Economic Laws

[Dermezel]

Marx discovered two main mechanisms of economic law:

1- Centralization: Capital Tends to Centralize and Accumulate over time within a privatized, competitive market. Just look at the megacoporations and you know that is true. I mean just look at a shopping center.

2- Constant Capital Displaces Variable Capital.

That is machines displace human labor.

Again--well duh. If I have a Bulldozer, I'm not going to hire 1000 people to flatten the ground in a week, because the Bulldozer can do it in a day.

These two laws combine so you get Constant, Centralized, Accumulated Capital i.e. one rich guy who owns all the Bulldozers and pays everyone else. He gets all the profit (because he owns the company).

This is not a subjective thing, you can prove it with mountains of statistics and common sense.

So if you are a proletariat, or even a capitalist but not a sociopath, this is a horrible thing. Because the relative value of labor declines, and if capital is Centralizing, more and more people depend on variable capital to survive.

The guy who owns the Bulldozers is putting other people, who own fewer or less quality Bulldozers out of business.

And those people end up working for wages that decrease in value all the time.

So given these FACTS, how can your conscience support this? You are basically saying most of humanity deserves to go without, deserves to be miserable, while others, greedy people and inheritance people, deserve it all. Just kinda messed up.

Only a sociopath would support that. And that person is, literally, sick.

[Dermezel]

BTW as you can tell I'm a reactionary.

[LeftSideDown]

Marx discovered two main mechanisms of economic law:

1- Centralization: Capital Tends to Centralize and Accumulate over time within a privatized, competitive market. Just look at the megacoporations and you know that is true. I mean just look at a shopping center.

2- Constant Capital Displaces Variable Capital.

That is machines displace human labor.

Again--well duh. If I have a Bulldozer, I'm not going to hire 1000 people to flatten the ground in a week, because the Bulldozer can do it in a day.

These two laws combine so you get Constant, Centralized, Accumulated Capital i.e. one rich guy who owns all the Bulldozers and pays everyone else. He gets all the profit (because he owns the company).

This is not a subjective thing, you can prove it with mountains of statistics and common sense.

So if you are a proletariat, or even a capitalist but not a sociopath, this is a horrible thing. Because the relative value of labor declines, and if capital is Centralizing, more and more people depend on variable capital to survive.

The guy who owns the Bulldozers is putting other people, who own fewer or less quality Bulldozers out of business.

And those people end up working for wages that decrease in value all the time.

So given these FACTS, how can your conscience support this? You are basically saying most of humanity deserves to go without, deserves to be miserable, while others, greedy people and inheritance people, deserve it all. Just kinda messed up.

Only a sociopath would support that. And that person is, literally, sick.

So lets get rid of all capital and have people working on farms with hos and rakes. This is a much better order of things.

[Dermezel]

So lets get rid of all capital and have people working on farms with hos and rakes. This is a much better order of things.

I am a Scientific Socialist. I believe in Science and Technology so much I believe it should be applied to social and political structures.

Capitalists treat societal make-up as sacred. Beyond science. Beyond improvement. Never to be touched.

I say the opposite. They can be studied and improved. And Socialism has proven itself to be a better system, from a utilitarian standpoint, for most people.

[LeftSideDown]

I am a Scientific Socialist. I believe in Science and Technology so much I believe it should be applied to social and political structures.

Capitalists treat societal make-up as sacred. Beyond science. Beyond improvement. Never to be touched.

I say the opposite. They can be studied and improved. And Socialism has proven itself to be a better system, from a utilitarian standpoint, for most people.

You cannot just remake society in the way you want it to be (namely, perfect). I do not think societal make up is sacred, but I do not think it is something you can purposefully formulate and purposefully shape. If you try you will have the worst form of tyranny the world has ever seen.

And, really, socialism has proven itself to be better?

http://upload.wikimedia.org/wikipedia/commons/thumb/e/e0/Socialist_states_by_duration.png/800px-Socialist_states_by_duration.png

I, myself, would much rather have to choose a country for myself out of the grey countries, rather than the colored ones, wouldn't you?

(Gray = non socialist, colored = socialist).

[Dermezel]

You cannot just remake society in the way you want it to be (namely, perfect). I do not think societal make up is sacred, but I do not think it is something you can purposefully formulate and purposefully shape.

Study what is best or worse for most and formulate. Not exactly magic.


If you try you will have the worst form of tyranny the world has ever seen.

Making everything liberal and democratic, even the economy, is tyranny?


And, really, socialism has proven itself to be better?

Well yeah. Look at this latest economic crisis. China came out the most ahead. A third world country is beating the United States. How the hell does that happen? It is embarrassing.


I, myself, would much rather have to choose a country for myself out of the grey countries, rather than the colored ones, wouldn't you?

You biased the entire map. Many grey counties inherited more wealth and technology.

That's like asking if you'd rather be Batman or Wolverine. Wolverine is a more bad ass fighter, but Batman was born with more money. Now if Wolverine was born rich and Batman was born poor, the choice would be obvious.

Simply put, more technology/money can represent geographic advantages like Jared Diamond has shown. The US might have got ahead despite not because of capitalism due to geographic advantages.

Being born on a Gold Mine is a huge advantage no matter how stupid you are,

[syndicat]

what are you talking about? There are no socialist countries. there are a couple of minor countries (Cuba, North Korea) where the bureaucratic class is dominant but the rest are forms of capitalism. The working class is not in control anywhere, hence no socialism anywhere.

[Dermezel]

what are you talking about? There are no socialist countries. there are a couple of minor countries (Cuba, North Korea) where the bureaucratic class is dominant but the rest are forms of capitalism. The working class is not in control anywhere, hence no socialism anywhere.

But at least they have State ownership. Which, as Nobel Prize winning economist Joseph Stiglitz explains, is better for an economy in the long-term because state actors cannot sell off industries for immediate profit. Hence they invest more in long-term development.

So even oligarchical or autocratic state ownership is better then privatized equivalents. If I cannot sell the company for money and move to Jamaica, I am forced to make it better.

[LeftSideDown]

So even oligarchical or autocratic state ownership is better then privatized equivalents. If I cannot sell the company for money and move to Jamaica, I am forced to make it better.

Who cares if its meeting consumer demand, right? We should be producing the same number of horse carriages, even if no one wants them anymore. Yeah right.

[Dermezel]

Who cares if its meeting consumer demand, right? We should be producing the same number of horse carriages, even if no one wants them anymore. Yeah right.

Actually it is the opposite. As Marx notes in capitalism there are 2 Values- use-value (supply and demand) and exchange-value (cost of production- labor theory of value) .

Under socialism use-value supersedes exchange value. Hence Socialism is more for supply and demand.

Or as David Ricardo notes, who came before Marx, and was the most famous economist after Adam Smith and a pro-Capitalist notes:



It is the cost of production which must ultimately regulate the price of commodities, and not, as has been often said, the proportion between the supply and demand: the proportion between supply and demand may, indeed,for a time, affect the market value of a commodity, until it is supplied in greater or less abundance, according as the demand may have increased or diminished; but this effect will be only of temporary duration.


Diminish the cost of production of hats, and their price will ultimately fall to their new natural price, although the demand should be doubled, trebled, or quadrupled. Diminish the cost of subsistence of men, by diminishing the natural price of the food and clothing, by which life is sustained, and wages will ultimately fall, notwithstanding that the demand for labourers may very greatly increase.


http://www.marxists.org/reference/subject/economics/ricardo/tax/ch30.htm


Marxists would make it the opposite. Supply and Demand would be Law.

[LeftSideDown]

Study what is best or worse for most and formulate. Not exactly magic.

Who decides whats best and worst?


