Debating guy on Capitalism vs Employee Management

[orafi]

There was a dude on youtube who made a basic argument against capitalism in favor of employee managed firms, skewed in his favor with fantasies as his foundation, of course.

So I pose him some questions, and these are his answers. Second post will have my rebuttals to his answers.

In the exchange I was in a hurry so that took me like 15 minutes to write (that'll explain that lack of flow and all the spelling errors), but anyone have any suggestions? I could probably use some learnin' as well.



>Capitalists own land they don't use?

Yes. All the time.

Consider this: there is a mine, and there is a group of 150 workers on the mine and they work hard for hours mining in the mine. Then there is someone who owns the mine and makes money off of the mine. That person probably won't set foot on the mine very often, maybe they will once a month or so. The mine in this case is CAPITAL, the owner of the mine is a CAPITALIST, and the system in which he is currently living in is CAPITALISM.

> Don't you think you should have a say when the government is spending your country into trillions of dollars of debt?

Sure. Recall the philosophy of self-management that I described earlier. All the people that are effected by these policies, that is people personally living inside of the United States, deserve a say in them. Just as workers on a factory deserve say in the management of the factory they are personally working on.

> Do you think you have a say when there is a central bank shrouded in secrecy, manipulating your wealth through currency?

In terms of self-management, everyone using the currency should have a say in those policies. If everyone using the dollar as their currency agrees to print more money, then I don't see a problem with it. On the other hand if it is as secretive and oligarchical as it is now, then I see a problem with that. The federal reserve is a lot like a corporation though, as we don't know much of anything about Microsoft, nor do we have much of any say in its policies.

Although you will probably say we have a say in Microsoft policies because we can decide to not use them, we also have a say in the federal reserves policies because we don't need to use the U.S currency and we can lobby politicans like Ron Paul and ask them to change things. We probably have less say in Microsoft's policies then we do the Fed's policies.

> Why can't workers form their own companies

Most people are born into the capitalist class or the working class, rather then getting a decision as to which one they want to be. Consider the Walton Family, the Rockefeller Family, and all those inhertors. Consider Bill Gates, he was never an employee his entire life. If Bill Gates had instead been born to lower-class parents that did not have the money to pay for his stay in Harvard, he probably would have had 250,000$ debt, and he would've spent his life paying it off, and he would've stayed in the lower class, and his children would have probably stayed in the lower class as well. Usually people do not jump very far in the class scale.

> entrepreneurs who risked millions and many hard years to start that business?

Show an example of an actual entrepreneur who risked millions, went through hard years, and worked hard to get to where he is. Consider the Walton family that got 17 billion dollars just from being born.


> Can the workers of the factory understand what the consumers want

Sure. Consider the Ubuntu operating system and the Ubuntu Brainstorm project at brainstorm.ubuntu.com. There would be more things like that where consumers can have a direct say in what they want in their product. Consumers do not have enough of a say in the current system.

> How will the workers have access to that information along with their other responsibilities?

There would be less work hours per person as there wouldn't be managers, bankers, accountants, etc and it wouldn't take too long for workers to have a weekly meeting where they democratically make decisions about their own workplace.

> In a free market economy, employees have a say by providing their skill to the employer

I don't really understand this point. Employees do not have much of any say. Consider a worker at a restaurant, he/she just takes orders and he/she cannot even say anything to the managers as to what should be done.

> Don't you think that an employee, if dissatisfied with that "factory" (let's say firm instead..), be able to quit and choose a better job?

Sure. You could also kill yourself or live in a jungle or a remote village as a protest to society, or you could move to a different country in protest to the government. That doesn't mean you have much of a say in these things.

> How can workers of a factory innovate without a management reading the trends of the market?

Perhaps, in some cases, the workers could bring in a full-time advisor who can give them advice as to what to do, however, the workers will still have the final say rather then a minority of managers.

> How can they know how to manage R&D funds

Oh yes, R&D funds. I am quite a fan of R&D as it is probably responsible for the majority of the standard of living increases in our society. Capitalism does not have a good track record in this regard. Nukes, Satellites, Lasers, Telephones, Computers, and the Internet were all invented by the government rather then capitalists. The reason for this is the government does not have any competition, competition which is all over the place in capitalism, does not make for good R&D. Consider NTT DoCoMo, it is a private corporation which invented 3G for telephones, it has a monopoly on the Japanese telecommunications market, so it doesn't have competition which is what made it good for R&D, so in the end R&D does not flourish under Capitalism because R&D does not work well with competition. There should instead be a public cooperative for R&D like for much of science. Nobody owns scientific theories.

