The Poor Abuse the Rich (not the other way around)

[Atheist.]

This really is a horrible argument, and it looks like it's written by someone in their early years of high school.. Anyone who's taken a college economics course is laughing at this right now. If you're going to try and get serious about writing an argument, try something a little less complicated. Honestly, the rich getting richer is a moderately simple expression, and you only need a little common sense to get the point.

Here's a really, really simple counter-point. The rich have a lower percentage of their income devoted towards cost of living, and therefore are able to put a larger portion of their income to work for them; this ultimately produces substantially more money than the poor man. The poor man can only invest what he has left after buying his basic life necessities, which usually is little to none.

Next..

Assume one child is born into a poor family, and another is born into a rich family. The child born into the rich family will have a LOT more opportunities to build wealth, as he has more opportunities for a better education. The rich child also may have a trust fund, which he can start investing immediately upon turning 18. The poor child will only be able to attend public school, and may or may not be able to attend college. The poor child definitely will not have a trust fund to invest, rather, he'll likely follow a path similar to his parents, with potential for a small margin of improvement.

These are two very simple arguments phrased in layman terms so that someone who lacks understanding of economics can relate to it, and should easily be able to understand.

Go take your straw man arguments elsewhere,

Thanks.

Edit: Also, here's a pretty simple way to see it mathematically.

Lets say a poor man makes 20,000$ a year after taxes, and has 1,200 dollars remaining at the end and he decides to invest it; while a rich man makes 2,500,000 a year after taxes, and has 2,000,000 left to invest at the end of the year.

Assume the rich man invests in a stock with moderate returns, 5% annual growth and the poor man invests more aggressively, and puts his money into a stock with a 10% growth, and they continue adding the same amount every year, for 20 years, and the interest stays the same.

Assuming the poor man keeps this up, he will have just over 75,000$ to retire on, while the rich man will have a bit over 73,000,000. While this doesn't include the tax taken from the investing, and it's not adjusted for inflation... you can certainly see the rate of gain is substantially unfavorable for the poor man, even with double the percent gain.

 

[CIA]

Why can't Richard give the phone to Fred instead?

Well, it cost Richard to make the phone, however, it was a $10 total parts and labor to make it, but $100 to sell it. That's quite a mark-up.

Of course, but Fred would be really happy if Richard gave it to him.

Yes, but it would screw Richard. That is not the nature of business. Profit the nature of business. As it should be.

Capitalism is the best economic system. It has made this nation what it is. Anyone complaining about that should go live in a Third World nation for a year or so. Than come back and tell us if capitalism sucks or not.

Richard would get, in return, a "thank you" and a warm smile. That's all the payment he needs.

Also, why is it, do you think, that "third world"-countries exist?

Richard cannot buy food, cars, or anything else with smiles and hugs.

Also, Third World nations exist for to many reasons to discuss here. But it is certainly not Americas fault.

I think hes saying its Capitalisim's fault.
Despite what many people think America =/= Capitalism. Also it can be argued that the existence of third-world nations is partly the fault of capitalism in that exploitative and unsafe factories for large international coorperations are often set up where there are less restrictions on how to treat workers. Third world countries are perfect for that.

Take Nike for instence: http://www.guardian.co.uk/business/2005/apr/14/ethicalbusiness.money

 

[the_dancy_vagrant]

Suffice to say, you have an element of truth in there, but personally I think the general thrust of your argument is entirely wrong.

Haha, that line made my chuckle.

This does not nagate the fact that an indivdual human will always make a rational choice. In hindsight it might not seem to be rational but at the exact moment of purchase the product they buy is valued higher than the money they spend. Secondly I rather doubt that the vats masses are as stupid as you are protraying them to be in a rather unequal fashion i might add.

Just a quick note... by "rational choice", you appear talking about a choice that cannot be explained by later consideration. How rational a choice does that really seem to you? Do you think the term "impulse buy" exists by accident, and that retail strategies to encourage it are the result of some bizarre misconception of human thought?

Fred buys the phone for £50 so the phone is worth £50? Wrong. Fred values the phone at more than £50 but the value Fred places on the phone is not in quantitive terms and is subject to change. Just as we don't say "I love my partner by a factor of 5" so we can't attrbuite one man's value system to any numerical basis.

Fred valued the phone at more than £50 but that is subject to change. The phone will not always be worth more than £50 to Fred. But at the exact time of purchase it was and therefore the decision was rational. As time goes by Fred's "value system" can change and therefore change the rationality of past actions from his perspective. This does not prevent the past action from being rational.

