Is there a solution for Economic Inequality?

Excellent Commentary All...........

Capitalism.....through the means of stock exchanges...creates the highest possible level of value...for the productive assets employed......

This is where the likes of Chavez and Castro are pursuing lower valuations...and thus less money to spread around....thus they are proving just the opposite of what they endeavor to create....

In order to create the optimal wealth levels for the world...the productive assets in each country should be allowed to reach their potential through fully disclosed electronic exchanges...made available to anyone that has access to the internet via personal computers...
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Once the means for the highest levels of value are allowed...then the highest levels of wealth are established...and therefore more wealth is available to be distributed....
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Wealth distribution should be allowed to be a natural process.

Although a person may own assets....other people are required to make the assets productive...Thus people are given part of the distribution....
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Taxes ....and legal largesse should be kept below 10%...such that valuations can be maximized.....Also non-economic legal largesse should be eliminated...

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A very simple example of a working capitalistic society somewhat resembles an ant colony.......

Do not fight mother nature...
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One could also argue that what has taken place ...has taken place in the most non-restrictive country in the world....

But when one looks at new $2500 cars being manufactured in India....one knows that legal largesse alone will put some US businesses out of business...

Thus in a sense...because of the fact that the legalness of the worlds countries is not uniform....this in itself is a form of a worldwide free and natural marketplace...Those countries placing the high cost impositions will fail to keep businesses within their borders...
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One world....one set of rules...one language ....

Perhaps the one language becoming money happens first....and perhaps nothing is wrong with the worlds marketplace after all in one sense...but in another sense the legal largesse is indeed the major impediment....
 
Clearly some people don't understand the importance of path dependance. Even in America, someone who come from a wealthy family is more likely to succeed. It's not because you're rich that you deserve it. Samething is true for those who are poor, they don't necessarily deserve it. The world is complex and you should not look for trivial answers like "he's poor because he's lazy..."
 
And here within lies one of the major capitalism problems with regards to wealth distribution...

http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html

IBM is clearly making an attempt to maximize IBM shares values by reducing costs assuming the same or greater outputs....

Thus theoretically paving the avenue for higher wealth creation....
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However what is happening is that there is a labor shift...thus displacing labor that created the company that is to carry on its activities....

Thus how is the wealth gain going to be shared with the displaced...

Or should it matter...The displaced are displaced ...so what....just a part of doing business...

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Again this is where legal largesse comes into the picture...and this is where the ownership issue is in somewhat of a contrast to the labor issue...
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The solution therefore lies within the ownership of the stock...If employees own shares of the company...then they also enjoy the value in the shares....and should continually adopt themselves towards jobs that maximize their stock holdings that they accumulate for themselves....no matter what the name of the company....

Owning shares is perhaps one solution.....and staying competitive in the sense of always trying to maximize ones ownership of shares in a professional manner...

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In other words ethics such as loyalty are no longer important...just business...

This is exactly what IBM is proving out....nothing more ...nothing less...
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This process is called Wal-Marting............
 
Quote from Voodoo-king:
There will always be people that make or have more than enough money. If these could chose to finance the social good instead of being forced to finance special interests much could be accomplished.
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Fine, standard line. But who will decide what 'more than enough' means, and who decides what the 'social good' is at any one time? Chavez? Geroge Bush? Hillary Clinton? Putin? Blair?

Walmart has done more to deliver cheap prescription drugs than any government plan could have. But those success are less than attractive to the left because a byproduct of their successes is shareholder wealth which is increased (and reinvested) rather than government spending.
 
Quote from joash99:

Clearly some people don't understand the importance of path dependance. Even in America, someone who come from a wealthy family is more likely to succeed. It's not because you're rich that you deserve it. Samething is true for those who are poor, they don't necessarily deserve it. The world is complex and you should not look for trivial answers like "he's poor because he's lazy..."
More...

Vast majority of wealthy people are self-made. But you don't hear about them nearly as often as about (let's say) retard Paris Hilton. Maybe that's why the confusion!
 
The solution for Economic Inequality is lower the standard of live.

This is how the "Out Come Based" education work. You lower the test standard, everybody pass, everybody have a diploma. No body fail. But do we want that?

Economic equality have been tried and failed. It is call communism. Everybody is not richer or poorer than the next guy no matter how hard or little you work. Except, the party boos, of course.

Economic equality make everybody is equally poor and miserable.

