Can there be a government funded social safety net consistent with "capitalism"?

[myrkul]

A capitalist society also has to limit the percentage of people scraping the bottom, as too many leads to social unrest.

One can do as China: Let the millions live just above the limit of starvation, but not too many or too hungry that they overpower your law enforcement. If such a government strike that balance they have the added benefit of lowest payed largest sustainable bluecollar workforce. Social safty and other benefits is just another way to pay your workers.

Ups! non capitalist countries do that too.

Actually, that's what non-capitalist countries do as a matter of course... keep people just above starvation.

In capitalism, you work, or you starve. This provides incentive to work, but most people won't need this incentive, they'll have other desires above and beyond food. It also provides for keeping too many from "scraping the bottom"... at least for very long.

Yes Myrkul, but there still is the same limit. I think it's in Thailand whole families collect waste from restaurants and deep fry the lot. It's sold as BAK-BAK for a few cents to just as poor hired hands that sleep under sheets of cardboard. In Mexico city I have seen mum and dad with small children pushing cards around at 2 AM collecting plastic bags for the cents they get from the recycler. They all make a living and their only hope in life (I have talked with them) is that their children get some minimum of education so they can have a maginally better life than they had. So you are right, Mexico City uses less on street sweepers and they all persue their dream, but i don't think either of them can tell the difference between a democracy and a dictatorship. As you say, not all are able to provide for themselve for the value of their work, so there is a level of poverty a maximum percentage the population can be below before they either have to get some benefits, or the "not starved to dead" need higher wages for the sake of stability.

Im not talking about us in the western world. We are the 20%. Benefits are given to people considered wealthy in most of the world. With us it's a balance between benefits vs. the willingness to work for minimum wages, but as this is an ideological thread about capitalism and benefits, extreme case examples are relevant.

Hmm, I don't recall mentioning either democracy or dictatorships. I was talking about capitalism and non-capitalist systems, like socialism or corporatism.

If someone cannot provide for themselves, who, besides them of course, does it benefit to support them? Who does it benefit to artificially lift the value of their labor to the same as that of someone who can support themselves?

[Luno]

A capitalist society also has to limit the percentage of people scraping the bottom, as too many leads to social unrest.

One can do as China: Let the millions live just above the limit of starvation, but not too many or too hungry that they overpower your law enforcement. If such a government strike that balance they have the added benefit of lowest payed largest sustainable bluecollar workforce. Social safty and other benefits is just another way to pay your workers.

Ups! non capitalist countries do that too.

Actually, that's what non-capitalist countries do as a matter of course... keep people just above starvation.

In capitalism, you work, or you starve. This provides incentive to work, but most people won't need this incentive, they'll have other desires above and beyond food. It also provides for keeping too many from "scraping the bottom"... at least for very long.

Yes Myrkul, but there still is the same limit. I think it's in Thailand whole families collect waste from restaurants and deep fry the lot. It's sold as BAK-BAK for a few cents to just as poor hired hands that sleep under sheets of cardboard. In Mexico city I have seen mum and dad with small children pushing cards around at 2 AM collecting plastic bags for the cents they get from the recycler. They all make a living and their only hope in life (I have talked with them) is that their children get some minimum of education so they can have a maginally better life than they had. So you are right, Mexico City uses less on street sweepers and they all persue their dream, but i don't think either of them can tell the difference between a democracy and a dictatorship. As you say, not all are able to provide for themselve for the value of their work, so there is a level of poverty a maximum percentage the population can be below before they either have to get some benefits, or the "not starved to dead" need higher wages for the sake of stability.

Im not talking about us in the western world. We are the 20%. Benefits are given to people considered wealthy in most of the world. With us it's a balance between benefits vs. the willingness to work for minimum wages, but as this is an ideological thread about capitalism and benefits, extreme case examples are relevant.

Hmm, I don't recall mentioning either democracy or dictatorships. I was talking about capitalism and non-capitalist systems, like socialism or corporatism.

If someone cannot provide for themselves, who, besides them of course, does it benefit to support them? Who does it benefit to artificially lift the value of their labor to the same as that of someone who can support themselves?

It benefits society to give benefits. As the cost of crime and social unrest at some point exceed the cost of benefits at a certain level. You can also argue that lifting poor neighbourhoods with free education sanitation, you also increase the value of their work long term, which generates a higher tax revenue and consumption.

