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Saturday
December 24, 2011

Capitalism & Socialism Rightly Understood by Tibor R. Machan

Nozick pointed out that in the libertarian system he presented in his book there is every chance to experiment with a great variety of human associations--he called the “utopias”--provided these do not sanction the coercion of some people by others. And since the kind of associations that “worker owned companies” are by no stretch of the imagination involve any kind of coercion, they are entirely compatible with capitalism wherein the major element is freedom of association, not the pursuit of any particular goal (including profit). (Read more...)
Discuss this Article (44 messages)

Saturday, December 24, 2011 - 12:12pm

And since the kind of associations that “worker owned companies” are by no stretch of the imagination involve any kind of coercion, they are entirely compatible with capitalism wherein the major element is freedom of association, not the pursuit of any particular goal (including profit).

...

He should acknowledge that socialism involves state coercion, especially on the economic front, and capitalism doesn’t. The various non-economic human associations he misidentifies as socialist do not involve coercion, which makes them fit within a capitalist but not within a socialist political economy.

Great point. It's very common for folks to associate capitalism fundamentally with profits -- because the thinker is thinking in a paradigm wherein an end goal is already included implicitly, if not explicitly. But, as you say, the fundamental characteristic of capitalism is freedom (non-initiation of force), not any particular end goal beyond that.

Ed

Sunday, December 25, 2011 - 5:20am

It depends on your viewpoint.

We honor the Renaissance masters of painting and sculpture for reasons of aesthetics, which ultimately rest on metaphysics. When we advocate for a new Renaissance, we are not calling for wars between small states and poisoning your dinner guests while lavishing tax money on oil paintings that put your family in the Nativity. An aesthete is not so concerned with who pays for it (ultimately). We think they should be. State-financed art is morally wrong. But it is still art.

Monasteries are internally communal, but survive by selling into the wider community. (Wine, champagne, brandy, cheese, bread..., medical care, ... university instruction...) The economics are not so important to them except as the structures and functions are valid within their theology. They interpret everything religiously.

Peter Drucker's monumental works on corporations likewise cared little about what the company sold or to whom. Organization theory applies to armies, businesses, governments, monasteries, universities, sports leagues, etc., etc.

We insist that competition be "non-coercive." In the first place, some theorists would deny that this is possible. Creating more pies under capitalism is one thing, but when one pie company runs another out of business, that is competition no different than armies at war, and the business managers and sales directors use the language of military combat in seizing markets and winning customers. For a psychologist, the competition among artists for gallery space or among monastics for important religion duties are analyzed by the same model.

In the 34 years we have been married - anniversary on the 30th - we have always belonged to food co-operatives: Wolf Moon in Lansing, Organ Mountain in Las Cruces, ..., and now Wheatsville in Austin. I served on the board at ELFCO the East Lansing Food Co-operative; my wife served as board secretary. Here at Wheatsville, the cashiers ask everyone, "Are you an owner?" They have a business orientation here. But at ELFCO, the culture was more left wing: we ran ahead of our losses with cash flow, like a ship pushed by a storm. The goal was community. Business just made that possible.

It just depends on what your model is.

You can think of yourself being paid to work or you can think of the company as a vendor selling dollars to your household.

Running a business by aesthetics is bad management, just as painting what a lot of motels want to buy creates bad art.

But as for the key point here, we call them "public" corporations for a good reason. Employee stock purchases were always possible and some companies encouraged that. Corporations are socialist entities - and many of them are coercive, perhaps intrinsically so... which is why we have discussions here on whether there would even be corporations in a truly laissez faire society.

Sunday, December 25, 2011 - 11:34am

Mike,

We insist that competition be "non-coercive." In the first place, some theorists would deny that this is possible. Creating more pies under capitalism is one thing, but when one pie company runs another out of business, that is competition no different than armies at war, and the business managers and sales directors use the language of military combat in seizing markets and winning customers. For a psychologist, the competition among artists for gallery space or among monastics for important religion duties are analyzed by the same model.

