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Re: Marxian classes and principles

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  • thekoba@aztec.asu.edu
    ... In the case of economic growth, I add this as a little addendum, capital investment will exceed capital consumption, but surplus value will still remain
    Message 1 of 26 , Jan 3 9:15 PM
      >Eventually surplus value does go to zero in some industries, and these
      >industries go out of business (e.g. horse drawn carriage builders saw
      >their surplus value go to zero when motor cars became more popular),
      >but more commonly a quasi-stasis is reached for a time at which the
      >market is saturated, capital investment equals capital consumption,
      >and surplus value varies little but is consistently above zero.

      In the case of economic growth, I add this as a little addendum, capital
      investment will exceed capital consumption, but surplus value will still
      remain positive (and will itself grow). Capitalists can't reinvest all
      their profits. They will consume at least some of them, so surplus value
      couldn't consistently go to zero.

      --Kevin
    • auvenj <auvenj@mailcity.com>
      ... invest ... has ... The required return is a cost, because if it is not covered then the capital will be consumed rather than invested. A capital
      Message 2 of 26 , Jan 5 10:27 PM
        --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
        > >It's no confusion; we simply disagree on which is the decision
        > >function in fact used by rational capitalists.
        > >
        > >We agree that capital has a cost. This cost is usually defined as
        > >the expected rate of return demanded by owners of capital to
        invest
        > >that capital rather than consume it.
        >
        > The cost of capital is the cost of producing the capital divided by
        > the useful life of the capital goods. The expected rate of return
        has
        > nothing to do with the actual cost of capital. It DOES indicate
        > whether capital will be invested and to what extent it will be.

        The required return is a cost, because if it is not covered then the
        capital will be consumed rather than invested. A capital investment
        must return MORE than the cost of production divided by the useful
        life or an investement will not be made.

        When economic value is produced there are only three things that can
        be done with it: Consume it, invest it, or save it. However,
        all "save it" really does is delay either consumption or investment.
        Thus over the long term there are really only TWO options:
        consumption or investment.

        Economic value that is consumed is (one component of) human happiness.

        Economic value that is invested is capital.

        ONLY consumption yields human happiness. The ONLY reason to
        translate economic value into capital instead of consumption is if
        that capital is expected to allow even greater consumption
        (happiness) in the future. This is why the cost of capital is more
        than just the economic value required to create it.

        > For example, a piece of machinery costs $10,000 and lasts ten years.
        > The cost of the capital will be $1000 per year. If it is only
        > expected to return $900 per year, there won't likely be investment.
        > If the return exceeds capital, overhead and wages by a substantial
        > margin, there will likely be investment. If the high rates of
        return
        > are expected to continue with further investment, far more than
        $10,000
        > may be invested in buying machines of this sort, but the expected
        > rate of return does not determine the cost of the capital.

        Capital does not magically appear. In order to have that
        hypothetical $10,000 machine TWO things must happen:
        (1) Someone must produce $10,000 worth of economic value.
        (2) Someone must invest $10,000 of economic value in a machine,
        rather than current consumption. In order to do that, there must be
        an expected return of more than what was invested. After all, if the
        return is not greater than what was invested, current consumption is
        both preferable and certain.

        (1) and (2) are both costs, because absent either one of them the
        machine will not be purchased. You account for only the first cost
        with $1000 per year for 10 years. You fail to account for the second
        cost.

        > >For sake of argument, let's say
        > >that's 10% per year. Any less, and the capitalists decide, "screw
        > >it, life is short, I'm going to consume rather than invest". Any
        > >more, and the capitalists have "surplus value", meaning that they
        > >earn more money from their capital than was actually needed to
        entice
        > >them to invest rather than consume.
        >
        > You are confusing the decision to invest surplus value with surplus
        > value itself.
        <SNIP more talking past each other about cost of capital>

        No, you have defined surplus value in such a way that it is the rate
        of return required to cause a decision in favor of investment rather
        than consumption. You have done this by ignoring the cost of the
        decision to invest in your definition of the cost of capital.

        The cost of something is EVERYTHING that it takes in order to produce
        it. In a capitalist society, it clearly takes both available
        economic value AND a decision to invest rather than consume in order
        to produce capital. Therefore, the cost of capital rightly includes
        both the economic value and the return required to induce an
        investment decision.

        --Jason Auvenshine
      • auvenj <auvenj@mailcity.com>
        ... explanation ... class , ... make ... an ... No, security only alters the parameters and perhaps the specific target choice of an attack. But the change in
        Message 3 of 26 , Jan 5 10:29 PM
          --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
          > >That's one potential explanation. I argue that such an
          explanation
          > >hinges on the utter stupidity of those you term the "master
          class",
          > >since it's obvious that the current invasive searches will not
          make
          > >anyone any safer. The other, more reasonable IMHO explanation is
          > >that they haven't consented, there is no "master class" other than
          > >the government itself, and they merely put up with it because it's
          > >easier than fighting.
          >
          > There is no stupidity here. Security does decrease the chances of
          an
          > attack.

          No, security only alters the parameters and perhaps the specific
          target choice of an attack. But the change in mindset on 9/11 did
          that already -- no one will ever again sit idly by and cooperate
          while a plane is hijacked.

          > Would other methods work better (e.g. allowing all passengers
          > to be armed)? Yes, they probably would, but the wealthy dislike the
          > idea of workers having the right to be armed for obvious reasons.

          This explanation is nonsense. "The workers" ARE armed just about
          everywhere but airports. If "the workers" wanted to take over, you
          think they'd start on a plane?!?!

          > If on the other hand government is the master class and beholden
          > to no one, there would be no reason for the wealthy to finance
          > political candidates and for the media to plug them. After all,
          these
          > politicians would only look out for their own interests, not the
          > interests of those who pay them and promote them.

          By and large, they do. The wealthy do finance political candidates
          to buy favors, and as I've mentioned they have more control per
          capita than the poor. But that control is very limited, wheras the
          politicians control over the wealthy (and everyone else) is virtually
          unlimited.

          I've had a fair bit of dealing with the media, who are only
          marginally more friendly to Libertarians than they are to
          Communists. A number of factors go into what they do, and more
          importantly do not, cover. The battle for audience share is very
          real, and most Americans aren't willing to take the time to consider
          anything deep or conflicting too strongly with what they already
          think they know -- flick, next channel. The other side of the coin
          is of course the advertisers, who don't want anything too upsetting
          that might make the audience not buy their products. And, there is a
          very real fear in many of them of offending the wrong politician too
          much, as the FCC, IRS, etc can make life miserable for anyone
          including a media corporation.

          The media plugs incumbant politicians because they're a safe topic
          that people are interested in (good for audience share) and will make
          people feel good about the status quo (good for advertisers) while
          keeping the government agencies on friendly terms that the station is
          living up to the mandate of performing a "public service".