Not only is the phone not worth 50 pounds, Fred will also be paying for service every month. He will pay fees if he goes over his minutes. If he is very unlucky, any change to his calling plan will result in his contract being renewed for a set amount of time. While the transaction does provide a two way benefit, Philip of Virgin mobile ends up with residual income from a product that won't hold its value. Here I'm assuming that since he's selling the phone he also has his hands in the wireless plan to go with it but I think that's a fairly safe assumption. Fred gains the utility of having a phone, which is certainly to his benefit. But Philip is the one actually getting money. I'm not saying that there's anything wrong with this, but as an example it doesn't really show how it's possible for the very wealthy to sow chaos for people on the low end of the pay scale.

Let me make my own example for you, this one based off of real life: The good ol' US of A's dairy industry, specifically milk sales. Milk is pretty cheap at any place that you buy it, I think a gallon is something to the tune of about $2.25 a gallon in my home town. The situation that's causing the low prices? A mega-conglomerate that buys milk wholesale from dairy farmers across a good 40-50% of the country. This is a good thing for consumers because the milk is cheap enough for practically everyone to afford. Here's the thing, though: the mega-conglomerate has been paying lawyers for the past several years to stall a congressional investigation into its business practices. As small farms have gone under, this conglomerate bought them out and condensed smaller pieces of farmland into massive lots for raising thousands and thousands of dairy cows. They can fund this because they are the ones that actually own the processing facilities for pasteurizing and shipping the milk, a lucrative business in its own right. What they are doing is pretty simple: they buy from the farmers, charge them processing fees, and sell to the supermarkets. The thing is, they aren't charging themselves the same processing fees for their own milk. This means that they can artificially manipulate the market price of the final product, keeping their own profits high and putting small farmers out of business. They make record profits while more dairy farmer go bankrupt only to have their land bought out and converted into another massive lot to continue the cycle.

Now, not every industry or business is like this. It's basically the same business model used by J.D, Rockefeller at the end of the 19th century. My point is this: first you get the money, then you get the power, then you get the womens. No, wait...that's not right. I think it's more like: capitalism is a good system, it provides a good way to encourage competition and wise use of resources...but it's also totally possible for it to be used for levels of ass-hattery that border on the supervillainous.

 

[annoyinglizardvoice]

I think the OP's comments seem idealistic and over-simplified.
Such comments assume that the public perfectly understand the product and the choices available to them and have the full choices avilable to them in the first place.
Personally, I feel the rich should be fucking greatful to the poor, as it's their cash that makes the rich rich in the first place.

 

[DoomyMcDoom]

I lost all sympathy for the "rich" a long time ago... when I saw a wealthy businessman get all sad because he could only access $640,000,000 of his assets, due to the market destabilizing... at a time I could barely afford to buy food. The way I see it, hard working people should be rewarded adequately, rather than having some lazy ass ceo sittin around with millions to spare crying about it... i mean come on I'd be set for a decade offa like $300,000.... and I'd live hella comfortably... looking at someone who is sad due to only being able to get at several hundred million... makes me sick to think some people can have that much in personal assets and complain about it...

capitalism is fine and dandy, but without the right balance and with such an imbalance of labour to reward... It sucks bein born poor, since when you look at it realistically, you've got a pretty good chance of dying poor too. it takes a freakin miracle to bring yourself outa the gutter these days.

 

[axia777]

I think hes saying its Capitalisim's fault.
Despite what many people think America =/= Capitalism. Also it can be argued that the existence of third-world nations is partly the fault of capitalism in that exploitative and unsafe factories for large international coorperations are often set up where there are less restrictions on how to treat workers. Third world countries are perfect for that.

Take Nike for instence: http://www.guardian.co.uk/business/2005/apr/14/ethicalbusiness.money

Yes, this may be true on some level but it takes two to tango as the old saying goes. If these countries rejected these factories then the abuse would not occur. They need to stand up for themselves and challenge such move by corporations. Letting themselves get screwed is all on them.

 

[PiCroft]

What I find really funny is that this current economic crisis was brought about basically by banks and financial institutions making up magic bullshit money to sell houses to people who can't afford it and not once did anyone stop to think "Hang on a minute, does anyone else think this is a bit of a bad idea?"

Then everything blew up and free marketers are howling that the only way to fix it and stop it happening again is to remove what token oversight there currently is.

Its like a fucking child sticks their fingers into a socket and not only nearly kills themself, but burns down the house and people are now saying "Gee, maybe we should not bother watching the little 'un at all, cos you know the reason he did that was because his interfering parents were too busy looking over his shoulder".

 

[oppp7]

1. Companies run by rich people exploit the poorest people they can so that they can have cheap labor. The conditions are normally horrible (Fiji) and cause many humanitarian issues.
2. People don't always make the right choice, and there is false advertising.
As a side note, both rich and poor exploit the middle class, which is strange because they are the most important (along with the working poor).

 

[Rooster Cogburn]

Absolute-free-market capitalism doesn't exist.
Regular old mostly-free-market capitalism does exist.

