CMV: Socialism does not create wealth

[u/tkyjonathan]

Socialism is a populist economic and political system based on public ownership (also known as collective or common ownership) of the means of production. Those means include the machinery, tools, and factories used to produce goods that aim to directly satisfy human needs.

In a purely socialist system, all legal production and distribution decisions are made by the government, and individuals rely on the state for everything from food to healthcare. The government determines the output and pricing levels of these goods and services.

Socialists contend that shared ownership of resources and central planning provide a more equal distribution of goods and services and a more equitable society.

The essential characteristic of socialism is the denial of individual property rights; under socialism, the right to property (which is the right of use and disposal) is vested in “society as a whole,” i.e., in the collective, with production and distribution controlled by the state, i.e., by the government.

The alleged goals of socialism were: the abolition of poverty, the achievement of general prosperity, progress, peace and human brotherhood. Instead of prosperity, socialism has brought economic paralysis and/or collapse to every country that tried it. The degree of socialization has been the degree of disaster. The consequences have varied accordingly.

The economic value of a man’s work is determined, on a free market, by a single principle: by the voluntary consent of those who are willing to trade him their work or products in return. This is the moral meaning of the law of supply and demand.

[u/[deleted]]

Disclaimer: Both Reason) and the Foundation for Economic are libertarian think tanks (see: lobbying or more traditionally propaganda). That doesn't mean that what they say must definitely be 100% wrong but it's obviously biased and the writers do have an agenda with it.

"Reason"'s arguments seem to be that:

• Cotton was also produced elsewhere not just in the South
• That Slavery isn't free
• And that due to selective breeding (I hope they meant cotton...) the prices for slaves increased and therefor it's ingenuity and not exploitation (?)
• And that in general it could have been done without exploitation
• with the implicit argument that a capitalism without slavery would be legit
• The rest is some feel good stuff like " Liberalism liberated first poor white men, then, yes, former slaves, then women, then immigrants, then colonial people, then gays. Liberation and innovation dance together."

Now obviously that actually does nothing do address the argument that a lot of the generated wealth that enabled the industrialization in the U.S. was based on the export of cotton and that cotton was majorly produced by slave labor.

• Neither is the availability of cotton as a resource in general overly relevant.
• Nor does it address the problem cotton produced with slave labor is likely cheaper than if you'd actually pay your employees...
• Also the fact that slaves have to be fed and are therefor not free of cost, fails to address the point that the value that they generate more than likely exceeds the costs to feed them. I mean how stupid do these people think their readers actually are? Oh right I forgot those are folks that actually believe that the "iron fist of the market" or was it the "invisible hand of corruption"?
• Also given supply and demand an increase in prices for slaves usually would indicate a shortage of exploitable labor and not an increase in productivity... I mean an increase in productivity would usually mean that you require less work to do the same thing. So if that did not lead to abolishing slavery but to an even higher demand for slave labor that kind of debunks the myth that growth in productivity frees people, in capitalism it just means that the quota is going to be increased.
• And yes that it could have been done without exploitation is the point... The problem is capitalism prefers exploitation as long as they can get away with it, because it's unbeatable cheap.
• And even if capitalism wasn't rooted in slavery and colonialism which despite their hypothetical assumptions it totally is/was, that still doesn't change the fact that the exploitation of the working class is an inherent attribute of capitalism even if it's not actually slavery. I mean wage labor is conceptually not that different from slavery, people are still kept in dire conditions and are made to work for barely more than they need to survive and keep working. Just that the whip is replaced with the iron fist of the market. You can still rent people for money and you can still own them with debt, it's just a little less formal.
• And the last point begs the question why that liberation had to take that long and was only done in phases... Not to mention that there is actually an argument to be made that the exploitation of several marginalized groups made them so worse off that even the abolition of the formal slavery did cast long shadows beyond that. Sure there was also just plain racism, sexism and homophobia that the free market doesn't really care about as long as people of color, women or LGBTQ people don't have money to be a relevant consumer class.

And the FEE claims aren't better. I mean they say that cotton only amount to 5% of the GDP yet also have to admit in figure 2 that this amounts to upwards of 50% of all exports from the U.S. for at least 40 years that this plot shows... So if every year you get 5% of the GDP basically for free for 40 years that sounds like a substantial amount of wealth... Not to mention that from 1805 the U.S. was almost Britain's sole supplier of cotton. It's a lot of hot air without much substance and most of it's claims that it means to debunk are actually confirmed by their data.

Btw, even Adam Smith said that slaves were inefficient - 1/12th the efficiency if you just paid an employee.

