Serfdom and Trickle down Economics -difference?

[drebo]

All the most prosperous nations in the world are welfare capitalist, with the differences being relative degrees of emphasis on the welfare aspect versus the capitalist aspect. None are anywhere near pure free market capitalism.

One has to wonder whether it is because of or in spite of the welfare portion.

To be honest, we've been "welfare capitalist", as you put it, for 30 years and it really isn't doing much.

The most prosperous countries are those with a strong, large, and self-sufficient middle class. Welfare strangles that middle class much more than the free market ever could. In fact, the very idea of "welfare capitalism" doesn't even have room for a middle class, as a class which is dependent upon the government (wage floors, benefits, etc) runs contrary to the definition of "middle class."

The middle class makes the economy go 'round. A welfare state (to ANY degree) WILL suffer a shrinking of the middle class. The two ARE mutually exclusive. That's why, even with all the welfare the US government is pumping out, the gap between rich and poor hasn't really changed much, and especially hasn't changed for the better. Taxes affect the middle class the most. Wage floors and forced benefits reduce the buying power of the middle class by the greatest percentage. When the buying power of the middle class is reduced, the class becomes poorer. Those at the bottom end become "lower class" and it makes it much more difficult for upward mobility.

In short, "welfare" and "strong middle class" are mutually exclusive. You cannot have a strong economy without a strong middle class. And a welfare state, by definition, will always be poorer than a state with a strong middle class. Redistribution of wealth only makes everyone poorer.

 

[Jhhnn]

Name those countries, drebo.

 

[dmcowen674]

Wondering since some people here still think trickle down economics are relevant somehow still to them as a economic theory, what is the difference between the elite rich "job creators" -the landlords of the feudal age taking the lions share and the serfs waiting for a handout here and there? I am curious how there is a difference to people 2010.

Only a name change, instead of King in the Feudal ages they call themselves Conservative Republicans

 

[drebo]

Name those countries, drebo.

Post WW2 US, up until we decided "welfare capitalism" was a good idea. Guess when things started to stagnate.

No country before or since (except maybe China currently) has been as relatively wealthy and experienced as much wealth growth as the US in the late 1940s through the 1960s. Except maybe turn-of-the-century US. We have but to look at our own past to find a better version of ourselves.

Of course, we should be looking at Western Europe to see the failure of what we are trying to become. Unfortunately, it looks like liberals are intent on learning that lesson the hard way, to the detriment of us all.

Except, all this is really besides the point, because what I said still holds true: you CANNOT have an economically healthy country without a strong middle class.

 

[GuitarDaddy]

Same thing, no difference

 

[bamacre]

In the purest form, over the long run, there is no difference between capitalism and serfdom. Eventually all wealth becomes aggregated to fewer and fewer hands, especially in a progressing economy. This will eventually result in slower growth, productivity, and innovation, as fewer and fewer serfs can gain education and opportunities.

Sadly, this country is heading towards more of a pure form.

What? We've had a mixed economy for longer than I can measure. And the results you're describing are today's reality. A result of our mixed economy, or crony capitalism really, not "pure capitalism." And to say we're moving in the direction of a more capitalistic economy is absurd and humorous.

 

[Throckmorton]

What? We've had a mixed economy for longer than I can measure. And the results you're describing are today's reality. A result of our mixed economy, or crony capitalism really, not "pure capitalism." And to say we're moving in the direction of a more capitalistic economy is absurd and humorous.

Maybe you missed the whole rightward shift thing with Reagan and friends...

 

[bamacre]

Maybe you missed the whole rightward shift thing with Reagan and friends...

What rightward shift? They increased the size and scope of government by leaps and bounds.

 

[Zebo]

Red - difference is wealth is not static. You can create out of thin air given right product people want. Benefit all.

With that said, taxes are price we pay for opportunity, education and a civil society.


Trick is taxing/spending/protections enough so you don't end up with no opportunity but not to much so they put in gulag to work.

 

[woolfe9999]

One has to wonder whether it is because of or in spite of the welfare portion.

To be honest, we've been "welfare capitalist", as you put it, for 30 years and it really isn't doing much.

The most prosperous countries are those with a strong, large, and self-sufficient middle class. Welfare strangles that middle class much more than the free market ever could. In fact, the very idea of "welfare capitalism" doesn't even have room for a middle class, as a class which is dependent upon the government (wage floors, benefits, etc) runs contrary to the definition of "middle class."

