Thomasio

The answer to that you can see for yourself if you pay a visit to Detroid. 2/3 of the population have moved out, following the money, the remaining 1/3 is growing food on the ruins of former factories, there are even some companies founded dealing with food, but nobody considers rebuilding a factory because the Chinese still produce cheaper than the cheapest American worker could. Detroid is simply falling back into preindustrial agriculture. If you believe that's a good goal, liberterianism it the way to achive it. You'll have 2/3 of American population move to Asia where a worker literally owned like a slave by his employer at least has 3 meals a day, a roof over his head, medical care and a tiny little bit of money, while the rest of America will grow the food China requires to feed their workers. Imagine it like this: No matter how many laws you abolish, no matter how many taxes you abolish, no matter how low you make prices, unless you produce in this kind of gigantic Chinese factories where workers do absolutely nothing but live to produce, you cannot compete with their prices, so in an entirely open market, the Chinese system will become the dominant one.

You're missing the main flaw of communism. If you want all demand met by supply, everybody would demand a property like Hugh Hefner has, but no one would be willing to produce the supplies necessary for that, let alone there isn't enough room in the world for 7 billion properties of that size. In communism you have to see how much is produced and you can try to spread out supplies as even as possible, but you will always face the problem that no one is willing to work harder to improve things for everyone, unless that gives him a personal edge over everyone else, which leads to the corruption we see in all communist systems. Communism without corruption might be a good system, yet I haven't seen any kind of idea of how to prevent corruption in communism.

How shall I say? Personally I've made a living out of just that. I grew up in a halfway small town, there was only one newspaper and they had 4 boys hired to deliver their newspapers every morning. That was an hour of work before school and they paid for that a free scooter also for private use, plus about twice as much money as my parents gave me for pocket money. I've applied for that job, because I wanted a free scooter, but all the jobs were taken, so I offered them, I'll take all 4 jobs, I work 4 hours every morning before school, I deliver all the newspapers and they save the costs of 3 scooters. I got that job the next day, the other 4 got fired and for the next 4 years there was only one paperboy in town. Even today, 35 years later, that's one single job, adjusted for inflation they still pay the same money, but now they have a 35 year old guy, a professor for English who can't find a job as a teacher or translator or whatever else after the state has cut funds for schools. Today no school kid would have the option to do what I did, today there are no little jobs for them anymore, because all the former small jobs children could take aside of school are taken by adults who can't find any regular job. Did I need the extra money back then? No, but it allowed me some extras no one else at my age could afford and I enjoyed it. I didn't have the slightest intension to share my labor burden, I was able to outcompete 4 others and I did. Later on I learned programming, not in a school, because those schools didn't even exist back then, I learned on my own and to make a living while learning I took a job in security business. I got paid minimum wage, but I compensated that by working 30 days a month, 14 hours a day, meaning I took away the jobs of 3 or 4 others. I never took a vacation, I had my vacation paid in cash and worked through on top of that, meaning for vacation time I earned twice as much. This way I was the most reliable worker in the company, I was allowed to choose the post I wanted and obviously I've chosen the easiest one, where I had nothing else to do but being present, so I could study coding during working hours. After 6 years of that, not only I had made enough money to make more money through investments, but I had learned enough coding and computer technology to get a better paid job in a computer company. And again, I could have done with less money, but I had nothing better to do anyway and the extra money I used to have a better life. Back then security business was full of failed lives, some had tried to run their own business and failed, were drowned in debt and willing to take any job, some had dropped out of school and never learned a thing, some alcoholics no one else would hire and people like that, so for me back then it was easy to outcompete everyone else. Today security business is full of graduate students who can't find any other job and the failed lives who used to find a low paid job there are now unemployed and homeless. But one thing hasn't changed, those people still work 300+ hours a month without any intension of sharing. Recently I've seen a documentary from Greece, how things are going there now. They had an opening for one job, where they offered 300 EURO a month, which is about 1/2 the minimum wage in Greece, still they had about 200 people lining up for the job. After 2 hours of interviews the manager came out stating, the job will pay only 150 a month and those not willing to work for that may go home. Am I set on the idea? Well, I believe without any kind of regulation limiting the amount of work a single worker can do, open competition will always lead to loads of unemployed people, simply because in our industrialized world the workforce needed to get all the work done is in fact far less than there are people and nobody is willing to share his job as long as that also means lowering his income and/or comfort in life. Just the opposite, while more hours mean more income, almost everybody volunteers to work as much as possible, regardless how many others they might outcompete. Chinese labor is taking over the production for the world and unless the western world raises walls of import duty to protect themselves from these low paid jobs, the western world will get drowned in poverty simply because nobody can compete with 25 year old Chinese people devoting their lives to nothing but producing goods in an industrialized environment, while getting paid $30 a month.