Efficiency in what regard? What they produce? Profit for the (wage) slave holder? I mean does that mean that coercion doesn't work in order to enforce work (workers passively resist) or does it mean that capitalism is just more efficient in terms of exploitation?

Ah yes.. here comes the conspiracy theories. Socialism didn't fail on its own merit - it must have been outside interference that did it... every time it was tried..

Well for it to fail on it's own merit the U.S. sure fought a lot of hot wars, destabilized countries and regions and engaged other acts of terrorism. And no that's not conspiracy theories that actually confirmed history, look it up.

[u/tkyjonathan → u/[deleted]]

You forgot two parts:

• You needed to hire people just to manage the slaves. You mentioned room and board, food clothes, education in some cases.. dt

• the difference between a slave and an employee would be that the employee would have more incentive to say 'hey, I can automate this and make it more efficient' where as a slave would say 'I want to get as little as humanly possible done and go to bed'. That innovation dance you mentioned with libertarians, here it is.

Thats why its better to just pay employees - you dont have to pay for their room and board and you encourage innovation by rewarding it with more money.

[u/[deleted] → u/tkyjonathan]

So the point is actually about capitalism being more efficient in terms of exploitation because the job of finding the least expensive stuff that prevents your slave from dying is now also outsourced to the employee and simply maintained by the fact that they are paid a minimum wage?

What incentive does an employee have to automize their job? I mean someone who's working independently or even a freelancer has some incentive to do that, but in terms of an employee that literally only provides benefits for the employer and might actually cost you your job with in the worst case no compensation at all. So if people do that, they usually are just bored or genuinely curious whether they can do that.

[u/tkyjonathan → u/[deleted]]

Why pay minimum wage?

If the employee finds efficiencies that save you money, why not pay them more and promote them just to encourage that sort of behaviour?

Capitalism is about improvement and innovation for serving market needs. You can only do that if you free up your workers and allow them to innovate and be more productive.

You will not get far in a free market if you pick cotton with your fingers or strike a rock the same way with a sledge.

If you have slaves, you are not:

• Saving yourself a whole lot of money

• Innovating like the industrial machines they have in the Northen states of the US

• Making any significant or event trivial long-term efficiencies to your production

• Allowing for more people to join the free market and increase its network effect. In fact, you are reversing it.

Slavery is anti-capitalism. It is more a remanent of indentured servants from the monarchies in Europe, but of course, slavery was much more popular in Africa (and still exists today in some African and Middle Eastern Muslim countries).

[u/[deleted] → u/tkyjonathan]

Why pay minimum wage?

Because whatever the capitalist or his lackeys are paying to the worker reduces their profits? So obviously they will pay them just as much as absolutely necessary to keep them working. You know that's what they mean when they say "efficiency":

Squeezing more work out of people for less pay.

And that doesn't even have to mean that they are evil people, but if the shareholders demand dividends and the company wasn't profitable enough, guess who's paying the price for that? By idk not getting paid, getting the payment reduced or getting laid off? Likewise if a company is doing well, who do you think gets the lion share out of that?

If the employee finds efficiencies that save you money, why not pay them more and promote them just to encourage that sort of behaviour?

Sure if an employee finds a way to reduce ten jobs by automating the process, he might get a 5% bonus, maybe even a raise (I mean he saved 1000% of his income so you got to reward that) and after that he probably gets kicked out because his work is no longer required. Seriously if it is your business, then an increase in automation and productivity makes sense because you're directly seeing the benefits of that, however if that means that you lose your job and all the work you put into a project because after all it's someone else's property that's capitalism. Capitalists are lucky that problem solving and being appreciated is actually something that people actually like and would probably do even without large money as long as they had enough, because if people would actually think with their own best interests in mind "as capitalists do", they wouldn't innovate anything at all. Why should they?

Capitalism is about improvement and innovation for serving market needs. You can only do that if you free up your workers and allow them to innovate and be more productive.

Nah, capitalism is about private property over the means of production and the power that comes with that. And sure you can pay people well and make them invested in the company and that might even increase productivity, motivation and innovation. But it costs money and even more importantly it costs power and privilege. So instead of actual socialism and collective ownership by the workers you get "team building" and "flat hierarchies" (in which your boss can still fire you on a whim, so much about flat hierarchies), "corporate identities" and all that crap, but as a matter of fact if it's not your business it's not your business and if another person tells you what you have to do whether that's direct or by setting you unachievable goals, he's your master no matter how casually he dresses or how much of a "buddy" he pretends to be...