          > Still, if you prefer to believe that the government is the master
          class
          > that needs to be opposed, I won't object too strenuously. You will
          > at least be attacking the symptom if not the disease :-)

          The disease which I attack is the widespread social acceptance of
          aggression against life, liberty, and property. It happens that most
          people in modern America accept such aggression only when it is
          conducted by government agents, which is why so much of my focus is
          there. This is also why I view government as the master class,
          because of the power which the general public accepts them having
          that they do not accept anyone else having. You'll note, however,
          that our discussion started when you praised the aggression of the
          9/11 hijackers. Were sentiments such as yours more common, I might
          spend more of my time actively opposing aggression by non-government
          agents.

          > >One may not "opt" the interests which drive other human beings.
          > >Whether or not values derived from being human are paramount over
          > >values derived from membership in a Marxian class in determining
          > >human behavior is an empirical question, albeit a rather difficult
          > >one to pin down with specificity.
          >
          > I would also contend that this is not static. Where there is a
          common
          > threat against all classes (e.g. disease), there are times when
          class
          > collaboration is reasonable and the norm. Individuals who share
          interests
          > become a class. Not all individuals will act in the class
          interest, but
          > then predicting the behaviour of individuals renders social analysis
          > impossible because of the sheer numbers involved. Class analysis
          reduces
          > the factors that need to be considered and makes social analysis a
          > possible thing.

          Like disease, aggression constitutes a threat against all classes.
          The proletarians suffer primarily from reduced opportunity to create
          an independant livelihood and build wealth. The small business
          owners suffer from burdensome regulations and fiat regulatory
          decisions that can put them out of business overnight. The large
          business owners suffer from having significant portions of their
          wealth confiscated.

          > >The answer is determined by whether or not there is a right to
          > >private property. Initiating force is defined as violating the
          > >rights of another without their consent.
          >
          > Then this again becomes tautological, as initiation of force is
          > contingent on this concept of natural rights and what those rights
          > are.

          No, it is not tautological because I have a working list of rights.
          I merely acknowledge that there are others who do not agree with my
          list.

          > >As I said, this is the
          > >point at which anarcho-capitalists and anarcho-socialists
          diverge.
          > >My own view is that the person who drives on a toll road without
          > >paying is the one initiating force. That is because my
          observations
          > >of human behavior have led me to conclude that there is in fact a
          > >natural right to private property, hence violating property rights
          > >without the consent of the owner constitutes initiation of force.
          > >Could I be mistaken in either my observations or my conclusions
          > >regarding the right to property and hence my judgement on who has
          > >initiated force? Sure...just as you could be mistaken in
          concluding
          > >that there is no such right to property. Either way, the decision
          is
          > >not arbitrary if it is based on evidence and reason instead of
          naked
          > >preference.
          >
          > Does the owner of the only road to my house violate my property
          rights
          > to access to my house by charging excessive tolls? Or can I
          reasonably
          > be expected to be a prisoner in my home so that I respect the
          property
          > right of the owner of the road? You see, it's not so clear.

          It is quite clear. When you bought your house, you did so with the
          understanding that you would have road access to it. At the time,
          this was an implicit contract between you and the government, because
          the government owned the road and as a matter of custom governments
          permit everyone to access their roads to general residential areas.
          If the government sold the road to a private party, they would be
          obligated to include an explicit provision for access as a condition
          that ran with the land, a CC&R to the effect "Owner of road xyz
          agrees to permit all owners and invited guests of all properties
          solely served by road xyz to use the road in perpetuity for a yearly
          fee not to exceed 110% of the yearly maintenance costs of the road
          divided by the number of properties solely served by the road..." In
          actual practice, the owners of the properties served by the road
          would likely form (if it didn't already exist) a homeowner's
          association to buy and maintain it, and such a homeowner's
          associations should have the first right to buy any road servicing
          their neighborhood from the government.

          New developments would almost certainly include road access
          explicitely contracted from the beginning with the homeowner's
          association. If they didn't, you wouldn't buy the property (unless
          you were particularly foolish). This already goes on in some
          locations, and seems to work pretty well.

          If you were foolish enough to buy a house served by only one private
          road with no contract for perpetual access, then you would in fact be
          violating the road owner's property rights even if he charged an
          extremely excessive toll or even outright forbade you to use the
          road. However, you'd have only yourself to blame in that situation,
          and in actual practice that level of stupidity would be extremely
          rare. :-)

          > >You are the one talking of "supressing capitalism" and the
          necessity
          > >of world hegemony for communism. I have absolutely no problem
          with
          > >2, 10, 100, or 1 million people voluntarily getting together and
          > >agreeing to produce and consume everything communally. Towards
          the
          > >lower end of the size scale, it happens all the time and it's
          > >typically called a family. :-) Towards the higher end of the size
          > >scale, I think that communes are inefficient and inconsistent with
          > >human nature. But voluntary communes of any size whatsoever are
          no
          > >threat to me nor are they an initiation of force. However, when
          you
          > >or anyone else says that _I_ must produce and consume communally
          with
          > >a certain group of people whether I want to or not...then you are
          > >initiating force against me.
          > >
          > >This asymmetry between capitalism and communism I see as one of
          > >communism's fatal flaws. Capitalism can and does tolerate
          enclaves
          > >of communism within it. By your own admission, communism demands
          the
          > >suppression of all capitalist enclaves, with disasterous
          implications
          > >for human freedom of choice.
          >
          > By your own admission human freedom of choice does not extend to
          activities
          > which are incompatable with the welfare of humanity. Capitalism is
          > inconsistent with human happiness. Therefore it is not to be an
          option.

          Your claim that capitalism is inconsistent with human happiness is
          not, and I will argue cannot, be supported by objective evidence.
          Note that I do not claim the opposite, that communism is inconsistent
          with human happiness. There are people who are happier not having to
          compete, worry about and plan for the future, and make endless
          choices as capitalism requires. Such people would, in fact, be
          happier in a commune. There are also people who are happier in a
          competitive environment, where they make individual choices and
          prosper or suffer as a result. Such people would be happier in a
          capitalist society.

          Unfortunately, we'll rapidly exhaust the possibilities of discussion
          on human welfare because it will simply lead to the question of how
          one measures welfare and happiness. And even (especially!) among
          materialists such as ourselves this is nothing more than naked
          preference, once you get beyond the mere basics of survival. One
          person values leisure time more than a larger house...another values
          the ability to raise 6 children to adulthood more than a new car
          every 3 years...and so on. Economic systems are this way as well, as
          mentioned above. Which is why no economic system is PER SE
          incompatible with human happiness, so long as one factor is
          universal: the ability to choose another system for oneself. It is
          only the lack of choice that is fundamentally incompatible with human
          happiness...and that's just what you advocate.