That's a weak analogy. "Coercion" involves force or threat of force -- but you blur that distinction. You are looking at the situation through Marxist eyes -- where 'a poor man isn't free to dine at the Ritz' (i.e., if you don't have all you want or even just what others have, then your rights have been violated). Being free to compete doesn't mean being free from competitors who may target you or your products with negative or competitive ads.

Corporations are socialist entities - and many of them are coercive, perhaps intrinsically so ...

Wow. This is an incorrect view of corporations. You are forgetting something crucial: It's not socialist if you can walk away.

Socialism is about forced associations, not associations that you can walk away from.

Ed

Monday, December 26, 2011 - 7:26am

Often friends of liberty tend to embrace what has come to be known as left-libertarianism which claims that business corporations are creatures of the state (a la Ralph Nader). But the correct position is laid out in Robert Hessen's In Defense of the Corporation (1970). By that account, a corporation, not unlike any other association of free men and women, is completely voluntary (in principle). The statist elements are historically accidental, due to the incessant presence of the state in every aspect of society (religion, the arts, education, etc., etc.). But with a revolution such as occurred in America, whereby sovereignty was nearly completely taken from the government and identified as an aspect of citizenship, business corporations became aspects of free enterprise. Of course, it didn't happen completely, just as freedom of the press isn't complete. Yet, in the theory of free market capitalism, there is nothing statist about a bona fide business corporation.

Monday, December 26, 2011 - 9:27am

I am and have been a corporation since July 1983. Sole shareholder, sole employee, sole officer. (And for about 7 years in the 90s, a Cayman's Corp as well.)

I don't find myself inherently coercive. Corporations by themselves are clearly examples of free association involved in commerce--until they bolt themselves up with the guns of state and become part of some kind of corparatist/soft fascism in America. The coercive enabling element is clearly the guns of state, not corporations per se. The blame lies as well with activists who have courted a game where that is often the only means of survival for corporations, first as a defensive requirement, and no doubt later as a goal because they find themselves able to prevail in that enabled cronyfest.

I was a schoolmate at some Ivy League Disneyland with a fuzzy radical, who eventually turned out to be one of the original founders of the WFP, currently a leader of Verizon's telecom workers union in New Jersey. We used to share beers and talk politics and, well, share beers.

I haven't talked to him in 35 years, but what always amazed me back then about his Ivy League chic radicalism was how completely uninformed it was of actual experience working in industry, or in a an actual factory or corporation. His zealous radicalism was a part of his persona, his very DNA--as if from birth. I'd spend my summers as a laborer in a steel fab plant, he'd spend his planning to be the last real savior of the True Working Men and Women in America. We'd come back to Disneyland in the fall, he'd go off on one of his lefty rants, and I'd say "Bob...have you ever even set foot inside of a factory? Do you know what the phrase 'fucking the dog' means, and have you ever heard it used in its proper context? Because I got to know, are you serious, or should I just be laughing at this uninformed Ivy League dufus nonsense?"

And his response was "We don't need to know any of that in order to help the real workers in America" or some such.

And, he meant it. Serious as a heart attack.

Something tells me, he's never installed a single phone or run a single telephone wire. Something tells me he took the direct Ivy League Disneyland-radical / big headed puppet parade leader -- labor organizer leadership track(which has its own well worn inbred path, deviating just slightly from the Wall Street/K-Street path.)

And, that is largely the kinds of folks who knee jerk at the word 'corporation' and involuntarily let their upper lips curl as they snarl out their rote responses.

Monday, December 26, 2011 - 5:58pm

Corporations are socialist entities - and many of them are coercive, perhaps intrinsically so ...

During my last 5 or 6 years of work in the data processing field, I was the sole officer and employee of Class C Corp I formed. I assure you it was not socialist in any fashion, nor was it coercive. Corporations are non-governmental organizations that offer different tax structures and different legal risks to those who own them. They certainly don't coerce. I was in business and it allowed me to be taxed in way that was more like a business, and it shielded my personal property from any law suit that might arise from my business activities.

Monday, December 26, 2011 - 11:38pm

MEM -- But as for the key point here, we call them "public" corporations for a good reason. Employee stock purchases were always possible and some companies encouraged that. Corporations are socialist entities - and many of them are coercive, perhaps intrinsically so... which is why we have discussions here on whether there would even be corporations in a truly laissez faire society.

