Fighting a New War on Poverty

[Capitalist Lawyer]

Fighting a new war on poverty
By Jack Kemp
Wednesday, May 30, 2007

To ignore the potential contribution of private enterprise is to fight the war on poverty with a single platoon, while great armies are left to stand aside. - Sen. Robert F. Kennedy

Mario Cuomo of New York electrified the 1984 Democratic Convention with his tale of America as two cities, one rich and one poor, almost permanently divided into two classes. Today John Edwards is running for president on this same platform and using the same metaphor.

But America is not divided into two cities; instead, America is divided into two separate and unequal economies, one that works well and one that is fatally flawed and must be fixed so as to combat poverty.

Our mainstream economy is entrepreneurially capitalistic: It is market-oriented and based on private property, ownership, the rule of law and with widespread access to capital and seed corn for new business ventures. It rewards work, savings, investment and productivity. This economy dominates the American market and serves as an example to the world of democratic capitalism.The second economy functions in almost direct opposition to our mainstream capitalist economy. Similar to a Third World socialist economy, it denies people an entry into the mainstream due to the barriers to economic activities along with a virtual absence of any link between human effort and reward. It perpetuates poverty, dependency and welfare while discouraging employment, and it prevents access to capital, ownership of assets and quality education. The irony is that this second economy was created out of a desire to help the poor, alleviate suffering and provide a social safety net. However, instead of independence, this welfare-based economy has led to near perpetual dependency, and the social and economic costs to our nation are enormous in terms of unfulfilled potential and dashed dreams.


As secretary of Housing and Urban Development from 1988 to 1993, I visited pockets of poverty in ghettos and barrios throughout America. I spoke personally with people living in the depths of poverty and hopelessness. I vowed then to take part in a bipartisan effort to help create an urban American Renaissance. I applaud Edwards' attempts to raise the issue of poverty and challenge the Republican candidates to join in the debate.The problem is that self-improvement and ownership of assets are discouraged by regulatory and tax policies that trap people in impoverished areas. In too many cases, the poverty that exists today is due in part to government welfare coupled with regulatory and tax policies that punish work, savings and investment and discourage ownership of assets. The system redlines certain areas of our country, limiting people's access to capital, credit, mortgage loans and well-paying jobs.

To wage a real war on poverty, we should launch a 21st century Marshall Aid Plan in the cities of America to reform education; create job opportunities; and provide access to capital, credit and ownership opportunities for low-income Americans. This plan must be based on equal opportunities to get jobs, own homes and launch businesses.

The first step is to create Enterprise or Empowerment Zones that would eliminate the capital gains tax in the newly "green-lined" zones, allow for expensing of all investment in plant machinery and technology, and eliminate payroll taxes for men and women who are first-time job holders up to 200 percent of the poverty line.

Next we need to cut the bureaucratic red tape that makes development in urban areas. We need to look at the legal barriers to production and commerce. Local impact (development) fees, application processing costs, building codes, zoning and land use restrictions, and nongrowth policies greatly increase construction costs. Instead of creating regulations that make it more difficult to build in urban areas, entrepreneurs need to be offered incentives for investing in cities.

The only way to create wealth is to work, save, invest, make a profit and reinvest.

Through eliminating America's second economy and tapping into the economic forces of a more democratic system of capitalism, we can develop a formula for ending chronic poverty in America. Everyone should have the opportunity to go as high as their merit, ability, determination and quality of their performance can carry them.

[CornetJoyce]

Ah yes, the "enterprise zone" where capitalism was to wreak miracles. "I invented the enterprise zone," guffawed Al Capp. "It's Dogpatch!"

[Capitalist Lawyer]

Why aren't there any replies to this thread?

It's an article advocating more capitalism to combat poverty. I thought you guys would be all over this article like a bum on a bologna sandwich? Or vultures consuming a corpse--picking it apart, piece by piece?

Let's see some action here?

[Matty_UK]

Reminds me of the bit in the Communist Manifesto where Marx talks about "bourgeois socialism" which believes "the bourgeoisie is a bourgeoisie for the benefit of the proletariat."

[Dimentio]

*writes something so that capitalist lawyer won't feel so alone*

[Demogorgon]

Well, let's abandon all rhetoric and look at simple facts. America has the greatest inequality of wealth and amongst the poorest level of social mobility of any Western Country (presumng we don't count Turkey) and has one of the more capitalistic economies. I know they are all capitalist, but they do come in variations.

