Capitalism and Risk

[BobKKKindle$]

In the past I have often heard supporters of Capitalism suggest that the difference in income between owners of corporations and workers can be justified because the owners undertake risks when the choose to start an enterprise - if the enterprise fails, they will be in debt, and on ocassion it has even been suggested that the Capitalist would be subject to hate and isolation by his community if the enterprise fails and that this is also a form of risk. How would you suggest that one responds to this 'risk' argument?

[Trent Steele]

The argument that those who control and own corporations are at greater risk and stand to lose more from it's failure than their workers is completely flawed.

Look at any major corporate failure recently, executives walk off with large (often multi-million pound) payouts and into their next cushy job. Large-scale stockholders will lose out, but have other holdings so even the complete bankruptcy of a business that they hold stock in will only create a dent in their wealth.

The real damage is to the firm's workers, who are left without a job, and therefore without an income (apart from a bit of redundancy pay, if they're lucky). These workers' pensions are also often dependant on the company they worked for, and they may lose this as well.

[Don't Change Your Name]

Criminals also run risks

[bezdomni]

The "risk" they are running is controlling the labor of other people. It is like saying a slave master runs a risk by buying a slave, therefore the slavemaster has a "right" to the capital that his slaves produce.

Furthermore, this argument fallaciously asserts that running a risk entitles you to exploit others. There is a risk involved with starting a company or incorporating...so fucking what? Taking risks doesn't give you the right to another person's labor-power.

[Kwisatz Haderach]

Originally posted by [email protected] 02, 2007 08:49 am
In the past I have often heard supporters of Capitalism suggest that the difference in income between owners of corporations and workers can be justified because the owners undertake risks when the choose to start an enterprise - if the enterprise fails, they will be in debt, and on ocassion it has even been suggested that the Capitalist would be subject to hate and isolation by his community if the enterprise fails and that this is also a form of risk. How would you suggest that one responds to this 'risk' argument?
It is absolute bullshit to suggest that people should be rewarded for no other reason than taking risks. Yes, capitalists take risks. So what? Compulsive gamblers take risks too. And, as El Infiltr(A)do mentioned, criminals have some of the riskiest jobs anywhere. If I jumped out the window right now, I would be taking a great risk of fatal injury or death. Should I be rewarded with a few million dollars if I survive, just because I took a risk?

Wealth comes from work, not risk.

[la-troy]

Capitalist take calculated risk. I have never heard of a capitalist losing every thing from a failed business. Indeed it seems to me that the workers suffer more if the business fails. The capitalist can always set up a next enterprise but not the worker. Imagine the worker that depends on that job for everything imagine it fails. He has lost his livelihood,
lost his health benefits so his family suffers. He has to wait for a next capitalist bastard to set up a business. But the only way he is going to set up the business is if he gets cheap labour, low taxes and lax environmental laws so the worker and his family his generations will suffer more.

[Luís Henrique]

The risk a capitalist runs is that of losing all his money and becoming... one of us...

Luís Henrique

[CrazyMode]

Originally posted by [email protected] 02, 2007 06:49 am
In the past I have often heard supporters of Capitalism suggest that the difference in income between owners of corporations and workers can be justified because the owners undertake risks when the choose to start an enterprise - if the enterprise fails, they will be in debt, and on ocassion it has even been suggested that the Capitalist would be subject to hate and isolation by his community if the enterprise fails and that this is also a form of risk. How would you suggest that one responds to this 'risk' argument?
The risk most investors isn't very serious at all. They get so much support from whoever, if they fail or make a bad decision, or even commit a crime, they rarely see a serious consequence. A working person can lose their entire livelihood in a moment's notice, regardless of any error they may make. An investor/owner/executive would never have to face poverty or criminal punishment.

Capitalists are also very often investing other people's money (wealthy parents). And as I said before, they are never punished for the failure of a firm. All the financial penalties are shifted to the worker's in the form of layoffs and executives get a slap on the wrist or a pat on the back.

Once a person is investing hundreds of thousands of dollars, they will always be able to recover. Maybe not completely, but they won't truly suffer consequences.

[Die Neue Zeit]

^^^ To play devil's advocate for a moment, you guys need to differentiate just a little bit between the big corps and the small businesses.

[Janus]

because the owners undertake risks when the choose to start an enterprise - if the enterprise fails, they will be in debt
But it is usually not the upper capitalist hierarchy that takes such major gambles but lesser accredited entrepreneurs who do so. Once they have become established however, they face little risks after that unless of course something major happens (recessions, etc.). In capitalism and in life itself, everyone takes risks including the workers and others who have joined these types of ventures.