That was the last paragraph in a longish post which suggested that there are many ways to view a complex thing. I meant that analyzing businesses as Gar Arperovitz, Robert Nozick, and Tibor Machan have done does not exhaust the possibilities. We could focus on religion. We could analyze it by aesthetics.

I was pretty clear about my intention for publicly held corporations. The replies here from sole proprietors Fred and Steve are nice, but not to the point. Laurel and I have been an LLC ourselves. It is just a legal thing. And that is the point: absent government licensing, corporations might not exist.
And I repeat "might."

There is a difference between a firm and a corporation. Not all firms are corporations. Not all corporations are pubicly held. Not all are eternal. We all know that, or should. But the eternal, artificial entity, independent of its owners, managers, and employees is a creature of the state. And maybe that's fine. I have mentioned here before, a science fiction novel, Valentina: Soul in Sapphire about an artificial intelligence that uses electronic filing to become an individual protected under law.

Also, if you look at the broad history of corporations from the Benedictines, to the universities to the Islamic waqf, all received some founding charter. This has roots in Rome where corporate charters were granted to guilds of firefighters and burial societies. Again, the state created the entity. That is not the same thing as a firm.

The Fuggers, Welsers, Medici and other families are famous. Those family firms existed independent of the many principalities in whose domains they did business.

In the Middle Ages, ad hoc partrnerships for business were created by registery with a notery. (This continued into the American West, hence cowboys calling each other "partner" in their argot.) The disadvantage to a partnership is that the loss of one member dissolves the association because you cannot claim the right to contract for a dead man. The corporaton solved that problem.

Socialism is not necessarily coercive any more than capitalism is necessarily exploitative. You can have voluntary socialism. Sweden, Norway, Denmark, and Iceland are proof of that. People are free to leave - John Frederiksen famously took his money away. No one stopped him. At the local level, as I pointed out, we have belonged to different food co-operatives and some were explicitly socialist ... and voluntary. A large body of theory and fact exists for voluntary socialism. See California's Utopian Colonies by Robert Hine (U Cal Press 1953).

As I said, "... many of them [corporations] are coercive, perhaps intrinsically so..."
Many - not all.
perhaps - not necessarily
It is possible for a good company to do bad things, as when Microsoft sued Sun or Mozilla sued Microsoft. Like some real individuals some companies are intrinsically evil, though we grant easily that Tibor, Ed, Fred, and Steve are not among either.

Tuesday, December 27, 2011 - 12:54am

Mike,

Charter, schmarter. I don't care if every company that has ever existed has always required a government charter. Even if it was historically exhaustive, a government charter is non-essential, nonetheless. Nothing in reality requires for there to be a blanket government sanction for the existence/operation of a business. Taking a jaded history and claiming that that has got to be the way it will always have to be is ... well ... malarky.

And a corporation is evil if the people running it are evil. Corporations don't actually exist in a metaphysical sense (i.e., being man-made, they don't exist outside of the people who run them). Corporations aren't individuals -- i.e., they don't deserve individual rights -- but corporations are nothing without individuals. Individuals voluntarily associating with corporations have rights and so, by extension, it will "appear" that corporations have rights (because corporations are nothing but the people who run them). Corporations shouldn't be taxed, only people. Corporations could only be socialist if run by socialists -- which is bordering on being a contradiction in terms (socialism means: no private ownerships).

Borrowing from epistemology, the people in a corporation are the "essential characteristic" of that corporation -- without which, the corporation wouldn't be what it is, just like man wouldn't be man without rationality, animals wouldn't be animals without sentience, and vegetables wouldn't be vegetables without always vegetating all over the place.

Ed

(Edited by Ed Thompson on 12/27, 12:55am)

Tuesday, December 27, 2011 - 7:49am

Michael:

If you've been an LLC, then you know also that you were not at the same time a sole proprietor; I have never been a sole proprietor, I have never filed as a sole proprietor. That is a clearly well defined entity.