          > >What new ideas and technologies were developed by the "rationally
          > >centrally planned" societies that controlled over half the world's
          > >territory and population for decades? How did these compare with
          the
          > >ideas and technologies developed by societies which relied on
          > >spontaneous (dis)order than central planning over the same time
          > >period? Again, this should be an empirical question for which
          > >history should provide some insight.
          >
          > Given the initial backward nature of these societies, they cannot
          > be judged on the basis of societies which had originally had
          numerous
          > trained scientists and great wealth (based on exploitation of other
          > countries). The Soviet Union and China naturally had to play a lot
          > of catch up. Comparing their scientific achievements to those of
          > the USA or Britain or Germany would quite obviously be idiotic.
          > Comparing them to those of Africa, India, and South America in the
          > same period would make more sense, as these societies started at
          > about the same level of development. Nonetheless we have some
          > impressive achievements by the socialist powers including
          spaceflight,
          > radial keratotomy, synthesis of human growth hormone, high octane
          > gasoline etc., certainly more impressive than those of the
          capitalist
          > third world.

          When you talk of the "capitalist third world" I believe you're
          actually referring to what I call the kleptocracies. The absolute
          best thing these countries can be called is "crony capitalist". For
          a country to be really capitalist it must have:
          - Primarily rule of law rather than rule of position
          - Effective legal protection for the rights of life, liberty, and
          property for all people (rich and poor)

          Most countries in the so-called "capitalist" third world are run by
          thugs one must bribe regularly to get anything done, and only protect
          the rights (particularly property rights) of those who are already
          wealthy and powerful.

          First world capitalist countries are to be blamed to the extent that
          the kleptocracies were created/maintained by their force. But
          comparing a kleptocracy to a communist country and calling it a
          comparison to capitalism is not appropriate either.

          I have yet to hear of a country where the rule of law and equal
          respect for property rights was actually implemented that the result
          has not been both prosperity and ingenuity. But I'll admit I'm no
          expert on the developmental history of the world.

          --Jason Auvenshine
        • thekoba@aztec.asu.edu
          ... Only to the extent that no security is foolproof is there truth in that assertion. By making many forms of attack more difficult it does in fact decrease
          Message 4 of 26 , Jan 6 8:47 PM
            >No, security only alters the parameters and perhaps the specific
            >target choice of an attack. But the change in mindset on 9/11 did
            >that already -- no one will ever again sit idly by and cooperate
            >while a plane is hijacked.

            Only to the extent that no security is foolproof is there truth in
            that assertion. By making many forms of attack more difficult it
            does in fact decrease the likelihood of attack.

            >> Would other methods work better (e.g. allowing all passengers
            >> to be armed)? Yes, they probably would, but the wealthy dislike the
            >> idea of workers having the right to be armed for obvious reasons.
            >
            >This explanation is nonsense. "The workers" ARE armed just about
            >everywhere but airports. If "the workers" wanted to take over, you
            >think they'd start on a plane?!?!

            Probably not. Still, the rich don't fear the workers collectively,
            as at this stage in social development there is very little worker
            collectivity, and such as there is is subservient to imperialism.
            They also don't fear individual armed workers much, as they generally
            don't have their weapons with them. They DO fear individual armed
            workers in crowded situations who might have a grievance.

            >> If on the other hand government is the master class and beholden
            >> to no one, there would be no reason for the wealthy to finance
            >> political candidates and for the media to plug them. After all,
            >these
            >> politicians would only look out for their own interests, not the
            >> interests of those who pay them and promote them.
            >
            >By and large, they do. The wealthy do finance political candidates
            >to buy favors, and as I've mentioned they have more control per
            >capita than the poor. But that control is very limited, wheras the
            >politicians control over the wealthy (and everyone else) is virtually
            >unlimited.

            That is certainly untrue. A politician who did something the wealthy
            didn't like would lose campaign money and media coverage.

            >I've had a fair bit of dealing with the media, who are only
            >marginally more friendly to Libertarians than they are to
            >Communists. A number of factors go into what they do, and more
            >importantly do not, cover. The battle for audience share is very
            >real, and most Americans aren't willing to take the time to consider
            >anything deep or conflicting too strongly with what they already
            >think they know -- flick, next channel. The other side of the coin
            >is of course the advertisers, who don't want anything too upsetting
            >that might make the audience not buy their products. And, there is a
            >very real fear in many of them of offending the wrong politician too
            >much, as the FCC, IRS, etc can make life miserable for anyone
            >including a media corporation.
            >
            >The media plugs incumbant politicians because they're a safe topic
            >that people are interested in (good for audience share) and will make
            >people feel good about the status quo (good for advertisers) while
            >keeping the government agencies on friendly terms that the station is
            >living up to the mandate of performing a "public service".

            Libertarianism is a bourgeois ideology (petit-bourgeois) but is certainly
            not favoured by the imperialist grand bourgeoisie, and thus the media,
            which ARE owned by the imperialist grand bourgeoisie (and in gross
            disproportion the Jewish elements of it), would not be much friendlier
            to it than to Communism. The FCC, IRS, etc. have nominal power to make
            life miserable for the media and the bourgeoisie, but in practice they
            rarely use that power unless the victim has done something of which
            the rest of the imperialist bourgeoisie disapproves. This is because
            they are subordinate to the president who is subordinate to the imperialist
            grand bourgeoisie.

            >> Still, if you prefer to believe that the government is the master
            >class
            >> that needs to be opposed, I won't object too strenuously. You will
            >> at least be attacking the symptom if not the disease :-)
            >
            >The disease which I attack is the widespread social acceptance of
            >aggression against life, liberty, and property. It happens that most
            >people in modern America accept such aggression only when it is
            >conducted by government agents, which is why so much of my focus is
            >there. This is also why I view government as the master class,
            >because of the power which the general public accepts them having
            >that they do not accept anyone else having. You'll note, however,
            >that our discussion started when you praised the aggression of the
            >9/11 hijackers. Were sentiments such as yours more common, I might
            >spend more of my time actively opposing aggression by non-government
            >agents.

            You might indeed, and if you lived in Iraq you might be functioning in
            a manner that objectively made you my enemy. Our alliance if, of course,
            conditional on existing circumstances, but, as I have said before, those
            circumstances which place us as soldiers in the same trench are not likely
            to change anytime soon.

            >Like disease, aggression constitutes a threat against all classes.
            >The proletarians suffer primarily from reduced opportunity to create
            >an independant livelihood and build wealth. The small business
            >owners suffer from burdensome regulations and fiat regulatory
            >decisions that can put them out of business overnight. The large
            >business owners suffer from having significant portions of their
            >wealth confiscated.

            This is entirely true. Nonetheless the benefits or pursuing aggressive
            class struggle ultimately outweigh the harm that aggression causes.

