it's based on a fallacy that the economy is a fixed pie; that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

minervx wrote:it's based on a fallacy that the economy is a fixed pie; that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

FAIR trade benefits both parties. Wealth equates with more economic power in individuals and companies. Are you saying that a 15 year old school leaver [without a union] can successfully negotiate a decent wage with a multinational corporation?? Even if there appears to a breach in a law, the fifteen year old might get legal aid [one overworked lawyer] , but the corporation can employ a 1000 lawyers if they want. And they would probably want, to intimidate other workers from appealing to the laws [presuming there are protective laws].

There is a fixed pie, at least in some sectors of the economy, particularity food. Yes, food production increases, but in poor countries, population increases faster. Your billionaires [companies] can buy up lots of grain to make ethanol. A poor farmer is more price-sensitive. If the price of grain exceeds his monthly income, he starves.
A large corporation has more knowledge of the market than an individual.
Lastly, the USA does have a lot of poor. Not quite third world, but bad enough, particularity with regard to health care. Medicines Without Boarders had to visit the southern US states as many could not afford health care, even those with jobs.

Some of the assumptions of free market economics is based on some little village, where everyone had the same income and knowledge. One could go around on market day and squeeze the fruit and bargain over prices...everybody knew the prices of all the fruit vendors, all four of them. Not even remotely realistic for a globalized economy that we have today.
"Equity is stratified" Sure, one poor bum knows about the same about the market as an other poor bum, and they both may have 10cents in their pocket.
One large multinational corporation may have hundreds of researchers, and can buy in bulk. Another company of the same size has the same knowledge and power. But both can fuck the guys with 10 cents in their pockets. Only if labour is scarce [in high demand], will wages go up. Even if the rises are substantial, the bun in the street essentially knows very little more, and the power in balance between rich and poor is still basically the same. Unless there is a union, where group worker power can balance corporate power. Of course, the unions can get really powerful, and screw the corporations. Then there are governments. Some corps are so large they are multinational or even global. These large corps can fuck the governments over, and the unions, because they can play one government off against the other, to get better tax deals or subsidies in return for jobs, or even the promise of jobs.
So it ain't as simple as you might think.
Both individualistic and socialistic societies and ideologies have problems. Extremes of both types are not successful or any way, or are nice places to live. I mean for everyone. Besides, if you screw the worker too hard, who is going to buy your goods? I suppose a billionaire could buy a million toasters, but what the fuck for???

Command economies are good for some sectors of the economy, and freetrade for others. You really need a mixed economy. Us what philosophy works best where. The soviets almost starved themselves to death until they ditched the communal farms and went "private enterprise" in that sector, that gave the farmer incentive get up in the morning and give a fuck about his crops and cows. They had to import grain from the USA, Canada, Australia, so private ownership made sense even in a socialist state.
On the other side of the coin, private enterprise can screw the little guy. Even the small shopkeeper, because he cannot buy in bulk like the food chain. They can sell shit cheaper than he can buy it. Corporations merge and get even bigger. They can say fuck off to government and unions. The barriers to entry in the market get higher. So even if your factory can turn out 100,000 shoes, someone who can turn out 1000,000 shoes of the same quality will win.
The cost of labour getting too high? Close down your factory and move somewhere cheap. The government, the unions and the people of that country are fucked. The new host country benefits, until wages rise again.
To be sure, if you can buy a quality drill bit made in China at less that the price of a USA made bit, then you are laughing-you have more buying power. Until your factory retrenches you, because no-one is buying the expensive local widgit. So you re-train. Some of you become computer programmers or sell insurance, many are too old too learn new tricks, so they go on welfare, or eat second-hand MacDonald's from a trash bin. [On holiday, passing though San Francisco I saw a medically discharged Gulf War Vet US marine doing this- I gave him fifty bucks ]. I am an Australian.
Then the computer jobs get outsourced to India or somewhere. Very efficient, your ADSL account is cheaper because of fewer overheads. But you waste half an hour on the phone listening to canned music waiting for tech support. Yo are now at the head of the queue. You can't understand the accent of the tech support guy, and you can't go see him/her in person because he lives in Bangalore, India.
Of course, it is assumed that each nation has it's strengths and weaknesses, so overall, everybody is better off everywhere. In theory. Once you have re-trained seven times because of outsourcing, you get cynical and start selling drugs, because although there is risk, there is a good mark-up. You are frustrated and try some. Your hooked, so you may have to start stealing. You'r high, so you kill the housholder. You are on death row.