Making everything liberal and democratic, even the economy, is tyranny?

Undoubtedly this is not the conclusion you will come to.


Well yeah. Look at this latest economic crisis. China came out the most ahead. A third world country is beating the United States. How the hell does that happen? It is embarrassing.

China is also much more economically sound than the US. The US is a retailer, we don't produce as we did, we don't export as we did, we're a debtor country. This is the result of irresponsible government policies, not of capitalism. As anyone knows, being in debt =\= good.


You biased the entire map. Many grey counties inherited more wealth and technology.

That's like asking if you'd rather be Batman or Wolverine. Wolverine is a more bad ass fighter, but Batman was born with more money. Now if Wolverine was born rich and Batman was born poor, the choice would be obvious.

Simply put, more technology/money can represent geographic advantages like Jared Diamond has shown. The US might have got ahead despite not because of capitalism due to geographic advantages.

Being born on a Gold Mine is a huge advantage no matter how stupid you are,

No dude, it doesn't matter. Socialism has proven itself better for people. So obviously you'll choose the colored ones; you'll be better off (or at least thats what you said).

[Dermezel]

Who decides whats best and worst?[/quote[

We do. Us influenced by physiological and psychological laws. Our own free, conscious choices. We vote on it and determine legal mechanisms,

[QUOTE=LeftSideDown;1726925]Undoubtedly this is not the conclusion you will come to.

And why not?


China is also much more economically sound than the US. The US is a retailer, we don't produce as we did, we don't export as we did, we're a debtor country. This is the result of irresponsible government policies, not of capitalism. As anyone knows, being in debt =\= good.

But why is China more economically sound? Maybe because the banks are State owned and forced to re-invest (whereas ours may keep money frozen in accounts. )


No dude, it doesn't matter. Socialism has proven itself better for people. So obviously you'll choose the colored ones; you'll be better off (or at least thats what you said).

A Scientific Socialist isn't a mystic. If you could be born from a Communist father who lives in Somalia, or a billionaire who is a capitalist, you pick the billionaire because you can do more with the money.

[LeftSideDown]

We do. Us influenced by physiological and psychological laws. Our own free, conscious choices. We vote on it and determine legal mechanisms,

If someone disagrees you are forcing it upon them. Herein lies the tyranny. In a democracy there are always those who disagree. This is why.


But why is China more economically sound? Maybe because the banks are State owned and forced to re-invest (whereas ours may keep money frozen in accounts. )

No, because they produce more than they import and their economy isn't based off debt fueled consumption. It has nothing to do with state ownership.


A Scientific Socialist isn't a mystic. If you could be born from a Communist father who lives in Somalia, or a billionaire who is a capitalist, you pick the billionaire because you can do more with the money.

No, you said "And Socialism has proven itself to be a better system, from a utilitarian standpoint, for most people."

If it is a better system you will move to it. You also assert that its better for people, so you will live a better life. Unless you want to retract this statement.

[Dermezel]

If someone disagrees you are forcing it upon them. Herein lies the tyranny. In a democracy there are always those who disagree. This is why.

What? No, I am making a system so most people have the most choices. Maybe to some choice=tyranny.

Look if someone doesn't want to be lazy, smoke pot, play video games, sleep with lots of hot women, and eat sushi- I won't force them. They can go sleep in a cave, sober, eating oatmeal and sleeping with gay Spartan men instead. Whatever.


No, because they produce more than they import and their economy isn't based off debt fueled consumption. It has nothing to do with state ownership.

Oh so why isn't India in China's place? Maybe cause one has State ownership and one doesn't?


No, you said "And Socialism has proven itself to be a better system, from a utilitarian standpoint, for most people."

If it is a better system you will move to it. You also assert that its better for people, so you will live a better life. Unless you want to retract this statement.

Workers' State =/= Socialist. And I would move to Cuba if I could. I am however poor.

[RGacky3]

Who cares if its meeting consumer demand, right? We should be producing the same number of horse carriages, even if no one wants them anymore. Yeah right.

You don't know what consumer demand means as opposed to social demand, until you do shut up about it. Consumer demand maens dollar demand.

[Cal Engime]

But at least they have State ownership. Which, as Nobel Prize winning economist Joseph Stiglitz explains, is better for an economy in the long-term because state actors cannot sell off industries for immediate profit. Hence they invest more in long-term development.

So even oligarchical or autocratic state ownership is better then privatized equivalents. If I cannot sell the company for money and move to Jamaica, I am forced to make it better.I think that the belief that only the state is capable of long-term planning is false and depends on a platonic ideal of government. In reality, state property is managed by people who will only be in power for a limited period of time, as they can always be deposed or voted out, and their incentive is to get as much value out of the property as they can, while they can. A private entrepreneur who owns not only the use of a resource but also its capital value has the incentive to invest.

[LeftSideDown]

You don't know what consumer demand means as opposed to social demand, until you do shut up about it. Consumer demand maens dollar demand.

You don't recognize that they are one and in the same and that both are met with dollars.

[Dean]

(Gray = non socialist, colored = socialist).

Uh, no. That entire post is a flat out lie. Denmark and Sweden, who have the highest income tax rate in the world, also have the highest levels of democracy and standards of life, as well as happiness. While they can't be detached from the global capitalist economy, the facts are staunchly contrary to your laughable, shallow map.

[LeftSideDown]

Uh, no. That entire post is a flat out lie. Denmark and Sweden, who have the highest income tax rate in the world, also have the highest levels of democracy and standards of life, as well as happiness. While they can't be detached from the global capitalist economy, the facts are staunchly contrary to your laughable, shallow map.

I didn't make the map sonny. And those things do not make socialist country. Define Socialist: a political theory advocating state ownership of industry OR
an economic system based on state ownership of capital (Source: wordnetweb.princeton.edu/perl/webwn). Denmark and Sweden are, in some ways, more economically free than the US, and their industries are not all owned by the state (if it only takes some industry owned by the state than the US would be socialist as well, which I'm sure you'll agree is wrong).

Just because you like a country doesn't make it socialist.

[Dean]

I didn't make the map sonny. And those things do not make socialist country. Define Socialist: a political theory advocating state ownership of industry OR
an economic system based on state ownership of capital (Source: wordnetweb.princeton.edu/perl/webwn (http://wordnetweb.princeton.edu/perl/webwn)). Denmark and Sweden are, in some ways, more economically free than the US, and their industries are not all owned by the state (if it only takes some industry owned by the state than the US would be socialist as well, which I'm sure you'll agree is wrong).
State ownership of the economy is called nationalization. It is therefore a nationalist mode of organization, whereas socialism, by its nature, is a popularly controlled economy (controlled by society).


Just because you like a country doesn't make it socialist.
Well, socialism has explicit definitions, which don't sufficiently coincide with that map - which only measures which nations have at one point called themselves "socialist." For an argument evaluating the different methods of economic organization, that's piss-poor.

The above map is especially crude once you consider the nationalist argument. What my own opinion is - that I "like" a state or not - bears little consequence here. What matters is the actual material conditions of these societies. Nationalism has historically served to marginalize economic control, and empower or perpetuate capitalist institutions, so its not really socialist. Since advanced capitalist nations serve an increasingly narrow population, it is increasingly non-social, though our experience shows that these same institutions increasingly rely on the prevalent security firm - the nation.

Really, your rejection of socialism can only be seen as meaningful if we consider it an attack on the popularization of consumer value or economic control. The fact that you resort to petty issues like state propaganda shows just how detached your theory is from the actual character of socialism and economic decentralization.

