Capitalism: A Love Story - THE SICKENING TRUTH

[Cyclone 10]

Introduce a maximum wage and a limit of capital savings and assets.

 

Once that limit (lets call it a greed factor) is reached then the excesses are taxed at 100 percent unless used to create further production or infrastructure necessitating employment for those who can never aspire to come close to the set limits of ownership.

 

Once you have enough wealth to live a life of ultimate oppolence for you and your kids and grandkids then i think you dont really need further wealth and should be made to use it creatively or have it taken away.

 

There would be no rich list as the top earners would be tied in a dead heat and the bank calculators would know how many noughts on a savings account would be enough.

 

Not just capitalism.........M and S capitalism

 

There would also be no need to continue to work or invent at that point, so the wealth that people were generating, people like Steve Jobs and Bill Gates wouldn't exist.

Or they'd just leave your land of limited socialism and move their income to somewhere else, depending on whether it was a worldwide thing or not.

I don't quite understand how it would work though, Bill owns shares in Microsoft there value increased, what do you do with that capital, just steal it? What do you do if the value falls again tomorrow, just give some back?

[Cyclone 10]

(i) share prices from being based on anything other than the value of a company's physical assets at any one time (buildings, physical stocks, etc. basically, anything you can hold or grab in your hand that belongs in whole or part to the company)

You can't 'prohibit' shares being worth what someone will pay for them, which is all they are ever worth.

(ii) speculation on anything other than physical assets already produced (no derivatives, futures, etc.)

If you don't like futures then you probably don't understand them very well. They're a valuable market tool.

(iii) negative speculation (betting on a negative outcome...I'm having a brain fart about the exact terminology)

Shorting. And why the hell not, it's another valid market tool.

[MrSmith 10]

Agreed.

No need. Look where the latest 'semi-global'/'multi-national' currency attempt (€) is currently heading.

No, speculation on the money thing got us into this mess. This time like the last (as corrently pointed out by donkey a while back).

Simples. Probably far too simples. But hey...

 

Maintain currencies, maintain the shares system, but prohibit (globally, and strictly):

(i) share prices from being based on anything other than the value of a company's physical assets at any one time (buildings, physical stocks, etc. basically, anything you can hold or grab in your hand that belongs in whole or part to the company)

(ii) speculation on anything other than physical assets already produced (no derivatives, futures, etc.)

(iii) negative speculation (betting on a negative outcome...I'm having a brain fart about the exact terminology)

 

Sounds like a plan, shorting is the term I think you were looking for and in my opinion is very dodgy practice of betting on share prices falling.

[Conrod 10]

. . .. . . , capitalism is and always has been radical evil . . . . .

Rather that than the unworkable dream of socialism.

i want world unification, where people of all kinds can live together in relative peace and harmony

 

but for some people that is un-attainable, it is only un-realistic to those that support this system

What you want is all well and good.

 

A lot of people rather like capitalism though. I'm encouraged by a society which favours elitism - a system which allows and encourages those with skill and motivation to strive for achievement, because by so doing they pioneer technologies and create wealth and employment for others.

 

The people who despise capitalism tend to be the ones who realise they screwed up by not working hard enough at school and don't like being at the bottom of the social ladder (champagne socialists aside of course).

[L00b 441]

You can't 'prohibit' shares being worth what someone will pay for them, which is all they are ever worth.

If you don't like futures then you probably don't understand them very well. They're a valuable market tool.

Shorting. And why the hell not, it's another valid market tool.

tinfoilhat asked for solutions, I merely suggested some (that would prevent the 'valid market tools' from evolving into the sort which are the root problem of the financial sneeze of these past few years).

 

I don't disagree that these 'market tools' (which I understand just fine, thank you very much...but I'll have a bit more condescending if there's some left-over, please) are valid and useful.

 

The issue is the context of 'moral' or 'social' responsibility in which they should be used at all times - i.e. a framework or set of boundaries, outside which the risk to the general economies exceeds their validity and usefulness if and when they got t*ts up.

 

If traders/financial houses won't stick to these of their own accord (which they wouldn't of course, greed is go[o]d), then the simplest solution is to cut the problem (or the potential for it to be come a problem) at the source.

 

Of course I'd expect share prices to still go up and down, through the interplay of trading - albeit limitedly. With a share valuation restricted to physical assets (rather than 'never-never' indicia like e.g. profit forecasts, new contracts, etc.), the potential for creating/maintaining artificial 'bubbles' (e.g. à la dot.com) should be cut at the knees: there is nothing to underwrite never-never money, there is always 'something' to sell for 'realising' a share. The more of the 'something', the higher the share value (which happens when the company grows). As I said, simples.

 

It also puts the onus back on good company management, and restricts financial (horse-)play.

Edited November 3, 2011 by L00b

[Cyclone 10]

I can always find a bit more

 

Financial markets and tools need controls, but you were suggesting banning them, rather than applying appropriate controls to them.

 

You can't restrict share price as you suggest though, it's meaningless and would be impossible to administer. Shares are priced based on a number of things, but a key one is the perceived potential for future profit, remove that and shares may as well not exist at all because there price is no longer linked to the chance of them generating income.