The middle class makes the economy go 'round. A welfare state (to ANY degree) WILL suffer a shrinking of the middle class. The two ARE mutually exclusive. That's why, even with all the welfare the US government is pumping out, the gap between rich and poor hasn't really changed much, and especially hasn't changed for the better. Taxes affect the middle class the most. Wage floors and forced benefits reduce the buying power of the middle class by the greatest percentage. When the buying power of the middle class is reduced, the class becomes poorer. Those at the bottom end become "lower class" and it makes it much more difficult for upward mobility.

In short, "welfare" and "strong middle class" are mutually exclusive. You cannot have a strong economy without a strong middle class. And a welfare state, by definition, will always be poorer than a state with a strong middle class. Redistribution of wealth only makes everyone poorer.

The welfare state did not start 30 years ago during the Reagan era. Are you daft? The welfare state started with reforms during the progressive era (early 20th century), gained considerable steam in the FDR era, and got another boost with LBJ. It's been a process, not something that happened at one moment in time. The middle class in this country was largely CREATED during that era, to an increasing degree as the era progressed. Yet there's been no evidence of a "shrinking middle class" until very recently in our history. In fact, the earliest vestiges of it starting in the 1980's during the Reagan era of tax cuts and deregulation of business, and it has gotten worse since, particularly in the last 10 years. While correlation does not necessarily mean causation, these correlations do not help your case.

Your theories about the welfare state being incompatible with a middle class are just that...theories. That is the trouble with libertarian economics. It is all theory and real world empiricism does not back it up. Communism had the exact same trouble. They are both utopian ideologies which operate on extreme "purist" principles, propagated by people who find the ideas attractive. But theories mean nothing. They are shit, because real world economics is vastly more complicated than any simple, elegant theory can ever explain. The only thing that matters in assessing an economic system is real world results.

- wolf

 

[Zebo]

What? We've had a mixed economy for longer than I can measure. And the results you're describing are today's reality. A result of our mixed economy, or crony capitalism really, not "pure capitalism." And to say we're moving in the direction of a more capitalistic economy is absurd and humorous.

This nation started with socialism what else do you call taking from the wealthy land owners and giving free land to impovrsihed masses of Europe.

I can go on from there like socialist Land Grant Act of 1862 that gave us State Universities and Colleges.

Or Veterans Readjustment Act of 1944 which it allowed the poor folks to get a college education paid by the Feds.

Or the Transcontinental Railroad Act of 1862: and Federal Highway Act of 1954 and Interstate Highway Act of 1956: Building of the largest road infrastructure on the planet which allowed billions to be made in agriculture, tourism, auto, etc

People require investment for success. Everyone knows this.

Especially the rich which is what keeps schools like 45K a year Phillips Academy in business. They just don't want you to have it.


Very short sighted IMO - you don't build empires and great countries with a bunch of hoarders. You end up like so many places instead - a few billionaires who own all and law does not apply to them and misery and destitution for masses. It's not a zero sum game. Rich can get richer if they remain competitive and their is demand for their product even with higher taxes.

 

[QuantumPion]

This nation started with socialism what else do you call taking from the wealthy land owners and giving free land to impovrsihed masses of Europe.

Actually you are more right than you know...

The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.

So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. At length, after much debate of things, the Governor (with the advise of the chiefest among them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things to go in the general way as before. And so assigned to every family a parcel of land, according to the proportion of the number, for that end, only for present use (but made no division for inheritance) and ranged all boys and youth under some family. This had very good success, for it made all hands industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.http://en.wikipedia.org/wiki/Plymouth_Colony#cite_note-Bradford.2C_William_1952.2C_pages_120-147http://en.wikipedia.org/wiki/Plymouth_Colony#cite_note-Bradford.2C_William_1952.2C_pages_120-147

-- William Bradford, 1623, Governor of Plymyth Colony

So 200 years before Karl Marx was born, they discovered how socialism wrought poverty and misery, and how quickly freedom brought wealth and prosperity.
http://en.wikipedia.org/wiki/Plymouth_Colony#cite_note-Bradford.2C_William_1952.2C_pages_120-147

 

[Zebo]

Actually you are more right than you know...

The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.