I think this worker wouldn't find a job for 4 hours a week, because where merciless competition rules, there would be literally millions of people willing to work 20 jobs of 4 hours a week simultanously for a lower wage, just to outcompete the others. This free competition would replace the wealthy by the diligent, like the switch from royalty to capitalism has replaced the royals by the capitalists, but it wouldn't solve the problem that competition requires a loser. Lowering the level of income, paying lower wages and making everything cheaper is the same story as it is right now, only on lower level. Actually I do.

No @shirgall there isn't. Comparing royalty to capitalism, I'd agree, capitalism is far better, but fair is something else. Capitalism is fair as far as it provides the same chance for anyone to achieve something, but since every winner in capitalism leaves behind one or more losers, overall it cannot be fair. If you compare your own life to 20 years ago, you're seeing the fruits of your own efforts, which is your success in outcompeting others. You don't take into account how bad those you outcompeted are doing now. Maybe you consider those as just too lazy, maybe they made it easy for you to beat them, but rest assured, in a globalized world with ever bigger free trade zones, you will soon compete against Chinese workers, living in gigantic factories, working up to 16 hours a day, earning $30 a month and getting fired at the age of 30 because they are burned out. In other words, you see what anyone could reach, but you overlook that if everyone else had done the same you did, you wouldn't have gotten anywhere. For the moment in the western world we're still able to find holes in the market, where our efforts can lead us to a success and sure enough, the more effort you put into it, the more success you can gain, but that's exclusively because you outcompete others. On a global level you cannot outcompete anyone, because for the world as a hole, there isn't anyone to compete against.

... is what some people still have to discover. When I hear people like Stefan talk about the capitalist system being fair, because he seems to believe all it takes is make an effort to accumulate enough money to make a living, I believe he's missing the main point. Obviously there are lazy people who never get anywhere and there are diligent people making every effort to make a living, so it's easy to get the impression, all it takes is make an effort and you'll be fine. But in a world where 1/2 the population is sufficient to produce all the goods and services needed, there will always be 1/2 of the population in poverty, no matter how hard they try to get out of it. As long as there are enough lazy people, it's easy to blame their misery on their lack of effort and at least in the western world it's in fact possible for about anyone to get out of poverty, but it's not possible for everyone. Personally I made the effort myself, I managed to make a living and up to the moment the whole system collapses I'll be fine, but I do realize, I was able to do this only because I outcompeted others. The world as a whole cannot compete, because it doesn't have anyone to compete against, there are no people on Mars the world could outcompete. Competition requires a loser and whoever that is and for whatever reason he lost, he will be poor. The more people are willing to make an effort, the more effort everyone has to make to get anywhere, but under all circumstances 1/2 of the people will remain poor. I believe the only way to even out inequality without ruining the whole world through increasing competition is limiting the amount of effort a single person can make. Something like: Once you made a living, once you have achieved a decent life of a given preset level, you have to stop making more and give others a chance to catch up.

Yes @shirgall money supply increases, but as long as this increase remains in the banks or among the rich, the only prices increasing are shares of stock, real estate and other forms of investment. The price of bread and any other kind of all day items for poor people would still decrease, because the poor who don´t get a share of the loans have less money to spend. Since the sum of all day items 250 million Americans consume is BY FAR greater than any amount of anything else that matters for inflation, the overall remains a deflation. The producers will not increase production, just the opposite, since they can sell less and less the more people become poor, they will take their spare money, they volunteer in taking loans at zero interest, but just to speculate at the stock market. They will decrease production, fire people and speed up the overall deflation while money supply increases exponentially.