[orafi]

These are my rebuttals, I have his answers from the previous post in smaller font here.

I didn't finish one of my points, I now realize haha. But I was in a hurry. : (

Yes. All the time.

Consider this: there is a mine, and there is a group of 150 workers on the mine and they work hard for hours mining in the mine. Then there is someone who owns the mine and makes money off of the mine. That person probably won't set foot on the mine very often, maybe they will once a month or so. The mine in this case is CAPITAL, the owner of the mine is a CAPITALIST, and the system in which he is currently living in is CAPITALISM.
>

How many people own mines of their own, individually? Are you speaking of a company? Do you think that a CEO owns the land his corporate building is based on? That is not a good fix on reality.

And let's adjust your example to correct terms. Don't you think that the President of Mining Inc. took a risk in purchasing land to mine in? Do you understand how expensive and risky it is to explore new mines and go deeper into already explored ones? It is a huge risk that is not shared by the workers.

And also, don't you think that the workers should be glad for the jobs that the founders of the mines provided them? Do you think that workers would band together and out of no where have started mines of their owns, if management would not exist? How would the miners have contacted each other? Split responsibility?

Capital is a means to production. Machines, money, people. That is what capitalism is. Not being a guy who rarely has anything to do with anything. Don't looka t everything in a one sided perspective.

Check this link out:

http://mises.org/daily/1005

"Sure. Recall the philosophy of self-management that I described earlier. All the people that are effected by these policies, that is people personally living inside of the United States, deserve a say in them. Just as workers on a factory deserve say in the management of the factory they are personally working on."

Employees don't have a say now? What do you mean deserve a say? Do they have special insight? A say for what? You are being vague.

Read this: http://www.lewrockwell.com/rockwell/faith-entrepreneurs-fm1205.html

"In terms of self-management, everyone using the currency should have a say in those policies. If everyone using the dollar as their currency agrees to print more money, then I don't see a problem with it. On the other hand if it is as secretive and oligarchical as it is now, then I see a problem with that. The federal reserve is a lot like a corporation though, as we don't know much of anything about Microsoft, nor do we have much of any say in its policies.

Although you will probably say we have a say in Microsoft policies because we can decide to not use them, we also have a say in the federal reserves policies because we don't need to use the U.S currency and we can lobby politicans like Ron Paul and ask them to change things. We probably have less say in Microsoft's policies then we do the Fed's policies."

Why would everyone who has a say in printing money want to print more money, when they will know that it will devalue their purchasing power?

The Federal Reserve is much more like a bureaucracy with extra protection and privileges. Corporations are a LOT more open than the Fed. It is an entity that is boosted by special interests and purchased politics.

http://mises.org/Community/blogs/damienmanier/archive/2009/11/22/corporate-welfare-and-corporatism.aspx

"> entrepreneurs who risked millions and many hard years to start that business?

Show an example of an actual entrepreneur who risked millions, went through hard years, and worked hard to get to where he is. Consider the Walton family that got 17 billion dollars just from being born."

Do you know how many businesses are started?

THERE are TONS of small businesses out there, and many examples of them becoming large companies due to smart and intelligent leadership.

My father owns a small business and spent his entire life building it. He has put in a lot of money, blood, sweat and tears. He just an example out of millions.

Do not confuse inherited wealth with entrepreneurs. That is a gross confusion, dangerously false.

It takes sacrifice. Read this American business man's account of his struggles.

http://www.freerepublic.com/focus/news/2114854/posts

Start a business of your own, and see where your view errs

"Most people are born into the capitalist class or the working class, rather then getting a decision as to which one they want to be. Consider the Walton Family, the Rockefeller Family, and all those inhertors. Consider Bill Gates, he was never an employee his entire life. If Bill Gates had instead been born to lower-class parents that did not have the money to pay for his stay in Harvard, he probably would have had 250,000$ debt, and he would've spent his life paying it off, and he would've stayed in the lower class, and his children would have probably stayed in the lower class as well. Usually people do not jump very far in the class scale."

Uh what is a capitalist class?

What is a working class? The middle class or lower class? Capitalism has brought us a middle class, capitalism has brought us a tremendous growth in our standard of livings. The middle class is a revolutionary phenonemon even today. But it is being crunched because of our government's deficit spending, wars, social regulations and economic regulations.

In America, even today, people HAVE A CHOICE to choose their futures. It is called hard work and dedication. Lazy inheritors lose their wealth over generations and their incompetent children become poor. But this can only happen in a truly free market society, where corporations are not in bed with government (big government + big business = corporatism).

(What is wrong with inheriting wealth that is your father's?)

