Ah, I recall that argument. It was made quite often by the slave-holding South. Jobs exist, though there is sometimes a lot of competition. Nobody starves unless they manage to drink themselves to death.
So how, exactly, isn’t it free? Because you might no get what you want? If so, you have on a whim eradicated the very concept of freedom except through death. Nobody and nothing can ever be free of all limitations or consequences, and I can’t imagine any of the great liberal thinkers who would say that having real consequences is the same as lacking freedom.
Wow, this thread has been zipping along. I hope to respond to a few specific posts (particularly from John Mace, as I called him out by name and he was kind enough to respond), but I have a few general comments:
(1) As far as I’m concerned, the issue of CEO-to-worker pay ratio is a symptom more than it is a problem. That is, I have a theory, which is that society is increasingly unfair and unbalanced towards the rich, and I think to myself “hmm, what would evidence for that be”, and one thing that immediately comes to mind is “well, I bet that rich people are getting paid more than they used to be, when compared to poor people”. So we take two jobs that presumably haven’t changed too much in the past 40 years, namely basic-average-company-employee and average-company-CEO, and see what the ratio of their wages is. And sure enough, CEOs have gone way way up compared to workers. So I view that as evidence for the claim, but not proof. It’s not a terrible crime purely on its own, it’s part of a larger system of issues, it’s just one that’s nice and dramatic and easy to point to.
(2) A large part of what makes this conversation so frustrating and difficult is how hard it is to define exactly what we’re talking about, and what would constitute proof. That is, I can easily imagine a hypothetical capitalist society which I’d look and and say “wow, I’m 100% certain that that society is deeply fundamentally flawed, something has gone very very wrong there. There is way the heck too much wealth concentrated in a very few hands, and way too many extremely poor people with almost no hope for the future”. (I don’t think the US is anywhere near that bad yet…) But looking at that society, would I be able to come up with some mathematical formula that proved that it was “bad”? Is there some magical number where you take someone in the 15th percentile of wealth and someone in the 98th percentile of wealth, and compare their incomes, and if the ratio is not greater than some magical X, then there is no problem? Of course not. And, for that matter, even something as simple as wealth ratios like that doesn’t necessarily prove anything. You could imagine having two societies in which both had a super-high-concentration of wealth among the top 1% compared to the bottom 20%, but in one, most of the bottom 20% were able to provide housing, food, and educational opportunities to their children, and in the other one, they weren’t. All of which is to say that it’s a bit facile to respond to any of these claims by saying “uhh, you think things are unfair? prove it!” or “you think things are too far out of balance? what’s the magic number that they crossed” because that’s basically an unanswerable challenge, but not one that actually really means anything, because even if things were utterly and completely awful and any reasonable person would agree, there still wouldn’t be “proof” of that sort.
(3) Another worrying issue here is the issue of it being a vicious cycle. Suppose for a moment that I and my alarmist doomsaying liberal compadres are correct, and things have gotten out of balance in favor of the rich, who now wield a disproportionate level of power and influence. The question then becomes, how is the situation ever going to get better? The basic way that things are supposed to change in this country is through politics and elections. But if politicians are in the pocket of rich people (as we think they are) and elections are hugely influenced by money (as they undoubtedly are), then it becomes very difficult for the situation to improve.
More to come later…
It’s hard for me to imagine that “the rich” are more politically connected now than they were 100 years ago. Or 150 years ago. There were considerable reforms made through the normal political process before the Great Depression changed the ball game. And that was with Jim Crow and all sorts of other shenanigans that kept people from voting.
But you’re avoiding answering the question I actually asked. Namely: can you imagine a capitalistic and democratic society which you would agree is, in fact, unbalanced and unfair? Do you even accept that as a hypothetical possibility?
Yes, that’s possible, but it has nothing to do with the fact that some earn more than others. Increasing or decreasing income disparity does not create or eliminate injustice.
Pointing to the fact that a CEO earns X times more than his lowest paid worker proves nothing.
Imagine a society which is one third black, one third white, and one third Asian. Everyone in the society gets $50K per year. Blacks and Asians have to work for their money, but whites get a government stipend. Everyone makes the same amount.
Is that a fair society? It’s balanced - is it just?
I don’t think we should just automatically believe it to be gospel truth. On the other hand, let me quote from myself in this thread:
In other words, there were an awful lot of ways in which things were much better in the 60s. So if we say “well, we should try to push a lot of economic things back to the way they were in the 60s” then useful symptoms to look at are simple statistics that have changed dramatically since then. Of course there’s a cart/horse issue. I’m not saying (and I don’t think anyone is saying) that we should just pass a law limiting CEO pay and that will make everything better. Rather, we should look at CEO pay as a symptom of a system out of whack, try to figure out how to un-whack it, and then hope that CEO pay will return to more sane levels.
