Consider for a moment society as a black box, with no insight into how anything is distributed inside of it. There's a certain amount of capital in use, and another amount available to be used for new things; and a certain amount of labor in use, and another amount available to be used for new things. To get a new thing done, that society needs to get some of that reserve capital out and apply some of that reserve labor to it.
Now let's peek inside that black box. As we have it now, that reserve labor is poor unemployed people, and that reserve capital is rich people's savings. To get anything new done, someone has to borrow that reserve capital from the rich, and pay some of it to the unemployed poor for their reserve of labor, but not pay too much of it to the poor workers because they need enough left over from the produce of this new activity to pay back what they borrowed from the rich owners plus interest.
There could instead be a society where that reserve labor is leisure time that all people have on their hands because they can all meet all of their needs with less labor than their maximal output (because their jobs pay them so well and their fixed expenses like rent are so low), and that reserve capital is the savings that all those people have because they're all capable of earning more than they need to get by (because their jobs pay them so well and their fixed expenses like rent are so low). So to get anything new done, you just need to get enough people to agree to pool their time and money together to make it happen.
There's the same amount of labor and capital in society in either case, and the same amount needs to be unused in reserve in order to make new ventures possible in either case. It's just the distribution of it that's different between the two scenarios.
So if there is enough reserve capital and enough reserve labor to enter into new ventures, but we don't have that idyllic scenario where everyone has leisure time and money saved up, both of which they can contribute to new ventures that they like, then that's entirely because something about the distribution of spare time and spare money is screwed up somehow. If we really can afford to enter into new ventures, then necessarily we have enough spare time and money to do that, so necessarily we could afford to have that idyllic society. And since we don't have that idyllic society, there's a lot of poor and overworked people for no reason other than that some people who get to make those decisions decided they would rather have even more leisure time and extra money at the expense of everyone else.
Or possibly it is the case that there actually isn't enough reserve capital and enough reserve labor in society altogether to really be able to afford to enter into new ventures, but we're nevertheless entering into them anyway, because some people get to make the decisions on what money gets spent on and what gets worked on, so the things they want made and done get made and done, while other things that many many other people desperately need made or done don't get made or done because those many many other people don't get any say in the direction that society's resources get used. — Pfhorrest
There could instead be a society where that reserve labor is leisure time that all people have on their hands because they can all meet all of their needs with less labor than their maximal output (because their jobs pay them so well and their fixed expenses like rent are so low), and that reserve capital is the savings that all those people have because they're all capable of earning more than they need to get by (because their jobs pay them so well and their fixed expenses like rent are so low). So to get anything new done, you just need to get enough people to agree to pool their time and money together to make it happen. — Pfhorrest
someone else is paying the price — Brett
we don’t know what that capital amounts to — Brett
What would you consider a reasonable mark up on products — Brett
Competition will also determine the price. — Brett
Competition is a central feature of the capitalist market economy based on profit. — Bitter Crank
If the price is set by the market, the consumer, then it’s going to be as low as they can get it. Competition will also determine the price. — Brett
If the price is low then how much is the factory going to make in profit, bearing in mind that the workers/owners are on good wages and working less hours? — Brett
Another point: would you lend your capital as a collective to another factory? — Brett
If the price is low then how much is the factory going to make in profit, bearing in mind that the workers/owners are on good wages and working less hours? — Brett
The factory will make excatly as much in profit as it does already, because nothing that would affect its profit is changed in the hypothetical scenario. — Pfhorrest
Imagine you own a steel factory. You import your iron ore from another factory. The price of iron ore starts climbing. What do you do? Suck it up and watch your profit/capital shrink, or pass it on with an increase in price on the steel you sell? — Brett
If prices fall, for whatever reason, then the owners/workers lose their profit margin and therefor the capital they have for investment shrinks. They’re caught in a position of not having the money to trade out of it, or reinvest in new equipment or whatever may be needed to stop the fall in profits. This time it’s not the capitalist who takes the loss on the chin but the collective. What should they do? Do they take a wage reduction, or work more hours to produce more product or borrow money to trade out of it? — Brett
How does your theory address this situation? — Brett
Where did they get the money to buy there homes outright? — Brett
Or alternately, if they don't want to compete in that business anymore, sell off their investment in that company and use it to start something else, — Pfhorrest
That is exactly the choice that owners of businesses today face, and there's no difference in my hypothetical world, except that the equivalent of "borrow money" would be "sell other investments for money". — Pfhorrest
Where did they get the money to buy there homes outright?