[Dermezel]

And here is the meat of the argument- empirical data:
http://www.endgame.org/primer-wealth.html



The richest 1% of adults owned 40% of the world’s total assets in the year 2000. The richest 10% of adults accounted for 85% of total assets. The bottom half of the world adult population owned 1% of global wealth. (Source: World Institute for Development Economics Research, The World Distribution of Household Wealth (http://www.wider.unu.edu/research/2006-2007/2006-2007-1/wider-wdhw-launch-5-12-2006/wider-wdhw-report-5-12-2006.pdf), 2006).
"There were an estimated 7.7 million millionaires in the world at the end of 2003, half a million more than at the end of 2002, as stock markets and economic growth picked up and the rich took more risks with their cash.These wealthy individuals saw their riches increase by 7.7 percent to $28.8 trillion in 2003, recovering to levels seen before the global recession took hold in 2001, according to a survey on Tuesday from U.S. investment bank Merrill Lynch and technology consultancy Capgemini. And the rich are set to get richer, with their wealth forecast to grow by seven percent a year and to exceed $40.7 trillion by 2008, the survey predicted... The survey also highlighted a small, but fast-growing global group of 70,000 super rich individuals with more than $30 million in financial assets. It found that this group was growing at a faster pace than those in the $1 million-plus bracket." (World's richest worth $29 trillion in 2003 (http://msnbc.msn.com/id/5214919/); Survey: Wealthy now back at level before dot-com bust. MSNBC.com, June 15, 2004,)
Very Richest's Share of Income Grew Even Bigger (http://www.nytimes.com/2003/06/26/business/26TAX.html?pagewanted=print&position=), New York Times, June 26, 2003
In the late 1970s, the top one percent of the US population held 13 percent of the wealth; in 1995 it held 38 percent. (Levy, Frank. The New Dollars and Dreams ).
In 1998 the top 1 percent of the population owned 38 percent of the wealth, the top 5 percent owned over 60 percent (source: www.inequality.org/fatcsfr.html).
The top ten percent of the U.S. population owns 81.8 percent of the real estate, 81.2 percent of the stock, and 88 percent of the bonds. (Federal Reserve Bank data in Left Business Observer, No. 72, Apr. 3, 1996, p. 5).
One percent of the U.S. population owns sixty percent of the stock and forty percent of the total wealth. (Hawken, Paul, The Ecology of Commerce: A Declaration of Sustainability. New York: HarperBusiness, 1993).
The top one percent of U.S. households owned 42 percent of all stock in 1997...
The top ten percent of households owned 82 percent of all stock-market wealth...
Only 27 percent of households held more than $10,000 in stock in 1997...
57 percent of Americans didn't own any stock at all...
The top fifth of households saw their income rise 43 percent between 1977 and 1999, while the bottom fifth saw their income fall 9 percent....
Since 1973, every group in society except the top 20 percent has seen its share of the national income decline, with the bottom 20 percent losing the most. They have just 3.6 percent of national income, down from 4.4 percent a quarter century ago.
Indeed, the top fifth now makes more than the rest of the nation combined...
Rebecca Blank, who recently left the President's Council of Economic Advisors, pointed out, ‘We've gone back to levels of income and wealth inequality that this country hasn't seen since the teens and 1920s.’" (Source: Merrill Goozner, Crash of '99?, Salon.com, Oct. 1, 1999).
The top one percent of Americans receive more income than the bottom 40 percent. (Korten, David. When Corporations Rule the World, p. 108).
When he was worth $40 billion, Microsoft chairman Bill Gates was worth more than the bottom 110 million Americans (the bottom 40 percent of the population). By 1998, Gates was worth $59 billion; a year later, he was worth $85 billion. Gates is twice as wealthy as the second richest American, Microsoft co-founder Paul Allen (worth $40 billion). (Source: open letter from Ralph Nader (December 1998), citing Edward Wolff of New York University, whose calculations included home equity, pensions and mutual funds, but excluded personal cars, based on Gates' then-current net worth of $40 billion).
In 1995, 358 billionaires were worth $760 billion, the same as the poorest 20 percent of the world’s people. (Korten, David. When Corporations Rule the World, p. 83).





