Why do non-wealthy people believe in the "free market"?

I can agree with this post almost 100%. I do however, insist that we have to tax these CEO and upper income (let's don't get into quibbling)folks more, too. WE can't just allow the fantasy lf trickle down.

 

No apologies needed, it's quite obvious that I am unhappy with various components of the capitalist purview (I just had not said so in this thread and disliked the not-so-veiled accusation of bias or anger).

I don't like subjective definitions of rich or poor or villainous. To a certain extent it's a moot point - what I am after is equality and freedom; two things that make talk of wealth really redundant. For what it's worth though, I don't think all the rich are nefarious schemers plundering the peasantry. Some are, and they should be held accountable, but most are simply rational actors functioning in an economic system and a society that rewards and cultivates greed*. They certainly are still causing problems and influencing things in a negative fashion, but for the most part they're totally oblivious to it. Furthermore, the far larger problem and the real "villains" are the corporations that allow (hopefully) normally conscientious people to act without conscience.

*I always though the notion of the "rational actor" was duplicitous, as it assumes that the only rational action is greed. What a strange thing to reinforce.

 

For thumbs, who at times seems sincere.

************

Robert Reich on Why we have to tax the rich more.

Here’s the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich.

Even if we got rid of corporate welfare subsidies for big oil, big agriculture, and big Pharma – even if we cut back on our bloated defense budget – it wouldn’t be nearly enough.

The vast majority of Americans can’t afford to pay more. Despite an economy that’s twice as large as it was thirty years ago, the bottom 90 percent are still stuck in the mud. If they’re employed they’re earning on average only about $280 more a year than thirty years ago, adjusted for inflation. That’s less than a 1 percent gain over more than a third of a century. (Families are doing somewhat better but that’s only because so many families now have to rely on two incomes.)

Yet even as their share of the nation’s total income has withered, the tax burden on the middle has grown. Today’s working and middle-class taxpayers are shelling out a bigger chunk of income in payroll taxes, sales taxes, and property taxes than thirty years ago.

It’s just the opposite for super rich.

The top 1 percent’s share of national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now). The richest one-tenth of 1 percent’s share has tripled. And they’re doing better than ever. According to a new analysis by the Wall Street Journal, total compensation and benefits at publicly-traded Wall Street banks and securities firms hit a record in 2010 — $135 billion. That’s up 5.7 percent from 2009.

Yet, remarkably, taxes on the top have plummeted. From the 1940s until 1980, the top tax income tax rate on the highest earners in America was at least 70 percent. In the 1950s, it was 91 percent. Now it’s 35 percent. Even if you include deductions and credits, the rich are now paying a far lower share of their incomes in taxes than at any time since World War II.
The estate tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it’s 35 percent and kicks in at $5 million. Capital gains – comprising most of the income of the super-rich – were taxed at 35 percent in the late 1980s. They’re now taxed at 15 percent.

If the rich were taxed at the same rates they were half a century ago, they’d be paying in over $350 billion more this year alone, which translates into trillions over the next decade. That’s enough to accomplish everything the nation needs while also reducing future deficits.
If we also cut what we don’t need (corporate welfare and bloated defense), taxes could be reduced for everyone earning under $80,000, too. And with a single payer health-care system – Medicare for all – instead of a gaggle of for-profit providers, the nation could save billions more.

Yes, the rich will find ways to avoid paying more taxes courtesy of clever accountants and tax attorneys. But this has always been the case regardless of where the tax rate is set. That’s why the government should aim high. (During the 1950s, when the top rate was 91 percent, the rich exploited loopholes and deductions that as a practical matter reduced the effective top rate 50 to 60 percent – still substantial by today’s standards.)

And yes, some of the super rich will move their money to the Cayman Islands and other tax shelters. But paying taxes is a central obligation of citizenship, and those who take their money abroad in an effort to avoid paying American taxes should lose their American citizenship.

But don’t the super-rich have enough political power to kill any attempt to get them to pay their fair share? Only if we let them. Here’s the issue around which Progressives, populists on the right and left, unionized workers, and all other working people who are just plain fed up ought to be able to unite.
Besides, the reason we have a Democrat in the White House – indeed, the reason we have a Democratic Party at all – is to try to rebalance the economy exactly this way.