[donkey 10]

Rather that than the unworkable dream of socialism.

 

 

So you believe we have two options. The current system, or a Soviet style sytem? This seems like a somewhat myopic understanding of the options available.

 

A lot of people rather like capitalism though. I'm encouraged by a society which favours elitism - a system which allows and encourages those with skill and motivation to strive for achievement, because by so doing they pioneer technologies and create wealth and employment for others.

 

 

You equate crashing the Global economy through a form of parasitism - designed to scrape percentages from other people's labours and innovations - with pioneering technologies and creating wealth?

 

 

The people who despise capitalism tend to be the ones who realise they screwed up by not working hard enough at school and don't like being at the bottom of the social ladder (champagne socialists aside of course).

 

There are undoubtedly character traits associated with ideologies. Fervant 'capitalists' often seem to be sociopaths, and if they are authoritarian as well, they often seem to display psychopathic tendencies.

 

However, there is no evidence to suggest accurate assumptions can be made about personality according to political outlook. People are more complex than machines.

Edited November 3, 2011 by donkey

[Cyclone 10]

He didn't equate crashing the global economy with wealth creation, he equated capitalism with it.

Of course capitalism unfettered has it's downside and needs social regulation, democratically moderated capitalism if you like, or maybe liberal socialist capitalism.

[donkey 10]

He didn't equate crashing the global economy with wealth creation, he equated capitalism with it.

Of course capitalism unfettered has it's downside and needs social regulation, democratically moderated capitalism if you like, or maybe liberal socialist capitalism.

 

The implication of his post was that there is no viable alternative to the present system - which inevitably leads to repeated cycles of boom and bust.

 

There is nothing wrong with rewarding people proportionate to their efforts, nor encouraging the development of socially useful talents and creativity through incentives. However, capitalism is generally understood to mean more than that.

 

Under the present systyem, the people who are rewarded the most tend to be those who make money off other people without actually producing anything themselves. This leads to arbitrary and unstable values being put on products, services and labour, which in turn leads to political and economic instability.

 

Furthermore, being the wealthiest, and therefore also the most powerful, the speculators are able to use their influence to perpetuate this system, which is fundamentally dependent on inequality. Because of this, vital decisions concerning all our futures are made on the basis of the short term interests of a minority. That is what is wrong with what is known as 'capitalism.' And it is a very big wrong.

 

Unfortunately, it is generally held as an article of faith by many that you can't have one (enterprise) without the other (speculation.) I don't see any evidence for this belief myself.

Edited November 3, 2011 by donkey

[L00b 441]

Financial markets and tools need controls, but you were suggesting banning them, rather than applying appropriate controls to them.

I don't believe that I was suggesting banning markets and most financial tools. Rather, further codifying the control (to ensure trading is limited to existing capital, not 'extrapolated' capital - see below) and getting rid of some tools devised to purely enrich (shorting springs to mind) rather than develop. Somehow, reign in the 'speculative speculation', so to call it.

You can't restrict share price as you suggest though, it's meaningless and would be impossible to administer.

I don't have all the answers, C, but...

Shares are priced based on a number of things, but a key one is the perceived potential for future profit, remove that and shares may as well not exist at all because there price is no longer linked to the chance of them generating income.

That is where the system has gone wrong for too long a time IMHO, to the situation where the tail ('future potential') truly and clearly wags the dog ('actual performance and corresponding worth'). There is something clearly wrong with a system that allows the halving of an international multi-$bn company's share price overnight (Olympus) based on mere speculation and gossip.

 

Surely some rules/controls/etc. can now be devised, implemented and enforced, to avoid yet another bis repetita of '29, wherein share prices bear just about no correspondence to a company's actual worth (or, in our more enlightened times (), financial products built from risky never-never money à la subprime mortgages can even be proposed to the market, never mind actively traded).

Edited November 3, 2011 by L00b

[donkey 10]

Surely some rules/controls/etc. can now be devised, implemented and enforced, to avoid yet another bis repetita of '29, wherein share prices bear just about no correspondence to a company's actual worth (or, in our more enlightened times (), financial products built from risky never-never money à la subprime mortgages can even be traded).

 

This is the crux of the matter. One approach would be to introduce a system of 'brakes' - the idea being to identify products and services which are rapidly valuing solely on the expectation of further rises in value (a bubble) - as opposed to a rise in their intrinsic value - and put in place measures designed to stop these 'feeding frenzies' in their tracks, before they gain momentum.

 

The big problem is that global politics is so closely linked to the people and institutions who make vast fortunes from the boom and bust system. It would take a sea change in public opinion and awareness to exert the type of pressure neccessary to impose fundamental change. I'm not massively optimistic about it.

Edited November 3, 2011 by donkey

[lizmachin 10]

That sounds lovely. How do you sign up and how many people do you need for it to happen ? I read the independent occasionally if that's a help.

 

 

You pretend it's 1968. You move to Laurel Canyon and smoke lots of weed and wear a Kaftan and dance around with flowers in your hair. You need a different strategy for 1969.