I think that something most people would agree with is that there’s a large class of jobs that form the basis of American society… firemen, teachers, nurses, plumbers, cops. There is certainly a prevailing belief (although I can’t prove off the top of my head that this is true) that 50 years ago, someone working one of those jobs was FAR more likely to be able to support a family, own a house, send kids to college, and take occasional vacations than someone working the equivalent job today. That is the far more serious issue than whether CEOs are super-duper-rich or just super-rich.
That’s certainly an internally consistent and in some ways intellectually pleasing position. But it’s also totally irrelevant to the current world we live in. It reminds me a bit of the old “So, do you support gay marriage?” “Well, I think we should get government out of business of marriage entirely, then it wouldn’t be an issue” “Sure, but that’s never going to happen, so do you support gay marriage?” conversation. There’s just no chance at all that within the next 30 years we’re going to move to a system in the US in which the tax code works the way you’d like it to. So sure, keep arguing for the system you really ideally want, and who knows, eventually we may get there. But in the meantime, in a practical sense, you have to live and debate in the system we have, and in the system we have, people change the tax code and campaign finance laws and other such things in order to sway society, and it’s your responsibility as a citizen (not to mention a doper) to evaluate and judge and mock those policies and decisions…
OK, obviously that society is not fair, balanced or just. Let me phrase my question a bit better:
“…the question I actually asked. Namely: can you imagine a capitalistic and democratic society which you would agree is, in fact, unbalanced and unfair along economic lines? Do you even accept that as a hypothetical possibility?”
To kind of envision what I’m talking about, I think we all agree right now that in the US it’s better to be born the child of a CEO than the child of a doctor, and it’s better to be born the child of a doctor than the child of a teacher, and it’s better to be born the child of a teacher than the child of an unemployed person. Forty years ago in the US that was certainly still true, but probably the difference was smaller. And we can certainly imagine the differences being much larger than they are. Can you imagine a society where the differences in opportunity represented are sufficiently large, and sufficiently difficult to overcome, that you would say “hang on, something is wrong here, this is not the way things should be”?
I would generally be concerned about not having management’s view represented. For small-cap public companies and smaller (probably mid-cap public companies also) it would be a total disaster. The board would have no idea whether the budget’s reasonable, should they acquire or build, sales force, etc … Also, if I have a position in the company as an insider (say I have 10%, not unusual at all for a small cap company), your damn right I’m going to be on the board.
But I’m a bit puzzled by the assertions that boards for large, publicly-traded companies have been compromised. I’m under the impression that these companies all have one or more complete outsiders on the board (academics, public service types, …). Have they all been compromised? Bought-off?
I would say that the differences would be more likely to be political rather than economic.
Jim Crow laws in the US certainly depressed black people’s earnings over their lifetimes. That was neither fair, balanced, nor just. But it has less to do with economics or capitalism, and more to do with political and social ideas.
Capitalism would tend in some cases even to work against this. One driver behind segregation in the workplace was that blacks were willing to work for less, and were sometimes out-competing whites for jobs. Hence the push for segregation from white-dominated unions.
I would dispute whether the differences in opportunity are bigger today than they were forty years ago.
Yes, I can imagine such a society. If there was no way for a non-genius-type average kid to study hard in school, go on to university, get a degree in a useful field, get a well-paying job and improve his situation in that manner.
There is plenty of opportunity in the US. I am an immigrant, now upper middle class, having arrived in the US with $100 in my pocket. I know a lot of other immigrants from the same country (former USSR). They and their kids are all doing well, with some (see Sergei Brin) doing extremely well.
There is no excuse for an average-intelligence ambitious person who started reasonably young in the US not to succeed. There can be various degrees of success, but the success is assured. Note the “ambition” part, though. That’s something that is seriously lacking in a lot of people.
John Mace is simply a liberal who understands the notions of policy cost and the law of unintended consequences. This makes him rather a cautious and thoughtful liberal on policy matters, much more so than the majority here.
Board membership can be influenced. For example, while the membership of the board is elected by the shareholders in many cases the existing board will directly or indirectly choose the nominees who the shareholders can vote for.
There is no reason that the CEO, CFO, and whoever else needs to give input, can’t participate in board meetings, but the suggestion is that they not participate as voting members. The BoD is free to invite anyone they like to give input.
Your second paragraph is also a point well taken. We should not accept the idea that there is a per se problem with CEOs being on the BoD, if they are one vote among many, and we should look into exactly what problems, if any, are created by the CEO being a member.
