Ukip! Ukip! Ukip!

[doodab]

The poor are trapped in poverty because they are imprisoned within the the suppressive command and control systems of socialism and the state. They are housed, fed, educated and nurtured by the state. If they were given capitalist style choices (education for instance) they would be empowered by having access to capitalism.

Really? What about all the poor people in countries where there is no, or minimal state housing, feeding, education or nurturing? Before our oh so terrible state came along many people in this country weren't properly housed or fed and weren't educated or nurtured at all. In fact, despite dominating the globe no purely capitalist system has ever in human history provided these things.

I'd also suggest that without the state intervening with respect to making basic education universal capitalism would not have been as successful as it had. It's this investment in education that has led to most of the innovation that actually drives growth and increased prosperity.

it is no coincidence that the poorest areas of UK society are governed and administered by socialist councils.

I think you might be confusing correlation and causation. After all, poor people don't tend to vote Tory.

[doodab]

The beauty of capitalism is that it doesn't distribute wealth evenly. It distributes according to the wants of the people who live by it.

No it doesn't. It primarily distributes it according to the existing distribution of wealth. If you aren't careful then eventually the distribution becomes so unequal that it will lead to the same sort of social disorder that has bought down other social orders.

[doodab]

The thing that isn't generally appreciated is that the "rising tide" effect is a short term effect that will go into reverse over the long term.

Take a simple example where there is a baseline of 100 units of output in year 0, growth in output is 2%, return on capital is 3%, economic output is initially distributed 50/50 between capital and labour and capital accumulates. That is to say the stock of capital increases at 3% a year while the economy grows at 2%.

In the short term although the share of income accruing to labour falls, the amount of real income due to labour rises, albeit not as fast as the income accruing to capital does. This is your much vaunted "rising tide". However after about 25 years the tide ceases to rise, the real income accruring to labour peaks and then it then starts to fall until after 50 years the real income accruing to the labour side of the equation is less than in year zero.

Ergo, those whose income is insufficient to allow them to accumulate capital and who are therefore reliant on labour will see their real income fall over time.

Note that I'm not talking about share of the pie here, I'm talking about the absolute size of the slice. In the long term it gets smaller i.e. wages fall in real terms. This occurs as long as the return on capital exceeds the rate of growth in the economy.

[SpontaneousOrder]

That is to say the stock of capital increases at 3% a year while the economy grows at 2%.

...

This occurs as long as the return on capital exceeds the rate of growth in the economy.

Only problem here is that Ponzi schemes are antithetical to capitalism. So it's hardly fair to claim it as a symptom of capitalism.

[SpontaneousOrder]

Only problem here is that Ponzi schemes are antithetical to capitalism. So it's hardly fair to claim it as a symptom of capitalism.

Also I dare say that that "rising tide" is measured, mistakenly, in income rather than wealth?

[Zero Liability]

I think he's referring to Thomas Piketty's book, which implies as much. It's also coming under increasing criticism, however, for its lack of much of a theoretical framework and concerns about whether the historical data and his projections on it, previously seen as impeccable, is even reliable. The fact that he identifies an 'inexorable' trend under a system of centrally coordinated fractional reserve banking and then attributes it to an inherent feature of capitalism is suspect in and of itself.

[SpontaneousOrder]

I think he's referring to Thomas Piketty's book, which implies as much. It's also coming under increasing criticism, however, for its lack of much of a theoretical framework and concerns about whether the historical data and his projections on it, previously seen as impeccable, is even reliable. The fact that he identifies an 'inexorable' trend under a system of centrally coordinated fractional reserve banking and then attributes it to an inherent feature of capitalism is suspect in and of itself.

Oh, right. I heard Peter Schiff going off on one about that - I didn't pay much attention though because I was already under the assumption that it was just a cheap shot at tapping into the 'Occupy' muppets' ignorance.

I don't know if JFK meant it entirely in monetary terms. I'd assumed not.

[SpontaneousOrder]

Piketty's Envy Problem | Euro Pacific Capital

Lol.

[xoggoth]

I think you might be confusing correlation and causation

I wonder if the two are actually separate. Yes, poverty may make people in favour of more wealth distribution but more wealth distribution can also destroy incentive and make people poorer. A vicious circle or negative feedback as us engineers would have it.

The thing that isn't generally appreciated is that the "rising tide" effect is a short term effect that will go into reverse over the long term.

Most impressive, still trying to work it out.

[tractor]

...

I think the minimum wage is a red herring, the real issue is the tax payer subsidy of big business via tax credits that distorts the market more than the minimum wage

This was one of the other points that I made earlier and I've been at work helping my rising tide and gorging all day so I haven't kept up with it.