Good example, at least for my point. You print $100 for 100 loaves of bread and you give everyone $1 so he can buy a loaf. Then you take 10% tax on all sales and the baker takes 10% for his profit, meaning the baker pays back in wages $80. Next month you print another $100 and give it to the baker. How much can the baker get for his bread next time? He still bakes 100 loaves, but the total amount of money among the population is $80, so either he can sell only 80 loaves, or he has to sell it for $0.80 a piece. That's DEFLATION, regardless how much money you give to the baker, the price of goods DEcreases. You can print 1000 trillion, a loaf of bread would still cost $0.80, unless you give the poor people a share of the printed money which ist precisely what QE does NOT do.

I wouldn't call the Japanese national debt a covered loan, even after 20 years their debt is still growing. Also on start of this Japanese deflation there wasn't much to cover. Would you call US national debt and/or US consumer debt anywhere near covered or being covered? How come the US is doubling their debt every few years, nearly all poor consumers have maxed out their credit cards, but there is no 20% per year inflation in the US?

In that case, would you care to explain, how Japan increased their supply of currency in the last 20 years, while inflation remained near zero? This table shows the evolution of real wages in the last 20 years. http://www.flassbeck-economics.de/wp-content/uploads/2014/12/Abb3-Reallohn1.jpg This one shows money supply in Japan http://upload.wikimedia.org/wikipedia/commons/6/62/Money_supply_of_japan.gif An this one shows inflation in Japan http://www.surlytrader.com/wp-content/uploads/2011/11/Inflation-Japan-Vs-United-States.jpg Upon THIS data, you really thing it's likely that money supply rules inflation? It looks more like the opposite.

Not sure if I can explain all that, after all I'm not one of those so called experts, I'm just trying to do additional research when I hear or read something I didn't know. Most times it turns out to be false, people just post a bunch of junk on the web, even in this case, this German professor is a Keynesian, where I disagree with a lot of other things he says. If you want the link, it's a German website, so it's all in German, but here it is: http://www.flassbeck-economics.de/ I've picked up just this one thing from what he says, so let me answer @TheRobin first. Productivity is the cost per piece. If you can produce the same amount of stuff with less labor or at lower wages, that increases productivity, if you replace a worker by a machine, where maintaining the machine costs less than paying the worker, that increases productivity. In consequence that means you have to sell each piece you produce at a lower price, because the total amount of money available in the population hasn't increased and that's deflation, because products become cheaper. Obviously I didn´t just pick up the info and believed it, but it made sense, so I went for research and I found countless examples. Best example as mentioned above, Japan has flooded the market with incredible amounts of cash, yet they have had deflation for 20 years and there's no end in sight. Germany has increased wages near precisely as much as productivity, real wages have been absolutely flat for the last 15 years and they have near precisely zero inflation, regardless of the fact they piled up 2 trillion state debt and flooded the banks with it in 2009. France has in these same 15 years increased wages by about 2% more per year than their productivity increased, so they ended up with 2% inflation per year. Most states in southern Europe have increased their wages 5-10% faster than productivity and they had 5-10% inflation, which is why they cannot compete on the European market anymore. As soon as Greece got in trouble, their market collapsed, loads of people lost their jobs, wages dropped, pensions and social services were cut, but productivity hasn't changed, therefore, even though Greece has increased their national debt from initially 50 trillion to over 300 trillion today, they went into deflation and depression and all prices in Greece fell by about 30%. If an increase in money supply would have any kind of influence on inflation, at least Japan should have seen gigantic inflation rates in the last 20 years, yet they have seen nothing but deflation and depression. As far as I know there are plenty of self nominated experts, who have continually predicted hyper inflation to come out of QE, yet, since all this money didn't go into higher wages or social services, but it all went into the banks, inflation didn't happen. So I find it likely to be true, that inflation depends in the relation between productivity and wages. @gausian I knew that video before, that's a different topic. Governments cut taxes for the rich and compensate the missing funds for social services, by cutting these services, or through increased taxes for the poor or through piling up state debt. That's just adding some extra lowering to lower wages, meaning it speeds up poverty. That will ultimately collapse, as soon as so many people have lost their jobs or pay less taxes upon lower wages, that they cannot produce enough to pay the interest on the national debt anymore. But if the theory of inflation coming from productivity and wages is right, we will see no sign of inflation up to the very end of this and so far I haven´t seen any kind of sign contradicting this.