            >> >The answer is determined by whether or not there is a right to
            >> >private property. Initiating force is defined as violating the
            >> >rights of another without their consent.
            >>
            >> Then this again becomes tautological, as initiation of force is
            >> contingent on this concept of natural rights and what those rights
            >> are.
            >
            >No, it is not tautological because I have a working list of rights.
            >I merely acknowledge that there are others who do not agree with my
            >list.

            >> Does the owner of the only road to my house violate my property
            >rights
            >> to access to my house by charging excessive tolls? Or can I
            >reasonably
            >> be expected to be a prisoner in my home so that I respect the
            >property
            >> right of the owner of the road? You see, it's not so clear.
            >
            >It is quite clear. When you bought your house, you did so with the
            >understanding that you would have road access to it. At the time,
            >this was an implicit contract between you and the government, because
            >the government owned the road and as a matter of custom governments
            >permit everyone to access their roads to general residential areas.
            >If the government sold the road to a private party, they would be
            >obligated to include an explicit provision for access as a condition
            >that ran with the land, a CC&R to the effect "Owner of road xyz
            >agrees to permit all owners and invited guests of all properties
            >solely served by road xyz to use the road in perpetuity for a yearly
            >fee not to exceed 110% of the yearly maintenance costs of the road
            >divided by the number of properties solely served by the road..." In
            >actual practice, the owners of the properties served by the road
            >would likely form (if it didn't already exist) a homeowner's
            >association to buy and maintain it, and such a homeowner's
            >associations should have the first right to buy any road servicing
            >their neighborhood from the government.
            >
            >New developments would almost certainly include road access
            >explicitely contracted from the beginning with the homeowner's
            >association. If they didn't, you wouldn't buy the property (unless
            >you were particularly foolish). This already goes on in some
            >locations, and seems to work pretty well.
            >
            >If you were foolish enough to buy a house served by only one private
            >road with no contract for perpetual access, then you would in fact be
            >violating the road owner's property rights even if he charged an
            >extremely excessive toll or even outright forbade you to use the
            >road. However, you'd have only yourself to blame in that situation,
            >and in actual practice that level of stupidity would be extremely
            >rare. :-)

            I would agree that such a contract would be wise if the roads were
            to be made private property, but then, this would restrict the road
            owner's right to do as he pleases with his property. Do I object to
            that? No. But it would infringe on the road owner's property rights.

            >Your claim that capitalism is inconsistent with human happiness is
            >not, and I will argue cannot, be supported by objective evidence.
            >Note that I do not claim the opposite, that communism is inconsistent
            >with human happiness. There are people who are happier not having to
            >compete, worry about and plan for the future, and make endless
            >choices as capitalism requires. Such people would, in fact, be
            >happier in a commune. There are also people who are happier in a
            >competitive environment, where they make individual choices and
            >prosper or suffer as a result. Such people would be happier in a
            >capitalist society.
            >
            >Unfortunately, we'll rapidly exhaust the possibilities of discussion
            >on human welfare because it will simply lead to the question of how
            >one measures welfare and happiness. And even (especially!) among
            >materialists such as ourselves this is nothing more than naked
            >preference, once you get beyond the mere basics of survival. One
            >person values leisure time more than a larger house...another values
            >the ability to raise 6 children to adulthood more than a new car
            >every 3 years...and so on. Economic systems are this way as well, as
            >mentioned above. Which is why no economic system is PER SE
            >incompatible with human happiness, so long as one factor is
            >universal: the ability to choose another system for oneself. It is
            >only the lack of choice that is fundamentally incompatible with human
            >happiness...and that's just what you advocate.

            Capitalism is not a matter of freedom of choice. It inevitably evolves
            into imperialism which affects everyone's freedom of choice, particularly
            those with the misfortune to live in the weaker nations. It is therefore
            incompatable with the happiness of the bulk of the world's people.

            >When you talk of the "capitalist third world" I believe you're
            >actually referring to what I call the kleptocracies. The absolute
            >best thing these countries can be called is "crony capitalist". For
            >a country to be really capitalist it must have:
            > - Primarily rule of law rather than rule of position
            > - Effective legal protection for the rights of life, liberty, and
            >property for all people (rich and poor)
            >
            >Most countries in the so-called "capitalist" third world are run by
            >thugs one must bribe regularly to get anything done, and only protect
            >the rights (particularly property rights) of those who are already
            >wealthy and powerful.

            I don't see any fundamental difference between that and the practices
            common in Europe, North America, Australia, and Japan. Here the bribes
            are called taxes and campaign contributions, and the police and military
            exist to protect the rights of the wealthy.

            >First world capitalist countries are to be blamed to the extent that
            >the kleptocracies were created/maintained by their force. But
            >comparing a kleptocracy to a communist country and calling it a
            >comparison to capitalism is not appropriate either.

            It is entirely appropriate. The technological progress of the first
            world is subsidized by the plundering of the third. It also stands to
            reason that capitalism in the third world would need to use more overt
            brutality than that in the first world. It is nonetheless still
            capitalism.

            >I have yet to hear of a country where the rule of law and equal
            >respect for property rights was actually implemented that the result
            >has not been both prosperity and ingenuity. But I'll admit I'm no
            >expert on the developmental history of the world.
            >
            >--Jason Auvenshine

            I am not aware of any country in which that which you call the rule
            of law and respect for property rights was actually implemented period.
            Arguing about the result of that would be on par with arguing about
            angels dancing on the head of a pin.

            --Kevin
          • thekoba@aztec.asu.edu
            ... I already covered capital consumption. ... No, necessary value also yields human happiness, as does cost of capital, as this all represents human labour.
            Message 5 of 26 , Jan 6 8:58 PM
              >
              >--- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
              >> >It's no confusion; we simply disagree on which is the decision
              >> >function in fact used by rational capitalists.
              >> >
              >> >We agree that capital has a cost. This cost is usually defined as
              >> >the expected rate of return demanded by owners of capital to
              >invest
              >> >that capital rather than consume it.
              >>
              >> The cost of capital is the cost of producing the capital divided by
              >> the useful life of the capital goods. The expected rate of return
              >has
              >> nothing to do with the actual cost of capital. It DOES indicate
              >> whether capital will be invested and to what extent it will be.
              >
              >The required return is a cost, because if it is not covered then the
              >capital will be consumed rather than invested. A capital investment
              >must return MORE than the cost of production divided by the useful
              >life or an investement will not be made.

              I already covered capital consumption.

              >When economic value is produced there are only three things that can
              >be done with it: Consume it, invest it, or save it. However,
              >all "save it" really does is delay either consumption or investment.
              >Thus over the long term there are really only TWO options:
              >consumption or investment.
              >
              >Economic value that is consumed is (one component of) human happiness.
              >
              >Economic value that is invested is capital.
              >
              >ONLY consumption yields human happiness. The ONLY reason to
              >translate economic value into capital instead of consumption is if
              >that capital is expected to allow even greater consumption
              >(happiness) in the future. This is why the cost of capital is more
              >than just the economic value required to create it.