The greatest level of social mobility is, if I remember correctly actually in Sweden, which has quite a good welfare state model. I don't say this to endorse the Swedish model because it is still pathetically inadequate, but facts are facts and it does do better than American corporatism.

The simple conclusion to all of this, is that the welfare state, progressive taxation and a great deal of Government programmes, provide a far more effective solution of poverty, when applied in the real world than the so called free market does.

[pusher robot]

Facts in isolation don't tell you anything about cause and effect.

For example, surely you would concede that the fact that the U.S. shares a long and rather porous border with a country that is easily in the top 20 most unequal in the world has some effect. How much? The statistics in isolation do not tell us.

[Demogorgon]

Originally posted by pusher [email protected] 06, 2007 05:04 pm
Facts in isolation don't tell you anything about cause and effect.

For example, surely you would concede that the fact that the U.S. shares a long and rather porous border with a country that is easily in the top 20 most unequal in the world has some effect. How much? The statistics in isolation do not tell us.
Well yes, people entering from Mexico do have an effect. That cannot be denied. I doubt it has as big an effect as you suspect, but I will grant you this one. We will drop America and use Britain as our example. Inequality in Britain is not as bad as it is in America, and it does have more of a welfare state. But it is pretty pathetic compared to the rest of Western Europe, and low and behold the rate of social mobility is also comparitively low (and getting worse).

[b man]

It is no secret that an increase in social spending stimulates the economy.


This would raise the quality of life in America if implemented, but it wouldn't be implemented, plus, it has been proven over hundreds of years of capitalist implementation that there will always be poor people.

[pusher robot]

Inequality in Britain is not as bad as it is in America, and it does have more of a welfare state. But it is pretty pathetic compared to the rest of Western Europe, and low and behold the rate of social mobility is also comparitively low (and getting worse).

Nearly the exact inverse is true as to fecundity. Do you concede a cause/effect relationship between welfare states and fecundity?

[CornetJoyce]

A few words on Jack Kemp: his press releases referred to him as a "great quarterback." In fact, he was a dimwit with a good arm, a photogenic mad bomber of a quarterback who was not mentioned in the same breath as the elite of the game. Had he not had the strong arm, he would have been a shirt model with electoral ambitions and hopes in the lottery.

[Demogorgon]

Originally posted by pusher [email protected] 06, 2007 06:30 pm

Inequality in Britain is not as bad as it is in America, and it does have more of a welfare state. But it is pretty pathetic compared to the rest of Western Europe, and low and behold the rate of social mobility is also comparitively low (and getting worse).

Nearly the exact inverse is true as to fecundity. Do you concede a cause/effect relationship between welfare states and fecundity?
Do you intend to continue dodging the question or might we get somewhere?

[Capitalist Lawyer]

Still waiting for someone to refute this article piece by piece (ala. quote boxes) intelligently.

*yawns*

[Demogorgon]

Originally posted by Capitalist [email protected] 07, 2007 05:02 pm
Still waiting for someone to refute this article piece by piece (ala. quote boxes) intelligently.

*yawns*
How can you refute that kind of article intelligently? It repels intelligence :lol:

Anyway, I have told you what is wrong with it. It is based on the faulty premise that the free market increases social mobility and helps combat poverty, when demontrably, it does not.

[redcannon]

using private enterprise to fight poverty is like using famine to end world hunger.

[Capitalist Lawyer]

Anyway, I have told you what is wrong with it. It is based on the faulty premise that the free market increases social mobility and helps combat poverty, when demontrably, it does not.

Ok, that's your premise. Now please, support it with more elaboration.

And not just with "no" or verbal references to "exploitation" or "capitalism sucks".

[Matty_UK]

Originally posted by Capitalist [email protected] 07, 2007 07:40 pm
Ok, that's your premise. Now please, support it with more elaboration.

And not just with "no" or verbal references to "exploitation" or "capitalism sucks".
"Similar to a Third World socialist economy, it denies people an entry into the mainstream due to the barriers to economic activities along with a virtual absence of any link between human effort and reward. It perpetuates poverty, dependency and welfare while discouraging employment, and it prevents access to capital, ownership of assets and quality education."

He already has. The entire argument hinges upon the idea that welfare and public services make for less social mobility.