All the President has to do is connect the dots – the explosion of income and wealth among America’s super-rich, the dramatic drop in their tax rates, the consequential devastating budget squeezes in Washington and in state capitals, and the slashing of vital public services for the middle class and the poor.

This shouldn’t be difficult. Most Americans are on the receiving end. By now they know trickle-down economics is a lie. And they sense the dice are loaded in favor of the multi-millionaires and billionaires, and their corporations, now paying a relative pittance in taxes.

The President has the bully pulpit. But will he use it?

http://robertreich.org/

 

i would have expected rhad to be more 'free market' given his views on privacy, TSA, government, etc. Cool.

I don't think you'll get many defenders of 'free market' when you define it as the strict adherence to the philosophies of any one book. But the freedom to buy from whom I choose, sell to whoever I choose, and operate with the least amount of gov't interference is fundamentally attractive to a lot of people.

And even non-rich people (and our bbs definition of 'rich' seems to start at an absolute minimum of of $250K/yr -- you privileged SOBS!), do feel, and seem to be much better off in capitalist societies (however loosely defined), then in non capitalist ones. So, absolutely, we need to protect common interests, and do a much much better job on that then we're doing now, but count me (certainly not rich by our BBS standards) as being closer to the 'free market' side then the centralized economy side (or whichever other textbook governance model you want to pick).

 

Given more thought on this topic, non-wealthy people believe in the American Dream, but they either think the free market is the best way to facilitate it or is synonymous with it.

 

The linkage between sincerety and non-concurrence is non-existent.

 

poor lawboi

i dont want to be part of the "he-man sam haters". how could i hate someone who provides so much entertainment for me here in the d&d?

 

A few observations about the OP:

The misconception that Adam Smith was for free markets. Adam Smith actually supported a lot of government intervention in markets.

Secondly, I'll answer your question: A lot of non-wealthy people believe in "free markets" because a lot of wealthy people have used their influence to control markets for their own personal benefit. That is simply the nature of power relations. I resent the government because rich people constantly use it to keep me down.

Get real, dude.

 

No I don't. I don't think any qualified, neutral economist would either.

You really think that Cuba's poor standard of living and human rights record is because of one embargo?

You really think the government is not at fault here? That people risk their lives to flee on rafts? Is that the fault of capitalism too?

I'm not saying that our relatively free market system does not have problems - but let's not compare apples with oranges here.

 

I'm coming very late to this thread but when capitalism leads to the creation of monopolistic power or even just a high degree of economic power I don't really see that much difference between that power and that wielded by the government.

 

I think government can be potentially much more abusive. They can legally tax you as much as they like and use physical force to enforce it.

 

These days, the wealthy are able to "legally tax" the poorest among us. A whole new usury industry has cropped up where people take "payday loans" at rates that make pawnbrokers blush. Unfortunately, once you have to take a payday loan to, for example, get your car fixed so you can get to work, that leaves less money for bills, which get pushed aside until the end of the next month, when a payday loan becomes necessary again. The whole thing becomes a downward spiral that becomes extremely difficult to get out of.

Government isn't the only entity "taxing" the people.

 

Corporations, or really anyone doing business, can use contract law to legally use force to push their will, in US history there have been many instances of businesses legally using physical force. Also if we are talking about the US there is a check of representative democracy to do prevent a government from becoming tyrannical. While we can also vote with our dollars in terms of Capitalism that like the democratic vote, can be greatly watered down when there is great concentrations of money and power.

As I said earlier once Capitalism leads to monopolies or just the great concentration of economic power in the hands of a few entities there isn't much difference between that and the power wielded by government.

 

What happens if you don't pay your taxes?

What happens if you drive past a Payday Loan center and don't give thm your business?

I actually know someone who worked there and the default rates are extremely high - thus the high interest rate. I don't think any normal bank would touch them with a ten foot pole.

At least they have the option to get expensive money. Just banning usury would remove that option.

Would you suggest government bailouts in these situations? While I believe in a safety net, bailing out everyone who wanted some money before payday would he a bad policy imo

 

That kind of depends on whether you are rich or poor. If you are rich, you hire lawyers and accountants to avoid as much tax as you can, delay what you can't avoid, and then settle with the IRS for pennies on the dollar.

If you are poor, you don't have a choice. Your taxes are removed from your paycheck before you ever deposit a dime.

