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What Capitalism Has Done to the Caucasians   [Copy link] 中文

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Post time 2012-2-20 15:17:56 |Display all floors
This is not meant to look down upon the Caucasians, but to feel bad for them, and to teach a lesson to China that the same will happen to them unless they be careful.  Here is the very sad charts:

motherjones.com/mojo/2012/02/mind-blowing-charts-senates-income-inequity-hearing

The chart shows the massive income inequality between the top 1% richest Caucasians, and the rest of the Caucasians.  The 1% no longer see themselves as part of the 99%, and want to enslave the 99% for resources without and regards for their welfare.  Be careful China, you are heading in the same direction with all your newly created rich elites.

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Post time 2012-2-20 15:51:38 |Display all floors
It was capitalism that brought a high living standard to the peoples of Europe and America. it is a problem if people get rich due to privileges granted by the government. We haven't had a true market capitalism for long time.

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Post time 2012-2-20 16:25:42 |Display all floors
There are better models that can be created: integrate the best aspects of each economic model to synthesize a better system.  Take meritocracy from capitalism, but also incorporate socialism to make sure inequality is not too great.  And then incorporate nationalism to ensure the wealth serves the overall national interest.  And finally incorporate humanism to ensure that in the end, most of the citizens are better off and happy.

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Post time 2012-2-20 16:38:17 |Display all floors
My favorite system is the Jewish model: do whatever works at the present time.  In other words, don't have an absolute view of economics and politics: be willing to change to adapt to the changing environment.  Since the world is always changing, one's politics and economics must also constantly change to adapt.

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Post time 2012-2-20 17:45:31 |Display all floors
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Writer's real name is Lau Guan Kim.  lau_guan_kim is for commentary and analysis. He writes also under another alter ego jinseng. I will respond to good reasoned debate. Mudslingers shall be ignored. What I do not like are ignorance, stupidity, chauvinism and bigotry. The other party has as much right as I have until it resorts to insults and nuisance.

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Post time 2012-2-20 18:32:45 |Display all floors
This post was edited by markwu at 2012-2-20 18:53

There are at least two kinks in capitalism.

One is that while it increases demand and thus wages, it also increases prices not attributable to labour alone so that the labourer who works hard in the hope of improving his lot will find that even as he earns more, his goal is moving further away from him.

The second kink is how capitalism tends to magnify wealth of those who are already wealthy.  These days wealth is magnified by capital gains in the stock market which tends to accelerate income disparity.

However, both kinks operate in a dynamic state.  

We have annual rankings of the richest but we should note that while last year they may be up, this year they can be down even if next year they will be up or down. When they are up, we remember income inequality. But when they are down, we don't share the same sentiment. That is because as humans we will rationalize that those who already have more than they will ever need will never suffer even a big drop in their fortune. But that's compared to the majority.

Likewise, wages and prices are dynamic. Of course if demand is down, justification for wage and price increases is weakened.  The inherent problem is that when someone is drawing a wage at a certain level, s.he will be reluctant to accept anything less because of prior commitments made that have been based on the wage level held. What for the rich, even more for the poor.

So what can one do when a situation arises which can be destabilized by the two kinks of market-determined wage-price dynamic and wealth inequality perception?

First thing is to stress that stability and steady growth will be the basic overall targets if only to provide a temporary buffer from the incipient effects of the two kinks of capitalism.  When the table is moving, so too the dice and cards.

Second thing is to keep domestic inflation down so that the many who can afford less will at least be able to get the basics of food, shelter, health, education, transport and livelihood to keep them going until hopefully the situation can change.

A subset of this thrust is to continuously educate people to think that situations are not static because capitalism itself is predicated on continuous change.  Sell more success stories.

Third thing is to spur more domestic investment and spending.

The challenge is in the third thing.  Domestic investment calls for those who are wealthy to invest their accumulated gains and put new kinetics into any sputtering growth.  But where to invest?  

Capitalism will say invest wherever maximum gains can be made in the shortest time using the least resources.

However, and in reality, life is not exactly axiomatic. One should invest where there is sequential improvement - first capitalistic gain, followed quickly by domestic improvement to help society.

Why? Because society today is made of consumers and customers tomorrow.  If more are uplifted now, they will become bigger buyers tomorrow.  It is inevitable. Humans will always want more and want better.

Therefore, can one be faulted for thinking the investment thrust should be to invest according to capitalism precept but distribute or repatriate the gains as soon as possible in wage-uplifting activities to pull society up so as to create more domestic spending?

However, there is a third kink of capitalism. The effect of urbanization. It creates pressures on resources. When more and more want what they can see easier and faster with their eyes focused in concentrated urbanized places, less and less can be given if supply cannot catch up to demand so that prices and costs run up.  

What happens then? People who cannot afford today will save for their future in the hope that one day they too will be able to enjoy what they have worked today for others to enjoy.  

Now if they are saving, they are not spending. Therefore there will be rumbles.  In addition, the third thing to be done will be jeopardized because more savings will not create more spending demand to meet new supply from new domestic investments which may thus move elsewhere.

The problem thus loops back to become worse from the other two kinks of capitalism.

Thus, economic restructuring.

Perhaps more study should be done on how to increase the value of savings. This does not exclusively mean increasing interest rates for doing so will in turn increase cost of investments which will decelerate growth.  

Perhaps it has to do with creating financial instruments for the masses with mechanisms that target the achievement of wealth-creating performances to a level similar to those of the very wealthy.  These instruments may have to be institutionalized.  Their activities may have to be initially federated to major-invest in vehicles like the monopolies.

Publicly listed trust funds, provident funds, insurance-based investment instruments? There are many combinations and all can be studied.  The caveat is that they must be studied in the light of what has happened to similar others which have put all their eggs into the stock market and mortgage markets. One need not take the same road.  Good and trustworthy management must be put in place. Due diligence and constant monitoring must be done.  And made publicly transparent.

There is yet again a fourth kink in capitalism.  It has to do with international competitiveness.  However, the byte limit for postings precludes that today.

But not enough to sneak something in.

Someone long ago said something like this:

“Go to the practical people, learn from them; then synthesize their experience into principles and theories; and then return to the practical people and call upon them to put these principles and methods into practice so as to solve their problems and achieve freedom and happiness.”

Who was the gentleman, one wonders? {:soso_e113:}



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Post time 2012-2-20 18:52:08 |Display all floors
Perhaps more study should be done on how to increase the value of savings.


(beast ex machina)

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