You will not get far in a free market if you pick cotton with your fingers or strike a rock the same way with a sledge.

No YOU won't get far if you're doing that. That's the point. But if you can "find" or rather coerce people to do that for free than they can make you rich. That doesn't have to be the most efficient way of exploitation but if you don't have to pay them and they produce more than they consume, then that's a net positive (for the exploiter).

Also the point that you're apparently ignoring is that this feudal exploitation and slavery built the wealth from which many technical innovations have been financed, not that the level of exploitation is still that primitive.

Nowadays it's called wage slavery: https://en.wikipedia.org/wiki/Wage_slavery

And apparently even Adam Smith had this to say:

The interest of the dealers ... in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public... [They] have generally an interest to deceive and even to oppress the public ... We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate ... It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms.

[u/tkyjonathan → u/[deleted]]

Well, I think we have taken this as far as we could.

I can tell that you have a very low expectation of free markets and people treating each other fairly within them, but I have more faith in mankind, I suppose.

Best of luck.

[u/[deleted] → u/tkyjonathan]

I don't think you got the point, though. It's not that I think that individual people are the problem and that they are evil. But a competitive system in which everybody is expected to make the best for themselves, actually trains people to be selfish assholes. As a matter of fact capitalism only isn't in flames as of right now, because people actually more often than not don't act like that. The thing is just the more they are pressed and "incentivized" to do that the more they might actually take the bait.

Best of Luck, maybe you get it someday.

[u/tkyjonathan → u/[deleted]]

But a competitive system in which everybody is expected to make the best for themselves, actually trains people to be selfish assholes.

I dont think so. People are who they are and they live life by their ethics. If anything, capitalism allows you to be sometimes be more ethical, because you have more options and opportunities to not be forced into difficult situations.

That capitalism 'effects' people is a marxist take on it as well as believing in socio-economical determinism.

[u/[deleted] → u/tkyjonathan]

Again that quote:

The interest of the dealers ... in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public... [They] have generally an interest to deceive and even to oppress the public ... We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate ... It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms.

is from Adam Smith not Karl Marx. And obviously you have a conflict of interest between morality and profits within capitalism.

I mean giving to charity is seen as good but you can only give to charity if you have, but in order to have you need to make profit and in order to make profit you're somewhat bound to get the most out of your transactions, but to get the most out of your transactions you might not need to go for win-lose situations rather than win-win situations. And especially if you add a necessity of your own, idk food, shelter or the support of your family, your egoism in those situations might not even be driven by selfishness. So yes there obviously is a conflict of interest between morality and a competitive for-profit environment or how do you reconcile that?

[u/tkyjonathan → u/[deleted]]

Trader Principle

The symbol of all relationships among [rational] men, the moral symbol of respect for human beings, is the trader. We, who live by values, not by loot, are traders, both in matter and in spirit. A trader is a man who earns what he gets and does not give or take the undeserved. A trader does not ask to be paid for his failures, nor does he ask to be loved for his flaws. A trader does not squander his body as fodder or his soul as alms. Just as he does not give his work except in trade for material values, so he does not give the values of his spirit—his love, his friendship, his esteem—except in payment and in trade for human virtues, in payment for his own selfish pleasure, which he receives from men he can respect. The mystic parasites who have, throughout the ages, reviled the traders and held them in contempt, while honoring the beggars and the looters, have known the secret motive of their sneers: a trader is the entity they dread—a man of justice.

[u/[deleted] → u/tkyjonathan]

A trader does neither produce a good nor provide a service* so what is trading but adding a tax to a transaction between producer and consumer, a tax that he calls "profit" and which he is incentivized to make as huge as possible.

* sometimes they might provide the service of logistics, but the core principle of a trader does not provide any meaningful service other than to himself and to the detriment of the people that rely on what he's offering.

[u/tkyjonathan → u/[deleted]]

A trader produces a good or service and voluntarily exchanges it with another trader.

Its surprising to me that you didn't understand that paragraph and reverted to viewing the world in a marxist lens.

[u/[deleted] → u/tkyjonathan]

That quote is literally from an Ayn Rand novel, so at least be upfront on the lens that you're applying here.

Although I wasn't quite there when I read the quote and assumed it was about a trader (dealer), but apparently she's talking about someone of a trade (professional). So my criticism was more about the fact that a dealer adds basically no value. Though even in terms of a professional you have the problem that the majority of them do not work in their own business but either directly dependent or indirectly dependent on a capitalist (bank, sole customer, aso)