"in the long run, “when pay setters set their own pay, there’s no limit,” unless “confiscatory tax rates” are imposed."
[Capitalism is broken? - NO!] "Piketty proposes instead that the rise in inequality reflects markets working precisely as they should: “This has nothing to do with a market imperfection: the more perfect the capital market, the higher” the rate of return on capital is in comparison to the rate of growth of the economy. The higher this ratio is, the greater inequality is."
Capitalism IS the problem.
I'm still reading LOTS of links but I got so excited when I read this I had to share.
You might also like this book, The Undercover Economist strikes back.
Capitalism IS the problem.
To parse this a bit more on economic inequality, Piketty says the problem is laissez-faire capitalism: the belief that unfettered markets achieve balance by themselves. (This is the most sacred dogma in the American right-wing canon.)
Note what Piketty wrote on the 'Conclusions' slide: "the ideal solution: progressive wealth tax at the global scale, based upon automatic exchange of bank information. Other solutions involve political & capital controls (China, Russia..) or perpetual population growth (US) or some mixture of all."
Piketty's solution is drawn from Keynesian economics: government controls for mass redistribution of wealth from rich to poor during recessions and times of economic inequality (like right now).
"Welfare is not part of the capitalist model."
Right. The capitalist model is that labor is a disposable resource. The more they fire, the cheaper they become. If it weren't for the extremely limited intervention of government in protecting their constituents, millions would simply starve and those lucky enough to be employed would have all the rights a dignity of indentured servants.
Capitalism has provided a higher standard of living for some. Emphasis on the some. If you asked has capitalism benefited me, how do you think the following would answer:
The teen and younger who worked in the coal mines a century ago
The children in the textile mills in the south
The tenant farmers, both black and white in the south
The immigrants in NYC living in a tenement and doing piece work for pennies a day
Today, the 10's of millions in poverty and not knowing where their next meal is coming from.
The children who go to bed hungry every night.
The list can go on and on. Capitalism is concerned with one thing and one thing only---providing maximum profit for those who own the means of production and those who own the natural resources.
Is there a better system---you bet there is. A modified capitalism with caps on profits and the requirement that a living wage be paid. Graft onto this a modified socialism which helps those who can't help themselves.
The revolution can't come soon enough.
" If you asked has capitalism benefited me, how do you think the following would answer:"
Sorry, I'm not understanding. Would you mind rephrasing?
I mean that not one of those groups would agree that capitalism provided even a mnimal standard of living. Capitalism by its nature consumes workers and discards them when no longer needed.
Read Andrew Mellons solution to the great depression. He said liquidate everything and start over and that included labor. He, himself, had no worries. His millions were already salted away, having been gained from the labor of others.
Before my parents brought me into the world, if they had told me the world has so many SOBs, I would have told them to leave me the hell alone.
I'm joking, of course.
My dad was trying to be a good Catholic and the old farts who run the Church had two years earlier "declared war" on all forms of family planning. He paid to send all of his five kids to Catholic schools, and before he died he knew all five of us had quit the Church. Our revenge, I suppose.
Capitalism by its nature consumes workers and discards them when no longer needed.
Of course, especially America's predatory capitalism. Its beneficiaries spend a lot of money to keep working folks divided.
Employees forming labor unions is one remedy, but capitalists can rent union leaders.
Employees owning and running the companies they work for (and sharing the profits and losses) is a better remedy. When enough employees do it, America's predatory capitalists will go extinct.
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A few billion years ago the big and strong pond scum (You do accept that we are ascended from such, don't you?) engulfed (ate) the nearby small and weak pond scum.
A few hundred years ago, the small and weak started replacing political tyranny with political democracy. We need to continue replacing economic tyranny with economic democracy,
"replacing economic tyranny with economic democracy"
...hmmm...an interesting concept.
The revolution can't come soon enough.
The revolution began decades ago, with employee owned and operated companies.
In the early 1970s, a Harvard Business Review story described two advantages: less employee theft and more concern for the environment.
I understand that the US federal tax code encourages owners, upon retirement, to sell their businesses to their employees. I don't know where in the tax code to look for evidence.
Political tyranny yielded slowly to political democracy; economic tyranny will yield slowly to economic democracy.
We homo not-very-sapiens might make the earth uninhabitable first.
Since just about everything else is not working to find work, I thought, "I will send my resume and letter if a senator asks for $$$, with the statement 'I will send you $$ went I get paid, and I have real skills that should be of use to YOU!' "
The problem with the economy is not that capitalism is broken, it's that capitalism isn't being practiced. Welfare is not part of the capitalist model. Neither is any other form of tax funded charity program.
I don't know what 'tax funded charity program' means, but if you're referring to social welfare programs like Social Security, Medicare, and food stamps, then I'm extremely grateful the United States is not founded on the 'capitalist model' as you describe it.
The US Constitution, Article One, Section Eight states: "The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common defence and general Welfare of the United States" after which 17 specific purposes are listed immediately following.
The US Supreme Court ruled in United States v. Butler in 1936 that "provide for... the general Welfare of the United States" refers to the taxation and expenditure of funds to advance the general welfare: "The clause confers a power separate and distinct from those later enumerated[,] is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. […] It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution."
All taxation is redistribution of wealth. The Constitution confers the power to redistribute for welfare and defense, but for no other purpose. Note that's for general welfare, not corporate welfare, not investment banker welfare, and not the exclusive welfare of people with enough money and power to buy members of Congress and pass tax exemption laws for themselves.