The problem is that people do not get the full value of their labor.
In fact, there is constant downward pressure on their wages - something that is confirmed by everyday observation of the economy.
However, you don't need a complicated and no doubt unworkable accounting system. All you need is a working free market. Their are few economists of any stripe who do not believe a price mechanism controlled free market is the best way to allocate resources.
Everything material is manufactured by a combination of land, labor, and capital - everything.
The free market controls labor and capital - but it doesn't control land.Land can be more fairly described as part of the collectible market. It has monopoly characteristics. You've heard the saying: "Buy land, they ain't making any more."
So, in the course of everyday production, land gathers in more and more of the result, even as labor and capital get less and less. There was a phrase in the 19th century - "all devouring land rent". It referred to the propensity of land to take the lions share of increasing production.
No matter what increases there may be in the power to produce, said the theory, the tendency is for the results to flow toward higher land rents and higher land sales prices. Check out my post to Brian which lengthily pursues this problem.
The legislation to repair the damage caused by "all-devouring land rent" is immense. But, there is no attempt to handle the problem directly.
So, how can the free market work with this problem? Well, you must bring land under market control. That's easy enough economically, but close to impossible politically. The landholders are too strong.
If you would like to see an experiment in land reform, watch what Lulu does in Brazil, where 1% of the people own 60% of the land. Actually they own a lot more, but valuable urban land is rarely counted in these statistics.
If Lulu can resettle the landless in large quantities on good land with holdings that are large enough for families to do well - then Lulu will succeed, not just for Brazil, but for all of South America.
But, the rub is it must be done without compensation to the landholders.
If he can't do this (with a landlord dominated legislature) then he will fail as so many have failed.
At the very least, I hope he stops the absolutely potty program that settles peasants in the rain forest. I really don't know what gets into these silly governments.
Harry
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Selma wrote:
Harry, It may get untangled if you can answer a few more questions for me; let's take them one at a time.Are you suggesting that all those who work, at any level, receive the full value of what their work produces? That is, there would be an accounting system that would be able to account for the value of what every person produces, from the lowliest laborer to the ceo and that person would receive, in payment, exactly what s/he is worth in terms of her/his contribution to the ultimate product. The accounting system would have to, of course, take into consideration all the maintenance, upkeep, research and development costs as well as the cost of maintaining the roads, airports, waterways, fire and police departments, sewer and water systems, etc. necessary for the businesses to function. Selma ----- Original Message ----- From: "Harry Pollard" <[EMAIL PROTECTED]> To: "Selma Singer" <[EMAIL PROTECTED]>; "Brad McCormick, Ed.D." <[EMAIL PROTECTED]>; "Ray Evans Harrell" <[EMAIL PROTECTED]> Cc: "Mantle, Rosalyn" <[EMAIL PROTECTED]>; "Anthony, David" <[EMAIL PROTECTED]>; "Bradskey, Teresa" <[EMAIL PROTECTED]>; "Cole, Karen Watters" <[EMAIL PROTECTED]>; "Dawn Anthony" <[EMAIL PROTECTED]>; "Downs , Jason" <[EMAIL PROTECTED]>; "Dunn, Darcy" <[EMAIL PROTECTED]>; "H, Joan" <[EMAIL PROTECTED]>; "harrell, jane" <[EMAIL PROTECTED]>; "Krueger, Jack A." <[EMAIL PROTECTED]>; "Sagowa" <[EMAIL PROTECTED]>; "Sleigh, Ben and Roz" <[EMAIL PROTECTED]>; "Watters, Valorie" <[EMAIL PROTECTED]>; "futurework" <[EMAIL PROTECTED]> Sent: Wednesday, December 11, 2002 5:16 PM Subject: Re: Whining ("Stop it! And say: 'Thank you'! .... ) > Selma, > > As you probably realize, I'm replying to the interesting posts that I put > on one side to answer later. > > I use the word "capitalism" to describe what we have now. Capitalism, in > practice, is not a lot different from socialism, in practice. They are both > mixed economic systems in which there is a divide between the leaders and > the followers. In both, there are the very well off and the poor. > > I approve of a free market system which is the opposite to those mixed systems. > > You say the bottom line for capitalism is making a profit. I assume you > mean the companies in the economy. > > How may that profit be maximized? In an economy that is swollen with > subsidies, protection, and market regulation - or in a market economy in > which "cut throat competition" and the "Law of the Jungle" describe the > arena in which they struggle to supply us with the things we want. > > I should say in passing that in any sensible economics, profit has no > meaning. It is an accounting term meaning an excess of income over outgo. > > So you can have a balance - or you can give higher salaries to the owners > to mop up the balance. Or you can have a "profit" which is really "set > aside" money for necessary maintenance or new equipment purchase. > > Profit is just an accounting term. It doesn't even show a healthy firm. > Maybe you get a "profit" by not replacing equipment you should replace. > That's a no-no. > > In a free market, how can a "capitalist" (which is all of us) advance its > own interests? Only by supplying consumers with what they want - and doing > it better than competing capitalists. Isn't that an excellent way to > improve the health of the community? > > The capitalist who best services the community will achieve the best > profit. The capitalist who fails to supply the community with what they > want will go broke - or will need to change his ways. > > Do you consider it untangled, Selma? > > Harry > -------------------------------------------------------------------------- --- > > Selma wrote: > > >So, maybe you can help me out here, Harry. > > > >I need to have someone explain to me how capitalism can exist separately > >from the power it generates to maximize its own interests as the > >corporations do when the fix prices and ask for government bail-outs, etc. > >etc. > > > >The bottom line for capitalism is making a profit; given today's > >technologies, that's not easily done by small businesses; the logical > >progression of things (certainly not a new idea-see Karl Marx) is for > >businesses to become larger and larger until only one dominates in each > >industry. We are already seeing that progression. The very principle of > >either get bigger or die seems to me to be antithetical to the idea of > >competition. > > > >What I need explained is, as I said above, how can capitalism be divorced > >from trying to exert its power in its own interests since capitalism is > >based on advancing its own interests and not the interests of anyone else. > > > >I know that theoretically, an intelligent capitalist will recognize that > >her/his interests are served better when the community is healthy but even > >theoretically that appears to offer a conflict with making the most profit. > > > >So can someone untangle this for me? > > > >Selma
****************************** Harry Pollard Henry George School of LA Box 655 Tujunga CA 91042 [EMAIL PROTECTED] Tel: (818) 352-4141 Fax: (818) 353-2242 *******************************
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