He pointed out that the USA has less public services and welfare than any other developed country, and also has the least social mobility.

On the other hand, the Scandinavian countries with a very strong welfare state have the highest level of social mobility.

So the argument is wrong.

[Demogorgon]

Originally posted by Capitalist [email protected] 07, 2007 07:40 pm

Anyway, I have told you what is wrong with it. It is based on the faulty premise that the free market increases social mobility and helps combat poverty, when demontrably, it does not.

Ok, that's your premise. Now please, support it with more elaboration.

And not just with "no" or verbal references to "exploitation" or "capitalism sucks".
We can see here clearly that countries with less restricted markets have less social mobility and much greater inequality

http://www.suttontrust.com/reports/Interge...nalMobility.pdf (http://www.suttontrust.com/reports/IntergenerationalMobility.pdf)

[Dr Mindbender]

Originally posted by Capitalist Lawyer
Still waiting for someone to refute this article piece by piece (ala. quote boxes) intelligently.

*yawns*
I would do, but I dont know the particulars of the social situation in the states so I'm not going to pretend I understand so I'll leave this one open to American comrades.

I will say though Capitalism needs poverty in order to survive. Its like 'fish declaring war on water'! :lol:

[bootleg42]

I'm about to go to sleep but let me quickly refute this in a simple way that ANYONE can understand (I'm also a "noob" in communism, I'm still learning).


To wage a real war on poverty, we should launch a 21st century Marshall Aid Plan in the cities of America to reform education; create job opportunities; and provide access to capital, credit and ownership opportunities for low-income Americans. This plan must be based on equal opportunities to get jobs, own homes and launch businesses.

The first step is to create Enterprise or Empowerment Zones that would eliminate the capital gains tax in the newly "green-lined" zones, allow for expensing of all investment in plant machinery and technology, and eliminate payroll taxes for men and women who are first-time job holders up to 200 percent of the poverty line.

Next we need to cut the bureaucratic red tape that makes development in urban areas. We need to look at the legal barriers to production and commerce. Local impact (development) fees, application processing costs, building codes, zoning and land use restrictions, and nongrowth policies greatly increase construction costs. Instead of creating regulations that make it more difficult to build in urban areas, entrepreneurs need to be offered incentives for investing in cities.

So he wants to get these people into the capitalist game by cutting their payroll taxes and by making it easier for busniess owners to invest in these areas????

In free market capitalism, there is no control over how much a person (or a group of people) can make. If there is a group of people who succeed, then THERE WILL ALSO BE A GROUP PF PEOPLE WHO FALL DOWN (think of a balance, add more weight to one side, the other falls way lower). He wants people, who already have a ton of money, to own the busniesses in the areas of people who don't have much money to begin with??? Then these people who now own the things in the poor areas are going to give jobs to the people in the poor areas, with their payroll taxes cut and they will want them to invest the money to try to make it grow.

So if that happens, considering the way I just described free market capitalism, then out of this group of poor people, there COULD be a few who play the game and win but in order for them to win, MANY OTHER PEOPLE HAVE TO FALL DOWN HARD.

In fact only a few will make it while the rest will be in a worst position that they were to begin with (private owners not from their areas now own everything in their areas, the poor people (a big number of them) of that area now have nothing much and they become alienated and that will cause social problems, etc).

That's the problem. I'd love to rufute it more but I'm sleepy and I will comment MORE about this tomorrow.

[Dimentio]

Nay, it is not a zero-sum game, but the problem is that the monetary economy cannot grow faster than the consumption (and production) of items. Lowering taxes generally mean more money used in consumption, and therefore that the economy risk over-heating. That in it's turn could make the fed increase the rent to cool down the economy, thus unleashing the housing bubble.

[CrazyMode]

Originally posted by Capitalist [email protected] 05, 2007 01:07 am
Fighting a new war on poverty
By Jack Kemp
Wednesday, May 30, 2007

To ignore the potential contribution of private enterprise is to fight the war on poverty with a single platoon, while great armies are left to stand aside. - Sen. Robert F. Kennedy

Mario Cuomo of New York electrified the 1984 Democratic Convention with his tale of America as two cities, one rich and one poor, almost permanently divided into two classes. Today John Edwards is running for president on this same platform and using the same metaphor.

