternatively in a socialized market, the government would declare "shocks are worth X price". KYB would have no reason or incentive to produce a better shock, because the government controlled the market.

Citizens would be stuck with a lower quality product, but all citizens would get the same lower quality product.

Again, socialism results in equality.... equally impoverishment.

Capitalism, by allow buyers the freedom to choose what product to buy, and how much they are willing to pay, results in inequality.

When I'm done, my car will have a smoother ride than other people with the exact same car, with OEM shocks. Inequality.

To the point....

While I disagree with the idea that Capitalism directly 'causes' inequality, I *DO* agree that Capitalism allows, and results in inequality.

But my main point is.... Inequality is GOOD. Equality can only be equally impoverished. Equally poor. Equally bad. It is impossible to have an equally 'rich' system, when people choose to not do what is required to be rich. The result of any system of equality, is always going to be to lower the standard to the lowest common economic denominator.

Inequality, despite the railing of the left, has result in a society where the vast majority of the public is in the top 1% of income earners in the entire world. All the 'equal' societies have not had that level of wealth.

 

[gnarlylove]

We tried capitalism? When? Thus far you stated an ideological political rant, so forget the rant and actually tell us what you are talking about, tell us the history of capitalism, go ahead and tell us the era, the people, how they played the market and used the money as you stated, go ahead, I will hold my breath as a wait for this enlightening history of capitalism and the usa.

I couldn't help notice you made no meaningful contribution to the conversation. What did you say exactly:

1. You openly admitted you don't know the history of capitalism.

2. You categorized my post as a political rant and had nothing else to say about my post.

3. Instead of addressing my "rant," you became punchdrunk with your feigned arrogance which you openly admit is ignorance.

So why do I have any sensible reason to assume you know how to participate in grown-up debate?

Openly admitting your amnesia of capitalism does not validate your arrogance. In fact, you obviously choose not to read my post, let alone address anything. Hopefully you'll actually read my post this time.

1. If free competition exists, there will be winners (competition results in winners necessarily).

2. Winners accumulate capital.

3. If capital accumulates, political influence also accumulates (anyone with a basic understanding of reality will know when human beings are given opportunity to influence outcomes in a favorable manner to themselves, they will do this. In fact, a satellite belief to capitalism is that if you want to get ahead you must use your capital in order to advance. It's a no brainer premise).

4. Political influence is used to influence economic policy.

5. If economic policy is influenced by the winners, free competition does not exist (which you obviously know since according to you, capitalism does not exist in America).

6. Therefore, capitalism is an impossibility. No wonder it doesn't exist because it can't for any steady amount of time.

The closest we came (i.e. America) to capitalism was 2 centuries ago when there had not yet been corporations. Once Carnegie Steel became the first billion dollar corporation, free enterprise was no more, not even close. Maybe instead of asserting your brilliance while simultaneously admitting you don't know, just think about what you're saying.

 

[Toddsterpatriot]

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

When the rate of return on capital exceeds the rate of growth and output in the economy, capitalism automatically generates the sort of wealth concentration that makes Democracy as significant as a "choice" between Republican OR Democrat.

Thomas Piketty On Capitalism And Inequality | On Point with Tom Ashbrook

You're conflating capitalism's unquestioned success as a wealth generating engine with its equally well established mechanism for concentrating that wealth in fewer and fewer hands with each passing generation.

Exactly! Just look at all the millionaires in China 40 years ago and compare that to the much smaller number of Chinese millionaires today.

Look at all those Walton billionaires in the US 40 years ago and compare them to the much fewer Walton billionaires today

I can see why you'd ignore the proof of your error.

 

[georgephillip]

Any family and I do mean any family in this country can amass great wealth in just a few generations.

All that is needed is the will and the discipline to do so.

If I told you that any married couple starting at age 25 could start their family on the road to great wealth would you believe it?

Or are you so convinced that it is impossible you can't even consider it?

Not only is it true but it can be done for the same amount of money as an average car payment.

Let's say a reasonable monthly payment for a car is 350 a month.