              No, necessary value also yields human happiness, as does cost of capital,
              as this all represents human labour. Surplus value is simply the human
              happiness that is taken from the labour of others.

              >> For example, a piece of machinery costs $10,000 and lasts ten years.
              >> The cost of the capital will be $1000 per year. If it is only
              >> expected to return $900 per year, there won't likely be investment.
              >> If the return exceeds capital, overhead and wages by a substantial
              >> margin, there will likely be investment. If the high rates of
              >return
              >> are expected to continue with further investment, far more than
              >$10,000
              >> may be invested in buying machines of this sort, but the expected
              >> rate of return does not determine the cost of the capital.
              >
              >Capital does not magically appear. In order to have that
              >hypothetical $10,000 machine TWO things must happen:
              > (1) Someone must produce $10,000 worth of economic value.
              > (2) Someone must invest $10,000 of economic value in a machine,
              >rather than current consumption. In order to do that, there must be
              >an expected return of more than what was invested. After all, if the
              >return is not greater than what was invested, current consumption is
              >both preferable and certain.
              >
              >(1) and (2) are both costs, because absent either one of them the
              >machine will not be purchased. You account for only the first cost
              >with $1000 per year for 10 years. You fail to account for the second
              >cost.

              There is no second cost. That is surplus value.

              >No, you have defined surplus value in such a way that it is the rate
              >of return required to cause a decision in favor of investment rather
              >than consumption. You have done this by ignoring the cost of the
              >decision to invest in your definition of the cost of capital.
              >
              >The cost of something is EVERYTHING that it takes in order to produce
              >it. In a capitalist society, it clearly takes both available
              >economic value AND a decision to invest rather than consume in order
              >to produce capital. Therefore, the cost of capital rightly includes
              >both the economic value and the return required to induce an
              >investment decision.
              >
              >--Jason Auvenshine

              When surplus value becomes necessary value, all who labour consume and
              all collectively make the decision to invest. That is socialism.
              An economy can function without surplus value.

              --Kevin
            • auvenj <auvenj@mailcity.com>
              ... candidates ... the ... virtually ... wealthy ... ... they ... because ... imperialist ... You have failed to demonstrate how the president is
              Message 6 of 26 , Jan 7 9:12 PM
                --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                > >> If on the other hand government is the master class and beholden
                > >> to no one, there would be no reason for the wealthy to finance
                > >> political candidates and for the media to plug them. After all,
                > >these
                > >> politicians would only look out for their own interests, not the
                > >> interests of those who pay them and promote them.
                > >
                > >By and large, they do. The wealthy do finance political
                candidates
                > >to buy favors, and as I've mentioned they have more control per
                > >capita than the poor. But that control is very limited, wheras
                the
                > >politicians control over the wealthy (and everyone else) is
                virtually
                > >unlimited.
                >
                > That is certainly untrue. A politician who did something the
                wealthy
                > didn't like would lose campaign money and media coverage.
                <SNIP>
                > The FCC, IRS, etc. have nominal power to make
                > life miserable for the media and the bourgeoisie, but in practice
                they
                > rarely use that power unless the victim has done something of which
                > the rest of the imperialist bourgeoisie disapproves. This is
                because
                > they are subordinate to the president who is subordinate to the
                imperialist
                > grand bourgeoisie.

                You have failed to demonstrate how the president is subordinate to
                the "imperialist grand bourgeoisie". He's elected for a four year
                term, can be removed only in the most extreme scenarios, and has the
                power of the military at his disposal.

                Consider a power struggle between George Bush and Bill Gates. Gates
                could certainly withold funds from Bush's re-election campaign in 2
                years, finance an opponent, or run against him. He could even buy ad
                time to run anti-Bush ads (though not as easily under the
                recent "Bipartisan Campaign Reform Act"). But that's about it, and
                it does little to help Gates any time soon.

                On the other hand, the Bush administration could put Gates out of
                business virtually overnight. Take away his wealth by taxation or
                fine. Nationalize the operating system software industry. If he
                mounts any kind of armed resistance, the Military can be sent in to
                crush it. Hell, under the PATRIOT act Bush could simply declare
                Gates a suspected terrorist and hold him incommunicado indefinitely,
                or even execute him.

                All of this is so because to a large degree the public DOES NOT
                accept initiation of force by private citizens like Gates, yet DOES
                accept initiation of force when commanded by government leaders like
                Bush.

                Bush clearly has greater power than Gates, and will win any power
                struggle. In that context, it is silly to refer to Gates as a master
                of Bush.

                > >Like disease, aggression constitutes a threat against all
                classes.
                > >The proletarians suffer primarily from reduced opportunity to
                create
                > >an independant livelihood and build wealth. The small business
                > >owners suffer from burdensome regulations and fiat regulatory
                > >decisions that can put them out of business overnight. The large
                > >business owners suffer from having significant portions of their
                > >wealth confiscated.
                >
                > This is entirely true. Nonetheless the benefits or pursuing
                aggressive
                > class struggle ultimately outweigh the harm that aggression causes.

                I do not see convincing evidence of that.

                > >If you were foolish enough to buy a house served by only one
                private
                > >road with no contract for perpetual access, then you would in fact
                be
                > >violating the road owner's property rights even if he charged an
                > >extremely excessive toll or even outright forbade you to use the
                > >road. However, you'd have only yourself to blame in that
                situation,
                > >and in actual practice that level of stupidity would be extremely
                > >rare. :-)
                >
                > I would agree that such a contract would be wise if the roads were
                > to be made private property, but then, this would restrict the road
                > owner's right to do as he pleases with his property. Do I object to
                > that? No. But it would infringe on the road owner's property
                rights.

                No, it would not. Voluntarily contracted obligations are not an
                infringement of rights. "I agree to do X, Y, and Z in return for the
                current owner (in this case the government) selling me the road" is a
                fair contract. If the owner didn't want to do X, Y, and Z as
                specified in the contract, he shouldn't have bought the road.

                This is the primary reason that most such roads would be purchased by
                homeowner's associations. The implicit contracts existing with
                current roads are such that ownership is naturally most beneficial to
                the property owners served by the road.

                > >It is
                > >only the lack of choice that is fundamentally incompatible with
                human
                > >happiness...and that's just what you advocate.
                >
                > Capitalism is not a matter of freedom of choice. It inevitably
                evolves
                > into imperialism which affects everyone's freedom of choice,
                particularly
                > those with the misfortune to live in the weaker nations. It is
                therefore
                > incompatable with the happiness of the bulk of the world's people.