Bleak perhaps, but not totally unrealistic, at least for some in the community.

minervx wrote:it's based on a fallacy that the economy is a fixed pie; that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

There is a fixed pie. But as it moves it acts like more. The problem with the rich is that they are cash sinks. people at middle class or lower actually spend about 105% (been a few years sense macro and micro economics. My figures may be out of date or I could just not remember them correctly but the effect is the same.) of their income driving the economy. The top tier spend far less about 20%. This translates directly to the number of people they indirectly employ. Basically stationary money isn't helping anyone.

lucek wrote:

minervx wrote:it's based on a fallacy that the economy is a fixed pie; that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

There is a fixed pie. But as it moves it acts like more. The problem with the rich is that they are cash sinks. people at middle class or lower actually spend about 105% (been a few years sense macro and micro economics. My figures may be out of date or I could just not remember them correctly but the effect is the same.) of their income driving the economy. The top tier spend far less about 20%. This translates directly to the number of people they indirectly employ. Basically stationary money isn't helping anyone.

Unless the rich are keeping their fortune under their mattress, the rich are investing their money so it would not be a cash sink, as that would imply they are taking their money out of circulation.

Tyrannical wrote:

lucek wrote:

minervx wrote:it's based on a fallacy that the economy is a fixed pie; that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

There is a fixed pie. But as it moves it acts like more. The problem with the rich is that they are cash sinks. people at middle class or lower actually spend about 105% (been a few years sense macro and micro economics. My figures may be out of date or I could just not remember them correctly but the effect is the same.) of their income driving the economy. The top tier spend far less about 20%. This translates directly to the number of people they indirectly employ. Basically stationary money isn't helping anyone.

Unless the rich are keeping their fortune under their mattress, the rich are investing their money so it would not be a cash sink, as that would imply they are taking their money out of circulation.

Even in a investment situation much of it can't be used. Bonds, savings accounts, and the like retain funds. Further all investment is a form of income (providing the body invested in doesn't fail). The point is the a dollar in the hands of Joe Schmo is worth more then a dollar in the hands of Bill Gates or Donal Trump.

Tyrannical wrote:

lucek wrote:

minervx wrote:it's based on a fallacy that the economy is a fixed pie; that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

There is a fixed pie. But as it moves it acts like more. The problem with the rich is that they are cash sinks. people at middle class or lower actually spend about 105% (been a few years sense macro and micro economics. My figures may be out of date or I could just not remember them correctly but the effect is the same.) of their income driving the economy. The top tier spend far less about 20%. This translates directly to the number of people they indirectly employ. Basically stationary money isn't helping anyone.

Unless the rich are keeping their fortune under their mattress, the rich are investing their money so it would not be a cash sink, as that would imply they are taking their money out of circulation.

They probably do invest their money, but what they invest in can vary enormously. If one is affluent, there is much greater temptation to try the outer envelope, because, why not? One can afford to loose. We have seen this in spades recently with bubbles in all sorts of investment vehicles. Many of the investments of the affluent today go whisking around the world at the speed of light, and may or may not benefit their home country.

As lucek has suggested, there is the well known multiplier effect in economics. Some investments in society pay off more than others. Giving someone in a low to middle income bracket a thousand dollars means that he or she is almost certainly- statistically- to spend it in the community in places that tend to generate employment. Give someone at the top end the same amount, and –statistically- it could end up in a lot of place that add little value to the community, such as diamond merchants in Switzerland, hedge fund fraudsters in New York (but based in Panama, due to tax advantages- not the working man’s tax advantages, of course), or dubious real estate deals in Arizona or Florida.

The idea that socialism sees the economy as a fixed pie is a nonsensical one that is only promoted by those who have a personal ulterior motive for expressing it, or by those with little to no understanding of economics.

minervx wrote:it's based on a fallacy that the economy is a fixed pie;

No, it isn't.

that if one person benefits, the other must suffer. trade benefits both parties. so it doesn't matter how much wealth the rich have since it has no effect on the. under the fixed pie logic, the us should be the poorest country in the world since it has the most billionaires.

Since the US is all bootstrappy, it should have the highest wages, the lowest unemployment, the best health care, the lowest crime rate...

But it doesn't. Put that in your economic hat.