If at the age of 25 a couple puts that 350 a month into an investment portfolio earning say 7.5% (a conservative estimate since the stock market averages over 10% in the long term)

By the time that couple is 80 they will have amassed nearly 3.4 million.

For simplification let's say this couple has twins at age 30 and at age 21 both the twins started investing 175 each into the family trust portfolio by the time those kids were 71 the trust would be worth almost 5.7 million

Now let's say the twins get married at 25 like their parents did and each couple invested 350 a month into the family trust.

Do you see where this is going yet?

We're not even three generations into the process yet.

All for the cost of a new car payment per couple. Do you think it's worth it to drive used cars for your entire life if the payout is this big?

I'm a little perplexed about when the payout occurs?
Am I correct is assuming each couple deposits $350 every month of their adult lives without ever spending any of the trust?

That's the problem isn;t it? You're worried about your payout.

By the time the original couple has grandchildren there will be enough to pay for any college in the world.

After 3 generations there will probably be enough to pay out individual trust funds for future progeny.

But the process has to start somewhere.

Even if you weren't interested in generational wealth that same 350 a month would give the original couple over 1.5 million when they were 70.

If all you care about is yourself that would make a nice retirement nest egg wouldn't it?

If would indeed for those earning twice as much as I did during my working career.
In my circumstances, $350 a month would have qualified as a rent payment, not a car payment. Since I never acquired a college degree, I never earned close to the median $50,000 a year income; however, I never had the debt burden today's graduates face either. FWIW, your numbers make sense for a select few with the income and will power necessary to fund their own retirements. What percentage of the US labor force do you think possess both qualities?

 

[Toddsterpatriot]

I'm a little perplexed about when the payout occurs?
Am I correct is assuming each couple deposits $350 every month of their adult lives without ever spending any of the trust?

That's the problem isn;t it? You're worried about your payout.

By the time the original couple has grandchildren there will be enough to pay for any college in the world.

After 3 generations there will probably be enough to pay out individual trust funds for future progeny.

But the process has to start somewhere.

Even if you weren't interested in generational wealth that same 350 a month would give the original couple over 1.5 million when they were 70.

If all you care about is yourself that would make a nice retirement nest egg wouldn't it?

If would indeed for those earning twice as much as I did during my working career.
In my circumstances, $350 a month would have qualified as a rent payment, not a car payment. Since I never acquired a college degree, I never earned close to the median $50,000 a year income; however, I never had the debt burden today's graduates face either. FWIW, your numbers make sense for a select few with the income and will power necessary to fund their own retirements. What percentage of the US labor force do you think possess both qualities?

You're right, when the government takes 12.4% of your income, for Social Security, it makes it harder to finance your own retirement.

 

[georgephillip]

Capitalism is being grossly misused to describe our economy which is totally ruled, governed, politisized, dictated to, constrained, and sued by a government that has grown large and oppressive.

Capitalism does not exsist.

Histories largest most powerful governments exsist.

Complete control of the economy by government is not capitalism.

That vast private fortunes capitalism produces control every government on the planet.
Wealth has controlled every government yet devised, and the US is one of the best examples of how oligarchy buys out democracy. Find a way to insulate government from the corrosive effects of private wealth, and democracy might have some real meaning.

Democracy? The United States is a Republic.

In a republic the sovereignty is in each individual person. In a democracy the sovereignty is in the group.

You live in Democracy, where the mob can trample the rights of the individual?

We live in an oligarchy where the rich few trample the rights of the many.

Maybe you've noticed the irony of SCOTUS using majority rule to decide when a law violates the basic charter our Republic is founded on?

 

[Andylusion]

That vast private fortunes capitalism produces control every government on the planet.
Wealth has controlled every government yet devised, and the US is one of the best examples of how oligarchy buys out democracy. Find a way to insulate government from the corrosive effects of private wealth, and democracy might have some real meaning.

Democracy? The United States is a Republic.

In a republic the sovereignty is in each individual person. In a democracy the sovereignty is in the group.

You live in Democracy, where the mob can trample the rights of the individual?