As well, whether one person, 3 persons, or 3 million persons, a corporation is an inanimate marionette with idle strings without living breathing human beings making an effort to pull the strings. Any corporation of any size would literally sit idle in a drawer as dusty words on paper, unable to respond to or take any actions in the world whatsoever without the breath of an actual living human being somewhere pulling the marionette strings. A corporation is a commercial form formed under the rules of free association-- free association of actual, living, breathing human beings.

There is a child-like myth propagated by folks just like my fuzzy radical once playmate at Disneyland that corporations are non-human and inherently malevolent actors in the world. That is total nonsense. Corporations do not point guns, are not permitted to point guns -- not even Mobil-Exxon. They do have guns pointed at them, however, and for all of our anti-trust, anti-monopoly mixed economies sensibilities, we forever fail to direct those sensibilities at the real monopolists with guns running loose among us who repeatedly aim monopolistic models of OneSizeFitsAll regulation at some other mythical singular entity called 'the' Economy. They do so, usually, for the latest benefit of an IBM buying influence through a Moynihan or a GE or Solyndra or Harris Corp or Loral or Boeing or whomever.

And, into that coercive fray, at first as a made necessary defensive mechanism, and later as a too often first choice easy path to prevailing over competitors, industry, business, firms, corporations -- basically, anything trying to move in the nation -- seek out preferential treatment from the folks pointing the monopolistic guns. In exchange for a cut of the guaranteed results, unavoidable risk in the universe is shed onto others, and the gun holding grantors and grantees divide up the win-no-lose results while disconnected others, especially the unborn, who pay by having their available tribal credit consumed before their first breath on earth, foot the unavoidable bill for unavoidable risk.

That unholy tribal free-for-some is our dysfunctional soft-fascism/corporatist cluster fuck. The villain is tribal acceptance of monopolistic concentrated power, even in our regulatory centers of power.

Because after all, imagine all the good we could do, plus 8%/yr for 50 years, if only we had access to the Tribe's Magic Stick. Lapel flag pin waving the whole time.

Tuesday, December 27, 2011 - 8:11am

Steve:

During my last 5 or 6 years of work in the data processing field, I was the sole officer and employee of Class C Corp I formed.

Here is how one source characterizes the issue:
In a nutshell, "Section 1706" made it so that the default presumption
for computer consultants was that they were employees, unless proved
otherwise.

For businesses known as "technical services firms" who provide
technical services to their customers (including computer
consultants), Section 1706 removed so-called "Section 530 employment
tax safe havens" that otherwise apply to all other types of businesses
using independent contractors. As a result, if a technical services
firm hires a high-tech worker to perform services for that firm's
customers as an independent contractor, then the firm must prove to
the IRS that this worker is an independent contractor under the
centuries-old "common law" employment test. Even if the firm shows a
strong reason for hiring the worker as an independent contractor --
for example, the IRS approved the firm's practices in a prior audit,
or the treatment conforms to industry practice or a court ruling, all
of which are "safe havens" under Section 530 -- Section 1706 makes
these reasons irrelevant for technical services firms.

The harm to high-tech firms and workers caused by Section 1706 is more
than theoretical. Technical services firms which use independent
contractors -- even if they act in good faith -- can be severely
penalized by the IRS and forced to pay "unpaid" employment taxes
although the contractors have already paid these same taxes in full!
In fact, some IRS auditors use Section 1706 to claim "incorporated"
high-tech independent contractors are not legitimate. Left with only
the common law employment test to prove a worker's status to the IRS,
many high-tech firms will not hire any independent contractors. They
do not want to "attract" an almost-certain IRS audit because the time
and expenses to fight the IRS means that even "winning" the audit is
really a "losing" situation.

I'd love to hear your reaction to the first time you ever heard of IRS 1706...in America. It is still on the books after 25 years. It came about in the 80's to 'pay' for special tax treatment that IBM wanted for its overseas operations. So Moynihan dreams up this swipe at this tiny slice of the self employed, to 'pay' for IBM's overseas tax treatment. ('Pay' for it?) The impact is to shepherd software engineers back into the corral, win-win for soft-fascist IBM buying Moynihan's guns aimed at real people just like you. And me.