So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. At length, after much debate of things, the Governor (with the advise of the chiefest among them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things to go in the general way as before. And so assigned to every family a parcel of land, according to the proportion of the number, for that end, only for present use (but made no division for inheritance) and ranged all boys and youth under some family. This had very good success, for it made all hands industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.http://en.wikipedia.org/wiki/Plymouth_Colony#cite_note-Bradford.2C_William_1952.2C_pages_120-147http://en.wikipedia.org/wiki/Plymouth_Colony#cite_note-Bradford.2C_William_1952.2C_pages_120-147

-- William Bradford, 1623, Governor of Plymyth Colony

So 200 years before Karl Marx was born, they discovered how socialism wrought poverty and misery, and how quickly freedom brought wealth and prosperity.
http://en.wikipedia.org/wiki/Plymouth_Colony#cite_note-Bradford.2C_William_1952.2C_pages_120-147

I am a advocate of balance. Which is why I hate welfare and UE, both you should have to work for check. Just like Lincoln made later peoples work for land they got free. Old people did their productve time already so SS is cool

Idle poor is as bad as idle rich for nation.

 

[Jhhnn]

Post WW2 US, up until we decided "welfare capitalism" was a good idea. Guess when things started to stagnate.

No country before or since (except maybe China currently) has been as relatively wealthy and experienced as much wealth growth as the US in the late 1940s through the 1960s. Except maybe turn-of-the-century US. We have but to look at our own past to find a better version of ourselves.

Of course, we should be looking at Western Europe to see the failure of what we are trying to become. Unfortunately, it looks like liberals are intent on learning that lesson the hard way, to the detriment of us all.

Except, all this is really besides the point, because what I said still holds true: you CANNOT have an economically healthy country without a strong middle class.

In other words, you have no current day examples, and you haven't the vaguest clue about the postwar era in the US, which was largely the product of the New Deal way of doing things. Minimum wage laws. Banking regulations. Glass-Steagall enforced. No too big to fail financial institutions. FDIC. FHA, VA and FNMA mortgage loans. Strong Unions. Strongly progressive federal income and investment tax system. Tariffs. And more.

It's one thing for Righties to tout their usual tripe, but revisionist history is a losing gambit.

 

[GaiaHunter]

In other words, you have no current day examples, and you haven't the vaguest clue about the postwar era in the US, which was largely the product of the New Deal way of doing things. Minimum wage laws. Banking regulations. Glass-Steagall enforced. No too big to fail financial institutions. FDIC. FHA, VA and FNMA mortgage loans. Strong Unions. Strongly progressive federal income and investment tax system. Tariffs. And more.

It's one thing for Righties to tout their usual tripe, but revisionist history is a losing gambit.

Basically all those things (or equivalents) are what are bringing Europe and US economies to their knees today - it just took time.

While there is a huge young active population, countries can afford big Governments and regulations. But then the young active population becomes a old inactive population expecting to receive what was promised to them by politics than only care about 5-10 years in the future.

And the newer generations (and lets not forget that before some/most women didn't have paid jobs - please this isn't a sexist remark, it is simply to show that before families could afford to live on 1 paycheck and now 2 isn't enough) can't afford the price of those things.

And look what is happening in Europe - Greece, Spain, Ireland, Portugal, all going to do massive cuts, increase of retirement age with lower retirement pay checks,etc.

It is no surprise that the stronger economies of today are countries that have much less regulations and much lower minimum wages.

Sure, the people in those countries have nowhere the standard of living of people in US and Europe. On the other hand, US and Europe are only able to maintain that standard of living by going into DEBT. And who is lending that money? Surprise, surprise, countries like China.

People are all equal, either be private individuals or people in public offices - you will have honest folk and corrupt folk.

The difference is that if a private individual in a free market (read no bail outs from government) makes bad decisions and fucks, it is his money that goes to hell, his company and its employees.

If someone in a public office screw up it is the tax payer money that goes to hell.

A free market system has an inbuilt greed/fear system.

A over regulated system has stuff like SEC that gives people reassurance but fail to detect a Madoff.

 

[Acanthus]

Actually, I think that with pure capitalism you would have a serfdom situation of ultra rich and almost everybody else quite destitute. Money (i.e. power) begets more and this would be a natural progression.

This is the exact argument many economists have against deregulation. (many is not all)

 

[Zebo]

LOL Chinese live like slaves in factory compounds work 70 hrs a week and have company security that will kill you if you take an iPhone out. Not a place I'd care to emulate. They will forever be a copier too so long as people are bottled up and every idea is stolen. China has GDP of 4 trillion ours is 14 Europe 20. I would not exactly call them economic successes.

Is social welfare too much in Europe, probably, nothing should be free - free education should have good grades, free housing public works, but without redistribution and opportunity you are destined to fail and be third world. (accidents of geology , oil not withstanding)

 

[GaiaHunter]

This is the exact argument many economists have against deregulation. (many is not all)

But look what are you getting as alternative - huge governments that keep taking more and more wealth. and getting more and more power.