Uh, dude? Bill Gates became rich because of the ideas he unleashed and brought ot the world, not because he was able to afford Harvard..

"Usually people do not jump very far in the class scale.""

Uh, do you know why there is a middle class and the standard of living we have today?

Because of capitalism. Capitalism, even through the mess of all bureacracies, is bringing technology to the world and bring down real price of goods and services. (this against the tide of government/central bank induced inflation). The feudal system was destroyed with this idea. The paupers of the 18th and 17th centuries were able to buy clothes, homes, and food for everyday. nowadays, thanks to capitalism, the only difference between a king and a middle class individual is a bentley vs a civic. they are still cars, they offer the same purposes. back then, paupers couldnt even afford to ride donkeys.



So this goes with my previous point of


"> Can the workers of the factory understand what the consumers want

Sure. Consider the Ubuntu operating system and the Ubuntu Brainstorm project at brainstorm.ubuntu.com. There would be more things like that where consumers can have a direct say in what they want in their product. Consumers do not have enough of a say in the current system."

This is an open source network where anyone can pitch in. This is no for profit and there is already feedback systems incorporated into the business models of most companies. What is it? The market trends.

This is also service which is in no way a financial risk to consumers to be involved in this, and there is no financial risk for the ubuntu. A program that is trumped in features by the professional alternatives.

There is a use for it, of course, but then again, there is a use for the professional versions for the layman and serious user.

Tell me. If Ubuntu, with its massive open source ability, is so able to understand what the consumer wants, why has it not usurped MS? Because it is a service to a niche group and cannot reach the layman.

Firefox is an example, however, that you should have used. But at the same time, this is a free and intangible service.

Are you saying that workers should not get paid?

"There would be less work hours per person as there wouldn't be managers, bankers, accountants, etc and it wouldn't take too long for workers to have a weekly meeting where they democratically make decisions about their own workplace."

So are you saying that the workers themselves will cut their own hours? Won't that lower productivity? Won't that limit supply and lower the quality of the product or service (without many hours, how will they gain skill. If they won't have incentive to work a full work day, why should they care about effort?, etc)

When is a banker a part of a corporation? That is a whole industry you are speaking of...

Without accountants, how will they keep track of their cash flows? They would not be able to keep their production efficiency if they cannot pinpoint where the profits are heading and where their are non productive secotrs of the business. How will they be able to manage a budget without a reference? How will they be able to appropriate the right amount of money into improving the product through research and development and refining the production process, the wages and liabilities and marketing and etc? How can they know for sure they they are not spending more than they are worth?

"I don't really understand this point. Employees do not have much of any say. Consider a worker at a restaurant, he/she just takes orders and he/she cannot even say anything to the managers as to what should be done."

The point is, is if that employee has a valuable talent and amount of experience, the employer would be stupid not to keep them for the price that they think is worth it. If they lose that employee, it is their loss and another employer's gain.

Why should a waitress have a say in a restaurant when the manager is hired to such a thing? Who do you think bares the responsibility in front of the customer when there is a problem? The manager, then the establishment. Do you think the waiter would get sued or the establishment/management when something terribly wrong (when it comes to legal parameters)?

A waitress can always have a say. But, why should the waitress be taking seriously? Do you think that the management shoudl just give them that for the sake of being nice and out of respect? Or, don't you think that, if the waitress makes a compitent suggestion, a suggestion that actually improves some factor of the business (employee relations, customer relations and satisfaction, food quality, services, etc) that the management would reward the waitress. Are you telling me that employees do not get rewarded for making such suggestions? I have worked quite a few jobs and have been offered benefits for hard work and ideas.

If you can benefit the management, they will value your work, and it will be more likely that, through your hard work, that if you strive for it, you can move on up. But why should you if you promote bad ideas? You can always have a say.

Question for you is, why do you think the employee's say will always work?

If the employee feels that the management is retarded, than the employee can easily quit and find a new job.

Oh wait, aren't Obama, Bernanke, the rest of DC killing those little things... those things you call jobs?

"
Sure. You could also kill yourself or live in a jungle or a remote village as a protest to society, or you could move to a different country in protest to the government. That doesn't mean you have much of a say in these things."

Yes you do, it's your choice to do whatever you want with your life. If you want to suicide to make a point, go ahead, but that isn't going to be productive.

Why should you ahve a say if you are not proactive? Not a good example for your case, friend.

"
Perhaps, in some cases, the workers could bring in a full-time advisor who can give them advice as to what to do, however, the workers will still have the final say rather then a minority of managers."

Wouldn't that be hiring a middle man and extra work? Again, that would be an advisor for market trends. If the advisor turns out to be right for many cases, wouldn't workers start taking his advice more seriously? And thus institute him as a defacto leader?