I'm not sure whether it has been discussed in here, I'm not even sure whether it's true, but I've seen a German professor of economics who stated, inflation is the increase in wages minus the increase in productivity, regardless of any other factor. If productivity falls or increases less than wages, there's inflation. If productivity increases more than wages or wages fall, there's deflation. Governments can influence this by increasing or decreasing social services, hiring or firing state employees, because an increase in social services is equal to an increase in average wages, same as state employees coming from unemployment increase average wages. Banks can temporary influence it by giving more or less credit to working people, because giving credit is equal to temporary increased income, only with the downside, once the credit money is used up, income is reduced below original level due to interest. After I heard this, I've looked up some data, of evolution of productivity and wages in different countries and there really is a high correlation between wages minus productivity and inflation. Best example is Japan, where increasing productivity upon stagnant wages have resulted in 20 consecutive years of depression. Through tons of QE and consumer credit they tried anything they could think of, except of increasing wages, which led them by now to a point where even increased wages wouldn't get them out of it anymore, because people would use increased wages to pay off their debt rather than spending it. This would mean, the way out of financial crisis is not QE, but increasing wages and the longer you wait with the increase, the more you flood the market with credit, the harder crisis will hit, once you reach the limits of credit banks are willing to give to consumers. The libertarian free competition where loads of unemployed competition presses down wages is the worst possible thing one could do, not only during crisis, but in general, because it would always lead into eternal deflation and depression. Of course, increased wages might lead to more unemployment, but that's another story. If the total amount of available workforce exceeds the total amount of available jobs, there will be unemployment and lower wages won't change that, only reducing working hours per worker and reducing retirement age will achieve that. Of course, if increased wages cause unemployment, this would decrease average wages again and you'd still end up with stagnant average wages, so either the theory is wrong and increased wages don't cause unemployment, or at least not as much, or there is no way out. What's your view on this?

Fairly easy. Within the EU there is no import duty, free trade without borders from any country to any other country. Germany can maintain its gigantic export surplus only because in Germany the relation between productivity and wages is better than in any other country of the EU, meaning without import duty German products are cheaper than local products in all other EU countries, meaning people in other countries prefer German products over local products. This way the Germans have the jobs to produce what people in other countries consume, or in other words, the Germans are exporting their unemployment. Obviously this only works until the countries Germany exports to are bankrupt, because the permanent trade deficit in other European countries without an own currency to devalue can only be paid by ever increasing debt, which is what we see in Greece, Spain, Italy, etc., meaning Germany is largely responsible for the poverty in southern Europe. Even though the UK have their own currency, if they would leave the EU, they could charge import duty on German products, so people would buy less German products, jobs would return to the UK and unemployment would return to Germany. Take a wild guess, why Germans as well as Americans are so keen on TTIP? After they have ruined Europe, Germany is now seeking a new victim and while the US pays exclusively with debt, they are the next target, where the US even volunteer, because they got used to importing whatever they need and pay with debt. The only problem the Germans have missed is, the US have an own currency to devalue, which makes the German export surplus a plain gift while exporting to non EU countries. The only problem the Americans have missed is, the German unemployment will still be exported to the US.

The only ones needing the UK within the EU are the Germans, because without duty free export of German products into the UK and other European states, the industry in Germany would collapse and unemployment rates would raise drastically. You might say, Germany has exported their unemployment and if their exports are reduced this unemployment would come back to them. The rest of the EU has understood this by now, but most of the EU countries depend on the money Germany pays into the EU, that's why Germany rules the EU and can push its demands. The UK would heavily benefit from leaving the EU, not only saving their payments to the EU, not only getting control over their borders, but also reducing their unemployment big time. The friendship between the UK and the US will keep them their influence internationally, so no problem there either. I believe even Cameron got the point by now and I'm really curious to know what the Germans will do, to influence the outcome of the upcoming referendum. It will be loads of propaganda, that's for sure. I believe the Germans will offer further special favors for the UK, just to keep them in the EU.