Median net worth of US households in 1995:
poorest fifth of the households: $5,000
second poorest fifth $21,966
middle fifth $35,949
second richest fifth $52,860
richest fifth $116,232
Source: US Census Bureau, Household Networth & Asset Ownership 1995, Publication P70-71, issued Feb 2001 (http://www.census.gov/prod/2001pubs/p70-71.pdf).
Racial inequality: In 1995, the household median net worth was $49,030 for households with a White householder, $7,073 for households with a Black householder, and $7,255 for households with a Hispanic householder. (Source: US Census Bureau, 1995 highlights (http://www.census.gov/hhes/www/wealth/1995/highlights.html)).
US Census Bureau 2001 factsheet on wealth (http://www.census.gov/prod/2001pubs/p70-75.pdf)
Income inequality: In 1999, the poorest fifth of the US population received less than 4% of the total income. The second poorest fifth received 9%. The middle fifth received 15%. The second richest fifth received 23%. The richest fifth received 49%.
(Source: US Census Bureau, 1999 Income Table F (http://www.census.gov/hhes/income/income99/99tablef.html) ).
Historical tables on income inequality (http://www.census.gov/hhes/income/histinc/ineqtoc.html)
Since 1973 the average income of the top 1% of Americans (income at least $90,000) has doubled, and the income of the top 0.1% (145,000 taxpayers with income at least $1.6 million) has tripled. (from Class in America series in the New York Times, May 2005).
Richest Are Leaving Even the Rich Far Behind. By David Cay Johnston, New York Times, June 5, 2005:
When F. Scott Fitzgerald pronounced that the very rich "are different from you and me," Ernest Hemingway's famously dismissive response was: "Yes, they have more money." Today he might well add: much, much, much more money.
The people at the top of America's money pyramid have so prospered in recent years that they have pulled far ahead of the rest of the population, an analysis of tax records and other government data by The New York Times shows. They have even left behind people making hundreds of thousands of dollars a year.
Call them the hyper-rich.
They are not just a few Croesus-like rarities. Draw a line under the top 0.1 percent of income earners - the top one-thousandth. Above that line are about 145,000 taxpayers, each with at least $1.6 million in income and often much more.
The average income for the top 0.1 percent was $3 million in 2002, the latest year for which averages are available. That number is two and a half times the $1.2 million, adjusted for inflation, that group reported in 1980. No other income group rose nearly as fast.
The share of the nation's income earned by those in this uppermost category has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell.
Next, examine the net worth of American households. The group with homes, investments and other assets worth more than $10 million comprised 338,400 households in 2001, the last year for which data are available. The number has grown more than 400 percent since 1980, after adjusting for inflation, while the total number of households has grown only 27 percent.
The Bush administration tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden.
President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers.
The Times set out to create a financial portrait of the very richest Americans, how their incomes have changed over the decades and how the tax cuts will affect them. It is no secret that the gap between the rich and the poor has grown, but the extent to which the richest are leaving everyone else behind is not widely known.
The Treasury Department uses a computer model to examine the effects of tax cuts on various income groups but does not look in detail fine enough to differentiate among those within the top 1 percent. To determine those differences, The Times relied on a computer model based on the Treasury's. Experts at organizations representing a range of views, including the Heritage Foundation, the Cato Institute and Citizens for Tax Justice, reviewed the projections and said they were reasonable, and the Treasury Department said through a spokesman that the model was reliable.
The analysis also found the following:
Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000.
Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000.
The alternative minimum tax, created 36 years ago to make sure the very richest paid taxes, takes back a growing share of the tax cuts over time from the majority of families earning $75,000 to $1 million - thousands and even tens of thousands of dollars annually. Far fewer of the very wealthiest will be affected by this tax.
The analysis examined only income reported on tax returns. The Treasury Department says that the very wealthiest find ways, legal and illegal, to shelter a lot of income from taxes. So the gap between the very richest and everyone else is almost certainly much larger.
The hyper-rich have emerged in the last three decades as the biggest winners in a remarkable transformation of the American economy characterized by, among other things, the creation of a more global marketplace, new technology and investment spurred partly by tax cuts. The stock market soared; so did pay in the highest ranks of business.
One way to understand the growing gap is to compare earnings increases over time by the vast majority of taxpayers - say, everyone in the lower 90 percent - with those at the top, say, in the uppermost 0.01 percent (now about 14,000 households, each with $5.5 million or more in income last year).
From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.
President Ronald Reagan signed tax bills that benefited the wealthiest Americans and also gave tax breaks to the working poor. President Bill Clinton raised income taxes for the wealthiest, cut taxes on investment gains, and expanded breaks for the working poor. Mr. Bush eliminated income taxes for families making under $40,000, but his tax cuts have also benefited the wealthiest Americans far more than his predecessors' did.
The Bush administration says that the tax cuts have actually made the income tax system more progressive, shifting the burden slightly more to those with higher incomes. Still, an Internal Revenue Service study found that the only taxpayers whose share of taxes declined in 2001 and 2002 were those in the top 0.1 percent.
But a Treasury spokesman, Taylor Griffin, said the income tax system is more progressive if the measurement is the share borne by the top 40 percent of Americans rather than the top 0.1 percent.
The Times analysis also shows that over the next decade, the tax cuts Mr. Bush wants to extend indefinitely would shift the burden further from the richest Americans. With incomes of more than $1 million or so, they would get the biggest share of the breaks, in total amounts and in the drop in their share of federal taxes paid.
One reason the merely rich will fare much less well than the very richest is the alternative minimum tax. This tax, the successor to one enacted in 1969 to make sure the wealthiest Americans could not use legal loopholes to live tax-free, has never been adjusted for inflation. As a result, it stings Americans whose incomes have crept above $75,000.
The Times analysis shows that by 2010 the tax will affect more than four-fifths of the people making $100,000 to $500,000 and will take away from them nearly one-half to more than two-thirds of the recent tax cuts. For example, the group making $200,000 to $500,000 a year will lose 70 percent of their tax cut to the alternative minimum tax in 2010, an average of $9,177 for those affected.
But because of the way it is devised, the tax affects far fewer of the very richest: about a third of the taxpayers reporting more than $1 million in income. One big reason is that dividends and investment gains, which go mostly to the richest, are not subject to the tax.
Another reason that the wealthiest will fare much better is that the tax cuts over the past decade have sharply lowered rates on income from investments.
While most economists recognize that the richest are pulling away, they disagree on what this means. Those who contend that the extraordinary accumulation of wealth is a good thing say that while the rich are indeed getting richer, so are most people who work hard and save. They say that the tax cuts encourage the investment and the innovation that will make everyone better off.
"In this income data I see a snapshot of a very innovative society," said Tim Kane, an economist at the Heritage Foundation. "Lower taxes and lower marginal tax rates are leading to more growth. There's an explosion of wealth. We are so wealthy in a world that is profoundly poor."
But some of the wealthiest Americans, including Warren E. Buffett, George Soros and Ted Turner, have warned that such a concentration of wealth can turn a meritocracy into an aristocracy and ultimately stifle economic growth by putting too much of the nation's capital in the hands of inheritors rather than strivers and innovators. Speaking of the increasing concentration of incomes, Alan Greenspan, the Federal Reserve chairman, warned in Congressional testimony a year ago: "For the democratic society, that is not a very desirable thing to allow it to happen."
Others say most Americans have no problem with this trend. The central question is mobility, said Bruce R. Bartlett, an advocate of lower taxes who served in the Reagan and George H. W. Bush administrations. "As long as people think they have a chance of getting to the top, they just don't care how rich the rich are."
But in fact, economic mobility - moving from one income group to another over a lifetime - has actually stopped rising in the United States, researchers say. Some recent studies suggest it has even declined over the last generation.
(Source: Richest Are Leaving Even the Rich Far Behind. By David Cay Johnston, New York Times, June 5, 2005).[/quote[


[quote]

Median U.S. family income grew by 37 percent from 1949 to 1959, by 41 percent in the 1960s, but only by 6.8 percent in the 1970s and 1980s, with 97 percetn going to the top 20 percent of the families. in the late 1970s, the top one percent held 13 percent of the wealth; in 1995 it held 38 percent.
Ten percent of the U.S. population owns 81.8 percent of the real estate, 81.2 percent of the stock, and 88 percent of the bonds.
One percent of the U.S. population owns sixty percent of the stock and forty percent of the total wealth.
Two percent of U.S. income recipients owned 50 percent of all stocks and 39 percent of all bonds.
Two percent of U.S. wealth holders own 54 percent of all net financial assets; more than half of families had no financial assets, or owe more than they own.
Ten percent of American households own 72 percent of the total wealth.
19 percent of all U.S. families own stock; 3 percent of all families own bonds.
Pension funds own almost a third of the total stock.
Distribution of U.S. wealth by percentages of the population:
top 5 percent holds 20 percent of the wealth
top 20 percent holds 45 percent
4th 20 percent holds 22 percent
3rd 20 percent holds 16 percent
2nd 20 percent holds 11 percent
bottom 20 percent holds 5 percent
Ten percent of the U.S. population owns 83 percent of all stock.
One half of one percent of the U.S. population owns 37 percent of all stock.
In 1992 the average salary of the CEOs of the largest 1,000 corporations was $3.8 million.
In 1960 CEOs received 40 times the average worker's salary. In 1992 they received 157 times.
The top one percent of Americans receive more income than the bottom 40 percent.
Between the late 1970s and the mid-1990s, the average income of lowest-income families with children fell by more than 20 percent. The avergae income of high-income families rose by nearly 30 percent; the incomes of the middle-fifth families fell by more than 2 percent.

Wealth in the World
The richest 1% of adults owned 40% of the world’s total assets in the year 2000. The richest 10% of adults accounted for 85% of total assets. The bottom half of the world adult population owned 1% of global wealth. (Source: World Institute for Development Economics Research, The World Distribution of Household Wealth (http://www.wider.unu.edu/research/2006-2007/2006-2007-1/wider-wdhw-launch-5-12-2006/wider-wdhw-report-5-12-2006.pdf), 2006).
In 1988, per capita GNP in the 20 richest industrial countries was $12,960; in the poorest 33 countries it was $270.
One percent of all TNCs own fifty percent of all FDI.
A third was transactions within a single corporation.
70 percent was controlled by 500 corporations.
In 1995, 358 billionaires were worth $760 billion, the same as the poorest 20 percent of the world's people.
When he was worth $40 billion, Microsoft chairman Bill Gates was worth more than the bottom 110 million Americans (40 percent of the population). By 1998, Gates was worth $59 billion; a year later, he was worth $85 billion. Gates is twice as wealthy as the second richest American, Microsoft co-founder Paul Allen (worth $40 billion). Number three in 1999 was Warren Buffett (chairman of Berkshire Hathaway, and worth $31 billion). Number four is Steve Ballmer, Microsoft's president (worth $23 billion). Number 5 is Dell Computer CEO Michael Dell (worth a mere $20 billion in 1999).
The world's three richest individuals have more wealth than the combined GDP of the 48 poorest countries.
Worldwide, the top incomes were 30 times greater than the bottom incomes; by 1989 it was 60 times, unless you calculate individuals rather than nations, in which case it was 150 times.
UNDP data on income distribution:
Top 20 percent receives 83 percent of all income.
Second 20 percent receives 12 percent
Third 20 percent receives 2 percent
Fourth 20 percent receives 2 percent
Bottom 20 percent receives 1 percent

[Dermezel]

http://www.lcurve.org/






The L-Curve graph represents income, not wealth. The distribution of wealth is even more skewed (http://www.lcurve.org/WealthDistribution-1998.htm). Quoting from a recently-published book by political philosopher David Schweickart (http://www.amazon.com/exec/obidos/ASIN/0742513009/103-5037110-1121455),

If we divided the income of the US into thirds, we find that the top ten percent of the population gets a third, the next thirty percent gets another third, and the bottom sixty percent get the last third. If we divide the wealth of the US into thirds, we find that the top one percent own a third, the next nine percent own another third, and the bottom ninety percent claim the rest. (Actually, these percentages, true a decade ago, are now out of date. The top one percent are now estimated to own between forty and fifty percent of the nation's wealth, more than the combined wealth of the bottom 95%.)