Sure they can have a final say. But what if the advisor tells them to lay off some employees because he tells them to install certain machinery that can replace them? What do you think the answer would be? Of course the employees would yelp "no!", or at least, the ones who would be affected. Those who stand to gain, will obviously go for the advisor's advice.

Do you see where the problem is with your idea, now? This would be quite a dilemma, but we have not even touched the tip of the iceberg!!!!

"
Oh yes, R&D funds. I am quite a fan of R&D as it is probably responsible for the majority of the standard of living increases in our society. Capitalism does not have a good track record in this regard. Nukes, Satellites, Lasers, Telephones, Computers, and the Internet were all invented by the government rather then capitalists. The reason for this is the government does not have any competition, competition which is all over the place in capitalism, does not make for good R&D. Consider NTT DoCoMo, it is a private corporation which invented 3G for telephones, it has a monopoly on the Japanese telecommunications market, so it doesn't have competition which is what made it good for R&D, so in the end R&D does not flourish under Capitalism because R&D does not work well with competition. There should instead be a public cooperative for R&D like for much of science. Nobody owns scientific theories."

But government has unlimited funds compared to the private businesses. They can just tax individuals whenever they need a budget.

The government funded scientists who have invented the nukes and weapons (what has that gained us but destruction)?

Who says the government gave us the computer? They say the first computer ever (of today's nature) was invented by a German in his parent's basement. The earliest digitized computers were invented by Cliff Berry and later, by a couple other individuals, all professors of grand universities.

The internet, in a BASIC BASIC form was invented by the government. But, it was such a basic creation with huge costly machines to operate it's minimal capabilities.

Who do you think made the internet,a nd the computer, the way it is today? The capitalist! You are typing on your microprecessor based computer, billions of times more powerful than the first computer, because of capitalism. You are sending me your rebuttals through your internet, which trumps the very internet government scientists had no idea what to do with when they invented it, with so many tax dollars.

Our standard of living is the way it is, because of capitalism, and how the customer is able to choose the best product, and the entreprenuer will provide it.

If government were truly the responsible ones, than we would not have had thousands of years of tyranny and fuedalism before the industrial revolution (we still do, where there are big governments around the impovershed places of the world).

Please answer my questions,as you haven't done so so far.

Thanks.

[Icymudpuppy]

In my own experience as a businessman.

I thought like your friend. Instead of hiring employees, I trained and brought people on as independent contractors with a mutually agreed upon contract of services. They were free to develop their own business and would work for me on a contractual basis.

Drastic failure. Most people aren't capable of running their own business independently. Since I wasn't riding them, they performed substandard work. They made no effort to improve their business in any way save by demanding a higher cut of referred business which they didn't do sufficient work to deserve.

All 3 of them are currently unemployed. I have started anew, this time with employees who sign a contract to do what I tell them to do or they will be fired. It is a stricter format and so less individual freedom, and I pay them less, but they have more job security, and benefits. The model is working better. I think we libertarians really are the odd ones out in desiring the freedom to excel. Most people really are sheep, and need a shepherd to herd them.

It is my opinion that only sole proprietor business owners should be able to vote as they are the only members of society who take full personal responsibility for their dealings, and the dealings of their employees.

[angelatc]

>Capitalists own land they don't use?

Yes. All the time.


No, not all the time. For example, very few small retailers own the land they use. Cellular tower companies rent the land they put their towers on. Equipment is rented.


> Why can't workers form their own companies?

It's America. They can do anything they want. But a guy working as a janitor will most likely never make a good CEO.

The cold hard truth is that what's best for the employees isn't always what's best for the business.

And it's just ignorant to insist that people can't climb out of the Middle Class. Capitalism is practically the only system that *does* allow that! Most systems don't even have a middle class. You're born either rich or poor, and you just stay that way.


Ibsen's play "An Enemy Of The People" show exactly why employees can't run companies, akin to the example of bringing in a management consultant to advice about technology and the such. ( First, do they all have to agree on if the consultant is even needed? Do they all have to agree on whois best suited for the job? Do they all have to listen to the presentation? I can go on, but it's fairly obvious that they will quickly have no time to actually make anything except decisions.) What happens when that consultant shows them the shiny new robot machine that the competition just bought - the machine that means 10 positions are no longer required? Or that buggy whips will soon be obsolete and they need to retool the entire factory and start producing engines. Will they all go into personal debt to fund the upgrade?

When the issue of short-term self-preservation bucks up against an external dynamic, people choose short-term self-preservation. No business can stand to be that short-sighted.