A private business can either fire an employee when they find a better qualified in the wild, or educate or provide cheap housing for the emploees that need it, so they can add more value to the company. This makes perfect sense from a cost benefit view point.

If you make the poorest less poor with incentives you grow human assets available for your economy in your country it is good business if you strike the right balance.

Calling it Dictatorships and democracies was an extrapolating brain fart, but in a democracy the poorest have a vote, so there will always exist a minimum of government benefits. Every election in any country is also about the level of benefits the number of the poorest voters demand. In a pure Stalinistic dictatorship benefits can be non exsisting as there is no political incentive to waste money on the poor to get votes.

[myrkul]

It benefits society to give benefits. As the cost of crime and social unrest at some point exceed the cost of benefits at a certain level.

I see. So basically, we're subsidizing not robbing people. Is that a fair characterization?

[Luno]

It benefits society to give benefits. As the cost of crime and social unrest at some point exceed the cost of benefits at a certain level.

I see. So basically, we're subsidizing not robbing people. Is that a fair characterization?

You mean subsidizing them so they don't rob us? Yes I do, and I don't imply that the subsidized reason that they can threaten their way to welfare. it's just a cause and effect mechanism. As i edited in while you wrote, it can also be a financial benefit for society.

[myrkul]

It benefits society to give benefits. As the cost of crime and social unrest at some point exceed the cost of benefits at a certain level.

I see. So basically, we're subsidizing not robbing people. Is that a fair characterization?

You mean subsidizing them so they don't rob us? Yes I do...

Would not cheap, reliable firearms, in the hands of the populace, be a more cost-effective solution to crime?

[Luno]

I could just feel which way this discussion was going. LOL

So instead of foreign aid building schools and factories in poor countries and buying their cheaply produced products, we should just let them mind their business but bomb them if they start burning our flag in their streets?

benefits are not simply handouts it's an investment in the future workforce, which has the side effect of reducing the number of gun slinging drug addicts.

[myrkul]

So instead of foreign aid building schools and factories in poor countries and buying their cheaply produced products, we should just let them mind their business but bomb them if they start burning our flag in their streets?

I don't think we're having the same discussion. That's not at all what I said. For the record, here's what I said:

It benefits society to give benefits. As the cost of crime and social unrest at some point exceed the cost of benefits at a certain level.

I see. So basically, we're subsidizing not robbing people. Is that a fair characterization?

You mean subsidizing them so they don't rob us? Yes I do...

Would not cheap, reliable firearms, in the hands of the populace, be a more cost-effective solution to crime?

I wasn't talking about foreign aid. I was under the impression that you were not, either. It was my understanding that we were discussing welfare and similar benefits.

[Luno]

I am, It was an anolagy. You are a lot sharper than this normally Myrkul. Tired?

[myrkul]

I am, It was an anolagy. You are a lot sharper than this normally Myrkul. Tired?

I see. To bring the analogy back, then, would be to shoot someone not because they were committing a crime, but because they were panhandling. I don't recall advocating that.

Also, "buying their cheaply produced products" is analogous to allowing workers to negotiate whatever wage they can get, without interfering by mandating a minimum wage. (Oh, and I'm definitely in favor of both, by the way, buying cheap foreign goods, and removal of minimum wage laws)

[Luno]

I am, It was an anolagy. You are a lot sharper than this normally Myrkul. Tired?

I see. To bring the analogy back, then, would be to shoot someone not because they were committing a crime, but because they were panhandling. I don't recall advocating that.

Well if you are panhandling with a satuday night special it is a crime!

Ok let's end this, I'm tired it's 7 AM here:

The taxman takes $100 out of your pocket and gives it to a guy on welfare. My argument is that it didn't cost you $100 as him spending it on goods, creates employment, tax revenue and less likelyhood that he today starts to deal crack. Long term he might be even less desperate shave shower and check job listings more often!

Im not discussing the fairness of the states right to decide how much or to whom you unvillingly donate charity. My two points, in this hour long two guy thread, is that;
1: a balanced level of benefits is more cost efficient from a government point of view short and long term than no benefits.

2: However, to generously distributed benefits to the less needy feeds "social speculation" and might even be counter productive in reducing poverty and be un profitable for the state.

