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

[Achiltibuie]

I personally totally agree with the message of this topic - even if there has been some oversights and generalisation.
I live in the UK and growing up my father paid over 60k p.a in taxes for well over 35 years at the same time paying for private healthcare and education for our whole family, now I'm not suggesting that we were particularly rich growing up nor that we shouldn't have had to pay taxes etc but it is a case of the poor benefitting directly from the rich - I never went to a state school or was treated in a state hospital so I have never been a direct expense to the government yet our taxes pay for other kids to go to schools and for the benefits to pay for their families if their parents situation meant they didn't have any/a sizeable income.
Im not saying this is a bad thing but from my point of view my entire life I have done nothing but give to our society because I was more comfortable than others.

 

[SmartIdiot]

No no no no no. Good effort, badly put together. The consumer is NOT king, never has been, never will be. Where you get that crazy idea from is... well... beyond me. YOU are a target market, I am a target market, everyone is a target market. It's easy to turn around and say "advertising and marketing doesn't affect me" but it does, it affects everyone and the worst thing is people rarely even realise it, hence the "...doesn't affect me" comeback. The producers and entrepeneurs spend millions on different ways of getting inside your head, from something as simple as getting you to recognise their product(familiarity is comforting, see neuromarketing http://en.wikipedia.org/wiki/Neuromarketing) to the overt classic that says "this is what perfection is, if you don't have our product you are worthless", believe it or not some adults still buy that kind of bullshit.

What it comes down to is they want your money, they've always wanted your money, they are constantly trying to find new ways to get your money and at the end of the day, in all likelihood they WILL get your money.

 

[Xvito]

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 labour 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.

 

[Elurindel]

In economics there are two common misconceptions about capitalism. First is that the richer get richer while the poor get poorer. Second is that the rich are free to abuse the poor.

First: the richer get richer at the expense of the poor. The root of this argument lies in the fact that people see a trade as a one way experiance. Fred the Poor Man pays £50 for a phone. Fred the Poor Man is now poorer by £50 and Richard Branson of Virgin Mobiles is now richer by the profits from the £50. Fred loses, Richard wins.

What these people fail to see is that the trade of £50 for the phone is a TWO way transaction. Fred pays £50 and gets a new phone. Now Fred is a rational human being able to make logical choices. At the time he bought the phone he valued it at more than £50. Otherwise he would not have bought it. If he valued the phone at less than £50 it would make no sense for him to buy it.

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.

I fail to see how this is a misconception or what it has to do with, the rich abusing the poor. It doesn't have any relevance to that at all. Nobody claims that people buying luxury items are being mistreated by rich companies, who have you been talking to?

The issue is when things such as food and drink become ridiculously expensive because the companies want profit. When poor people struggle to by necessities because of the greediness of corporations.

The other issue is that Capitalism is about profit and being on top. Large companies such as Wal-Mart create a monopoly on shopping that makes smaller (poorer) businesses struggle. There is no "choice" for the smaller company is there?

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.

Without their support (in the form of monatary purchases) a Producer can do nothing, an entreprenur can do nothing, they are shut up to the whims and fancies of consumers.

So that's my argument against two common capitalist facilies. Do you agree? Am I right? Got a better argument?[/

Again, your point is irrelevant to the argument you are making. Just because an individual can choose to buy elsewhere doesn't mean all will. The producer will cater to the majority not the minority. If the majority are wealthier then they will get the best deal whereas the poorer people will be stuck.

And let's not forget places where the market is exclusively cornered by one company. Take areas in America where only one cable/wireless/phone company is set up. This company is able to charge whatever they want because there's no competition. Do we value their products/services at the inflated value? No. Why do people still buy them? Because they have no choice, except to move to where it is less expensive, which is far from practical.

 

[iamthehorde]

Like most arguments around here, its idealic but completely wrong. You are missing so many factors i cant even begin to argue against you. Either way nice try, poor execution.

Please do, although a socialist calling me idealic causes me to chuckle. I'll admit it ain't perfect (nothing is) but it's a damn sight more perfect than any other economic theory.

how do you know he´s a socialist? is anybody a socialist to you who criticizes capitalism like you described it?

