Capitalism is broken

[Sqrl]

ManusJustus said:

Sqrl said:

As for the classical view of communism you mention, you pretty much hit on why it sucks...you're forced and threatened to do things. However when you compare this to Walmart employees it is really just nonsense. The communist worker is forced into that position where they have to work with no possibility to move up, the walmart employee put themselves in that position and had other options.

In your final paragraph you're advocating workers owning a share of the product they make, the problem with this of course is that you're not asking the workers to invest in an equavalent share of the company.  Almost anyone can invest in the company they work for in the US and thus purchase the rights to a share of the profits their work produces.  Additionally companies can implement such structures in their own business to increase efficiency (and many do).  Keeping it on a business by business decision rather than a government mandate allows the idea to be fluid and responsive to changes in the market and competitiveness rather than rigid and unresponsive (as all legislation is).

Concerning the Wal-Mart employee, capitalism does dictate how they operate in the same sense that communism dictates how a collective farmer works.  My point here is that in both systems is that personal incentives can lead to people to be more or less efficient.  If the Wal-Mart employee has a chance for meaningful advancement he can be more efficient, if he gets a has a commision for sales he can be more efficient, if he is involved in profit sharing he can be more efficient.  The driving function is personal incentive, and it doesnt matter what name it goes by, whatever system provides more personal incentive will be more productive.

Whether or not a company provides personal incentive has nothing to do with capitalism, capitalism does not preclude companies from providing any form of incentives to its employees.  Capatalism tells companies to run their businesses the way that is most efficient and lets them compete to determine who really is the most efficient...if profit-sharing (or whatever incentive you want to try) with employees is the most efficient way to run a company then it will be reflected in the makeup of the businesses in the economy as businesses with that style will dominate. 

Personally, I think more than likely the best way to motivate employees is going to vary greatly from business to business and from industry to industry.  As a result I think capitalism would be ideal for anyone who thinks those types of incentives would work because they can invest their own money into it and if they're right they will be richly rewarded...if they're wrong however they might lose quite a bit.  But if you're sure enough to advocate for that style of company than you should be sure enough to put your money where your mouth is.  By your theory the advantage you gain in efficiency should give a competitive advantage.

And that really gets to the crux of the matter here for me, I see absolutely no reason why the government should be telling businesses how to incentivize their employees. It is not the government's money at risk, it is not the employee's money at risk, it is the owner's (stockholder's, etc..) money and it should be their decision how that business motivates its employees.

In each system you will have 'un-driven' people who did not advance themselves and end up working at Wal-Mart.  Still, that person is influenced by personal incentive.  Put a person in Wal-Mart without much supervision and he will barely work, but take that same person and only pay them for how much they personally work and they instantly become more productive.  Think of the old time coal mining days when miners put their stamp on carts of coal they personally produced which was much more productive than just paying them to go into a mine for a day.

Concerning the above quote.

The form of ideological forms of communism I mentioned does not force people into positions.  Just as in capitalism, workers are free to choose their profession and they have opportunities for advancement.  The only difference here is that advancement would be decided by the workforce instead of by the ownership, much in the same way labor unions elect a leader.  You could argue that this can be inefficient since the workforce may not be as knowledgable of the business as the ownership, but I would argue that ownerhip's tendency for favoritism and inheritence also leads to inefficiency.

You really haven't differentiated why the ownership would be less efficient than the workforce other to imply that they might play favoritsm.  But based on the premise of your argument the ownership should have the most personal incentive of anyone and thus should be the most efficient, no?After all not only do they stand to gain the most but generally speaking they have the most money invested, have been with the company the longest (ie they started it), and probably even have an emotional attachement to what is their life's work.

I also wanted to say that a business owner cannot simply give money from the company coffers as inheritance...they have to take the money out of the company in some legitimate way.  Whether that is a bonus, a paycheck, etc.. or simply leaving their interest in the company as the inheritance etc...  But again I would point out that since the owner stands to gain the most profit from an efficient and well run company they should be the most efficient manager of it by your theory.

Finally, moving to unions I think you should realize that unions are one of the big reasons the US auto industry has been getting its ass kicked internationally.  It's not because they offer a bad product, they don't, it is because you can get a product of pretty much identical quality for far less from foriegn automakers because they don't have to deal with absurd union rates and benefits.  Those benefits and rates are great for the employees in the short term but in the long term it makes the company less competitive and those jobs dry up and move overseas.  And no matter how you calculate it having no job is 0% efficiency.

Furthermore, in the ideological form of communism I mentioned, workers invest a lot more into their company than they do in a capitaliost system.  When workers own the production, say 100 workers own a cement factory, they invest everything into that factory.  If the factory in not profitable, every worker will lose money.  Compare that a typical captialist system, say where those 100 workers having a garuanteed salary of $50,000 a year with some of their retirement in stock options, they actually have less invested with the welfare of the business.

Do you have any historical example of the form of communism you're referring to or is this something you're brainstorming here and now?  I just want to make sure I understand where you are coming from (and where you are headed) with this.

Finally, and most importantly, I want to say you really didn't address the main point from my previous post.  Namely that you can give employees all of the incentives you are talking about within capitalism should you choose to and that if it is as efficient as you claim it should be the de facto standard because it would give a competitive edge to those companies.  What aspect of what you're trying to do cannot be achieved in capitalism, and specifically why can't it be done under capitalism?