To my mind there is no such thing as an ideal world. Humans are inherently egotistic, no matter whether as individuals or in groups of whatever size. Look at yourself and consider: The GDP of the entire world is about 75 trillion US$. 75 trillion divided by 7 billion people gives just over $1000 per year for everyone. Can you imagine any kind of circumstances under which you would be willing to live from $1000 a year, given the buying power of $1000 in today's money? Or do you believe you should have more of the cake, because of one or another reason? Access to electricity doesn't give you the right to make enough money to pay for it. Living in a rich country where renting a house is expensive doesn't give you the right to afford the place. The existence of a job in your town that makes more than $1000 a year doesn´t make your efforts more valuable than the efforts of some guy in Central Africa. From a really ideal point of view, all humans should have the exact same rights, all the exact same chances to make a living, all the exact same health care. If someone then chooses not to work and has less because of that, that's another story. So as long as you believe you personally need more than $1000 a year to survive, you yourself do not believe in an ideal world. Do you believe countries like Germany should stay on their GDP of $41,500 a year per person until the rest of the world has caught up or do you realize that would be an impossible task, because the rest of the world could never catch up while Germany permanently keeps such a large portion for itself? If you believe we should elevate living standards across the world, you'd have to start by lowering yours, because as long as you insist on having more than the average in the beginning you will never reach equality on a global scale, simply because your own advantage on start will give you the option to increase it, where human egotism will definitely abuse the opportunity, especially in an anarchy.

Hey, thanks for your answer. Yes, those approvals by moderators make things a bit slow on start, but I don't mind, I believe it's better than a forum drowning in the bashings of some ..... (fill in a word of your choice). What I don't understand about anarchism is, how would it make a difference on inequality? You would exchange the power of money and government by the power of brute force, but exchanging the one in power doesn't resolve the problem that they will abuse their power. How could all men enjoy the fruits of the earth, if half the population doesn't own a thing and doesn't have the strength to conquer anything? Do you believe the forces of anarchy would honor human rights, if no one has the power to force them, or how would an anarchy force the powerful to obey some basic principles of social behavior? How should an anarchy make sure the handicapped aren't drowned in poverty? You haven't commented on the idea of restricting the working hours per worker in order to let the poor participate in production. Do you believe an anarchy would automatically spread the available work evenly among all available workers? My questions at the end of my first post do not reflect my opinion, those were just meant to give some basis for discussion and show what theories I have been reading about. I personally believe, we will see several further crisis, with or without war, but capitalism will survive, unless a real strong socialist movement captures all governments worldwide and does what socialism was originally supposed to do, which is making the workers owners of the company they work for and have the workers decide what the company should do. But unless we reinvent borders in way smaller scales than we have today, charge huge import taxes and create real tight laws to protect local wealth from low wages in other parts of the world, there's nothing that can prevent capitalism from outcompeting itself until the whole world is ruined. After all making the workers owners of their company is still a system based on property and capitalism. I believe we will for a while longer see a stream of wealth moving from the western world towards the far east, but once wages in China reach a given level, capitalism will move on to Africa, where more profit can be made at lower wages. I believe the western world will experience a complete collapse of all wealth, up to a point where 99.99% of the population live from food stamps, before the capitalists realize they cannot sell anything after they ruined their customers. I believe gold or any other form of value isn't the solution, because it doesn't improve anything. Gold is a way to protect yourself from decreasing values of currencies, but it only keeps its buying power, you will be able to buy about the same amount of food for an ounce of gold at all times, but once you spent the gold for food, it's gone. So once you're out of any other form of income, or if your income isn't enough to live from it anymore, you'll start to eat up your gold reserves until it's gone and then you fall into poverty anyway, which is what I believe western banks are doing right now. So gold might delay the downfall, it might even be sufficient to help me personally long enough to reach the end of my life, but it will not prevent the collapse. But then, I don't have the money to buy a lot of gold, so thinking what I could do with it is pointless.

