Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Keep posting those links. People need to be reminded every now and then how fragile heir freedom is. Hitler, Stalin, Mao reminded us in the past now we have LB.
Awes! I was so waiting for your entrance; I am sure many were. The Godwinization of Braham, how can it get any better than that with you on this forum?
It's true, anyone can become one of those 62 in the land of opportunity where the streets are paved with gold. As they say, all you need is a dollar and a dream. Only problem is Powerball is now $2. So revision: All you need is $2 and a dream and your odds are only 1 in 292 million. If you think about it, your odds of being just born one of those 62 Norse Gods--7.125 billion people divided by 62--are 1 in 115 million. So you are 2.5 times more likely to be born a demigod than win the Powerball. So maybe in the next life, we'll be reborn as one. Who knows? Keep chasing those rainbows!
Awes! I was so waiting for your entrance; I am sure many were. The Godwinization of Braham, how can it get any better than that with you on this forum?
Wrote the person who thinks economics is the study of echos.
I've been trying to figure out which MFO posters are among those 62.
Was going to suggest Ted - but he's already excluded himself. Others have made fortunes in junk bonds, gold, and investment advising writing and publishing - perhaps not to the degree needed.
I've been trying to figure out which MFO posters are among those 62.
Was going to suggest Ted - but he's already excluded himself. Others have made fortunes in junk bonds, gold, and investment advising writing and publishing - perhaps not to the degree needed.
Yea, I was wrong about Ted too. What a let-down. Oh well, I guess he is still our favorite Ted even if he lives outside the top eight tenths of a millionth percentile.
The reference article reports the obvious when you get to pick the threshold numbers. But it does so in a somewhat inflammatory manner. On the surface, it appears to be manifestly unfair. But is it so?
It was written by an agency that has a focused agenda. The agenda should always be recognized when assessing the merits of any research. It is likely to be honest (accurate facts reported), but its trustworthiness might be questionable (selection of facts and omissions to satisfy its agenda). Such is the case with the Oxfam world charity organization.
The world’s Capitalistic systems generate winners and losers. That’s the nature of the beast. Its goal is to grow the economic pie, but the distribution of that pie is random and mostly uneven. It is nearly impossible to project which movie or new product will be a huge success. To a large extent, randomness rules our lives. With apologies to author Jude Wanniski, that’s the way the world works.
Karl Marx was on target when dividing the population into two groups: the bourgeoisie and the proletariat. Of course, as history has proven, he was dead wrong on the final outcome. Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses.
And those guys and gals who are the influential forces driving capitalism (in terms of finance and in terms of innovative ideas) are amply (perhaps over-amply) rewarded for their inventiveness, persistence, and risk taking. There is a striking correlation between these folks and those that populate the 62 wealthiest billionaires list.
The original reference does not directly give the richest billionaires in the world. Here is a Link to that interesting list:
In general terms, the list can be bifurcated into two groups: those who inherited their wealth and those who earned it. Those who earned it dominate the listing and are familiar names. Not many would argue that Bill Gates, Amancio Ortega, Jeff Bezos, Larry Ellison, and numerous others on that top 62 listing have not benefited most of us and others around the World. They pioneered transformational industries; they made things happen in a positive direction.
They earned what they acquired. I do not begrudge them a penny of their rewards. It’s puzzling that some folks easily accept the outsized salaries that professional athletes receive, yet take issue with the rewards accumulated by these industry giants. Go figure?
Disclaimer: I am NOT a member of the elite 62. But I'll keep trying.
It’s puzzling that some folks easily accept the outsized salaries that professional athletes receive, yet take issue with the rewards accumulated by these industry giants.
I agree...and throw actors/actresses in there, as well! At least pro athletes have quantifiable talent!
@MJG You say: "Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses." This is factually incorrect. It produces to satisfy the needs of those with financial capital. At this it is often efficient. The distinction is quite important. Consider someone with a lot of capital--say one of the 62 billionaires discussed. If he wants to buy a yacht with the name of his dog on it and has the money to do so, the market will efficiently satisfy that desire and he may get competing bids from yacht manufacturers. Now consider the many millions of people without financial capital--a significant portion of the masses you described. They have an anticipated and directed need for food, shelter and healthcare, yet the market does not efficiently satisfy their needs. The market is only efficient at satisfying the needs of those with money. The more money you have, the more efficient the market should be at satisfying your needs. The less you have, the less efficient it will be.