                Military imperialism, or the trade and economic specialization
                between nations that you also call "imperialism"? The former is not
                inevitable, and where it occurs is to be opposed but is not a
                consequence of capitalism as communism was forcibly imposed on a
                number of "client states" of the USSR shortly after WWII. While the
                latter form is an inevitable consequence of capitalism, you have
                failed to demonstrate that it is harmful to human happiness. In
                fact, absent military force it is quite easy to demonstrate that it
                increases human happiness. Absent military force, the
                supposedly "exploited" contries are free to NOT trade at all. By
                agreeing to trade, they are agreeing that they are better off by
                trading than by not trading.

                > >Most countries in the so-called "capitalist" third world are run
                by
                > >thugs one must bribe regularly to get anything done, and only
                protect
                > >the rights (particularly property rights) of those who are already
                > >wealthy and powerful.
                >
                > I don't see any fundamental difference between that and the
                practices
                > common in Europe, North America, Australia, and Japan. Here the
                bribes
                > are called taxes and campaign contributions, and the police and
                military
                > exist to protect the rights of the wealthy.

                Taxes are extortion, not bribary. :-) They are harmful to be sure,
                but in a predictable and relatively evenhanded, well documented way
                that interferes far less with development and property rights than do
                widespread requirements for bribes and policy exceptions whose size
                vary by the day and the mood of the bureaucrat. Campaign
                contributions are a form of bribary, but one which is significant
                only to those already relatively wealthy.

                In other words, an American of average means can purchase a small
                plot of land and in most cases have the title to that plot justly
                enforced, while only paying predictable extortions proportional to
                the size of the property (commonly called "property taxes"). He does
                not have to make any campaign contributions to do so.

                The average citizen of a kleptocracy can do no such thing. First of
                all, the bribes required to "process" such a transaction are very
                large in proportion to the value of a small plot of land. And even
                if the right bribes are paid for the transfer of title to occur, the
                rights of the small landowner are not enforced consistently unless
                more (unpredictable) bribes are paid. Confiscation by bureaucratic
                fiat (for the benefit of the wealthy who have paid other bribes, of
                course) is quite commonplace.

                As a result, the average citizen of a kleptocracy has little
                incentive to accumulate any property whatsoever. As a result, they
                don't. Economically what this does is artificially create a steep
                economy of scale in the ownership of property -- it's relatively easy
                on a proportional basis to acquire and maintain ownership of a lot of
                property, but relatively hard to acquire and maintain ownership of a
                little property. This in turn creates a stark divide between the
                wealthy, who own a lot, and the poor, who own (essentially) nothing.

                Unfortunately, the first world capitalist states are becoming more
                like the third world kleptocracies by the day. Nominal tax rates are
                generally falling, which is a good thing, but unpredictable
                regulatory "takings" and "policy exceptions" and "environmental
                impact assessments" are becoming far more commonplace. The
                difference between first and third world property rights from the
                perspective of the average citizen is still quite significant, but
                much less stark than it once was. The resultant shrinkage of what is
                commonly referred to as the American middle class is a clear warning
                of what is to come if such policies continue.

                > >First world capitalist countries are to be blamed to the extent
                that
                > >the kleptocracies were created/maintained by their force. But
                > >comparing a kleptocracy to a communist country and calling it a
                > >comparison to capitalism is not appropriate either.
                >
                > It is entirely appropriate. The technological progress of the first
                > world is subsidized by the plundering of the third. It also stands
                to
                > reason that capitalism in the third world would need to use more
                overt
                > brutality than that in the first world. It is nonetheless still
                > capitalism.

                We could argue endlessly about the definition of capitalism. I argue
                that capitalism definitionally requires consistent protection of
                property rights under the rule of law and in actual practice. This
                is not the case in the third world kleptocracies, hence I do not
                consider them capitalist.

                Suffice it to say that I am not advocating the form of government in
                place in most third world countries, whatever you choose to call it.
                Arguing a comparison of the achievements of such societies is
                pointless.

                > >I have yet to hear of a country where the rule of law and equal
                > >respect for property rights was actually implemented that the
                result
                > >has not been both prosperity and ingenuity. But I'll admit I'm no
                > >expert on the developmental history of the world.
                > >
                > >--Jason Auvenshine
                >
                > I am not aware of any country in which that which you call the rule
                > of law and respect for property rights was actually implemented
                period.
                > Arguing about the result of that would be on par with arguing about
                > angels dancing on the head of a pin.

                In absolutely perfect terms, no.

                But in relative terms it definitely has, and when it has the results
                have been consistently good.

                --Jason Auvenshine
              • auvenj <auvenj@mailcity.com>
                ... be ... the ... is ... cost ... second ... OK, well at least now our difference is clearly defined. You do not include a rate of return sufficient to
                Message 7 of 26 , Jan 8 1:57 PM
                  --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                  > >Capital does not magically appear. In order to have that
                  > >hypothetical $10,000 machine TWO things must happen:
                  > > (1) Someone must produce $10,000 worth of economic value.
                  > > (2) Someone must invest $10,000 of economic value in a machine,
                  > >rather than current consumption. In order to do that, there must
                  be
                  > >an expected return of more than what was invested. After all, if
                  the
                  > >return is not greater than what was invested, current consumption
                  is
                  > >both preferable and certain.
                  > >
                  > >(1) and (2) are both costs, because absent either one of them the
                  > >machine will not be purchased. You account for only the first
                  cost
                  > >with $1000 per year for 10 years. You fail to account for the
                  second
                  > >cost.
                  >
                  > There is no second cost. That is surplus value.

                  OK, well at least now our difference is clearly defined. You do not
                  include a rate of return sufficient to induce a decision to invest in
                  the cost of capital, rather you label such a return "surplus value".
                  This is what I thought the communist position would turn out to be,
                  but wanted to be certain by getting a complete definition. Such a
                  position is consistent with my understanding of the labor theory of
                  value. I hope my position is also now clear -- by including a rate
                  of return in the cost of capital, the expected surplus value would in
                  fact be zero over the long run. But as returns to capital are
                  specifically what you wish to exclude from necessary value, for me to
                  use a term like "surplus value" as I define it would be
                  counterproductive.

                  "Returns to capital" and "surplus value" are thus equivalent. You
                  can continue to say "surplus value", and I will translate to "returns
                  to capital". Likewise when I say "returns to capital" you can
                  translate to "surplus value". This should allow us to converse about
                  the subject intelligently. :-)

                  > When surplus value becomes necessary value, all who labour consume
                  and
                  > all collectively make the decision to invest. That is socialism.
                  > An economy can function without surplus value.

                  Such an economy is not functioning without returns to capital
                  ("surplus value"), it is simply functioning where the returns to
                  capital are owned and consumed collectively. Where there is no
                  return to capital the decisions to invest are so poor that on balance
                  a $1000 machine will return only $1000 of economic value over its
                  life. I would certainly argue that returns to capital under
                  socialism are less than returns to capital under capitalism, owing to
                  the inefficient nature of collective decision making in regards to
                  its investment. However, even I would not argue that socialist
                  decisions are so poor as to, on balance, return _nothing_ beyond the
                  cost of their capital investments.