We live in an oligarchy where the rich few trample the rights of the many.

Maybe you've noticed the irony of SCOTUS using majority rule to decide when a law violates the basic charter our Republic is founded on?

For example?

 

[georgephillip]

Democracy? The United States is a Republic.

In a republic the sovereignty is in each individual person. In a democracy the sovereignty is in the group.

You live in Democracy, where the mob can trample the rights of the individual?

We live in an oligarchy where the rich few trample the rights of the many.

Maybe you've noticed the irony of SCOTUS using majority rule to decide when a law violates the basic charter our Republic is founded on?

For example?

"Brown v. Board of Education, 347 U.S. 483 (1954), was a landmark United States Supreme Court case in which the Court declared state laws establishing separate public schools for black and white students unconstitutional."

 

[Andylusion]

We live in an oligarchy where the rich few trample the rights of the many.

Maybe you've noticed the irony of SCOTUS using majority rule to decide when a law violates the basic charter our Republic is founded on?

For example?

"Brown v. Board of Education, 347 U.S. 483 (1954), was a landmark United States Supreme Court case in which the Court declared state laws establishing separate public schools for black and white students unconstitutional."

Alrighty..... and how does that fit in with the "oligarchy where the rich few trample the rights" line of thinking?

 

[georgephillip]

For example?

"Brown v. Board of Education, 347 U.S. 483 (1954), was a landmark United States Supreme Court case in which the Court declared state laws establishing separate public schools for black and white students unconstitutional."

Alrighty..... and how does that fit in with the "oligarchy where the rich few trample the rights" line of thinking?

Well, shucks...I guess I jumped to the conclusion you were asking about "the irony of SCOTUS."

I think the US Senate is a good example of where oligarchy is on full display:

http://www.princeton.edu/~bartels/economic.pdf

 

[gnarlylove]

"Brown v. Board of Education, 347 U.S. 483 (1954), was a landmark United States Supreme Court case in which the Court declared state laws establishing separate public schools for black and white students unconstitutional."

Alrighty..... and how does that fit in with the "oligarchy where the rich few trample the rights" line of thinking?

Well, shucks...I guess I jumped to the conclusion you were asking about "the irony of SCOTUS."

I think the US Senate is a good example of where oligarchy is on full display:

http://www.princeton.edu/~bartels/economic.pdf

Good luck getting Androw to click that link haha, I hope he does...Oligarchic Legislature:

Millionaires' Club: For First Time, Most Lawmakers are Worth $1 Million-Plus

 

[bripat9643]

"Brown v. Board of Education, 347 U.S. 483 (1954), was a landmark United States Supreme Court case in which the Court declared state laws establishing separate public schools for black and white students unconstitutional."

Alrighty..... and how does that fit in with the "oligarchy where the rich few trample the rights" line of thinking?

Well, shucks...I guess I jumped to the conclusion you were asking about "the irony of SCOTUS."

I think the US Senate is a good example of where oligarchy is on full display:

http://www.princeton.edu/~bartels/economic.pdf

So "oligarchy" is just another name for representative government?

 

[Toddsterpatriot]

Alrighty..... and how does that fit in with the "oligarchy where the rich few trample the rights" line of thinking?

Well, shucks...I guess I jumped to the conclusion you were asking about "the irony of SCOTUS."

I think the US Senate is a good example of where oligarchy is on full display:

http://www.princeton.edu/~bartels/economic.pdf

Good luck getting Androw to click that link haha, I hope he does...Oligarchic Legislature:

Millionaires' Club: For First Time, Most Lawmakers are Worth $1 Million-Plus

Sounds like a good reason to have term limits and 401Ks, instead of pensions, for all politicians.

 

[gnarlylove]

Alrighty..... and how does that fit in with the "oligarchy where the rich few trample the rights" line of thinking?

Well, shucks...I guess I jumped to the conclusion you were asking about "the irony of SCOTUS."

I think the US Senate is a good example of where oligarchy is on full display:

http://www.princeton.edu/~bartels/economic.pdf

So "oligarchy" is just another name for representative government?