Wealth distribution in the U.S. is extremely concentrated, much more so than income. These statistics, on the other hand, only hint at the L-Curve phenomenon because the top 1% isn't scrutinized in sufficient detail. Still, compare the net worth of the top half of the top 1% with the bottom half of the top 1%! If you add them together and proportion them out, 3/4 of the wealth in the top 1% is actually in the top 0.5%.

The top and bottom halves of the top 0.5% would undoubtedly show even greater disparity if the data were presented with enough resolution. Note that nothing on this page even mentions billionaires. The largest fortunes are in the $100-billion range. The statistics on billionaires are diluted by lumping them in with mere millionaires.



Household distribution of net worth (1998), i.e. total value of assets: Percent of owners Net worth Cumulative Percent Cumulative net worth Top 0.5% 25.6% Top 0.5% 25.6% Next 0.5% 8.4% Top 1% 34.0% Next 4% 23.4% Top 5% 57.4% Next 5% 11.4% Top 10% 68.8% Next 10% 12.8% Top 20% 81.6% Last 80% 18.5% All 100% 100%





Average household wealth by wealth class (in 1998 dollars): (Remember that $100-billion is 10,000 times greater than the average wealth of the top 1%.) Wealth class Average wealth of class Top 1% $10,203,700 Next 4% $1,441,200 Next 5% $623,500 Next 10% $344,900 Next 20% $161,300 Next 20% $61,000 Next 20% $11,000 Last 20% -$8,900
Household distribution of common stocks in 1998 (i.e. who "owns" the corporations). These statistics include indirect ownership through mutual funds, 401k plans, etc. Percent of owners Net stocks Cumulative Percent Cumulative stocks Top 0.5% 37.0% Top 0.5% 37.0% Next 0.5% 10.7% Top 1% 47.7% Next 4% 27.2% Top 5% 74.9% Next 5% 11.3% Top 10% 86.2% Next 10% 9.8% Top 20% 96% Last 80% 4.1% All 100% 100%

[Dermezel]

Updated CBO data reveal unprecedented increase in inequality
by Jared Bernstein
Earlier this week, the Congressional Budget Office (CBO) updated its authoritative data series on household incomes (1979-2005). The new data—highly regarded as a particularly complete source of information on this important topic—reveal a sharp increase in income inequality over the past few years. In fact, the increase in income inequality (both pre- and post-tax) as measured by the change in the shares of income going to different income classes, was greater from 2003 to 2005 than over any other two-year period covered by the CBO data. Over these years, an amazing $400 billion in pre-tax dollars was shifted from the bottom 95% of households to those in the top 5% (all income data in this report are inflation adjusted and in 2005 dollars). In other words, had income shares not shifted as they did, the income of each of the 109 million households in the bottom 95% would have been $3,660 higher in 2005.
Recent inequality developments
In response to the bursting Internet bubble and ensuing loss of capital income, inequality contracted for a few years in the early 2000s, but then reversed course in 2003 and started growing quickly in 2004.
Table 1 shows each household's share of income for the latest three years of CBO data, including a breakdown of the richest fifth. By 2005, the top fifth held a larger share of both pre- and post-tax income than everyone else in the bottom 80%. On a pre-tax basis in 2005, the top 1%, with 18.1% of total income, held a much larger share of income than the bottom 40% of households, which only received 12.5%.
http://www.epi.org/Issuebriefs/239/table1.gif
Figure A plots the changes in each income group's share in the 2003-05 period. The first five bars reveal a shift in income from the bottom 80% to the top 20%. But by breaking down households within the top fifth, we find it was only the top 5% who saw gains, with small increases at the 95-99th percentiles, but truly large gains going to the top 1%. Together these gains amount to about a 4 percentage-point increase for the top 5%, the largest two-year increase over the history of these data.
Putting this shift in dollar terms reveals a redistribution of $400 billion of pre-tax income over these two years, an average loss of $3,660 per household to the bottom 95% of households. Again, these are the largest income shifts on record over a two-year period (see appendix table below).
http://www.epi.org/Issuebriefs/239/figurea.gif
Long-term growth and inequality
Figure B shows the long-term growth in real income for each fifth from 1979 to 2005. The "staircase" pattern of growth is evidence of the increase in unequal income growth over this period. Note also that, while the federal tax system raised the income growth of each group of families, it clearly did not turn back the inequality tide. To the contrary, after-tax income growth was much higher for the top 1% than was pre-tax growth (the decline in effective tax rates—the share of income paid in federal taxes—was largest for households in the top 1%).
Real income growth over this period was minimal to moderate for most households. Income growth for the poorest households grew only 1.3% pre-tax but 6.3% post-tax, thanks largely to the increase in the refundable Earned Income Tax Credit over these years. Middle incomes grew 15% pre-tax and 21% post-tax, or less than 1% per year over this 26 year period. Income for the top fifth grew much more quickly in the 1979-2005 period: 75% pre-tax and 80% post-tax. But the most dramatic growth occurred at the very top of the income scale: Households in the top 1% saw their income triple over these years, up by 200% pre-tax and 228% post-tax.
These trends led to stark differences in actual income levels by 2005. In that year, the average after-tax income for households in the bottom fifth was $15,300; for the middle fifth, $50,200; and for the top 1%, just over $1 million. These gaps have led to much greater economic distance between income classes over the years. Back in 1979, the post-tax income of the top 1% was eight times higher than that of middle-income families and 23 times higher than the lowest fifth. In 2005, those ratios grew to 21 (top compared to middle) and 70 (top to bottom), a vast increase in the distance between income classes.
http://www.epi.org/Issuebriefs/239/figureb.gif
Conclusion
The CBO data reveal the severe depth of our inequality problem. Though overall tax reductions during this period have meant slightly faster post-tax income growth for households in each income group, it has made little difference to the overall picture of inequality and has even exacerbated unequal outcomes over this period.
The problem is particularly stark in recent years. Before the current problems in housing and financial markets developed, the overall economy grew solidly over this recovery, with notably strong productivity growth. As the CBO data reveal, aggregate household income grew $1.1 trillion in the 2003-05 period (see appendix table). But these gains have failed to flow broadly throughout the income scale, and the extent of their concentration at the top of the income scale is historically unique. Just under two-thirds (63%) of the gain in household income from 2003 to 2005 went to just 5% of the nation's wealthiest households.
Such concentration of income is unsustainable in a democratic society. The distribution mechanisms that have historically worked to ensure much more equitable outcomes appear to be wholly inoperative. Fixing them must be at the heart of any serious economic policy discussion.
Appendix
Table A-1 shows the method for assigning a dollar amount to the change in pre-tax income shares over the 2003-05 period. Aggregate household income is derived by multiplying the number of households by average household income.1 We then show actual income shares and the income levels that correspond to them. Note that over these years, the aggregate income accruing to the top 5% was much greater than that accruing to the bottom 95%.
Next, we ask what those levels would be if the 2005 shares were unchanged from the earlier year, that is, we apply the 2003 shares to the 2005 aggregate amount. This shows, for example, that instead of going up $396 billion in the 2003-05 period, the aggregate income going to the bottom 95% would have gone up $794 billion. The difference between the simulated and actual changes amounts to $398 billion.
The CBO reports that there were 114.5 million household in 2005. Dividing the $398 billion by 95% of this number allowed us to determine the loss of $3,660 per household in the bottom 95%.
http://www.epi.org/Issuebriefs/239/tablea1.gif


http://www.epi.org/publications/entry/ib239

[Dermezel]

I think that the belief that only the state is capable of long-term planning is false and depends on a platonic ideal of government.