Does that sound like medieval lords and kings?

Or just because you vote a new king every few years, they aren't kings anymore?

 

[Acanthus]

But look what are you getting as alternative - huge governments that keep taking more and more wealth. and getting more and more power.

Does that sound like medieval lords and kings?

Or just because you vote a new king every few years, they aren't kings anymore?

The system has its problems. All systems do.

A great expansion of the government is the new consumer protection agency overseeing banks and their regulation.

A poor expansion of the government is the department of homeland security.

 

[GaiaHunter]

LOL Chinese live like slaves in factory compounds work 70 hrs a week and have company security that will kill you if you take an iPhone out. Not a place I'd care to emulate. They will forever be a copier too so long as people are bottled up and every idea is stolen. China has GDP of 4 trillion ours is 14 Europe 20. I would not exactly call them economic successes.

Is social welfare too much in Europe, probably, nothing should be free - free education should have good grades, free housing public works, but without redistribution and opportunity you are destined to fail and be third world. (accidents of geology , oil not withstanding)

Not yet.

But doing much better than communist Soviet Union that broke apart.

US and Europe have a huge starting lead.

On the other hand look at the US trade deficit with China.

Basically they are US slaves. And they even buy trillions of dollars that they lend back to US consumer to buy their products.

Imagine if they simply decide instead of lending money to US so US citizens can buy their (China) products they start to consume it themselves and/or sell to countries than don't need loans to afford it?

How is US going to afford to buy those things? How much does US have to invest in industry to make all that shit in US? How many times more will you have to pay US workers?

And China has over 1 billion people. There is bond to be some smart dude over there.

Add to that all the money (read trillions of US dollars) China has to invest and the only thing in the way of China becoming the world number 1 economy is the communist elite being afraid of losing power.

That doesn't mean China will reach US or Europe current standard of living, but they are bound to syphon some of it for themselves.

 

[Zebo]

Not yet.

But doing much better than communist Soviet Union that broke apart.

US and Europe have a huge starting lead.

On the other hand look at the US trade deficit with China.

Basically they are US slaves. And they even buy trillions of dollars that they lend back to US consumer to buy their products.

Imagine if they simply decide instead of lending money to US so US citizens can buy their (China) products they start to consume it themselves and/or sell to countries than don't need loans to afford it?

How is US going to afford to buy those things? How much does US have to invest in industry to make all that shit in US? How many times more will you have to pay US workers?

And China has over 1 billion people. There is bond to be some smart dude over there.

Add to that all the money (read trillions of US dollars) China has to invest and the only thing in the way of China becoming the world number 1 economy is the communist elite being afraid of losing power.

That doesn't mean China will reach US or Europe current standard of living, but they are bound to syphon some of it for themselves.

Pretty perceptive. I just leave this. When you owe the bank a million that's your problem, when you owe them 6 trillion that's the banks problem.

 

[GaiaHunter]

The system has its problems. All systems do.

A great expansion of the government is the new consumer protection agency overseeing banks and their regulation.

Do you believe in the government ability to regulate stuff?

Look at Fannie Mae and Freddy Mac! The government can't even regulate itself!

It is just going to be another of public workers paid by tax payer money that will create more regulations that will be impossible for small business/banks to cope with while the big companies/banks can, making them even bigger.

 

[GaiaHunter]

Pretty perceptive. I just leave this. When you owe the bank a million that's your problem, when you owe them 6 trillion that's the banks problem.

Except they will get paid.

The Fed will print the money.

Imagine if they decided to buy assets in US. Who will be able to outbid them?

 

[Zebo]

Nah we'll nationalize debt and even take assets before we pay it. Been done 100x before.

Invasion of Taiwan perfect excuse.

 

[JohnOfSheffield]

Here is another, maybe the op will not generate discussion for a bit.

Riddle me this Capitalist defenders:

Most of the world is capitalist. Most of the world is poor. Why is it the more mixed market a country is usually the considerably higher standard of living? Why is Somalia a unregulated paradise but a total dump? But most modern first world mixed economies have almost no homeless and people are pretty well off, explain this please. (without racism for a extra 10 points)

Mixed market economies is what almost all nations have, the extremes of it one way or another are the ones standing around holding their cock right now while the more middle of the road ones are actually doing quite fine even though their economy is down it's just generally down, it will be rebuilt and it's been about a year now since THAT started.

Oh, the US isn't one of those nations, neither is the UK or France, we've been too stupid and our market is out of whack awaiting our next and hopefully smarter generation to lead the economy into a better place.