In some of the countries Oxfam in particular is looking at the vast majority of people have little to no financial capital. So their needs are not satisfied. Citizens of these countries still possess human capital, but no way to translate that human capital into much if any financial capital in a modern market-based economy. The educational infrastructure, the technology and the access to financial capital isn't there for them. So they go hungry.
But there are even implications for developed nations. Consider someone who lives in a poor neighborhood in the U.S. Because the neighborhood is poor supermarkets often will not locate there. The person may not be able to afford a computer, an Internet connection or be viable for a credit card. As a result, they cannot comparison shop for the best deals online. They must shop in their own area and buy from the local grocery stores which gouge them on food prices--a common practice in impoverished communities. They do not get their needs efficiently satisfied.
There is a much finer nuance to it even within earned which explains the reaction or lack of it to the salaries of athletes and entertainers. Bay Area wealth is a good illustration of that. While there is wealth envy everywhere, there isn't much animosity to people like Bezos or Musk or Jobs or the huge number of tech founders that created companies. This is not that much different from athletes or actors because their wealth is perceived to be directly related to their performance in a way everyone can see. That is the good kind of wealth acquiring worth aspiring to. This is what makes capitalism great. It is not a bad thing and clumping these people with some statistic about all wealthy from the left side of the spectrum is not productive.
Just talk to a baseball fan when their team isn't winning and they will rant about the owners being too greedy about paying enough to get good players. If people stop paying for the entertainment value of athletes or actors their wealth stops. People get that so not as much begrudging.
On the other hand, the reaction to wealth of financial leaders is very different (or even highly paid CEOs). There is a perception (and not without some justification) that perhaps this wealth wasn't "earned" but rather acquired by gaming the system at the expense of the workers or their customers and that they have managed to game the system so they cannot lose even if they do not perform. This is a problem and explains a lot of animosity towards wealth. Clumping this kind of gaming the system to acquire wealth as many on the right side of the spectrum tend to while pointing at the former is I think also unproductive. Not the kind of wealth I would aspire to.
You can see some nuances of it even in Apple. No one begrudges Steve Jobs for the wealth he acquired. But there is an increasing animosity to most of the executives at Apple including Tim Cook who are becoming billionaires without any tangible performance other than possibly getting a free ride from the momentum Jobs created with his brilliance. It is not that they are not doing what is a tough job, but there is the feeling that making huge amounts of wealth even when "earned" should be limited to those that have taken huge risks and have shown brilliance in advancing industry and perhaps their wealth should be better shared with the people they depend on for their "earnings". I am sympathetic to this limited criticism of wealth.
All wealth is not created equal even when "earned".
@MJG You say: "Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses." This is factually incorrect. It produces to satisfy the needs of those with financial capital. At this it is often efficient.
@LewisBraham, you keep using the word factually to support what just follows from your definition based on some ideological framework.
Capital flows to where there is a good chance of getting a return. This is because such decisions are made by people who want a return on capital. And they are not dumb. Just as labor migrates to where the best salaries are (just that capitals can flow much more easily). Nothing wrong with any of this.
As the world I live in amply demonstrates, capital does not always gets its return and so like evolution, the things that survive are those where there is sufficient return. This would apply even if the structure was doing so was very labor friendly (as is the case in most startups) and the capital has to be satisfied by what labor produces or not.
I think you would have a much better chance of convincing someone of the problems within the system if you didn't try go portray everything as some epic battle between capital and labor where capital is the devil reincarnate with magical powers. Unless you just want a ranting match between the pigheaded ideologists on the other side rather than arrive at some solutions.