 

[Rooster Cogburn]

Rational-

I would like to make a point about the word 'rational'. There seems to be a lot of confusion about what this means. In the context of economics, 'rational' only refers to action and volition. It has nothing to do with intelligence or whether the means you employ actually achieves desired ends. A 'rational actor' in economic terms is not one who is particularly bright, but one who possesses rational agency. In this sense, all humans are rational actors. When I say all humans are rational in this context, I am not saying all humans are smart.

It's just a matter of conflating definitions, and its a very easy mistake to make when you have homonyms representing related concepts.

 

[Ghostkai]

Capitalism - It just fucking works.

 

[The_root_of_all_evil]

The simplest destruction of your arguments is that for the poor the devaluing effect of negative equity threatens their livelihood far quicker than that of the rich and debts rise exponentially on your inability to repay them.

So although the rich get richer slower, the poor get poorer much quicker.

 

[ben---neb]

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.

 

[MusicalFreedom]

Rational-

I would like to make a point about the word 'rational'. There seems to be a lot of confusion about what this means. In the context of economics, 'rational' only refers to action and volition. It has nothing to do with intelligence or whether the means you employ actually achieves desired ends. A 'rational actor' in economic terms is not one who is particularly bright, but one who possesses rational agency. In this sense, all humans are rational actors. Human intelligence is completely irrelevant to a purely economic discussion. When I say all humans are rational in this context, I am not saying all humans are smart.

It's just a matter of conflating definitions, and its a very easy mistake to make when you have homonyms representing related concepts.

so you have to narrow the definition of a word down to an incredibly specific usage just so that it defends your argument? you have to throw out the big picture out and look at one area?

 

[Macaco]

Thank god, its nice to hear a different viewpoint.

The rich don't abuse the poor, and the poor don't abuse the rich.

I'm constantly amazed at how people disown capitalism even as it makes their lives better.

 

[thiosk]

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.

...What? I do not think the government sustains it.

Walmart is just really good at what it does-- its world-class distribution system allows it to do things like automatically ship extra water to hurricane-susceptible areas during hurricane season, or extra hot pockets to college towns before the students come back to school. The size of their market allows them to muscle sellers into giving them lower prices (or walmart doesn't sell their goods.)

You are paying more at the mom and pops because they don't have the world class distribution system or the ability to muscle anyone.

I don't see how the government does anything, though the "Walmart is Evil" mantra is one that repeated quite often and embellished even more.

 

[Rooster Cogburn]

Rational-

I would like to make a point about the word 'rational'. There seems to be a lot of confusion about what this means. In the context of economics, 'rational' only refers to action and volition. It has nothing to do with intelligence or whether the means you employ actually achieves desired ends. A 'rational actor' in economic terms is not one who is particularly bright, but one who possesses rational agency. In this sense, all humans are rational actors. Human intelligence is completely irrelevant to a purely economic discussion. When I say all humans are rational in this context, I am not saying all humans are smart.

It's just a matter of conflating definitions, and its a very easy mistake to make when you have homonyms representing related concepts.

so you have to narrow the definition of a word down to an incredibly specific usage just so that it defends your argument? you have to throw out the big picture out and look at one area?

I don't think you understand- I'm not defending either side of any debate. I'm trying to clarify definitions so discussion can be more fruitful. I can see I was unclear- I don't mean that one or the other definition of rational is 'wrong', just that there needs to be an understanding of the distinction between the two.

If two people are using the same word to refer to different concepts and neither realizes it, it leads to endless misunderstandings.

 

[ben---neb]

Rational-

I would like to make a point about the word 'rational'. There seems to be a lot of confusion about what this means. In the context of economics, 'rational' only refers to action and volition. It has nothing to do with intelligence or whether the means you employ actually achieves desired ends. A 'rational actor' in economic terms is not one who is particularly bright, but one who possesses rational agency. In this sense, all humans are rational actors. Human intelligence is completely irrelevant to a purely economic discussion. When I say all humans are rational in this context, I am not saying all humans are smart.