Capitalism allow those who can be rich be rich. Those who can't still a little better. Look at China, everybody were poor and miserable when China was under pure Communism . Everybody got much better after China induced capitalism. Those can be rich got rich. Those who can't be rich still got a better job, a better road to walk on, more electricity...etc, from the tax paid by the rich guy.

At the least with economic inequality, you have a rich guy to blame, otherwise there is no body to blame.
 
It is the nature of nature that the strong get stronger and the weak become the prey. Society actually works to create a middle class, which is difficult but begins with education. Eventually, the riches of one side are given back to society (the middle).
 
In argument to Vanessa points I would argue the opposite that as result of capitalism the poor are benefiting from this structure, I will also argue her solutions as well.

The important thing in a society is that everybody is given the opportunity to be successful, opportunity being the right word as we are all born with different amounts of intelligence, motivation and skills, in socialist societies it is very hard to avoid the free rider problem, however in capitalist societies the hard worker receives the benefits of his/her hard work and thus strives to be productive and works hard. Often corruption is mistaken for capitalism, this is wrong. Corruption provides disincentive for entrepreneurship and for working hard as these people are punished, this is why countries like Indonesia/Russia/parts of Africa, have very large inequality.
Generally though this argument comes back to the age old one of growth v equality.
Some would actually argue that inequality is not a problem, shouldn’t brain surgeons get paid more than bartenders, If they didn’t who would want to be a brain surgeon?


More taxes

This again would provide disincentives to work and invest. Since taxes have come down in the United States (70’s) and in Australia/other western countries tax receipts have actually increased, this is a direct result of the increased employment and economic growth experienced by lowering taxes. For more see the Laffer curve or empirical evidence from examples above.
Raising taxes would stifle economic growth and increase unemployment, along with disincentives to work.
Increases in tax receipts I assume Vanessa is what you want as then more income can be distributed to the poor and invested in education etc, lowering taxes would achieve this along with increasing employment and growth.

Increasing minimum Wage

This would lower employment. Firstly much more jobs would become obsolete, as input prices have increase return on investment is not there for some projects, and therefore companies will not invest. Secondly as a result, all goods would become more expensive as a result of increased input costs again making it hard for disadvantaged to purchase everyday things. Thirdly and most importantly the lower skilled would get squeezed out of the market as firms would look to hire the more skilled candidates. For example if the minimum wage increased to US$15 worldwide, as a employer would you hire a college student studying law who would be prepared to work for this amount or a poor uneducated person with much less skills than the uni/college student, most employers would hire the latter causing greater income inequality as the less skilled cant find jobs


Large Multinational companies investing in developing nations

This is quite a good idea and is being done at the moment with great results, miro finance and micro-credit has been a huge success in many countries. However raising minimum wages in all countries would greatly hinder employment/investment in these countries form multinational countries.


The solutions to this are hard and require a whole new thread but a solution will generally punish winners or hard workers in favour of losers and lazy people in my opinion. I would argue that education is the most important thing in this argument as everybody must be given the opportunity to succeed and at the present this is not occurring all around the world, in Australia I feel we are lucky enough where those that work hard and have the ability can get good education using things like HECS. This unfortunately is not the case around the world and this is where the problem lies, not in the capitalist system but in the equal sharing of opportunity.

Overall your argument is a socialist one mine is a capitalist one neither is really right or wrong just differences in opinion, good luck in the assignment.

Cheers
Michael Euvrard
 
Quote from Rehoboth:

So a girl is at college and has become an avid socialist. Her father is a business owner and a free market capitalist. On her most recent visit home they have this conversation.

Father: So how are your grades?

Girl: Fantastic! I have worked really hard and gotten a 4.0. I am learning so much.

Father: That's great! And how is your roomate doing?

Girl: Well, she is partying a lot, skipping classes and not caring so much about school, she is getting probably a 2.0.

Father: Well you should go to the dean and tell the dean to give some of your GPA to your roomate. So you both are closer in GPA.

Girl: WHAT?!?

Father: Give her some of your gpa, you will still be ok at a 3.5 and she could use a 2.5

Girl: That is not fair. I worked very hard to get a 4.0. She doesnt even go to class, and you think I should just give her some of my grades. There is no way I am doing that.

Father: How does it feel to be a capitalist?
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Love that story. And to complicate matters, the more she helps her roommate, the more her roommate can slack off. Eventually, the roommate will expect those extra GPA points to come rolling in. Perhaps one day, she'll have children and the kids who have seen those GPA points roll in time and time again will expect it.

SM
 
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