Under the form of capitalism that actually exists, rich people abuse poor people.

-- Alex

I strongly agree with this sentiment, Alex_P. Except that I don't like using the word 'capitalism' (like 'socialism': too vague) and I almost swallowed my gum at the word "mostly". hehe.

 

[Death_Korps_Kommissar]

Capitalism - It just fucking works.

In the short term it does.

Long term, not so much.

Capitalism lets huge corporations run free with little to no restrictions and the same with banks. Capitalism's main fault is that it will 99% of the time break down to a recession if not a full blown depression because the corporate leaders get to greedy.

And for the record ben---neb socialism works incredibly well when done properly. There are several socialist countries in europe that have I think around 60% of what you earn tax but the way the government works with the taxes is so efficient that not many people go hungry or loose their home. With free health and education what do you have to spend your money on? Correct me if I'm wrong but parents and students pay most on health insurance/care and education.

 

[axia777]

EDIT 2: Apologies for defending Wal Mart at one point. I'm British and wasn't fully aware that it was a government sustained monopoly. I admit to being wrong to hold it up as an example of free market competition.

For the record here in America local city and state governments are standing up to and rejecting Wal-Mart successfully all over the place. Wal-Mat has actually been losing quit a bit of money because of this. Wal-Mart is not all powerful.

Capitalism - It just fucking works.

In the short term it does.

Long term, not so much.

Capitalism lets huge corporations run free with little to no restrictions and the same with banks. Capitalism's main fault is that it will 99% of the time break down to a recession if not a full blown depression because the corporate leaders get to greedy.

And for the record ben---neb socialism works incredibly well when done properly. There are several socialist countries in Europe that have I think around 60% of what you earn tax but the way the government works with the taxes is so efficient that not many people go hungry or loose their home. With free health and education what do you have to spend your money on? Correct me if I'm wrong but parents and students pay most on health insurance/care and education.

Aren't most European countries a blend of Capitalism and Socialism? The things such as health care, education and social services are taken care of by the government but the economy is capitalistic in nature. Am I wrong? Because this is how I want America to be. A carefully blended form of Socialism and Capitalism. To me that is the best system.

 

[CIA]

I think hes saying its Capitalisim's fault.
Despite what many people think America =/= Capitalism. Also it can be argued that the existence of third-world nations is partly the fault of capitalism in that exploitative and unsafe factories for large international coorperations are often set up where there are less restrictions on how to treat workers. Third world countries are perfect for that.

Take Nike for instence: http://www.guardian.co.uk/business/2005/apr/14/ethicalbusiness.money

Yes, this may be true on some level but it takes two to tango as the old saying goes. If these countries rejected these factories then the abuse would not occur. They need to stand up for themselves and challenge such move by corporations. Letting themselves get screwed is all on them.

The only problem there is that if you don't have factories to employ people you have even less of an economy then if you had allowed them. Often countries don't have the luxery of choosing if their economy will grow (or shrink).

 

[axia777]

I think hes saying its Capitalisim's fault.
Despite what many people think America =/= Capitalism. Also it can be argued that the existence of third-world nations is partly the fault of capitalism in that exploitative and unsafe factories for large international coorperations are often set up where there are less restrictions on how to treat workers. Third world countries are perfect for that.

Take Nike for instence: http://www.guardian.co.uk/business/2005/apr/14/ethicalbusiness.money

Yes, this may be true on some level but it takes two to tango as the old saying goes. If these countries rejected these factories then the abuse would not occur. They need to stand up for themselves and challenge such move by corporations. Letting themselves get screwed is all on them.

The only problem there is that if you don't have factories to employ people you have even less of an economy then if you had allowed them. Often countries don't have the luxury of choosing if their economy will grow (or shrink).

But they can stand up for themselves and regulate the corporations. They are autonomous nations. They are not run by the corporations. If they take the power then eventually the corporations will have to play their form of ball. Corporations are not all powerful. The people have power as well.

 

[Kiutu]

Yeah, cause Im really sticking it to the rich by not being able to afford things I need. Suck THAT rich people.

 

[CIA]

I think hes saying its Capitalisim's fault.
Despite what many people think America =/= Capitalism. Also it can be argued that the existence of third-world nations is partly the fault of capitalism in that exploitative and unsafe factories for large international coorperations are often set up where there are less restrictions on how to treat workers. Third world countries are perfect for that.

Take Nike for instence: http://www.guardian.co.uk/business/2005/apr/14/ethicalbusiness.money

Yes, this may be true on some level but it takes two to tango as the old saying goes. If these countries rejected these factories then the abuse would not occur. They need to stand up for themselves and challenge such move by corporations. Letting themselves get screwed is all on them.

The only problem there is that if you don't have factories to employ people you have even less of an economy then if you had allowed them. Often countries don't have the luxury of choosing if their economy will grow (or shrink).