Actually the evidence proves that private industries think less long-term with respect to research and technological development: http://arstechnica.com/old/content/2006/07/7340.ars




AT&T Labs vs. Google Labs: not your grandfather's R&D

By Jon Stokes (http://arstechnica.com/author/jon-stokes/) | Last updated July 24, 2006 6:14 PM
It's easy to knock the telcos nowadays, especially in the wake of the Net neutrality debates. AT&T and Verizon are lumbering old dinosaur behemoths from the post-war era who are steadily being displaced by the smaller, more agile, more innovative mammals of the Internet age—or so the standard narrative goes. But before we write off the telcos in general and AT&T in specific, I think it's worth looking at their legacy of innovation and how that legacy has evolved. It's also worth asking if the best metaphor for their troubles in the fast-moving innovation economy is really "dinosaurs being replaced by mammals." For my part, I think a better metaphor might be "old people blowing money in an effort to compete with the young, fabulous, and deeply in debt."
Making fun of the grandparents

When you're young and fabulous, it's easy to make fun of old people. Take this Business Week article (http://www.businessweek.com/magazine/content/06_31/b3995070.htm), which looks at the state of research and development at the nation's two largest telcos, AT&T and Verizon, and concludes that said R&D is practically nonexistent. These old-line companies—relics of the bygone telecommunications revolution—are now threatened by technological innovation, the author argues, because their business model is centered on extracting tolls from their existing pipes. Hence the noises (http://arstechnica.com/news.ars/post/20060112-5965.html) about double-charging companies like Google (once for bandwidth, and then again for access to customers).
AT&T's Project Lightspeed, where the company plans to use its pipes to offer its customers moving pictures beamed directly into the home (this looks suspiciously like "television"), was allegedly put forth to Business Week by executives as the premier example of the company's innovative prowess. This was supposed to counter the notion that AT&T's only innovations nowadays are aimed at coming up with new ways to squeeze young Internet upstarts. The article's "greedy, out-of-touch old pensioners trying to nickel and dime the kids" narrative is attractive, but the real story is both more complicated and more troubling.
While AT&T may have shown some Business Week author a IPTV (http://arstechnica.com/guides/other/iptv.ars) demo to pitch him on what the company is doing in the consumer services market, the company has by no means abandoned R&D. AT&T Labs is still open, and it still has multiple active research programs. In particular, AT&T researchers are working in the areas of voice recognition, network traffic analysis and shaping, the use of graphics processing units for nongraphics DSP algorithms, data mining, information security, wireless networking, and the list goes on (and on and on). The lab remains one of the largest and most productive in the country, in spite of numerous high-profile splits over the years and quite a bit of downsizing.
The real problem is that what AT&T is doing today is not your grandfather's R&D, and neither is the work coming out of Google's labs, or Microsoft's, or the labs of any of the other information economy wunderkinds.
Of pocket protectors and unlimited budgets

The Cold War, with its "Pentagon socialism", combined with large corporate monopolies that were expected to provide lifetime employment and pensions, made for something of a golden age for American technological innovation. This is the era that brought us the transistor and the predecessor to the Internet, an era where all the seeds of today's "information economy" were sown and carefully cultivated at great private and public expense.
The great labs of this era—Bell Labs, Xerox PARC, and IBM's labs—were places with massive budgets, where the world's top scientists were invited to pursue "blue sky" research into areas with no immediately apparent commercial applications. The facilities were state-of-the-art, and there was no pressure from management or shareholders to do anything but science for science's sake. To be able to fund such a lab was a mark of corporate prestige, and the labs themselves, along with their public counterparts like NASA, were major sources of national pride. For a company like Xerox or AT&T, what it meant to have a blue sky research lab was very much like what it means for a city to host a winning sports team; it was a source of pride and an anchor of collective identity. So much like the science that they produced, these labs were ends in themselves.
You might think of these private and public laboratories, with their hordes of young, energetic PhDs and blue-sky research programs, as producers of a kind of scientific capital. This painstakingly built fund of scientific capital that the postwar era left us was what the later generation of engineers—the fabled "two guys in a garage in Silicon Valley"—drew on to produce the information revolution that began to burgeon even as the Soviet menace was disintegrating.
Dropping out of school and spending the family fortune

It's no coincidence that many of those who went on to lead the information revolution were dropouts from either PhD programs or top-notch undergraduate programs. Even those who finished their doctoral work didn't end up doing open-ended research at the new companies they either founded or joined. The information economy demanded go-getters who would put their energy towards turning basic science into marketable products, and that economy rewarded those who opted out of more traditional research careers with a mix of world-altering power and cold, hard cash. Thus many of the truly ambitious adjusted their career aspirations away from the blue sky research labs where their parents might have dreamed of working and focused instead on the new brass ring: the profitable start-up. Start-ups aimed not at producing scientific capital but at turning it into technological wizardry, and from there into real money—or, rather, into stock value.
Now, I think it's important not to oversimplify things too much, or to caricature anyone. The more agile start-ups played an important structural role in making pure research careers less attractive. It's not that everyone was suddenly lured away from doing science by the promise of instant wealth. The competitive pressure that start-ups and new industries put on established businesses ultimately combined with trust-busting, structural changes in the economy, social shifts, and an array of other factors to turn expensive prestige items like research labs into unaffordable luxuries. Thus it stands that to one extent or another, all of the aforementioned labs have been downsized and/or transformed over the years into places where research programs must now yield commercial fruit.
In today's more agile economy, where workers hop from job to job and businesses spring up from nowhere to dominate an industry in the span of half a decade, there's no longer anything in the private sector like the enduring safety of the Ma Bell monopoly to lavishly support a blue sky research lab. The closest we have today is Google's "20 percent time," where engineers are encouraged to spend 20 percent of their time working on whatever research project strikes their fancy. But 20 percent isn't 100 percent.
With today's short-term corporate focus on maximizing shareholder value by inflating the stock price at all costs, the pressure to innovate comes from the boardroom and the marketing department. Hence all the men and women in R&D have to be able to make a case for the eventual marketability of what they're working on or risk being downsized. We've come a long way from men with pointy glasses and pocket protectors who spend decades just doing pure science on the corporate dime.
There's no doubt that the information economy continues to create a lot of wealth, but I think it's fair to ask if it's also creating enough science to replenish the stock of scientific capital that it's still burning through. I think it's clear that chaotic, market-driven change is a good way to bring ideas quickly and efficiently from concept to profitable product. However, such a rapid churning of the institutional and cultural landscape ultimately may not be conducive to the kind of steady, expensive, long-term investment in fundamental research that produces the really big ideas that somewhere, at some completely unforeseeable point in the future, change the world.
(And no, before you suggest it, the academy isn't all that insulated from rapidly changing market pressures anymore. Grant money is doled out to academics by private-sector corporations who are looking for a return on their investment. But this issue would take up a whole other article.)
Not your grandfather's Soviet competition, either