@vkt I am not talking about investment capital. I am talking about financial capital, i.e., currency/cash/doubloons and the market for goods and services. You are misunderstanding me again. When people buy food or luxuries, they are not looking for a return on their investment. Perhaps I should've just said money up front, although I do a few sentences in. I think mainly you are arguing with some left-wing bogeyman in your own mind. What I am talking about is the production and consumer side of capitalism, the question as to whether what the system produces efficiently satisfies the "masses" needs as MJG said. It does not for many people.
@LewisBraham, I may understand you position better if you were clear about what you actually mean.
You refuted @mjg's statement about Capitalism as factually incorrect. Perhaps you misunderstand what he was saying. All that statement says is that Capitalism as an economic doctrine encourages the production of things for which there is a market. The product may be luxury goods for the 1% or cheap $0.25 hamburgers for the masses which is actually a very efficient system for that product. the economies of scale actually work in favor of mass products than one-of yachts. The ability for capital to flow when justified by a return, investment capital as you call it, is what defines Capitalism. This is "factually" correct.
Deleted some additonal parts here after posting as I may have misunderstood you. Will wait for clarification on what you mean before advancing that.
@vkt. What MJG said and what you just said are two different things. MJG said: "Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses." For a market to exist in capitalism it requires people with the financial resources to support it. There are many people with needs who do not have the financial resources to satisfy them and there is nothing particularly "judicious" about their lack of satisfaction. Nor is there anything particularly judicious about how the markets satisfy the "needs" of people for certain luxuries while others go without. The demand for meat is a classic example. It takes several pounds of grain feed stock to produce one pound of meat. Many people in developing nations cannot afford meat and also are losing access to grains that could sustain them so that meat can be produced for wealthier nations. The market will always satisfy the highest bidder for a good or service even at the expense of others who may have a greater human need for that good or service than the bidder.
And by the way the 25 cents hamburger--more likely a dollar today--is a dollar because the U.S, government subsidizes the corn industry, which is the primary feed stock for U.S. beef. So that isn't really capitalism by itself satisfying human need. And by the way, the $1 hamburger is crap and terrible for people's health. And those people may actually have a desire for healthier food they can't afford in the U.S. Meanwhile in the developing world they can't even afford the $1 hamburger let alone the grain being used to produce it.
@Lewis Braham: "And by the way, the $1 hamburger is crap and terrible for people's health." Are you saying hamburgers are Un-American ? I'm reporting you to Ronald McDonald, the BurgerKing, and Dave Thomas's daughter. Where's The Beef ? Ted
I see by the firestorm of replies that my insipid post captured your attention. I thought that my comments were merely conventional, commonsense economics.
I believe that “Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses,” is not controversial in a Capitalistic society. Apparently my statement is not clear enough; it can be interpreted in several conflicting ways, some of which are highly emotional.
That was definitely not my intention. I casually wrote that line from the perspective of the business person; an entrepreneur who rushes to fill the needs of a luxury goods client or of a hungry, poor public. My intended meaning was along the lines that MFOer vkt extracted from my post. Capital is risked for potential profit. It is risked to satisfy an actual need, or is created by a not so subtle advertising campaign.
A boat maker will adjust his mixed production of yachts, of 18-foot power boats, and of row boats (do they still sell these?) to fulfill the demands of his customers. My statement was no deeper than that. I’m imagining a mountain out of a molehill at this moment.
I was thinking about how difficult that mix-and-match task is to execute with an end profit to cover all costs. The percentage of startup businesses that fail to survive their first 5 years is high. Specific business category dependent, failure rates from over 50% to as much as 80% are often reported.
All too frequently, new businesses crash and burn. When I wrote what I believed was an innocuous summary line, I was thinking about XFL Football, about Pets.com, and about the Edsel, all businesses that quickly crashed, burned, and don’t exist now. By the way, I bought an Edsel at a terrific price after a discontinue production announcement.
I suppose I need to thank you for your interest? Maybe not?
Comments
Regards,
Ted
Regards,
Ted
Ted don't need no stinkin' Norse gods or slavery as long as he has those widespread Ayn / Koch fantasies.
Was going to suggest Ted - but he's already excluded himself. Others have made fortunes in junk bonds, gold, and investment advising writing and publishing - perhaps not to the degree needed.
that's good!