Not lawyers. Not accountants. Not photographers. Not bakers. Not house painters. Not drywallers.

A special law aimed only at specific job titles and services. From this 'law':

(d) EXCEPTION. - This section shall not apply in the case of an individual who pursuant to an
arrangement between the taxpayer and another person, provides services for such other person as an
engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker
engaged in a similar line of work.
(b) EFFECTIVE DATE. - The amendment made by this section shall apply to remuneration paid and
services rendered after December 31, 1986.

From the NYTimes:

A Treasury Department study in 1991 also thoroughly undermined the justifications for the law. It found that tax compliance for technology professionals was actually among the highest of all self-employed workers and that Section 1706 probably raised no additional tax revenue and perhaps even resulted in losses, because self-employed workers did not enjoy as many tax-free benefits as employees.

Section 1706 is an example of how Congress enacted a discriminatory law that hurt thousands of technology consultants, their staffing firms and customers. And despite strong bipartisan efforts and unbiased studies supporting that law’s repeal, it remains on the books.

In this fucking America?

regards,
Fred

Tuesday, December 27, 2011 - 8:29am

Anyone:

A Treasury Department study in 1991 also thoroughly undermined the justifications for the law. It found that tax compliance for technology professionals was actually among the highest of all self-employed workers and that Section 1706 probably raised no additional tax revenue and perhaps even resulted in losses, because self-employed workers did not enjoy as many tax-free benefits as employees.

First of all, "raised no additional tax revenue"...by forcing people out of business, which was its intent.

Nobody is the least bit uncomfortable with that policy in this nation?

Second of all, "because self-employed workers did not enjoy as many tax-free benefits as employees"

This doesn't mean 'did not have the benefits.' It means, 'were taxed for providing them for themselves, unlike employees, who were not taxed when provided by their employer for them.' Or else, the observation would not impact tax revenue.

Which begs the question; why would self-employed workers not enjoy as many or few 'tax-free benefits' as employees? What is the economic, ethical, moral, justification for that fact? Why would one group be treated any differently at all, in this regard? What is the justification?

Because indeed, there was a goofy period in the last 30 or so years where I was not only taxed for my health care premiums, but taxed twice. Once when they were limited as non-fully deductible business expenses, and once when I had to declare their value as personal income as a fringe benefit. (The double taxation no longer applies, the law was changed, but did apply during the period mentioned in the NYTimes article in which this study was done, looking back from 1991.)

But why would the self-employed only ever have been required to declare the value of their health insurance as income, and not 'employees?'

At least that part of the law was eventally changed. But that is just one example; this complete tribal bullshit is exactly what has turned our economies into a tribal cluster fuck, racing to the bottom fast. It has no place in this free nation.

Tuesday, December 27, 2011 - 9:01am

Marotta wrote,

"Socialism is not necessarily coercive any more than capitalism is necessarily exploitative. You can have voluntary socialism. Sweden, Norway, Denmark, and Iceland are proof of that. People are free to leave..."

So, the proof that socialism is voluntary is that one can leave the country???? By that standard, pretty much everything is voluntary - why pay American taxes if you can just leave the country?

Because some individuals can form a private organization or even a commune where they practice socialist principles, voluntarily, does not mean that socialism, as implemented by government, is voluntary. When the government implements socialism it is with the force of law - that's not voluntary.

And what is with the reference to capitalism as exploitative? Where is the example of that?

I can't keep my frame of reference clear when considering Michael. He used to be an anarchist, and recently I feel like his post are coming from the far left.

Tuesday, December 27, 2011 - 9:02am

Steve... I'd love to hear your reaction to the first time you ever heard of IRS 1706

Initially it was disbelief and then horrified.

(Edited by Steve Wolfer on 12/27, 9:46am)

Tuesday, December 27, 2011 - 1:05pm

Steve,

Your post 11 was a good one. Regarding this:

I can't keep my frame of reference clear when considering Michael. He used to be an anarchist, and recently I feel like his post are coming from the far left.