But America is not divided into two cities; instead, America is divided into two separate and unequal economies, one that works well and one that is fatally flawed and must be fixed so as to combat poverty.

Our mainstream economy is entrepreneurially capitalistic: It is market-oriented and based on private property, ownership, the rule of law and with widespread access to capital and seed corn for new business ventures. It rewards work, savings, investment and productivity. This economy dominates the American market and serves as an example to the world of democratic capitalism.The second economy functions in almost direct opposition to our mainstream capitalist economy. Similar to a Third World socialist economy, it denies people an entry into the mainstream due to the barriers to economic activities along with a virtual absence of any link between human effort and reward. It perpetuates poverty, dependency and welfare while discouraging employment, and it prevents access to capital, ownership of assets and quality education. The irony is that this second economy was created out of a desire to help the poor, alleviate suffering and provide a social safety net. However, instead of independence, this welfare-based economy has led to near perpetual dependency, and the social and economic costs to our nation are enormous in terms of unfulfilled potential and dashed dreams.


As secretary of Housing and Urban Development from 1988 to 1993, I visited pockets of poverty in ghettos and barrios throughout America. I spoke personally with people living in the depths of poverty and hopelessness. I vowed then to take part in a bipartisan effort to help create an urban American Renaissance. I applaud Edwards' attempts to raise the issue of poverty and challenge the Republican candidates to join in the debate.The problem is that self-improvement and ownership of assets are discouraged by regulatory and tax policies that trap people in impoverished areas. In too many cases, the poverty that exists today is due in part to government welfare coupled with regulatory and tax policies that punish work, savings and investment and discourage ownership of assets. The system redlines certain areas of our country, limiting people's access to capital, credit, mortgage loans and well-paying jobs.

To wage a real war on poverty, we should launch a 21st century Marshall Aid Plan in the cities of America to reform education; create job opportunities; and provide access to capital, credit and ownership opportunities for low-income Americans. This plan must be based on equal opportunities to get jobs, own homes and launch businesses.

The first step is to create Enterprise or Empowerment Zones that would eliminate the capital gains tax in the newly "green-lined" zones, allow for expensing of all investment in plant machinery and technology, and eliminate payroll taxes for men and women who are first-time job holders up to 200 percent of the poverty line.

Next we need to cut the bureaucratic red tape that makes development in urban areas. We need to look at the legal barriers to production and commerce. Local impact (development) fees, application processing costs, building codes, zoning and land use restrictions, and nongrowth policies greatly increase construction costs. Instead of creating regulations that make it more difficult to build in urban areas, entrepreneurs need to be offered incentives for investing in cities.

The only way to create wealth is to work, save, invest, make a profit and reinvest.

Through eliminating America's second economy and tapping into the economic forces of a more democratic system of capitalism, we can develop a formula for ending chronic poverty in America. Everyone should have the opportunity to go as high as their merit, ability, determination and quality of their performance can carry them.
The barriers that exist for this "second economy" aren't caused by the government. They are caused by the very definition of capitalism and that is that existing capital is invested and in the long term profits are obtained. To be an "entrepreneur" in Capitalism, one MUST have some form of capital. This can be money, this can be an education. This can be something as simple as a good, secure family upbringing. These are all forms of capital, and all of these forms of capital are often outside of the reach of the poor. And this article tries to suggest the poor would do better if they were given LESS help.

[Sentinel]

Cappye Lawyer lol I would have responded if i' d been more sober. maybe next time man. lol in he meanwhile, just read the Redstar papers and you'll be fine,

[pusher robot]

Originally posted by Demogorgon+July 06, 2007 08:18 pm--> (Demogorgon @ July 06, 2007 08:18 pm)
pusher [email protected] 06, 2007 06:30 pm

Inequality in Britain is not as bad as it is in America, and it does have more of a welfare state. But it is pretty pathetic compared to the rest of Western Europe, and low and behold the rate of social mobility is also comparitively low (and getting worse).

Nearly the exact inverse is true as to fecundity. Do you concede a cause/effect relationship between welfare states and fecundity?
Do you intend to continue dodging the question or might we get somewhere? [/b]
That depends on whether you intend to concede that correlation does not imply causation, thus your statistics, while interesting, prove nothing.