The reference article reports the obvious when you get to pick the threshold numbers. But it does so in a somewhat inflammatory manner. On the surface, it appears to be manifestly unfair. But is it so?
It was written by an agency that has a focused agenda. The agenda should always be recognized when assessing the merits of any research. It is likely to be honest (accurate facts reported), but its trustworthiness might be questionable (selection of facts and omissions to satisfy its agenda). Such is the case with the Oxfam world charity organization.
The world’s Capitalistic systems generate winners and losers. That’s the nature of the beast. Its goal is to grow the economic pie, but the distribution of that pie is random and mostly uneven. It is nearly impossible to project which movie or new product will be a huge success. To a large extent, randomness rules our lives. With apologies to author Jude Wanniski, that’s the way the world works.
Karl Marx was on target when dividing the population into two groups: the bourgeoisie and the proletariat. Of course, as history has proven, he was dead wrong on the final outcome. Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses.
And those guys and gals who are the influential forces driving capitalism (in terms of finance and in terms of innovative ideas) are amply (perhaps over-amply) rewarded for their inventiveness, persistence, and risk taking. There is a striking correlation between these folks and those that populate the 62 wealthiest billionaires list.
The original reference does not directly give the richest billionaires in the world. Here is a Link to that interesting list:
http://www.mirror.co.uk/news/world-news/who-62-billionaires-more-cash-7197275
In general terms, the list can be bifurcated into two groups: those who inherited their wealth and those who earned it. Those who earned it dominate the listing and are familiar names. Not many would argue that Bill Gates, Amancio Ortega, Jeff Bezos, Larry Ellison, and numerous others on that top 62 listing have not benefited most of us and others around the World. They pioneered transformational industries; they made things happen in a positive direction.
They earned what they acquired. I do not begrudge them a penny of their rewards. It’s puzzling that some folks easily accept the outsized salaries that professional athletes receive, yet take issue with the rewards accumulated by these industry giants. Go figure?
Disclaimer: I am NOT a member of the elite 62. But I'll keep trying.
Best Wishes.
Why is the freedom of heirs any more fragile than anyone else's?
I agree...and throw actors/actresses in there, as well! At least pro athletes have quantifiable talent!
Regards,
Ted
In some of the countries Oxfam in particular is looking at the vast majority of people have little to no financial capital. So their needs are not satisfied. Citizens of these countries still possess human capital, but no way to translate that human capital into much if any financial capital in a modern market-based economy. The educational infrastructure, the technology and the access to financial capital isn't there for them. So they go hungry.
But there are even implications for developed nations. Consider someone who lives in a poor neighborhood in the U.S. Because the neighborhood is poor supermarkets often will not locate there. The person may not be able to afford a computer, an Internet connection or be viable for a credit card. As a result, they cannot comparison shop for the best deals online. They must shop in their own area and buy from the local grocery stores which gouge them on food prices--a common practice in impoverished communities. They do not get their needs efficiently satisfied.
There is a much finer nuance to it even within earned which explains the reaction or lack of it to the salaries of athletes and entertainers. Bay Area wealth is a good illustration of that. While there is wealth envy everywhere, there isn't much animosity to people like Bezos or Musk or Jobs or the huge number of tech founders that created companies. This is not that much different from athletes or actors because their wealth is perceived to be directly related to their performance in a way everyone can see. That is the good kind of wealth acquiring worth aspiring to. This is what makes capitalism great. It is not a bad thing and clumping these people with some statistic about all wealthy from the left side of the spectrum is not productive.
Just talk to a baseball fan when their team isn't winning and they will rant about the owners being too greedy about paying enough to get good players. If people stop paying for the entertainment value of athletes or actors their wealth stops. People get that so not as much begrudging.
On the other hand, the reaction to wealth of financial leaders is very different (or even highly paid CEOs). There is a perception (and not without some justification) that perhaps this wealth wasn't "earned" but rather acquired by gaming the system at the expense of the workers or their customers and that they have managed to game the system so they cannot lose even if they do not perform. This is a problem and explains a lot of animosity towards wealth. Clumping this kind of gaming the system to acquire wealth as many on the right side of the spectrum tend to while pointing at the former is I think also unproductive. Not the kind of wealth I would aspire to.