                  Once again, we return to the fundamental question of whether
                  collectivism or individualism is more amenable to human happiness.

                  --Jason Auvenshine
                • thekoba@aztec.asu.edu
                  ... No, I thought I made it clear that surplus value was only part of the returns to capital. Necessary value is the part that goes to the proletariat.
                  Message 8 of 26 , Jan 8 5:57 PM
                    >OK, well at least now our difference is clearly defined. You do not
                    >include a rate of return sufficient to induce a decision to invest in
                    >the cost of capital, rather you label such a return "surplus value".
                    >This is what I thought the communist position would turn out to be,
                    >but wanted to be certain by getting a complete definition. Such a
                    >position is consistent with my understanding of the labor theory of
                    >value. I hope my position is also now clear -- by including a rate
                    >of return in the cost of capital, the expected surplus value would in
                    >fact be zero over the long run. But as returns to capital are
                    >specifically what you wish to exclude from necessary value, for me to
                    >use a term like "surplus value" as I define it would be
                    >counterproductive.
                    >
                    >"Returns to capital" and "surplus value" are thus equivalent.

                    No, I thought I made it clear that surplus value was only part of the
                    returns to capital. Necessary value is the part that goes to the proletariat.

                    Capital investment also represents necessary value of workers. I would
                    contend that surplus value does not go to zero, as the bourgeoisie tend
                    to live more lavishly as the returns of their investments increase. If
                    it tended towards zero, they would live more and more modestly.

                    >Such an economy is not functioning without returns to capital
                    >("surplus value"), it is simply functioning where the returns to
                    >capital are owned and consumed collectively. Where there is no
                    >return to capital the decisions to invest are so poor that on balance
                    >a $1000 machine will return only $1000 of economic value over its
                    >life.

                    As this is based on a misunderstanding I explained earlier, I won't
                    comment further.

                    >I would certainly argue that returns to capital under
                    >socialism are less than returns to capital under capitalism, owing to
                    >the inefficient nature of collective decision making in regards to
                    >its investment. However, even I would not argue that socialist
                    >decisions are so poor as to, on balance, return _nothing_ beyond the
                    >cost of their capital investments.
                    >
                    >Once again, we return to the fundamental question of whether
                    >collectivism or individualism is more amenable to human happiness.
                    >
                    >--Jason Auvenshine

                    Few capitalist societies have come close to the fantastic rates of economic
                    growth achieved by the USSR during the Stalin administration, and those
                    that did only did so with massive investment from other capitalist powers.

                    --Kevin
                  • thekoba@aztec.asu.edu
                    ... Gates personally is not the master of Bush. Bush also is a member of the imperialist grand bourgeoisie. Not every president has been, but all in the past
                    Message 9 of 26 , Jan 8 6:22 PM
                      >You have failed to demonstrate how the president is subordinate to
                      >the "imperialist grand bourgeoisie". He's elected for a four year
                      >term, can be removed only in the most extreme scenarios, and has the
                      >power of the military at his disposal.
                      >
                      >Consider a power struggle between George Bush and Bill Gates. Gates
                      >could certainly withold funds from Bush's re-election campaign in 2
                      >years, finance an opponent, or run against him. He could even buy ad
                      >time to run anti-Bush ads (though not as easily under the
                      >recent "Bipartisan Campaign Reform Act"). But that's about it, and
                      >it does little to help Gates any time soon.
                      >
                      >On the other hand, the Bush administration could put Gates out of
                      >business virtually overnight. Take away his wealth by taxation or
                      >fine. Nationalize the operating system software industry. If he
                      >mounts any kind of armed resistance, the Military can be sent in to
                      >crush it. Hell, under the PATRIOT act Bush could simply declare
                      >Gates a suspected terrorist and hold him incommunicado indefinitely,
                      >or even execute him.
                      >
                      >All of this is so because to a large degree the public DOES NOT
                      >accept initiation of force by private citizens like Gates, yet DOES
                      >accept initiation of force when commanded by government leaders like
                      >Bush.
                      >
                      >Bush clearly has greater power than Gates, and will win any power
                      >struggle. In that context, it is silly to refer to Gates as a master
                      >of Bush.

                      Gates personally is not the master of Bush. Bush also is a member
                      of the imperialist grand bourgeoisie. Not every president has been,
                      but all in the past century have been subservient to it and have been
                      voted into office through the direction of the media and campaign
                      finances based on their known loyalty to this class. Could a president
                      suddenly decide he or she didn't want to be loyal to this class? Of
                      course this could happen. If it did, the media would turn against him,
                      as would Congress (composed of similar class members and lackeys), the
                      Supreme Court and ultimately the military. That president would be
                      impeached or overthrown. Politicians are beholden to the imperialist
                      bourgeoisie, not the reverse.

                      >> This is entirely true. Nonetheless the benefits or pursuing
                      >aggressive
                      >> class struggle ultimately outweigh the harm that aggression causes.
                      >
                      >I do not see convincing evidence of that.

                      That classes succeed in their aims by so doing is proof of that.

                      >> I would agree that such a contract would be wise if the roads were
                      >> to be made private property, but then, this would restrict the road
                      >> owner's right to do as he pleases with his property. Do I object to
                      >> that? No. But it would infringe on the road owner's property
                      >rights.
                      >
                      >No, it would not. Voluntarily contracted obligations are not an
                      >infringement of rights. "I agree to do X, Y, and Z in return for the
                      >current owner (in this case the government) selling me the road" is a
                      >fair contract. If the owner didn't want to do X, Y, and Z as
                      >specified in the contract, he shouldn't have bought the road.
                      >
                      >This is the primary reason that most such roads would be purchased by
                      >homeowner's associations. The implicit contracts existing with
                      >current roads are such that ownership is naturally most beneficial to
                      >the property owners served by the road.

                      If one can purchase property only if one agrees to use it a certain
                      way, a portion of that property right is retained by the seller, and
                      only a portion of the property right is purchased. If the road is
                      completely owned by a private party, he or she can do what he or she
                      likes with it--destroy it, charge extreme tolls, charge no tolls, fail
                      to maintain it, etc. If the new owner of the road is required to
                      maintain it by contract and to charge as fees and tolls no more than
                      110% the cost of maintenance, that "owner" is in fact no more than a
                      contractor-for-life. The real owner remains the public, and therefore
                      the government, because it retains the right to control how that road
                      is maintained and what fees can be charged. It seems, therefore, that
                      you do not in fact advocate privatizing the roads only the maintenance
                      contracts of them.

