Distribution of Wealth

[FlipMode]

You are really all looking too far into this, it has almost nothing to do with ideologies, fairness or any of those kinds of things, and everything to do with business and finance, if that sounds intriguing, read on. If not, well thanks for reading this part of the post at least.

[quote="Azdgari"]Discussed this a bit on SaS and wanted to see what people here thought of it. Basically, an idea my brother had was to essentially enforce a sort of salary cap of ten million dollars: you can't earn more than ten million dollars per year. The surplus would be a) be diverted sensibly through your company to give -everyone- a higher wage and standard of living or b) be diverted to social programs, education, and other charities.

[/quote]

Noble ideas, but not really very practical. The problem when hypothetically making decisions when it comes to government and particularly the economic sector of it is that you need to consider the long term, not short term effects otherwise the cycle repeats and ends up worse off, as many governments have demonstrated in technicolour glory.

Straight off the bat, a salary cap means that no one would want to be the owner of a business any more - thus leading to people quitting work earlier and businesses closing down. If one year I was earning £50 million and the next I only earned a fifth of that, I would probably choose to take the money and leave work. (there is a important reason bosses earn that much you see, I will get to it later.)

Now as far as those ideas of where the money could go. . A) Would not work, you see a business is comprised of employees and shareholders, shareholders invest money into the business, some more than others and get more money back if the profits increase, you are suggesting employees get more of the profit from the company which is a big turn off to shareholders and investors including banks... No investments will lead to the business shutting down, leads to lack of employment options and thus economic crisis.
This goes in with what I said earlier, most bosses you will find reinvest money into the business that they earn so they can earn more. This is all to do with a psychological thing, people who earn less want more - hence someone who can not afford a Ferrari is much more likely to want one and go into debt buying one than someone who can afford 20 of them in spare change. Rich people are reinvesting, not wasting their money, they know they are rich. Poorer people want people to think they are rich.

B) You just suggested that money that businesses earn should be unfairly taken from them and invested into other businesses, and to be quite honest I do not even know what to say to that... I mean its just a ridiculous concept. A business is a business, regardless of them operating in the public, private or not for profit sectors.

[quote]"In the United States at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% owned 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth." The idea would be to work on that ugly statistic.
[/quote]

Can I ask where you found these statistics? If you cant remember then no worries ^^. And I am not being sarcastic in asking that, or trying to make another point, its just that as a business studies student I am just interested.

[SimbaKovu]

The problem with most people's assertions in this thread is that they assume that business owners actually put all of their profits towards investment in their business. While a decrease in profits or negative cash flow will almost assuredly result in layoffs of employees, upper class tax cuts and lower wages won't necessarily result in increased hiring. In fact, I'd go as far to say that the exact opposite is likely to occur.

If a business owner is receiving more money, why would he in turn spend it on hiring more workers or increasing wages for the employees he already has? Would that not take away from that money he could be keeping for himself? As the principles of Keynesian economics correctly state, wages and hiring are naturally stagnant, due to the business owner wishing to not cut into the profits he or she is enjoying as a result of a bettering economic environment, or through less costs spent on bringing their business up to code for regulations, or through upper class tax cuts. In other words, while layoffs and wage cuts associated with increased costs of production occur almost immediately after those costs rise, increased hiring and increased wages which are all too often incorrectly associated with lower costs of production, do not occur immediately (if at all) after the business owners profits rise as a result of the reduction of cost of production. This is because the business owner, acting in his own self-interest, wishes to preserve the business's increased profit margin and not reinvest that increase in profit towards either hiring more workers or increasing wages; he keeps it mainly for himself.

TL;DR: As cost of production goes up, layoffs and wage cuts occur. As cost of production goes down, business owners don't hire more workers or increase wages and keep the increased profits for themselves.

[TheLionPrince]

I don't believe any country especially the United States should have any involvement in "redistribution of wealth". This economic idea is somewhere on the lines of socialism, and slightly communism, which I strongly oppose.

Even Samuel Adams of the Founding Fathers opposed this idea:

[quote="Samuel Adams"]"The utopian schemes of leveling [redistribution of wealth], and a community of goods, are as visionary and impracticable as those which vest all property in the Crown. [These ideas] are arbitrary, despotic, and, in our government, unconstitutional."[/quote]

The government shouldn't dictate how much money a person can make, and if the person earned their money legally, he/she can spend anyway they want. Redistribution of wealth does little to help those in poverty, and the idea only takes money from the job creators, which they need to create more jobs for the economy.

[SimbaKovu]

To TheLionPrince: How about taking the brackets out of Samuel Adams' quote and telling us what he really said?

And, as I've said before in a TL;DR manner, capitalism and democracy cannot coexist. They are competing ideologies. Think of democracy as Socialism of Freedom. If money is, as Ayn Rand once put it, "a means of liberty", then how is capitalism, which distributes money (and therefore, freedom) unequally, compatible with democracy, which distributes political freedom equally amongst everybody?