But they can stand up for themselves and regulate the corporations. They are autonomous nations. They are not run by the corporations. If they take the power then eventually the corporations will have to play their form of ball. Corporations are not all powerful. The people have power as well.

Sure, but the fact is that they don't. The corperations should have some way of regulating themselves.

 

[danielje]

might as well have just said "YARR, you've been trolled" in the text box, would have saved me the time it took to read that nonsense.

 

[Captain Blackout]

Therefore Fred pays £50 and recieves a phone he valued at more than the £50. The phone brings him more satisfaction (utility) than keeping the £50. Yes, Richard gets richer but in terms of utility (rather than monetary terms) Fred is richer as well. Fred is happier owning a new phone than he would be in keeping the £50. His own valuation of his net worth has increased. If he were not he would not have made the transaction.

This can apply to any situation. The consumer ALWAYS has a choice: to buy or not buy. In the case of neccessities this choice may be harder to make but it is always a choice. Judging wealth purely in terms of money in the bank account is stupid, the net worth of the person has to be taken into account.

Next is the argument that the rich abuse the poor. I say no, take our previous example. As the entreprenur Richard is worth several hundred million yet Fred controls what decisions Richard can and can't make. Richard is shut up to answering Fred's call for cheaper phones, better phones, changing tastes in phones, music players with phones, phones with internet, phones with touchscreens. Fred demands all these things and Richard has to answer. If he doesn't Fred will go to another firm that will listen to him. In other words the Consumer is King. Whether the consumer is rich, poor, black, white, fat, whatever he/she wields control over the Producers of products.

I don't know if this has precisely been brought up. If so, ignore me. If not, you should read this. You have one major flaw in your thinking. It's so large I can drive a Harkonnen annihilator tank through it.

First let's abandon phones as our example. Some items capitalism works wonderfully well for. I'm going with food for this simple reason: A choice not to buy, whether it's land, food from the store, a hunting license or some other way to obtain food equates to a choice to die unless you have your food provided for you somehow. Yes it's a choice. It's a brutal choice and clearly was not the way America decided to handle fire and police service (as examples)

Second, in every capitalist system you have the following effect. As more consumers demand a resource the price goes up. The rate that the price goes up is determined in part by the highest price offered for a resource, the money coming from the richest. The rate that the price increase is dampened by the lowest price offered, the money coming from the poorest.

As the price goes up those at the bottom find the money they had yesterday buying less than it did today. When you don't have a disposable income you have to cut out needs. As the poorest spend less on needs the dampening effect lessens.

Those at the top may find that they have to use disposable income for food, although in reality it often means they eat less luxurious food but easily just as nutritious. As long as the poorest help dampen the price increase the rich loose less buying power and when that factor is weakened or removed the richest make less of a sacrifice.

All the while those at the bottom continue to find themselves having to rely on substandard nutrition. Luxury went out the window long ago if was ever even a factor.

It isn't just about a flat trade, an item for a price. It's about the continuing effects of capitalism on buying power for every consumable or good that is sold mostly or strictly through capitalistic means.

Because of this reality the rich do get richer and the poor do get poorer in terms of buying power.

As for your second point, this only works if at least a majority the Freds involved have the buying power to influence Richard. If Richard targets his products (and many healthy food choices are targeted to an economic group) towards high end purchasers and runs his business properly, Richard is only beholden to his target audience and can ignore everyone with buying power lower than his target purchasers.

Good try. There are other flaws, some possibly fatal, but I strongly suspect what I've posted here almost entirely leaves your theory in shreds.

EDIT: I saw the comment about food prices being too high due to subsidies. While bad subsidies do cause problems they are tangential to this argument. The effects I stated are still visible. Furthermore in America this argument is currently complete crap for the following reason: On one hand we pay taxes for food stamps. On the other hand we pay subsidies to farmers to not grow food in order to keep food prices 'competitive'. Anybody think if we did some rational consolidation we could reduce the price for nutrition for the poorest and end subsidies to farmer's to not produce? Ok, maybe it's not complete crap, but it's completely tangential to the argument. We have a subsidy for socialism, a subsidy for capitalism, each working against the other, and at least one is completely unnecessary.

/thread (or at least the portion dealing directly with the OP)

 

[More Fun To Compute]

Too many people seem to have pathetic, idealistic fantasies about rich people being benevolent patriarchal figures who always do the best for everyone. Yeah, capitalism can give people an incentive to make great contributions to society and it can also give people huge incentives to lie and cheat the system.

The trends in lack of social mobility, division of wealth and corporate fraud in the Anglo Saxon countries says that the idealistic interpretation is not happening and the pragmatic one is. The rich are getting richer. Huge CEO bonuses are being paid by tax money but people only get really angry when someone at the bottom of society manages to get a bit more from government than they did before.