I've been employed for quite some years and I made it way past entry level, but I've never been satisfied with my job, nor the money they paid me for it. Then I discovered the simple fact, what the employer pays is the value of your labor minus his own profit, or in other words, you will always be paid less than you're worth. The obvious solution is to become self employed and offer your skills without someone in between taking (or should I say stealing?) part of your value. The hard part is finding customers, but with a little bit of effort that's doable, after all you can easily outcompete your former employers price while still keeping more for yourself. Of course there are jobs where that's not possible, or at least not so easy, i.e. if your job requires heavy machinery or is a mass production requiring a large structure of distributors, but if you have such a job, you might simply have the wrong job.

First let me say hello to this community, I'm new here. My name is Thomas, I´m a 52yr old German living in Italy. I've been through a lot of things and I've spent about every spare minute of my last 5 years with research, trying to find out how to secure my future, on top of what I've done in the past. I've been employed for a while, paid into the public retirement funds, so I'll have a small pension, I've been self employed for a while, paid into a private pension plan, from where I'll get some more one day, Italy has a state financed health insurance, so for the basics I'm all set, but of course there are always things one could do to improve something. On the way of doing that, I stumbled into these huge discussions, capitalists, socialists, communists, liberals, conservatives, greens and all that, mostly through YouTube videos, where I found this forum as well. I've tried cross viewing/reading, sort out obvious nonsense, remain as objective as I can and build some kind of average of all the extreme opinions as the most likely truth behind it. There's one thing that strikes me more than anything else, where I´m not even sure whether or not I got that right, so I´ll make that my question for my first post here, maybe we can get a discussion about this going. This world has built up the capacity to produce enough stuff to supply the whole galaxy and the workforce required to produce way more than humans could possibly consume is apparently less than half the world's population. From ridiculous expiration dates, such as a 2 year expiration on salt, over planned obsolescence, discounts for replacing an old product before you really need a new one and state subsidized products, up to large advertising campaigns promoting of why the latest version of some new product is better than the previous one, politics and industry have come up with an incredible amount of ideas, of how to make people consume more and faster, still about half the world's population is left out of the production process and remains in poverty, simply because industrialized production can do the job without them. Furthermore the poverty of these people and their hunger driven willingness to work for ever lower wages is abused to press down wages for all other workers. Big industry has moved to the far east, where people work for $30 a month, leaving behind unemployment, sinking wages and increasing poverty in the western world. By now we're approaching a situation, where the western world is becoming the poor half of the population left out of the production process. Now, as always, there are 1000s of suggestions around, of what to do about it. The libertarians keep voting for entirely unregulated open markets, where it's easily predictable that worldwide competition for a place in the workforce will through decreasing wages throw every more people into poverty. The conservatives believe in making the rich even richer, the socialists believe in government spending to create jobs for the unemployed and the greens believe in taxing the hell out of everyone, just to save the planet from the humans. To my mind there can only be one solution to this, but I wouldn´t know, how to achieve it. If half the available workforce is more than sufficient to do the job, it doesn't matter what kind of rules or no rules the system has, there will always be half the population in poverty, the only question is, who that is and right now it clearly looks as if that's the future of the western world. Frequent redistribution of wealth, like capitalism driven inequality evened out every now and then through taxing the rich seems a rather hard thing to do, because the rich are usually also the powerful, doing anything in their power to prevent or at least delay a redistribution. Permanent donation funds for the poor seem to be by far not enough. So the only possible solution would be to limit the amount of hours a single person can work so drastically, that companies struggle to find workers and are forced to increase wages up to a point where production matches demand and workforce matches available jobs. I'm aware, there are movements even in the US, demanding a 20 hour week, I've even seen some German professor claiming 10 hours a week would still be too much. Either way, this would have to be done worldwide simultaneously, otherwise China would still outcompete the rest of the world and I really have no clue of how to organize such a drastic thing throughout all the different forms of government in the world. So what do you guys think? Is it possible to organize the world by plain free competition, or would then everybody end up working for $30 a month, where 99% of the world would drown in poverty? Is it possible to print your way into inflation until state debt gets dissolved in devaluation of currency, while ever lower wages result in ever less products sold and therefore lead to deflation? Should we all buy physical gold and silver or whatever else of value and wait for the unavoidable crash after which our property makes us the winners of the next crisis? Or what's your solution to make this world a better place?