What happens when your choice is...

• Get a payday loan to fix your car
• Quit or get fired from your job because you don't have transportation

Actually, the payday loan centers (with the exception of some backed by pawnbrokers) are generally backed by a "normal bank" somewhere in America. Default rates are definitely high, thus the unbelievable interest rates, but when you don't feel like you have a choice (see choice matrix above) you get your car fixed so you can get to work.

Usury is banned in many parts of the country and is almost unheard of in most other parts of the world. Muslims are banned from paying or collecting interest AT ALL. I wouldn't go quite that far, but usury is illegal in almost every part of the world.

Of course not, straw man much?

 

Thing is, without these businesses, there would be no option. Your car stays broken and you get fired. Your choice matrix would be a list of one.

I'm not saying that these places are benevolent by any means. I'm just saying that no one is forcing customers - unlike taxes - which we all have to pay. I'm sure there are loopholes, clever accounting, etc. that rich people can use to lessen their income taxes, but they do have to pay sales taxes, property taxes, etc. Also - most of us are not that rich.

If we ban these Payday advance places, then what do we do to help out the guy with the broken car? Thus my straw man

 

I wanted to repost this here (from http://bbs.clutchfans.net/showthread.php?p=6077228#post6077228) because I thought it was very applicable to show how self-harming it can be to think like you do. We shouldn't focus on the demand side. As a matter of fact, I think it is great to have demand and people buying from American companies. The issue is what the American companies end up doing with the money they earn. The core of the "free market" concept that everyone is ready to fight for is 'compartive advantage'. It's good for us to focus on something (designing the iPad) while another country focuses on something else (manufacturing the iPad).
But an under-regulated "free market" ends up with a huge income disparity. See example below.

Here's where the money from purchasing a $500 iPad goes.

$250 - 50% Cost of Raw Materials - Goes mostly outside the U.S.

Spoiler

All told, 52 percent of the retail price of the lowest-priced $499 iPad is tied up in its hardware, including the $9 cost of actually building the thing along with box contents priced at $7.50 for a total of $259.60. http://www.livescience.com/6318-ipad-breakdown-costs.html

$200 - 40% Profit - Goes to shareholders around the world

Spoiler

http://www.computerworld.com/s/article/9150045/Apple_makes_208_on_each_499_iPad

$10 - 2% Cost of Blue Collar Labor - Goes to China

Spoiler

http://www.livescience.com/6318-ipad-breakdown-costs.html

$40 - 8% Cost of White Collar Labor (research, engineering, marketing, sales, management, etc) AND Federal Taxes - Stays in United States



Sales in United States: 14 Million iPads
Revenue: $7,000,000,000

Spoiler

http://www.onlinemarketing-trends.com/2011/01/ipad-sales-data-by-us-states-statistics.html

One way to look at the data above is "Americans Spent $7 billion dollars and only received $560 million back". The issue is that the current system allows income siphoning from the low and middle class in the United States to the rich class in America and the World. This is what our "good for all" free market is doing. The wealth is not being recycled.

The solution is reduction in shareholder profits an increase in salary for the jobs in the United States.

F*** Gordon Gekko, greed is BAD!

 

That $500 iPad may not have even been feasible without free markets. How many $3000 iPad's do you think would sell? Would Apple have even built it?

 

I guess I didn't emphasize that the free market idea is the BEST out there. The idea of free markets is that doing something good for yourself ends up being good for everyone. Survival of the fittest, that's the way nature intended. BUT it has to have some regulation. No good to the "whole" comes when someone who is making 1 mil per year makes 1.02 mil at the expense of someone making $60k a year now making $50k. The rich person barely feels the change but that middle classer just took a significant hit. It may look great when you sum it all up (i.e. GDP) but majority of the people are worse off.

The scary part is that unlike before, the rich can "transfer" wealth regardless of where they are. The addage of "bite the hand that feeds you" is out the window. Worst case scenario (and it'll happen one day) U.S. economy permanantly crumbles and the rich move on to the next superpower to exploit. You think if the United States turns into a 2nd class country, Apple would never be able to make the iPad 3? They'd probably make out even better. Instead of paying $100k salary to some American engineer, they'll pay some engineer in India to do the work for a third of the salary. United States doesn't "own" that kind of knowledge anymore thanks in part to the internet age.