[Faux Real]

Originally posted by Capitalist Lawyer
The second economy functions in almost direct opposition to our mainstream capitalist economy. Similar to a Third World socialist economy, it denies people an entry into the mainstream due to the barriers to economic activities along with a virtual absence of any link between human effort and reward. It perpetuates pove

I stopped reading after that... sorry.

[Labor Shall Rule]

To Capitalist Lawyer:

"Similar to a Third World socialist economy, it denies people an entry into the mainstream due to the barriers to economic activities along with a virtual absence of any link between human effort and reward."

A socialist economy is not merely an aggregation of public services; with ongoing privatizations and free-trade agreements, they are clearly not safe from the vultures of foreign capital.

It appears as if it will convert these areas into centers for investment; they are 'zones' in which capital will be able to find cheaper labor-power and less restrictions on their growth. I noticed that the author of this article stated that it was "regulatory and tax policies" that had kept workers from owning their own business or saving and investing themselves — this is misleading at best, considering that their wages from private owners are their means of subsistence, and when you are not paid a wage that is high enough to give you a decent standard of living, you simply can not consider engaging in any of those economic transactions. The Preamble Center for Public Policy discovered, through analytical evidence, that low income workers who were even welfare recipients had to make an hourly wage of $8.89 to afford a one-bedroom apartment.

Besides, this is based on the neoliberal presumption that the "rising tide lifts the boat" — that since capital investment is increasing while increasing 'job opportunities', it will lift everyone from the murky and uncertain water of poverty by increasing income. In other words, the rich get richer, but the poor get richer too. What this forgets is that economic growth in capitalism is always unevenly distributed. So median income may go up, but living costs may skyrocket ahead of real wages, which is in fact what has happened all over the world. In New York, this trend is especially visible. The truth is that the rich get fantastically richer and the poor possibly get a few more crumbs from the table.

[Demogorgon]

Originally posted by pusher [email protected] 09, 2007 05:04 am

That depends on whether you intend to concede that correlation does not imply causation, thus your statistics, while interesting, prove nothing.
You are still trying to wriggle out of this. Corelation is obviously not causation. However I have proved that increasing the welfare state ALWAYS increases social mobility (and vice versa). That implies more than correlation.

Now if you can find some other reason why there is an increase in social mobility in these countries unrelated to the welfare statem, I will have to admit, this is co-incidence. Until that time however we have to conclude that there is a direct relationship and that you are trying to avoid yet another inconvvenient fact.

[Punkerslut]

Next we need to cut the bureaucratic red tape that makes development in urban areas. We need to look at the legal barriers to production and commerce. Local impact (development) fees, application processing costs, building codes, zoning and land use restrictions, and nongrowth policies greatly increase construction costs. Instead of creating regulations that make it more difficult to build in urban areas, entrepreneurs need to be offered incentives for investing in cities.

Yes, deregulate the industries!! Get rid of firecodes that make buildings safe for living and working. Remove the OSHA requirements on workplace safety, especially with heavy, industrial equipment. While you're at it, get rid of the eight hour day and the minimum wage; that's just stopping businesses from popping up that offer twelve-hour days for $2.50 an hour -- businesses we could use! After all, what's a few dead miners and some mutilated children in the long run? Meanwhile, get rid of the laws requiring food to be sold and distributed in sanitary conditions. So what if some thousands become sick, lamed, or worse. In free enterprise, people just won't buy that brand again. Free choice! And those are the businesses we're lacking by keeping these regulations up! We're just losing all this "valuable industry." I can see why our economy sucks. ;) ;)

[pusher robot]

Now if you can find some other reason why there is an increase in social mobility in these countries unrelated to the welfare statem, I will have to admit, this is co-incidence

Let us assume you have incontrovertibly demonstrated a strong correlation between A and B. It does not necessarily follow that A caused B. It could be that B caused A. It could be that C caused both A and B. Or it could still be a coincidence.

In the specific case, it could be that social mobility actually causes a society to become more socialist, rather than the opposite that you are claiming. It could also be that some other factor, like, say, culture, causes both higher social mobility and a socialist tendency and that the two are not otherwise related. Nothing you have presented actually demonstrates a causal link, only a correlation. Even if it were the strongest of correlations, that still proves nothing about causation!

Even assuming you have demonstrated the correlation, it does not prove that socialism is the cause and mobility the effect.

I hope that's clear.