I think it's also worth asking ourselves if certain aspects of our current competitive environment aren't setting us up for a future drubbing by countries that are not only willing to spend the kind of money to fund blue sky research—both in the private and the public sectors—that America once spent in her generation-long effort to out-innovate the Soviets, but also don't have some of the structural problems that threaten to keep the two guys in the garage from ever bringing a product all the way to market. The South Koreans and the Chinese in particular have no qualms about building public broadband infrastructure and pumping state money into shiny new research facilities, and while their IP laws are (thankfully) tightening, they are not yet headed in the direction of an IP regime that actively stifles innovation and keeps new players out of the market. Meanwhile, back in America, a perfect storm of rent-seeking behaviors by entrenched players, a broken patent system, a lack of substantial corporate oversight, and old-fashioned executive greed threatens to drown the fabled "two entrepreneurs in a garage" just as surely as those two guys helped sink the blue sky research labs of the Cold War era.
In sum, I worry that not only is the information economy not replenishing the fund of scientific capital that it inherited from the great Cold War-era research labs, but that new start-ups are being actively locked out of the market by means of patent and trade secrets litigation so that a combination of old and new interests can fight over what's left of the shrinking pie.




Also after they privatized Russia, a lot of State industries were sold off for quick profit:



Ten years ago this month, Russia's parliament, the duma, was seeking to impeach President Boris Yeltsin, initiating a time of stalemate and struggle that ended seven months later when Yeltsin ordered tanks to fire on the duma's headquarters. Yeltsin's victory settled who ruled Russia and who would determine economic policy. But were Yeltsin's economic policy choices the right ones for Russia?
The move from communism to capitalism in Russia after 1991 was supposed to bring unprecedented prosperity. It did not. By the time of the rouble crisis of August 1998, output had fallen by almost half and poverty had increased from 2% of the population to over 40%.
Russia's performance since then has been impressive, yet its gross domestic product remains almost 30% below what it was in 1990. At 4% growth per annum, it will take Russia's economy another decade to get back to where it was when communism collapsed.


http://www.guardian.co.uk/world/2003/apr/09/russia.artsandhumanities

[LeftSideDown]

Wall of text crits you for over 9000!

[Dermezel]

State ownership of the economy is called nationalization. It is therefore a nationalist mode of organization, whereas socialism, by its nature, is a popularly controlled economy (controlled by society).

Well China is a Multi-Nation State, so I am not sure if that is completely accurate. But say it is, even then that is more progressive then privatization because either it puts more emphasis on long-term development over immediate gain.

Think of how the Reaganomics privatization movement has wrecked the US economy, and how the fascists privatized everything to ill effect:


Who did Mussolini and Hitler support once they seized state power? In both countries a strikingly similar agenda was pursued. Labor unions and strikes were outlawed, union property and publications were confiscated, farm cooperatives were handed over to rich private owners, big agribusiness farming was heavily subsidized. In both Germany and Italy the already modest wages of the workers were cut drastically; in Germany, from 25-40%; in Italy, 50%. In both countries the minimum wage laws, overtime pay, and factory safety regulations were abolished or turned into dead letters. Taxes were increased for the general populace, but lowered or eliminated for the rich and big business. Inheritance taxes for the wealthy were greatly reduced or abolished. Both Mussolini and Hitler showed their gratitude to their business patrons by handing over to them publicly owned and perfectly solvent steel mills, power plants, banks, steamship companies ("privatization," it's called here). Both regimes dipped heavily into the public treasury to refloat or subsidize heavy industry (corporate welfarism). Both states guaranteed a return on the capital invested by giant corporations and assumed most of the risks and losses on investment. (Sounds like S&Ls, doesn't it?)

As in all reactionary regimes, public capital was raided by private capital. As a result, in Italy during the 1930s the economy was gripped by recession, a staggering public debt, and widespread corruption, but industrial profits rose, and the armaments factories busily rolled out the weapons. In Germany, unemployment was eased somewhat because of the massive arms program and the arms spending. But generally, poverty increased. But from 1935-1943, the net income of German corporate leaders rose 46%. In both countries, the conditions of labor deteriorated greatly: speed-ups, dismissals, imprisonment for workers who complained about unsafe or inhumane work conditions, longer hours for less wages.

http://sonic.net/~doretk/ArchiveARCHIVE/M%20P/Parenti%20on%20Fascism.html

This vs. the Soviet Centralized economy, which was able to produce 11 tanks to each of Germany's 1.

Also even Democratic State ownership is better then Democratic/Private ownership because even a Democratic group of workers could put their interests above that of other workers and society in general. They could also "sell-off" their industries, again leading to less focus on long-term development.

[Dermezel]

Wall of text crits you for over 9000!

Yeah I like to go by evidence.

[Dermezel]

More evidence:

The Distribution of Wealth in America


There is very little data about the distribution of wealth in America. There is one source, the Survey of Consumer Finances (http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html), sponsored by the Federal Reserve Board, that does provide data from 1983.
These data suggest that wealth is concentrated in the hands of a small number of families. The wealthiest 1 percent of families owns roughly 34.3% of the nation's net worth, the top 10% of families owns over 71%, and the bottom 40% of the population owns way less than 1%.
http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/Wealth2004.gif



Changes in the Concentration of Wealth


What is happening to the concentration of wealth in America?
Are we experiencing increasing equality, increasing inequality, or not much change?


http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/Wealth83_04.gif


As with the case of income, the evidence suggests an increase in inequality over time.
The Distribution of Wealth and Income

The distribution of wealth is much more unequal than the distribution of income, especially when focussing on the bottom 60% of all households. The bottom 60% of households possess only 4% of the nation's wealth while it earns 26.8% of all income.
http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/WealthIncome07.gif (http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/INC&WealthDataTable.htm)
(http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/INC&WealthDataTable.htm)


Can you think of any reason for the much greater inequality in wealth than in income?
What do we tax more in the US: wealth (assets) or income?
Think of all kinds of "income" taxes that exist -- federal, state, and (in some cases) local. Think of the very few kinds of assets that are taxed: property taxes, in some states taxes on the value of cars. If you own considerable assets do you have a reason to keep them in forms that will not be taxed?

Which is a Better Measure of Societal Inequality: Wealth or Income?


Looking at the distribution of wealth and looking at the distribution of income gives the researcher two quite different views of the amount of inequality in American society. Which economic measure -- wealth or income -- should be emphasized?


