In going over the concept of the ownership of capital I come to the conclusion that wealth will tend to pool over time. Is this a correct conclusion?
In over-regulated markets you're absolutely right.
Don't allow leftists to play games with definitions! Some of the libertarian-leaning leftists at this forum will try to redefine "left-wing" back to its original defition (Third Estate, limited government, free-markets, laissez-faire reforms, etc.). Fine! We non-leftists can't stop them from using their own personal definitions; they can use whatever labels they want to describe any concept they want.However, they have the audacity to then use their personal definition of "left-wing" (remember, the original definition, which is no longer valid) to prove that modern leftists are more libertarian than modern rightists! They will say that libertarianism is "inherently leftist" (again, using the original, no longer valid definition), and use that to insist that we should prefer and side with modern leftists over modern rightists.
Question their motives.
Libertas est Veritas:I'm not sure what you mean by 'pooling'. That wealth will concentrate to few people? Unlikely, since capital doesn't translate into automatic profits. For some reason, people seem to hold a very Marxian view that capital only accumulates. This is quite one-sided, as it offers a theory on profit, but not one on losses.
I got into this argument the other day on a different site, a couple of (paraphrased) quotes;
"Money gravitates towards other money"
"The easiest way to make your second million is to make your first million"
Etc...
All arguments to justify the theft from one person (or group) and give it to other less fortunate people because money has inherent qualities that give its possessor an unfair advantage.
Anonymous Coward:"Money gravitates towards other money" "The easiest way to make your second million is to make your first million"
Pliny: In going over the concept of the ownership of capital I come to the conclusion that wealth will tend to pool over time. Is this a correct conclusion?
Wrong, but it is true that someone with the skills to amass wealth might very well have the skills to increase it. Mises wrote:
"To be rich, in a pure market economy, is the outcome of success in filling best the demands of the consumers. A wealthy man can preserve his wealth only by continuing to serve the consumers in the most efficient way. Thus the owners of the material factors of production and the entrepreneurs are virtually mandataries or trustees of the consumers, revocably appointed by an election daily repeated."
Bear Stearns is a poor example to the contrary. The owners of Bear - the shareholders - lost almost everything. Their shares fell from a peak of over $170 to just $10 when it was scooped up by J P Morgan, the only banking house willing to bid for it. Joe Lewis, the British billionaire who had bought into it late last year, lost $1 bn.
Thanks Lancett for the Mises quote.
Ego:
I agree that overregualted markets will result in the pooling of capital but that is the purpose of market regualtion.
As for the left-right paradigm, as a political "spectrum" I find it wholly inefficient. The dialectic of no government-total government gives me a better understanding of political parties than the artificially contrived dialectic of left wing and right wing which are essentially, in their extreme, both totallitarian and it is thus of little consequence to the average citizen whether a dictator or a politburo is enacting and enforcing laws.
That the right was conservative in France and upheld the status quo of the nobility left no room for change and the Libertarian had to sit with the anti-monarchists and socialists on the left contributes little to understanding of political position other than it's physical location in the room.
Rothbard points out that he never changed his political point of view but found himself on different sides and locations of the spectrum over the courseof his career.
I believe employment of the currently accepted political spectrum is enabling to the slippery position of politicians who can abandon or take up left and right positions dependent upon their favourability in the polls.
Thanks to others who contributed your input was interesting.
Pliny:In going over the concept of the ownership of capital I come to the conclusion that wealth will tend to pool over time. Is this a correct conclusion?
What is the ownership of capital concept? There are so many existing organizations varying from the public corporations to cooperatives. And it doesn't make sense to ask whether your conclusion is correct, when you don't provide the rationale you took to get there...
Anyway, in a services economy the marginal cost in terms of capital is extremely cheap. Many people don't realize but even in factories, the most expensive capital is human capital; engineers that can design the chips, cars or whatever you are manufacturing. From there, the raw materials and labor is way more expensive than any land and capital you need to use. Here in Portugal, in the last couple of years, two enterprises were started by guys out of college that manufacture chips and high-end automobiles. And there have been guys from poor classes, with no college degrees to show for, that organized lines to fabricate clothes and some related stuff.
When capital is a stronger component in your maginal cost, then you can go public and finance it through shares. Even very rich people won't jeopardize their wealth into their own projects. If your conclusion is true, then stockholders should have a lot of dividends to show for. That's only true for under-developed countries, where capital is a lot more needed than labor, but this are generally very risky, so few people put their money there. In developed countries, most investors are counting on gains from capital appreaciation (selling higher than they bought them), not dividends.
Equality before the law and material equality are not only different but are in conflict with each other; and we can achieve either one or the other, but not both at the same time. -- F. A. Hayek in The Constitution of Liberty
Pliny: In going over the concept of the ownership of capital I come to the conclusion that wealth will tend to pool over time. Is this a correct conclusion.
In going over the concept of the ownership of capital I come to the conclusion that wealth will tend to pool over time. Is this a correct conclusion.
I'm thinking the whole concept packages several fallacies and ambiguous definitions together. What is capital? What is wealth? They are not the same thing, though the wording of this might imply they are synonyms. "Pool" implies some sort of fungibility in wealth. Value is left out of it entirely.
Here's a hint: value is subjective. You know nothing about the relative value of ramen noodles and filet mignon by comparing their prices. The value of money is subjective as well, and so very likely the millionaire values an additional dollar less than a poor person does - as he probably does with the things he buys with his marginal dollars. That implies something about the relative value of filet eaten by a millionaire and ramen eaten by college student. Wealth is the accumulation of value, capital is an accumulation of money. Money translates into things of value through exchange, so "pooled" capital is not necessarily accumulated wealth, except when taken out of the pool.
The state won't go away once enough people want the state to go away, the state will effectively disappear once enough people no longer care that much whether it stays or goes. We don't need a revolution, we need millions of them.
histhasthai:so very likely the millionaire values an additional dollar less than a poor person does
scineram: No, this a meaningless statement.
No, it's not.
Are you claiming that every new dollar (or gold ounce, no difference in this context) is valued the same as the previous one by the same person? That a unit of money has an objective value?
Or is there some other objection?
Perhaps he's trying to say you can't make such assumptions. However, as an argument against the notion of diminishing marginal utility implying income redistribution, it's a real possibility that a wealthy person values that extra dollar more than some poor sod, as it might be highly valuable to them to invest, for instance.
-Jon
I cannot be caged. I cannot be controlled. Understand this as you die, ever pathetic, ever fools.
Irenicus' Diaries.