You can see some nuances of it even in Apple. No one begrudges Steve Jobs for the wealth he acquired. But there is an increasing animosity to most of the executives at Apple including Tim Cook who are becoming billionaires without any tangible performance other than possibly getting a free ride from the momentum Jobs created with his brilliance. It is not that they are not doing what is a tough job, but there is the feeling that making huge amounts of wealth even when "earned" should be limited to those that have taken huge risks and have shown brilliance in advancing industry and perhaps their wealth should be better shared with the people they depend on for their "earnings". I am sympathetic to this limited criticism of wealth.
All wealth is not created equal even when "earned".
Capital flows to where there is a good chance of getting a return. This is because such decisions are made by people who want a return on capital. And they are not dumb. Just as labor migrates to where the best salaries are (just that capitals can flow much more easily). Nothing wrong with any of this.
As the world I live in amply demonstrates, capital does not always gets its return and so like evolution, the things that survive are those where there is sufficient return. This would apply even if the structure was doing so was very labor friendly (as is the case in most startups) and the capital has to be satisfied by what labor produces or not.
I think you would have a much better chance of convincing someone of the problems within the system if you didn't try go portray everything as some epic battle between capital and labor where capital is the devil reincarnate with magical powers. Unless you just want a ranting match between the pigheaded ideologists on the other side rather than arrive at some solutions.
You refuted @mjg's statement about Capitalism as factually incorrect. Perhaps you misunderstand what he was saying. All that statement says is that Capitalism as an economic doctrine encourages the production of things for which there is a market. The product may be luxury goods for the 1% or cheap $0.25 hamburgers for the masses which is actually a very efficient system for that product. the economies of scale actually work in favor of mass products than one-of yachts. The ability for capital to flow when justified by a return, investment capital as you call it, is what defines Capitalism. This is "factually" correct.
Deleted some additonal parts here after posting as I may have misunderstood you. Will wait for clarification on what you mean before advancing that.
And by the way the 25 cents hamburger--more likely a dollar today--is a dollar because the U.S, government subsidizes the corn industry, which is the primary feed stock for U.S. beef. So that isn't really capitalism by itself satisfying human need. And by the way, the $1 hamburger is crap and terrible for people's health. And those people may actually have a desire for healthier food they can't afford in the U.S. Meanwhile in the developing world they can't even afford the $1 hamburger let alone the grain being used to produce it.
Regards,
Ted
Where's The Beef ?
Ted
I see by the firestorm of replies that my insipid post captured your attention. I thought that my comments were merely conventional, commonsense economics.
I believe that “Capitalism does not produce without purpose: it judiciously produces to satisfy the anticipated and directed needs of the masses,” is not controversial in a Capitalistic society. Apparently my statement is not clear enough; it can be interpreted in several conflicting ways, some of which are highly emotional.
That was definitely not my intention. I casually wrote that line from the perspective of the business person; an entrepreneur who rushes to fill the needs of a luxury goods client or of a hungry, poor public. My intended meaning was along the lines that MFOer vkt extracted from my post. Capital is risked for potential profit. It is risked to satisfy an actual need, or is created by a not so subtle advertising campaign.
A boat maker will adjust his mixed production of yachts, of 18-foot power boats, and of row boats (do they still sell these?) to fulfill the demands of his customers. My statement was no deeper than that. I’m imagining a mountain out of a molehill at this moment.
I was thinking about how difficult that mix-and-match task is to execute with an end profit to cover all costs. The percentage of startup businesses that fail to survive their first 5 years is high. Specific business category dependent, failure rates from over 50% to as much as 80% are often reported.
All too frequently, new businesses crash and burn. When I wrote what I believed was an innocuous summary line, I was thinking about XFL Football, about Pets.com, and about the Edsel, all businesses that quickly crashed, burned, and don’t exist now. By the way, I bought an Edsel at a terrific price after a discontinue production announcement.
I suppose I need to thank you for your interest? Maybe not?
Best Wishes.