I get that same feeling, too. He almost said that socialism isn't really a bad thing -- as long as you only get a little bit of it, like in Scandinavia (i.e., that we should champion a mixed-economy). Next, he's going to say that altruism really isn't that bad of a morality for humans -- as long as they don't over-do it and get pathological with it.

Oh wait, that is another thread ...

:-)

Ed

Thursday, December 29, 2011 - 7:56am

Steve, as you say "Because some individuals can form a private organization or even a commune where they practice socialist principles, voluntarily, does not mean that socialism, as implemented by government, is voluntary. When the government implements socialism it is with the force of law - that's not voluntary."  This applies to capitalism, as well. Here in Austin, the city owns the electric company. That's socialism. In Ann Arbor, we had DTE, the old Detroit Edison, which, while privately-owned, was a legal monopoly. You and I can agree that this is not true capitalism, but then we have to square off against our comrades who claim that Stalin or Mao were not "true" socialism, that "true" socialism is voluntary.

By definition, capitalism is "exploitative" because workers are paid less than the value of the product or service they deliver. Now, clearly, we know that there is more to the problem than that. We know that the socialists stop thinking at Step 1. That was my point: the discussion here stopped at Step 1. As you note above, some socialist communities are voluntary.

There was, indeed, a time, when I self-identified as an "anarchist." It's an easy label. I believe in voluntary association. But a few years ago, I realized that the label does not fit the actual body of thought that I have developed since working in private security and completing several college and university degrees. If I have to point to a pivotal learning moment, it was reading the works of jurist Wolf Devoon. You can find his archive here and I am not about to defend any of it. I'm just saying that Devoon's theory is that government is one way, a very common one, that we instantiate law. Law comes first. So, no, I am not an anarchist. And, for that matter, I never advocated for anarchy here. I only pointed to existing market alternatives to existing government services, just news reporting. You made something else out of it, entirely.

And by the way, I no longer self-identify as an "atheist." It is a convenient label. I do not believe that the universe had a creator. I think that the Earth may have.  I recently failed a Turing Test design to cull Christians from Atheists: both sides outed me as a faker. Many social statuses are ascribed to us by others for their convenience. So, rather than cause confusion, I no longer say that I am an atheist. I just say, "It's complicated."

BTW: IRS 1706 hit me, too.  In 1984, I was a contractor. In 1985, I was an employee of a placement firm ... recruiter, headhunter, body shop, flesh peddler... the new law created a new tier of businesses to reduce the market ineffeciency in the collecting of taxes, if you want to look at it that way. We still file long and always have. As a self-employed writer, I used to get in a rick of 1099s every January, regardless of the equal number of 1040s created by work for GM, Ford, etc., etc. Things have been slow the past few years, but, essentially, what you are depends on how you define yourself, even if the IRS does not agree. It is a principle of law that you have the right to arrange your finances in any legal way. While open laissez faire might be the utopia we dream of, it is not the real world.

And yes, in the real world, you have the right to leave the country. It's pretty easy. Frederikson left Norway. Some countries are not so easy to leave from. In order to leave Germany, the Wittgensteins delivered literally tons (perhaps hundreds of tons) of gold to the Nazis. Leo Szilard traveled lighter: he had a suitcase of mixed currencies and just used his visa. Von Mises was already in Switzerland for the Anschluss of Austria.  It is not so much leaving as getting in. The story of the SS St. Louis is infamous. Of course, here and now, we have this broujaja over "illegal aliens." It's not the leaving; it's the getting in. But in any case, that is the theme of Harry Browne's How I Found Freedom in an Unfree World: everything has a price; and to be free as you want, you may need to pay more than you thought; and therefore you need to decide what is important to you according to your values.

(Edited by Michael E. Marotta on 12/29, 8:09am)

Thursday, December 29, 2011 - 8:02am

Michael:

even if the IRS does not agree

If the IRS does not agree, we always have the right to appeal...to the IRS.

D'OH!

Thursday, December 29, 2011 - 8:30am

Michael:

By definition, capitalism is "exploitative" because workers are paid less than the value of the product or service they deliver.

No, only by Marx's definition, which is flawed and totally incomplete. Because workers are paid a guaranteed ROI for their efforts as wages not at risk, guaranteed by folks who exert their efforts in our economies with ROI totally at risk. Workers are paid discounted wages as payment for that guarantee.