I know it’s hard for some people to understand that the world is not made up only of liberals and conservatives, but I don’t consider myself to be either. I agree with you on some things, and disagree on others. Same with the liberal members of this board.
The OP put my name in the thread title, but I’d really rather not have to respond to generalized statements about myself. Not taking a pot shot at you, personally, but just hoping to nip this in the bud.
My only caveat here is that ‘Capitalism’ doesn’t determine what peoples salaries are, The Market™ does. And those aren’t the same things.
Other than that…yeah, the market determines roughly what people get paid in our quasi-free market society. ‘Fairness’, whatever that even means, doesn’t come into it by and large, unless someone is deliberately distorting the market.
Capitalism and Capitalistic societies don’t operate in terms of fairness or unfairness. Not sure what ‘unbalanced’ means in this context, but probably not that either. Capitalism is at it’s root simply about private ownership verse public or collective ownership. That’s about it. It might involve markets (free or otherwise), but really it’s as simple as that. It’s not even about democracy, as you can obviously have Capitalism (capitalized :p) in society that doesn’t have democracy…and you can have democracy in a society that doesn’t allow private ownership of goods, services, property, Means of Production™ or any of that stuff.
So, I guess the answer to your question here is that yes…I can imagine a Capitalistic society that was ‘unfair’ and ‘unbalanced’ (depending on what that means), since those aren’t goals of Capitalism. This isn’t a bug so much as a feature. If you want to put in stuff about fairness and balance then you do that with your social democracy stuff, building it on top of your base. Same with your ‘free market’, assuming you swing that way.
Certainly, since, again, Capitalism isn’t about any of those things. I don’t believe that this is the case in the US today (though it has been the case in the past), but I can certainly envision this happening. It all depends on that structure you build around your ‘Capitalistic society’…and what it is, exactly, that you are trying to achieve. What are or were the goals of the society you built around Capitalism? THAT is where you are going to get your ‘injustice’ (either real or perceived), or distortions in your markets…or distortions in your political system and process.
None of this stuff has anything to do with Capitalism though. Or even markets.
I’m unhappy with the current situation, but, again, this has nothing to do with Capitalism and the real or supposed issues with Capitalism. To me, the problems stem from all the crapola we’ve built on top of a Capitalistic framework. Most of the problems you list here are, IMHO, issues with society and our political system, and whether you agree with them or don’t (some I do, some I don’t agree are even problems, per se) it’s not Capitalism that’s the issue, it’s our government and our society. If we, the people want ‘fairness’, whatever that is, then we can easily incorporate it into our system…and Capitalism will hum along just fine beneath the hood (as long as you keep the core tenet of private ownership) . Our society and system might be dysfunctional as a result (I think it would be, depending on the devil in the details there), but it won’t be dysfunctional due to Capitalism…it will be dysfunctional due to the stuff we put in on top of it. Same with if we toss ‘fairness’ out and go with a survival of the fittest type system of cut throat I Gots Mine and That’s all I Cares About! type system. Capitalism will, again, chug along fine in that system as well (with the same caveat).
I believe that our SOCIETY is more ‘fair’ today than in the '60s, for several reasons, but none of them have anything to do with the underlying Capitalism part of the equation. Certainly I think that our society, as a whole is far richer today than it was in the 60’s, with both the rich and poor having more actual wealth available to them than they did then (plus the whole change in segregation and minority discrimination/civil rights stuff that has changed radically from the 60’s to today), but none of that really has to do with Capitalism. Some of it (how wealthy our society is, for instance) has to do with markets, IMHO, but that’s something different.
You can call yourself what you wish. I consider you to be fairly liberal - certainly you are more liberal than I am, and I consider myself a moderate conservative.
I certainly meant no disrespect by calling you this.
On the other hand, while you may consider yourself to not belong in certain camps, it is obvious that others might think of you as being of one political persuasion or another, whatever your denials. That’s their right, whether it is on point or off base.
And frankly, they might be closer to the truth than someone so close to the issue.
He doesn’t seem to be begging any questions there…just making an assertion. Whether you agree or disagree with the assertion I’m not seeing any questions in there to be begged.
We must be miscommunicating here… pretty much all the “capitalist” countries in the world today do have SOME regulations on what you can buy and sell and trade. So the USA, Japan, China, most of Western Europe, etc., I would describe as “basically capitalistic”. I mean, I don’t think I’m trying to make some super-subtle or controversial point there…
I’m talking about the actual rules, the laws and regulations that govern exactly what economic behavior is and is not allowed… glass-steagal and its ilk. (Along with tax rates and codes, and zillions of other things).
I gotta say, I am really missing the point of what you’re saying here, and I particularly don’t see how it answers the question I asked. Can you clarify?