— Brett
You're once again presuming that we start in a situation where everything is owned by someone else, and people have to come up with the money to buy it for themselves from nothing. The point of this thought experiment is to imagine a world where that isn't already the case, where ownership is already widely distributed, and how things would function there. — Pfhorrest
So it’s only a theory and wouldn’t actually work in the real world unless someone could snap their fingers and say “ Behold, I give you widely distributed ownership”. Like God creating the world. — Brett
Why would someone buy a failing business — Brett
Well assuming you had other investments. There’s a lot of investing going on here with very little capital. — Brett
The difference now is that the CEO might plan a new direction. He/she might go to the bank with a plan to diversify and seek a loan big enough to carry out that plan over five years. In your new world you couldn’t do that. — Brett
No, you’re just asking questions about how things would work in a world that was like that, so I’m discussing a hypothetical world that is already like that. You can’t then ask how people in a world that’s already like that got to the state that people in such a hypothetical world are already in. They were born into that state, because that’s the normal state of people in their world. — Pfhorrest
Think about it and you wont need authority to guarantee its right, youll see it for yourself. Abolition of rent, and particularly interest, being such integral parts of the present economy would obviously bring enormous changes. — Janus
Enormous changes would mean we would no longer have the same economy. It's not diificult to understand. — Janus
The only thing changed between the real world and the hypothetical world is who owns what. — Pfhorrest
Let's now move on to adult questions. — Xtrix
On the face of it, I would not be surprised if to inherit wealth is much easier, and requires merely the luck of birth and the common sense not to antagonise the previous generation. — unenlightened
transition comfortably from a financial growth economy to whatever a non-growth economy might look like — Janus
But if you split up the kingdom each generation, the royalty should eventually become paupers. — frank
One needs to look no further than the structure and operation of corporations to see how undemocratic and exploitative it is. This is the nature of the game. A few people (the major shareholders, the board of directors, and the CEO/executives) are the people making the decisions about what to produce, how to produce it, where to produce it, and what to do with the profits from all of this work. — Xtrix
I haven't anywhere said that it would not be possible to have an economy without rent or interest. — Janus
You’re just begging the question if you’re implying that we do depend on rent and interest, i.e. there is no possible way to have a society without it.
And contractual slavery has been a common institution in the past. We got rid of it and society didn’t collapse.
— Pfhorrest
There is no way to have the economy we have without rent and interest, and no foreseeable way to transition to an economy without it; that's what I'm saying. — Janus
If you don't see the conundrum then I'll conclude you are mired in fantasies, unless you can come up with a plausible plan of action for humanity's future trajectory. — Janus
One needs to look no further than the structure and operation of corporations to see how undemocratic and exploitative it is. This is the nature of the game. A few people (the major shareholders, the board of directors, and the CEO/executives) are the people making the decisions about what to produce, how to produce it, where to produce it, and what to do with the profits from all of this work.
— Xtrix
Yep, and these guys make $$$ when business goes well. If only the everyday employee could get some skin in the game.
But what happens when things go poorly? You don't just lose your pay and get fired; the company collapses and you could be on the hook for insane amounts of money - those debts don't just disappear into thin air when the company declares bankruptcy. Now you've got 18 year old employees dealing with bankruptcy lawyers. — BitconnectCarlos
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