Replies to This Discussion

Permalink Reply by Gabriela Menicucci on December 11, 2011 at 12:03pm

@Ed I think we all are aware that the average American buys at Wal Mart and not at Gucci. 

However as I said before Gucci, Bentley, and all other "exclusive" brands due to their prices and their outsourcing to the 3rd world manage to survive... So not because the "majority" can't afford certain brand , the company will go into bankruptcy. Why? Because the upper class sustain this companies.

Permalink Reply by Arcus on December 11, 2011 at 10:34am

If there's only one company you don't have capitalism, you have a monopoly..

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Permalink Reply by Gabriela Menicucci on December 11, 2011 at 10:38am

Duh! 

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Permalink Reply by No Nick for me on December 11, 2011 at 11:01am

That is where capitalism is headed, the strongest destroy the weaker and wealth accumulates. That is not a secret and it is simple math. As soon as you have a certain amount of money your wealth will grow bigger and bigger by investing. At the same time your investions create goods and services which in turn are worth something so more money can be produced without too much inflation. But the wealth is growing by far faster than the production can keep up so all the profits above that line which are made are due to exploiting those with less money. Thus the rich become richer and the middle class becomes smaller as you have increasingly less money in your pocket.

Why the hell did you think communism was created? Marx saw this coming and the only reason it didn't was because communism was a threat and you had to keep the people happy or they would go to the other side. But since the 90's Marx prophecies come closer to a reality, now that the competition is gone. It is a shame that we as a species are too stupid, selfish and corrupt to enable something like communism, which in theory is a good thing but has been proven again and again not to work, to happen.

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Permalink Reply by No Nick for me on December 12, 2011 at 7:35am

I'm not "warm to communism", because as I said, it has been proven again and again not to work, but I think it is due to our flaws as humans, not because the system itself is flawed.

But using this logic you could probably justify all kinds of government, even totalitarism. The only thing you can conclude from that fact is that the people who invented the concept were pretty good people with good intentions who probably would be disgusted by how it ended up. The only thing you can say about Marx and others like him is that he had a little too much faith in humanity. And not all of his ideas have to be invalid, they seemed extremely logical at the time and many of them are still valid today, which is why communism was tried in the first place and some of the things he feared are coming about right now.

Permalink Reply by Arcus on December 11, 2011 at 11:34am

"now that the competition is gone."

This is a counterfactual statement. Competition has never been higher due to the rapid pace of globalization the last decade. This has led to extreme pressures on wages and extreme payoffs for success. The rich tend to get richer faster than the poor, but everyone is still getting richer.

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Permalink Reply by Arcus on December 11, 2011 at 12:19pm

False would be an acceptable synonym :)

Well, "demand outstrips supply" is a fairly nonsensical statement as it would be regulated through the price mechanism. If supply increases or demand decreases the price will fall, and conversely if supply decreases or demand increases, the price will rise (ceteris paribus and for normal goods). I guess you could say that demand outstrips supply of Ferrari's; I certainly wouldn't mind having one, but the price mechanism discriminates against me. (I'll attempt to find a way to cope with this horrible atrocity of not having one.)

Changes in the tech infrastructure effects mostly efficiency, the capitalist still takes his goods to the market and sell it for maximum profit, though he will be more efficient using a jet than an ox cart in bringing it there.

Don't know if that answers anything, but I think perhaps you have are resting on some assumptions which I am unaware of. :)

Permalink Reply by Arcus on December 11, 2011 at 1:18pm

"Consider the fact that supply is finite."

I would prefer not to ;) In essence, supply can be seen as being infinite since it tends to be constricted by economics, there is also the possibility of substitution, and also recycling. Indeed, a scenario restricted to only Earth is not wide enough - if/when extraction on Mars becomes economical we'll probably be extracting on Mars. It's a variation of the 'Peak Oil' argument, and it's a weak argument.

"the supply cannot be increased [..] there is a tendency to self-regulate?"

It would be difficult to see such a situation apart from a case in which a country is in full trade boycott (i.e. North Korea). Such a scenario would be absolutely devastating with massive decrease in living standards, but it's a bit far fetched. At that point we are not really talking about a market at all, thus self-regulation wouldn't apply, and usually a centralized diktat-economy is established.

"there are other nations in this world that might not like to give up their resources"

Since markets are globalized this would only have minor effects. That the US refuse to buy oil from Iran doesn't mean anything else than Iran selling oil to China. The market balance would be similar unless a full boycott is in place. (There would be some effect on transportation costs, but these are very tiny.)

"technological change will allow investors to drive demand"

I think this would quickly hit the "electric mousetrap" territory, where useless products for which there is no demand would be offered. This tends to be heavily constricted by financial resources availability, investors and consumers both would shy away. In general it's very hard to drive up demand since the consumer would not have the required utility, and all demand is based on the individual's utility function. Add whatever tech you want into the equation, the effects will be marginal if there is any at all.

I would doubt that a return to slavery is probable beyond the theoretical. Both social norms and microeconomics speak against it, it's too unacceptable and inefficient. 

What we will see is continued stratification of society. Low value added jobs cannot be protected and gets (re)moved, and the payoff for high value added rises sharply. Essentially, if your job can be done by computers or in China, prepare for unemployment.

Permalink Reply by No Nick for me on December 12, 2011 at 7:42am

The domestic competition is gone, you have a decrease in the number of companies and an increase in the size of them, or to put it easier, the bigger swallow the weaker. Globalisation is just putting it to a larger scale and allowing corporations to defeat their competition on an international scale now.

Just think about the Wal-Marts which no one can compete to because of their size and them being so widespread and for other reasons, no new business could be built with prices which could compete. Or all the other megacorporations. And it is a lie that "everyone is still getting richer", I have explained why that is not the fact. The middle class is shrinking, because the wages are not increased to fit the inflation and because of the pressure on wages that you mentioned.

Permalink Reply by Gabriela Menicucci on December 11, 2011 at 1:45pm

@Parau I agree with your POV. However true Marxism has never taken place so I think is far too soon to judge and say it won't work.

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Permalink Reply by Matthew on December 10, 2011 at 9:29pm

Yeah, it all pisses me off. I used to think living in America was great, but as I read I began to realize that our country is most warmongering country today. Every single time they start a new war they claim that it's in OUR name,nthe people's name, and that sickens me. They say that theyre fighting FOR us when it's all really for THEM. This country has turned into a warmongering police state and it sickens me. It feels more like an oligarchy. If I weren't in NOrth Carolina and in college working on my nuclear engineering degree, I would be right alongside the occupy folk.

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Permalink Reply by Matthew on December 10, 2011 at 9:29pm

Sorry for my bad typing, I'm using an iPad keyboard. Just so you know, I don't normally type this horribly...

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