[myrkul]

The taxman takes $100 out of your pocket and gives it to a guy on welfare. My argument is that it didn't cost you $100 as him spending it on goods, creates employment, tax revenue and less likelyhood that he today starts to deal crack. Long term he might be even less desperate shave shower and check job listings more often!

The reality of it is: Government take $100 of your money, gives $30 of it to a guy on welfare, and $70 of it to useless bureaucrats along the way. This does indeed get spent on goods, creating employment, and tax revenue. Wouldn't it have done the same if left for you to spend, though?

It might reduce the likelihood that he starts dealing crack... But I don't see any problem with him choosing to provide a product to his community. If there is demand, why should he not fill it? It's gainful employment.

And it certainly will not induce him to check the job listings more often. After all, he's getting paid money for doing nothing. Why would he give that up in favor of getting (in many states, less) money for actual work?

1: a balanced level of benefits is more cost efficient from a government point of view short and long term than no benefits.

I disagree. Private charity is much more cost effective than "state charity," and private gun ownership is much more cost effective than law enforcement spending.

2: However, to generously distributed benefits to the less needy feeds "social speculation" and might even be counter productive in reducing poverty and be un profitable for the state.

Indeed... which is why you'll find low-income families having more children because it increases their benefits. Welfare is incentive to be poor.

[conspirosphere.tk]

Trying to return in-topic, i see the problem as how establish a guaranteed income floor with minimum inconveniences.
First of all, that would be much more compatible with capitalism compared with the incredibly complex and inefficient "welfare" bureaucracies we have.
Now I am wondering if such guaranteed minimum income could be financed without resorting to taxation: I am imagining a free market of monies where the governmente issues its fiat with no "legal tender" obligations on the market. We know that the real point of taxation is to give an exchange value to fiat money, but there are probably other ways to render valuable such fiat money. For example making such fiat money a property share of privatized state's assets. Any other idea?

[DoomDumas]

This is a spin off of this thread:

https://bitcointalk.org/index.php?topic=135176.0

I can think of problems with all the solutions I come up with.
What do you think?

To answer OP : No !

Capitalism and monetary system are broken by design.  Try to patch/fix it by traditional means is madness..  A. Einstein said something like : The definition of madness is repeating the same thing over and over, in the hope of getting a different result !

[Luno]

monetary system are broken by design.

So bitcoin is broken. Damn, why didn't you tell me before i got into bitcoin ? Now i have all these broken coins.

People are broken. We always try to make a buck on the cost of others. Socialism works within a family. Capitalism is a spinoff of individualism and competition.

Chimps know that you don't turn your back on your lunch while amongst friends.

Another thing about chimps. Whenever a group gets too large, 12-20 individuals, fractions form and the group "decides", with attitude and bullying, who is going to leave.

Even small city states governments need different kinds of tricks to maintain coherency in their society.

Gang affiliation, murder, theft and rape are natural impulses amongst primates and multi million people societies are just incomprehensible as part of your own social group. The social norms that apply to you and your peers, within your own group, is not transferred, in your head, to the greater society. There is always elements of deamonising the unfamiliar.

So we need philosophical, ideological or relegious ideals to overcome our genetically evolved social limitations if we want to exist in large societies. So every time politicians demonise an ethnic or social group or a foregin country, it appeals to our monkey genes, but breaks your illusion of being part of a larger tolerant community. Capitalism is not an ideology it's animal instinct. So talking about capitalism alone being a benefit to society is a contradiction; the politician that say that he will nurse your persuit of happiness on behalf of others is, besides being untrustworthy, undermining the sense or illusion of fairness that is nessecary for a society to function. If he lives what he speaks, he is really just trying to make a living out of your vote anyway.

Adam Smith, the arch capitalist that is cited at the start of a lot of economics publications, was quite convinced that unregulated markets without government intervention, would undermine the state economically and socially and lead to more suffering of the poor. (Thats not something that's cited very often).

[myrkul]

Adam Smith, the arch capitalist that is cited at the start of a lot of economics publications, was quite convinced that unregulated markets without government intervention, would undermine the state economically and socially and lead to more suffering of the poor. (Thats not something that's cited very often).

Well, they certainly undermine the state economically and socially. I dispute that they lead to more suffering of the poor, however. Could you give us the exact quote?

