If I were in charge of things - which of course, I’m not and never will be - I’d maintain interest rates at a permanently low level, tax unearned income at the same rate as earned income, continue the Fed’s policy of monetizing the debt, and target unemployment with massive public infrastructure projects whenever it went beyond some prescribed level (say 5%). Among other things.
This is a good point, though it doesn’t apply to “my” apartment building.
This is what I was getting out by saying that private ownership of land and large tracts of property was not something that is inherent but is applied by law. I can easily imagine a legal system and government that held that someone cannot assert ownership over real estate or other large pieces of capital unless they manage, maintain, and oversee them personally.
Let me ask you a question. What if she did build it completely by herself? She was a master mason, architect, plumber, and electrician who started at a young age and worked at night to build this massive multi-story building on land she bought by selling produce on the street during the day. Granted, she didn’t create the land but she owns it and she built every single square inch of the apartment building by herself. As soon as she was done at age 40, she retired and now just lives off of the proceeds. I should mention that this property is in Manhattan and she bought the land on an unused corner and built the property during the Great Depression. It is worth $50 million dollars now and the rents alone are worth several million dollars a year.
Do those circumstances change your view at all? Why or why not?
Let’s boil this down to the basics: You inherited partial ownership of property that generates income. You would be correct that you don’t “deserve” it in the sense it was your grandfather who actually put up the capital to buy it, but here’s the first question:
Do you have a problem with parents giving their children and grandchildren property? Saving so you can pass something on to your kids is a pretty common strategy, and if you want to abolish it, you’re going to face some stiff resistance. If you have a problem with this, say so. If not, then go to the second question:
Would you be okay if your grandfather just saved up $100,000 and instead of buying property had put it in a trust that paid out $1000 a year for the next 100 years to his heirs? Is there something inherently wrong about this? If not, go to the third question:
If instead your grandfather had invested the money in some security, say microsoft stock, and passed that on to his kids, how is this different from the previous scenario? The stock might return gains and dividends for a century, or microsoft might go bankrupt, so there is some risk involved in this strategy, but it probably offers greater rewards long term.
If by that you mean, “make other people magically agree with my take on economics” which I’m pretty sure is what you DID mean … then yes, you’re right, of course.
Okay, suppose you do all these things.
Some people will still be making money without working. Some people will still be living on dividends, or rent, or other money that they acquire without earning.
Your proposals don’t solve the problem you’re complaining about. They don’t eliminate it. They don’t even reduce it very much!
boggle So when I buy something, it’s a government subsidy, simply because I rely on the rule of law in order to conduct my business? Sorry, but this does not pass the laugh test.
By the way, nice non sequitur. Merely relying on the rule of law does not guarantee a profit; you still have to have someone willing to buy or rent what you own. So where does her profit come from? It sounds like it comes from her ability to recognize a good investment and her ability to exercise her rights. What the government has to do with her profits is still a mystery.
And I notice you have ignored everyone pointing out that the money invested in buying the building is her contribution. After all, any one of those renters could have chosen to buy it instead.
Precisely. And she can now take that money and buy the building from the original scenario, putting us back in the same place we were using a slight more scenic route. It seems as if LinusK must be against inheritance.
I will stop you there. Yes, I do have a problem with it. In my family’s case, I know for a fact that my paternal lineage (the source of that investment) spent over a century in Barbados before finally making it from England to the U.S. They owned a plantation there and enslaved many people of African origin.
But almost any longstanding wealthy family has origins of their wealth that are ethically murky at best. And why should one person be rich and another poor because of wealth that originated from someone the wealthy person never met?
Sure, let people leave a little something to their kids. But we should crank up a seriously progressive inheritance tax so families cannot coast for many generations on inherited wealth.
I never once stated that owners get paid for providing information.
I was responding to your thoughtlessly stupid argument in Post 314 that transactions don’t create any value, which is yet another example of your inability to recognize the value that results from abstract processes.
Owners get paid for making decisions, first and foremost for their decision of what to buy but often also for additional business decisions that can’t be made by management. I have been saying this from my first post in this thread. Other people have been saying similar things, with different words, from the very initial response to the OP. Specifically owners get paid for making good decisions about allocating capital. Post 244, Post 256, Post 269, and Post 315 all touch on this topic. There are plenty of things that we do that create value that we don’t get paid directly for. Providing market information through our purchases is one such thing.
Good luck with that. 
I’ve had the same thoughts at one time or another, but policing this would be pretty much impossible.