It's just a matter of conflating definitions, and its a very easy mistake to make when you have homonyms representing related concepts.

so you have to narrow the definition of a word down to an incredibly specific usage just so that it defends your argument? you have to throw out the big picture out and look at one area?

No, he's saying that in the science of economics and in the context in which I am using it then rational has a narrow and specific meaning. He is explaining that my usage of the word rational is rational. He is not throwing out the "big picture" because I am not talking about "the big picture" I am solely discussing the rationality of humans in the narrow sense of the term.

 

[Alex_P]

So that's my argument against two common capitalist facilies. Do you agree? Am I right? Got a better argument?

Counterpoint: the entire banking industry.

Bankers are rich.
Banks have a fee structure that fucks over poor people. For example: minimum balance requirements, overage fees, overage fees incurred when the bank charges you the first overage fee. Bank accounts are a money sink for anyone living even remotely close to paycheck-to-paycheck.
Other major systems -- the structure of which is controlled by rich people -- tend to require bank accounts. Try renting an apartment without a bank account. Hell, unless you're in a country where it's common to just pay you in cash (e.g. Japan), you need either a bank account or a check-cashing place to actually do anything with your paycheck. So, not using banks also fucks over poor people.

Therefore, banks enable rich people to fuck over poor people. They're part of a system where poor people have to give rich people money as a surcharge for being poor.

-- Alex

 

[ben---neb]

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.

...What? I do not think the government sustains it.

Walmart is just really good at what it does-- its world-class distribution system allows it to do things like automatically ship extra water to hurricane-susceptible areas during hurricane season, or extra hot pockets to college towns before the students come back to school. The size of their market allows them to muscle sellers into giving them lower prices (or walmart doesn't sell their goods.)

You are paying more at the mom and pops because they don't have the world class distribution system or the ability to muscle anyone.

I don't see how the government does anything, though the "Walmart is Evil" mantra is one that repeated quite often and embellished even more.

I am not saying that Wal-Mart is evil I am just being catious before whole heartedly supporting it. It had been pointed out to me that some of Wal-Mart's monopoly is as a result of government legislation. This is a fact I can well believe. Therefore I moderated myself. Like all such things Wal-Mart is neither completely good nor evil but is definetly completely human.

 

[curlycrouton]

Like most arguments around here, its idealic but completely wrong. You are missing so many factors i cant even begin to argue against you. Either way nice try, poor execution.

Please do, although a socialist calling me idealic causes me to chuckle. I'll admit it ain't perfect (nothing is) but it's a damn sight more perfect than any other economic theory.

Yup, because sitting in your mansion drinking champagne on your king size bed while children starve and die on the other side of the world is damn fine.

I say, you jumped to a rather hasty conclusion there.

Communism combined with human nature does not work.Capitalism has many problems, but at least it works to a significant degree.

 

[axia777]

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.

 

[ben---neb]

So that's my argument against two common capitalist facilies. Do you agree? Am I right? Got a better argument?

Counterpoint: the entire banking industry.

Bankers are rich.
Banks have a fee structure that fucks over poor people. For example: minimum balance requirements, overage fees, overage fees incurred when the bank charges you the first overage fee. Bank accounts are a money sink for anyone living even remotely close to paycheck-to-paycheck.
Other major systems -- the structure of which is controlled by rich people -- tend to require bank accounts. Try renting an apartment without a bank account. Hell, unless you're in a country where it's common to just pay you in cash (e.g. Japan), you need either a bank account or a check-cashing place to actually do anything with your paycheck. So, not using banks also fucks over poor people.

Therefore, banks enable rich people to fuck over poor people.

-- Alex

Hmmm, this is where the lax definition of capitalism doesn't help me. In my opinion the baking industry is not an example of capitalism (by which I mean free markets). Indeed the banking industry has a Central Bank that inteferes with it and seeks to control it. In fact i would say that the banking industry is one of the few remaining examples of a centrally planned industry. The reason for the current economic crisis and the power of the banking sector is due to the government granted special treatment of the industry through central bank institutions.

 

[awesomebillfromdawsonville]

I'd love to abuse the rich... physically.