Workers in America traditionally have had three choices on the topic of facing unavoidable risk in the universe:

1] Labor with ROI totally at risk. Unlimited risk, unlimited reward. No guarantees. It is totally possible to exert effort under this risk model for three years and end up roadmeat, happens every day. When an ROI at risk laborer gets stiffed by the unavoidable downside of risk, he does not have a cause of action, the balance of the tribe does not(and should not)come running to eat his risk for him. That is the discipline of managing risk, and those who can, do, with proper incentives for doing so.

2] Labor with ROI guaranteed at a discounted rate of return guaranteed as wages. Wages are paid regularly on a guaranteed basis. No tickee, no washee. A wage worker is still at unavoidable risk of losing his job, but when he does, he stops making effort. His ROI is limited but guaranteed by others, ultimately, those making effort with ROI at risk. When a wage worker is stiffed, he has a cause of action, the balance of the tribe will come running with the law.

3] Totally self modulated participation in risk-reward model by way of equities. Individuals decide how much risk/reward they want to personally take on, even as they are primarily guaranteed wage earners.

There is another totally criminal method of managing unavoidable risk that has reared its ugly head, and that is, to artificially shed risk onto others far away. Risk isn't avoided, it is simply shed onto others. A state gun of some kind is usually involved in this model. The 'socialization of risk.' Complete nonsense. It is risk management with no discipline whatsoever. It is a tribal race to the bottom.

It is as if Marx and his acolytes believed in a world of risk management where it was possible to have our cake and eat it, too. That, the entire tribe must ignore the guaranteed nature of wages as ROI, and focus instead on the fact that such guaranteed wages are paid at a discount--without acknowledging what value received (a guaranteed rate of return) the discount is for. Gee, why is this person exerting effort on a guaranteed basis receiving less than this selective pile of folks who labor with ROI totally at risk(as long as we all ignore this other pile of roadmeat that took on risk and lost...)

Marx is not only flawed, but deeply and severely flawed. The foundation for his entire schtick is without basis, an almost child like view of the economies, or I should say, The Economy.

Why should wages paid on a guaranteed ROI basis be the same as compensation totally at risk? The only way to make that argument is to blink away the reality of the downside of risk often experienced by those who guarantee the wages of others, even if it is at a discounted rate of return.

It should be at a discounted rate of return, to reflect the value of the guarantee.

It is as if Marx and his acolytes believed in having your cake and eating it, too.

Well, that's ok...for children to believe. But not for long, and not by a nation of adults living as peers.

Marx is childish garbage, easily dismissed, and I don't care how many children have swallowed his convoluted and yet at the root of it simple minded nonsense.

Thursday, December 29, 2011 - 12:10pm

By definition, capitalism is "exploitative" because workers are paid less than the value of the product or service they deliver.

Michael, that is the socialist definition of capitalism. Those who believe in free markets understand that the voluntary agreement between the employer and employee is not exploitive because the employee likes the wages better than the time and effort given up as an employee, and better than attempting to be a employer (which may offer more money, but only at the cost of more risk, and usually at the added cost of time and effort required to first acquiring the capital to place at risk).

There was, indeed, a time, when I self-identified as an "anarchist."

Michael, my objection was that an anarchist is NOT an Objectivist. Since you no longer 'self-identify as an anarchist' I'll not repeat my arguments. But your current way of phrasing your position on government is that "it is complicated" is peculiar. Is that a kind of agnostic position regarding minarchy? Maybe minarchy is the best solution, but maybe it isn't?

Objectivists are able to grasp that the protection of individual rights is best done by instituting a government whose purpose is the protection of those rights, and that is limited to actions that don't violate those rights. It isn't that complicated.

Thursday, December 29, 2011 - 12:11pm

the claim that corporations are creature of the state is an old and tired claim.

Friday, December 30, 2011 - 7:09am

Mike M.,

I agree with Fred and Steve that you are viewing capitalism (or just "corporations") through the cloudy lens of Marxism. See here for details.

Ed