If the people who subscribe to the OP haven’t been convinced yet in 8 pages, I don’t know what will. This is a very elementary Marxian theory - the Labor Theory of Value and it has been dispelled many times, many ways.
a) Supply and Demand. Technically the labor that goes into making a gucci bag and a knockoff are the exact same yet one is worth more than the other. The labor that goes into planting saffron and the effort that goes into planting tomatoes are the same yet Saffron is 1000x more expensive. Whether you agree wit it or not, labor is not the only component of value.
b) Technology. Even though it takes more labor to make shirts, pants, cars, etc. by hand, the labor saved via technology diminishes the labor but does not diminish the value of the good produced.
c) Tangentially, quality. Just because more labor went into something does not intrinsically make that good better. A horribly constructed house that took months upon months to construct does not make it better than a well-builty house that took less man-hours.
Specifically to rebut the apartment argument:
Even in lands without property rights such as China, they don’t subscribe to the LTV. It’s not a property rights issue, it’s a ownership issue in general. Put it this way. You’ve got a car that you paid for with your paycheck that you got through our labor. Then you get a new car so you let your little brother borrow your car. You effectively disappear. You didn’t build the car, you don’t maintain the car, you don’t gas it up, you put zero labor into it. Does it stop being your car? Does it erase the value that you previously exerted to purchase the car in the first place?
Profits have been defined many different ways throughout economic history. Intuitively we know what it is, and we can define it through an accounting definition but I think pinning it down to any one particular economic definition is an exercise in futility. There’s more than one way to skin a cat and there’s more than one way to turn a profit. No singular definition can possibly encompass the ways that a man and his money are parted.
p.s. I don’t think the personal opinions of the ethics of the roots of inherited wealth should play a role in the overall outlook and system of economic policy. Just because SOMEONE’s grandparents profited off slavery doesn’t mean we should scrap the inheritance policy, or even put an arbitrary cap on it.
The thing is, even if you took over the management of it yourself, that wouldn’t convert the unearned part of your income (the part you got for owning it) into earned income (the part you got for managing it).
A few years ago, during the internet poker boom, I made some money playing internet poker. Now, in that particular case, it was actually a lot of work. Even so, I didn’t imagine I was doing anything productive.
If I got money for owning an apartment building - I’d be quite happy about it - but I wouldn’t imagine I was doing anything productive.
You haven’t listened to a word anyone else has written, have you?
Regards,
Shodan
And yet Canada, as a whole, have no interest in doing so. Why is that?
Or, to be more precise; why is it that Canadians have unimaginably vast access to every kind of food a person could want at highly affordable prices, to the point that it is contributing to an explosion in obesity and overeating, and there is effectively no serious hunger problem at all, but at the same time Canadians are almost universal in their support of a universal health insurance system?
Do you in fact know, or can explain, the concept of market failure?
[QUOTE=Evil Captor]
in a few decades automation will make almost all human labor redundant, and transform almost everyone into socialists except the one percent.
[/QUOTE]
Automation has already made almost all human labor redundant. I’m not sure how you missed that. It was a rather big part of history class.
We found other things to do, as in fact we always will.
We found other things to do because there were things machines could not do better and cheaper than us. Once machines get to the point where they can mimic the human eye-hand coordination thing, there will be NO labor that won’t be done more cheaply and effectively than humans can. I am sure humans will TRY other things, but in a capitalist society like ours, where the person who owns the company that makes the machines gets almost all the value of their labor, there will be the One Percent doing the buying and the 99 Percent doing the selling … and perhaps the dying, without a social safety net. (Do you think our current crop of Republicans and libertarians would then be moved to develop a social safety net? I don’t.)
Your belief that we “always will” find other things to do is a touching article of faith.
Jesus Christ, what CENTURY are we having this debate in?
If by listen you mean, “Kneel down before your capitalist swine ideologies as you hold your foot down on the throats of the working class proletariat”, and I think you do, then no.
Actually, we don’t know that he got the building by saving up his wages. Since the average wage in the US is around $40k, and even a smallish apartment building might run into several millions, that seems like a pretty unlikely option. (Even if he saved half his wages, it’d take a century, or two, to save up enough for an apartment building.)
But what difference does it make? You’re not saying his entitlement to profit depends on how he got the building, are you?
I’m not. Where have I suggested stealing anything from anybody?
I have nothing against inheritance. In fact, if I’m the one getting the inheritance, I’m 100% for it. What I’m arguing is that for one person to live off his inheritance, someone else (or some other people) must work more, or consume less, in order to make up for it.
We don’t have to take anything on faith.
The point at which there is nothing useful for a human to do is the point at which all humans everywhere have all of their needs fulfilled.
Where our “needs” doesn’t just mean basic needs like food and shelter, but anything any human wants.
If the machines cannot do everything we want, or if not everyone can afford what the machines produce, then there are jobs for humans.
That’s why they’ll be jobs for humans for the foreseeable future, and when there isn’t, it won’t be a bad thing.