[MysteryMiner]

There could be one, but only in transition stage. Commies got the social safety right compared to capitalists. But the Nazism is FTW - government funded heathcare for workers and soldiers and government funded Aktion-T for retards and cripples!

[myrkul]

There could be one, but only in transition stage. Commies got the social safety right compared to capitalists. But the Nazism is FTW - government funded heathcare for workers and soldiers and government funded Aktion-T for retards and cripples!

You're a particularly toxic individual, you know that?

[MysteryMiner]

You're a particularly toxic individual, you know that?

No, did not know. All my blood tests were normal, no toxins found. Does not matter that I have Toxin General avatar here.

I had a chance to live in both communism and capitalism and I talked to people who experienced nazism at first hand. From all these three systems I hate the capitalism the most and I think that National Socialism is the only way for humanity to go. Otherwise the world would be a place that is total shit. Like it is now.

[Luno]

Here you are myrkul, from "the wealth of nations" 1776 In buatyfull upper class scottish english (he must have sounded like Sean Connery):

"Men may live together in society with some tolerable degree of security, though there is no civil magistrate to protect them from the injustice of those passions. But avarice and ambition in the rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the passions which prompt to invade property, passions much more steady in their operation, and much more universal in their influence. Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days' labour, civil government is not so necessary. Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property. (...) Men of inferior wealth combine to defend those of superior wealth in the possession of their property, in order that men of superior wealth may combine to defend them in the possession of theirs. All the inferior shepherds and herdsmen feel that the security of their own herds and flocks depends upon the security of those of the great shepherd or herdsman; that the maintenance of their lesser authority depends upon that of his greater authority, and that upon their subordination to him depends his power of keeping their inferiors in subordination to them. They constitute a sort of little nobility, who feel themselves interested to defend the property and to support the authority of their own little sovereign in order that he may be able to defend their property and to support their authority. Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all." (Source: The Wealth of Nations, Book 5, Chapter 1, Part 2)

----end of qoute----

It's quite amazing considering what else he said about the simple needs of the working class, Like he was some kind of closett commie!!!

I read the above as;

Market forces gives the maxium raise of wealth possible for the whole society. However it also accumulates wealth on fewer hands and increases economic and social inequallity for the non citizens (the ones without property). The state has to tether capitalism or social unrest and suffering for the poor part of the population will be the result. By law and taxes the state has to provide greater equallity and not only be the wealthy's defence against the poor.

Maybe he was inspired your independence declaration which also fueld the French revolution?

Communism agrees on the pitfalls of such a society,  the stalinistic and Maoistic idea of outlawing property rights for anyone but the government led, as we all know, to even greater inequality.

Adam Smith was well aware of the ugly face of unchecked capitalism, But he is often misquoted in economics as the unnuanced father of neo liberalism. It's like the pump and dump mentality in economics has twisted his works to disregard his warnings for their own purposes.

Adam Smith and Stalin lived before globalisation. Any model will work to some extent when you have expanding markets and or plenty natural resources. Brittan found out that colonisation and Ostindian trading was a clever way of migrating poorest class to another nationality. Russia and china had plenty of natural resources and advances in farming made food abundant, So even the poorest saw their living standards improve.

This is not such a world we live in today. We fight over oil, minerals and food supply and the remaining un expanded markets. We are at the apex of a 250 year growth bubble. No economic model will work if there is scarcity, everything becomes a zero sum game. Adam Smith did not imagine that god's earth would ever run short on supplys or get crowded.

Thats the real challenge we or our children are facing. Do we believe that technology can mend that in time?
Doe's it seem like any national figure has the currage to discuss it? (excluding Al Gore)

Chimps are an endangered spieces, they normally move a few hundred meters further in the jungle when the trees around their nests are out of fruits. Deforrestation however brings them in a simmilar situation as us, and they too have no clue of what is going down.

[Snipes777]

Government by definition is violent, and the antithesis to voluntary exchange. Asking the OP is like asking "Can two people fall in love and be happy if the male only rapes the female occasionally?" Rape is the opposite of love making in the same violence vs. voluntary scale that the OP presents. I prefer to donate voluntarily in some sort of anarcho-capitalist or anarch-mutualist solution that is voluntary. People obviously care about the poor, or else they wouldn't tolerate government welfare as they do.