Alan Greenspan, chairman of the Federal Reserve Bank, make the case for wealth:
"Ultimately, we are interested in the question of relative standards of living and economic well-being. We need to examine trends in the distribution of wealth, which, more fundamentally than earnings or income, represents a measure of the ability of households to consume." Those who argue for the greater importance of income make the case that for wealth to actually have a significant impact on one's standard of living it has to be translated into higher income.


http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/income&wealth.htm

[Dermezel]

More evidence: http://www.corpwatch.org/article.php?id=377


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Top 200: The Rise of Corporate Global Power
by Sarah Anderson and John Cavanagh, Institute for Policy Studies
December 4th, 2000


Contents



Key Findings (http://www.corpwatch.org/article.php?id=377#key)
Introduction (http://www.corpwatch.org/article.php?id=377#intro)
Overview of the Top 200 (http://www.corpwatch.org/article.php?id=377#overview)
Power of the Top 200 (http://www.corpwatch.org/article.php?id=377#power)


Economic Clout
Political Clout


Contributions of Top 200 (http://www.corpwatch.org/article.php?id=377#contributions)


Jobs
Taxes


Conclusion (http://www.corpwatch.org/article.php?id=377#conclusion)
Notes
Table 1. Changing Profile of the Top 200 (1983-1999)
Table 2. Top 100 Economies (1999) Table 3. Top 200 (1999)


Download Report
http://www.corpwatch.org/img/original/pdf.gif Top 200: The Rise of Corporate Global Power (http://www.corpwatch.org/downloads/top200.pdf)
Available in PDF
File Size: 203KB

Key Findings



Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and country GDPs).
The Top 200 corporations' sales are growing at a faster rate than overall global economic activity. Between 1983 and 1999, their combined sales grew from the equivalent of 25.0 percent to 27.5 percent of World GDP.
The Top 200 corporations' combined sales are bigger than the combined economies of all countries minus the biggest 10.
The Top 200s' combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in ''severe'' poverty.
While the sales of the Top 200 are the equivalent of 27.5 percent of world economic activity, they employ only 0.78 percent of the world's workforce.
Between 1983 and 1999, the profits of the Top 200 firms grew 362.4 percent, while the number of people they employ grew by only 14.4 percent.
A full 5 percent of the Top 200s' combined workforce is employed by Wal-Mart, a company notorious for union-busting and widespread use of part-time workers to avoid paying benefits. The discount retail giant is the top private employer in the world, with 1,140,000 workers, more than twice as many as No. 2, DaimlerChrysler, which employs 466,938.
U.S. corporations dominate the Top 200, with 82 slots (41 percent of the total). Japanese firms are second, with only 41 slots.
Of the U.S. corporations on the list, 44 did not pay the full standard 35 percent federal corpo-rate tax rate during the period 1996-1998. Seven of the firms actually paid less than zero in federal income taxes in 1998 (because of rebates). These include: Texaco, Chevron, PepsiCo, Enron, Worldcom, McKesson and the world's biggest corporationGeneral Motors. 10. Between 1983 and 1999, the share of total sales of the Top 200 made up by service sector corporations increased from 33.8 percent to 46.7 percent. Gains were particularly evident in financial services and telecommunications sectors, in which most countries have pursued deregulation.

[Endomorphian]

Uh, no. That entire post is a flat out lie. Denmark and Sweden, who have the highest income tax rate in the world, also have the highest levels of democracy and standards of life, as well as happiness. While they can't be detached from the global capitalist economy, the facts are staunchly contrary to your laughable, shallow map.

They also have some of the simplest tax codes and business regulations in the world. Perhaps it's more of a question of where the tax burden lies than the fact a tax burden exists in the first place.

[Dean]

They also have some of the simplest tax codes and business regulations in the world. Perhaps it's more of a question of where the tax burden lies than the fact a tax burden exists in the first place.

Right. Materially, in terms of taxation, buying power and distribution of services, Sweden and Denmark are far more proximate to a socialist paradigm than all of the red-colored states on the map.

Socialism is the decentralization of economic distribution, which is directly contrary to capitalist and free-market systems, which experience increasingly centralized economic distribution by their nature.

[Endomorphian]

free-market systems, which experience increasingly centralized economic distribution by their nature.That's a hard argument to sell when all major, centralized organs of commerce today are products of subsidies and legal practices that show favoritism towards their operations. Over the past five years farming, energy, information, mechanical, and retail corporations have received tens of billions of dollars in each sector. The most oligopolistic industries like banking and insurance are also typically the most regulated and subsidized.

Labeling socialism without any qualifiers "decentralization of economic distribution" when RevLeft has been frequented over the years with more than a dozen self-admitted Hoxhaists, Stalinists, Maoists, and technocrats is a bit dishonest. Only particular socialists are decentralists.

[RGacky3]

You don't recognize that they are one and in the same and that both are met with dollars.

Tons of Social needs are not mett (except for government intervention), simply because there is no profit in it, so there is a huge difference, your idea that consumer need and social need are one in the same is as stupid as saying that royal need and peasant need are one in the same, and royal decree takes care of all of them.

[Bud Struggle]

Yea, but you have to remember who PAYS for those social needs:

http://static.businessinsider.com/image/4bbe17ce7f8b9a8f516f0000/chart-of-the-day-share-of-total-federal-tax-liabilities-by-income-category-2006.jpg

Frankly, the rich pay for everything.

[Dermezel]

Yea, but you have to remember who PAYS for those social needs:

That's like arguing that the King pays for everything. It's easy enough to do when you are the only game in town. The rich "pay" for it because they have already expropriated the wealth and labor. Thus they are "paying" for it, after the Working Class has already paid them for it.

Again, your argument is like telling a Slave that his Master pays for his food, and water, and housing.

[RGacky3]

If that graph includes what the highest quintile's funds are it would look much better.

giving $200 when you have $1000 is MUCH MUCH MUCH less significant that giving $4 when you have $20.

The top 5% control 95% of the wealth so of coarse they pay more taxes.

The point is, the market does'nt take into consideration social needs, in US Capitalism, the government is forced to.

[Dean]

Yea, but you have to remember who PAYS for those social needs:



Frankly, the rich pay for everything.

The highest 20% is incredibly different than the highest 1%, which itself owns something like 60 or 80% of US wealth, so statistics concerning this range - which I'm sure will contradict your claim - will really shed light on the issue.

[Dermezel]

The highest 20% is incredibly different than the highest 1%, which itself owns something like 60 or 80% of US wealth, so statistics concerning this range - which I'm sure will contradict your claim - will really shed light on the issue.

And it's been growing every year.

[Cal Engime]

Also after they privatized Russia, a lot of State industries were sold off for quick profit:Forgot I hadn't posted this: doesn't the fact that the industries were sold for short-term profit necessarily imply that somebody bought the industries for long-term profit?

[Dermezel]

Forgot I hadn't posted this: doesn't the fact that the industries were sold for short-term profit necessarily imply that somebody bought the industries for long-term profit?

Not necessarily. In cases of capital flight they may be doing it because it is cheapened by economic instability, and because the sellers are desperate to convert their currency and holdings before the general economy collapses even more. In other words the reasons could simply be opportunistic.

Likewise you have to keep in mind that profit is not necessarily gain for the overall economy. If I destroy a countries general economy by introducing my products which they cannot compete with, I may have brought untold misery to millions of people while filling my own pockets. For them it is a loss, for me it is a profit.

Profit can even be accrued at the expense of the entire economy. Simply transferring wealth even at the cost of inducing a financial crisis, as Goldman Sachs did, can be seen as a form of profit that creates no real wealth or surplus value. Likewise, when oil companies impair the use of electric cars and alternative fuels, they are harming the overall economy and technology development merely to acquire their own profits.

In fact a key example here would be the Global Warming issue, where various companies are willing to risk bringing the entire planet to the brink of nuclear war in order to maintain their control of oil reserves. Apparently their narrow minded calculations don't take into account that the widespread disasters of Global Warming could well negate any of their future earnings.

Last, I have to note that this isn't an accidental or individual case by case phenomenon but a law which follows inherently from the basic premises of capitalism. When companies compete it is often an existential event. Company A literally puts Company B out of business, and like the Romans and Carthage probably does as much as it can to make sure they never recover, and no new threats arise. In this situation long-term profits may be absolutely trumped by short-term need because your opponent might be going for a quick killing blow. If Delta Airlines launches a massive negative media campaign against you, you may need some initial capital to compete now. If IBM develops a new way of making computers that allows them to sell at 50% of the price, then Microsoft might need to compete with them immediately.

Long-term thinking often times might be detrimental in a competitive system. A man who saved for 20 years could lose it all in a day to a thief who murders him in the night.