[Demogorgon]

Originally posted by pusher [email protected] 11, 2007 01:06 am

Now if you can find some other reason why there is an increase in social mobility in these countries unrelated to the welfare statem, I will have to admit, this is co-incidence

Let us assume you have incontrovertibly demonstrated a strong correlation between A and B. It does not necessarily follow that A caused B. It could be that B caused A. It could be that C caused both A and B. Or it could still be a coincidence.

In the specific case, it could be that social mobility actually causes a society to become more socialist, rather than the opposite that you are claiming. It could also be that some other factor, like, say, culture, causes both higher social mobility and a socialist tendency and that the two are not otherwise related. Nothing you have presented actually demonstrates a causal link, only a correlation. Even if it were the strongest of correlations, that still proves nothing about causation!

Even assuming you have demonstrated the correlation, it does not prove that socialism is the cause and mobility the effect.

I hope that's clear.
Well had you read the link I posted (which does not come from a left wing source) you would have noted that the level of social mobility falls when and only when the level of social spending also falls.

I have not simply proved this across countries, I have demonstrated the way things change within countries. In other words I have shown causation. If you have any compelling evidence of a different cause that I may have overlooked, by all means post it. But do not claim I am confusing causation and correlation without even looking at the evidence I have psted

[Labor Shall Rule]

Capitalist Lawyer, are you there? Are you going to respond to my counter-arguments?

[Capitalist Lawyer]

What this forgets is that economic growth in capitalism is always unevenly distributed. So median income may go up, but living costs may skyrocket ahead of real wages, which is in fact what has happened all over the world. In New York, this trend is especially visible. The truth is that the rich get fantastically richer and the poor possibly get a few more crumbs from the table.

Income isn't distributed...it is earned.

I'll repeat myself.

Employers cannot pay whatever they want, or they'd pay less than a dollar per day. Employers, (like consumers and everyone else that participates in the economy) are subject to supply and demand, and therefore must pay what the market demands.

When workers get paid a low wage, it's not because the capitalist is "evil" or "greedy" but rather responding to basic market mechanisms.

Labor is a commodity.

[Demogorgon]

Originally posted by Capitalist [email protected] 12, 2007 10:45 pm

Income isn't distributed...it is earned.

I'll repeat myself.

Employers cannot pay whatever they want, or they'd pay less than a dollar per day. Employers, (like consumers and everyone else that participates in the economy) are subject to supply and demand, and therefore must pay what the market demands.

When workers get paid a low wage, it's not because the capitalist is "evil" or "greedy" but rather responding to basic market mechanisms.

Labor is a commodity.
You are randomnly throwing out phrases you do not understand.

You tell us that income is earned. Do you believe all income is earned? Isn't income from investments referred to properly as "unearned income" for example?

A capitalist predominantly gains his income through investment, his income is unearned. A worker of course earns his income predominantly by selling his labour. That you seem to agree is earned. But is what is earned appropriate?

Let's have a look at Labour markets. THe employer is simply responding to the labour market, is he? That isn't how markets work. Supposing that you are correct and wages are set by market forces then the employer will be constrained by market forces from paying an employee below the market rate. The market is not forcing him to pay only the market rate, he can pay more, he can pay above it. He doesn't of course, that isn't good business, but it isn't the market that is causing him to pay that. He wants to get the maximum return on his investment. And to do that he will have to pay the workers less than the wealth they are producing through wealth.

Wealth doesn't come out of nowhere, it has to be created. It is creates through the production of goods and services. This is done by those who do the actual producing the workers. The wealth of course then gets distributed throughout society, some of it will go to the workers in their earned incomes. A large part goes to the capitalists in their unearned incomes.

[RNK]

When workers get paid a low wage, it's not because the capitalist is "evil" or "greedy" but rather responding to basic market mechanisms.

Let's take a large step and assume that this is mostly true; then what's the problem with changing the mechanisms to allow big business to benefit the workers more?

[pusher robot]

Originally posted by [email protected] 14, 2007 11:23 am

When workers get paid a low wage, it's not because the capitalist is "evil" or "greedy" but rather responding to basic market mechanisms.

Let's take a large step and assume that this is mostly true; then what's the problem with changing the mechanisms to allow big business to benefit the workers more?
There's only a problem when you are changing the mechanisms so as to deny reality.

Supply, demand, costs, risk - these are all objective facts of reality. They must be accounted for.