Oligarchy is thee premier form of representative government, although it is by definition not thee populous form of government since our representation in America does not correlate to the bottom 60%. Oligarchy is rule by the elite and all policy studies from the beginning of this country will reveal this. In the last few decades however, political influence has become a frenzy for investors to invest money into candidates that will enact or pass favorable policy. Hence, the investment theory of politics.

So the question becomes, do you think the elites are doing a good job or do you think the people, the 60% should also have a voice, including yourself?

 

[bripat9643]

Well, shucks...I guess I jumped to the conclusion you were asking about "the irony of SCOTUS."

I think the US Senate is a good example of where oligarchy is on full display:

http://www.princeton.edu/~bartels/economic.pdf

So "oligarchy" is just another name for representative government?

Oligarchy is thee premier form of representative government, although it is by definition not thee populous form of government since our representation in America does not correlate to the bottom 60%. Oligarchy is rule by the elite and all policy studies from the beginning of this country will reveal this. In the last few decades however, political influence has become a frenzy for investors to invest money into candidates that will enact or pass favorable policy. Hence, the investment theory of politics.

So the question becomes, do you think the elites are doing a good job or do you think the people, the 60% should also have a voice, including yourself?

So how would a government that isn't "ruled by the elite" operate? How would leaders be chosen that weren't part of the "elite?"

 

[PaintMyHouse]

So "oligarchy" is just another name for representative government?

Oligarchy is thee premier form of representative government, although it is by definition not thee populous form of government since our representation in America does not correlate to the bottom 60%. Oligarchy is rule by the elite and all policy studies from the beginning of this country will reveal this. In the last few decades however, political influence has become a frenzy for investors to invest money into candidates that will enact or pass favorable policy. Hence, the investment theory of politics.

So the question becomes, do you think the elites are doing a good job or do you think the people, the 60% should also have a voice, including yourself?

So how would a government that isn't "ruled by the elite" operate? How would leaders be chosen that weren't part of the "elite?"

A very good question actually. Two points. Let's see what he has to say.

 

[bripat9643]

Oligarchy is thee premier form of representative government, although it is by definition not thee populous form of government since our representation in America does not correlate to the bottom 60%. Oligarchy is rule by the elite and all policy studies from the beginning of this country will reveal this. In the last few decades however, political influence has become a frenzy for investors to invest money into candidates that will enact or pass favorable policy. Hence, the investment theory of politics.

So the question becomes, do you think the elites are doing a good job or do you think the people, the 60% should also have a voice, including yourself?

So how would a government that isn't "ruled by the elite" operate? How would leaders be chosen that weren't part of the "elite?"

A very good question actually. Two points. Let's see what he has to say.

The reality is, that no matter what the system, the leaders of the system are going to be part of the "elite." The idea that some schlep off the street is going to become a leader of the government is too absurd for words.

 

[gnarlylove]

We have 3 options. The first two involve maintaining hierarchy.

1. We sit back and let the Oligarchy continue and watch it turn into full-blown "Dear Leader" Totalitarianism;

2. We aspire to create a genuine Democracy (NB: America has never ever been a Democracy). But this is nothing short of a miracle since it would require the self-awareness of basically all citizens to be an informed populous. This would require massive overhaul of the media, education k-16, and general attitudes instilled, social values and norms. Half-assing a Democracy is what America is (no democracy at all).

3. We aspire to create a non-hierarchical commons or commune.

I am not claiming any of these are better. I am trying to facilitate discussion and currently do not wish to contribute personal opinions. I know what I think but I'm far more interested in walking through your beliefs and how you think about these issues. I've heard you disagree with Democracy. Was this a joke like your locking people up who disagree with you joke or do you think genuine Democracy is flawed? Or do you simply think the American population is too large for a functioning Democracy?

We need to keep in mind that if we are serious about questioning the structure of government (which we obviously should be) we must also be willing to deeply question what is provides for us, what it does (mostly for the super-rich) and how changes in government affects global order, and even how likely a proposal is given current political climate.