[FlipMode]

[quote="SimbaKovu"]The problem with most people's assertions in this thread is that they assume that business owners actually put all of their profits towards investment in their business. [/quote]

They do. Their salary may be high but the actual business profit is usually reinvested. Its the same reason why Apple made the IPhone, IPad and IPod variants when the original IPod was already the default MP3 player of choice.

[SimbaKovu]

Did you read the rest of the post that that quote of mine came from? I go into specific detail.

[Regulus]

[quote="DGFone"]^ I have to agree with that.

And for the argument of "how many Ferrari's does one need to have", I have the answer: Like it or not, but these exotic, extremely expensive machines are what drive the future. Look at computers. They started out as large, bulky, building sized behemoths that only governments could afford. Now computers fit in your pocket.

You never know what little thing the $1000000 car will introduce that will someday be used by all cars. And who can afford to buy these cars and keep the companies researching? Not me. Just look at the Teslas. And so far, all hydrogen vehicles are also expensive. Your cheap cars all run on petroleum for now.

So to put it at another way, you cannot limit the wealth of people, because they are the ones who can afford to take risks, and drive society technologically forwards. And I think today, everyone know that our current level of technology is not good enough.[/quote]

Our technology doesn't move forward because of the economy. Technology is mainly a product of war.

It is simply part of the human nature to want to invent and innovate. The best of technology today is, ironically, open source. Linux is free, and it pwns Mac and Windows. The internet is free, and look where it is now. Is that not, in itself, enough evidence, that capitalism isn't the only thing that drives technology?

Go ahead and call me a socialist. But I think that capitalism, in the extreme that we have it today, is doing far more harm than good. I'm glad you mentioned the Teslas, but lets consider this for a minute.

Who really controls the world? Supposedly the government. But, what can influence the politicians? Money. Who has loads and loads of money? The oil companies.

I don't know about you, but I don't really think that these people are making it easy for us to adopt alternatives to their own business.

No, this isn't just some conspiracy theory. A high speed "bullet" train was going to be constructed in central Florida, along I-4. I-4 is one of the craziest interstates in all of America, with ridiculous amounts of people using it every day to travel from Tampa to Orlando (where Disneyworld is). Not only would this bullet train lighten up the load along I-4, but it would also be much quicker than driving, and it would use electromagnets for propulsion, not fossil fuels.

Florida's Governor, Rick Scott didn't like the idea of this project. Could it be because the billionare Koch brothers, who own a petroleum business, have supported him?

If corporations like that were never allowed to get so big, then this kind of stuff wouldn't happen. If someone has billions of dollars, chances are, they aren't going to be doing anything with it that is in the common interest of the majority of the people. Money is, after all, the root of all evil.

Full blown communism isn't the answer. But a balance between an open market and a regulated market is the happy medium.

I'm not asking everyone to agree with me, but I would appreciate any input regarding whether or not I am correct to come to such a conclusion.

[TheLionPrince]

[quote="SimbaKovu"]To TheLionPrince: How about taking the brackets out of Samuel Adams' quote and telling us what he really said?[/quote]

Fine. I will.

[quote="Samuel Adams"]The Utopian schemes of leveling, and a community of goods, are as visionary and impractical, as those which vest all property in the Crown, are arbitrary, despotic, and in our government unconstitutional."[/quote]

Doesn't make a difference. Adams still opposes the idea of redistribution of wealth, and Jefferson opposed it as well.

[quote="Thomas Jefferson"]To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one a free exercise of his industry and the fruits acquired by it."[/quote]

[SimbaKovu]

TheLionPrince: Yes, because we should hold a slaveowner up as the man who is simply never wrong, correct? As for Samuel Adams, he's simply wrong. You know, it's okay to disagree with the Founding Fathers. Why not hold Thomas Paine up to be your idol? You know, the Founding Father who was honorarily elected as a member of the French National Assembly following the peasant rebellion against the upper class, thanks to his unwavering support for the French Revolution? The one who called for free, universal education and the one who conceived of the idea of Social Security 150 years before it was actually established? The one who was the first to come up with the idea of a government-enforced minimum wage?

[Azdgari]

Actually it was the opposite Fip, it was supposed to be all about ideology and not about the practical, literal sense. x3
I don't mind it going this way though. The statistics are from my bestie wikipedia.


@Snowy:
[quote]The whole "being fair" and 1% arguments and complaining is an appalling display of childish "its not fair!!" Behavior.[/quote]
Noting thing are unfair is childish? That's an approach I haven't heard yet. Thanks for calling my argument appalling, though. ;3

[quote]What one person (or a large group of people) deems fair doesn't give them the right to usurp the rights of others in the interest of upholding what they deem as "fair." [/quote]
Unless the rights of the other person are unfair or not working, which is what I said I believe? And before you say "fairness is childish", the entire point of having rights is to ensure fairness for everybody.