                      >Military imperialism, or the trade and economic specialization
                      >between nations that you also call "imperialism"? The former is not
                      >inevitable, and where it occurs is to be opposed but is not a
                      >consequence of capitalism as communism was forcibly imposed on a
                      >number of "client states" of the USSR shortly after WWII. While the
                      >latter form is an inevitable consequence of capitalism, you have
                      >failed to demonstrate that it is harmful to human happiness. In
                      >fact, absent military force it is quite easy to demonstrate that it
                      >increases human happiness. Absent military force, the
                      >supposedly "exploited" contries are free to NOT trade at all. By
                      >agreeing to trade, they are agreeing that they are better off by
                      >trading than by not trading.

                      In fact it is inevitable that military force is used on those who
                      refuse to trade when the [economic] imperialist powers think it
                      worthwhile. You may not approve of it, but it happens every time.

                      >Taxes are extortion, not bribary. :-) They are harmful to be sure,
                      >but in a predictable and relatively evenhanded, well documented way
                      >that interferes far less with development and property rights than do
                      >widespread requirements for bribes and policy exceptions whose size
                      >vary by the day and the mood of the bureaucrat. Campaign
                      >contributions are a form of bribary, but one which is significant
                      >only to those already relatively wealthy.
                      >
                      >In other words, an American of average means can purchase a small
                      >plot of land and in most cases have the title to that plot justly
                      >enforced, while only paying predictable extortions proportional to
                      >the size of the property (commonly called "property taxes"). He does
                      >not have to make any campaign contributions to do so.
                      >
                      >The average citizen of a kleptocracy can do no such thing. First of
                      >all, the bribes required to "process" such a transaction are very
                      >large in proportion to the value of a small plot of land. And even
                      >if the right bribes are paid for the transfer of title to occur, the
                      >rights of the small landowner are not enforced consistently unless
                      >more (unpredictable) bribes are paid. Confiscation by bureaucratic
                      >fiat (for the benefit of the wealthy who have paid other bribes, of
                      >course) is quite commonplace.
                      >
                      >As a result, the average citizen of a kleptocracy has little
                      >incentive to accumulate any property whatsoever. As a result, they
                      >don't. Economically what this does is artificially create a steep
                      >economy of scale in the ownership of property -- it's relatively easy
                      >on a proportional basis to acquire and maintain ownership of a lot of
                      >property, but relatively hard to acquire and maintain ownership of a
                      >little property. This in turn creates a stark divide between the
                      >wealthy, who own a lot, and the poor, who own (essentially) nothing.

                      This is absolutely untrue. There is a large petit-bourgeoisie in
                      every capitalist third world country. Sure they pay some bribes
                      that Americans might not, but they generally pay smaller taxes.

                      >Unfortunately, the first world capitalist states are becoming more
                      >like the third world kleptocracies by the day. Nominal tax rates are
                      >generally falling, which is a good thing, but unpredictable
                      >regulatory "takings" and "policy exceptions" and "environmental
                      >impact assessments" are becoming far more commonplace. The
                      >difference between first and third world property rights from the
                      >perspective of the average citizen is still quite significant, but
                      >much less stark than it once was. The resultant shrinkage of what is
                      >commonly referred to as the American middle class is a clear warning
                      >of what is to come if such policies continue.

                      The disappearance of the American "middle class" has a lot more to
                      do with shipping jobs overseas for cheap labour than with any
                      domestic tax policy or bribery problem. In other words it is
                      [economic] imperialism that is destroying our own middle class.

                      >We could argue endlessly about the definition of capitalism. I argue
                      >that capitalism definitionally requires consistent protection of
                      >property rights under the rule of law and in actual practice. This
                      >is not the case in the third world kleptocracies, hence I do not
                      >consider them capitalist.
                      >
                      >Suffice it to say that I am not advocating the form of government in
                      >place in most third world countries, whatever you choose to call it.
                      >Arguing a comparison of the achievements of such societies is
                      >pointless.

                      I would certainly not contend that you are ADVOCATING the third world
                      "kleptocracies", merely that their development is the logical result
                      of the capitalist system, given sufficient time to evolve. That you
                      are fighting against these bad results is praiseworthy, but they are
                      in fact the result of capitalism.

                      >> >I have yet to hear of a country where the rule of law and equal
                      >> >respect for property rights was actually implemented that the
                      >result
                      >> >has not been both prosperity and ingenuity. But I'll admit I'm no
                      >> >expert on the developmental history of the world.
                      >> >
                      >> >--Jason Auvenshine
                      >>
                      >> I am not aware of any country in which that which you call the rule
                      >> of law and respect for property rights was actually implemented
                      >period.
                      >> Arguing about the result of that would be on par with arguing about
                      >> angels dancing on the head of a pin.
                      >
                      >In absolutely perfect terms, no.
                      >
                      >But in relative terms it definitely has, and when it has the results
                      >have been consistently good.

                      No, the result of the societies that are in any way close to what
                      you advocate has been imperialist [economic and military] plunder of
                      the third world.

                      --Kevin
                    • auvenj <auvenj@mailcity.com>
                      ... not ... in ... value . ... be, ... of ... rate ... in ... to ... the ... proletariat. If we can t agree on definitions then we can t have a productive
                      Message 10 of 26 , Jan 9 9:33 PM
                        --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                        > >OK, well at least now our difference is clearly defined. You do
                        not
                        > >include a rate of return sufficient to induce a decision to invest
                        in
                        > >the cost of capital, rather you label such a return "surplus
                        value".
                        > >This is what I thought the communist position would turn out to
                        be,
                        > >but wanted to be certain by getting a complete definition. Such a
                        > >position is consistent with my understanding of the labor theory
                        of
                        > >value. I hope my position is also now clear -- by including a
                        rate
                        > >of return in the cost of capital, the expected surplus value would
                        in
                        > >fact be zero over the long run. But as returns to capital are
                        > >specifically what you wish to exclude from necessary value, for me
                        to
                        > >use a term like "surplus value" as I define it would be
                        > >counterproductive.
                        > >
                        > >"Returns to capital" and "surplus value" are thus equivalent.
                        >
                        > No, I thought I made it clear that surplus value was only part of
                        the
                        > returns to capital. Necessary value is the part that goes to the
                        proletariat.

                        If we can't agree on definitions then we can't have a productive
                        discussion. Let me try it again in more concrete terms. You've
                        defined surplus value as follows:

                        Surplus Value = Market Value - (Wages + Overhead)
                        Shorthand: sv = mv - (w + o)

                        Right away we have to qualify this equation with some assumptions,
                        only one of which we've touched on previously:
                        ASSUMPTION1: Equation represents expectations for decision making
                        purposes, since the costs/values are determined at different times
                        after the decision to produce has been made. Once production occurs,
                        the actual values probably will be different from expected values.
                        But it is the expected values which affect decision making.
                        ASSUMPTION2: All variables in this equation are based on common
                        units, for purposes of discussion these can be units of time only if
                        we assume a certain production rate. If we assume we're talking
                        about one year, and producing "widgets", then "Market Value" is
                        really the expected market value of all the widgets produced in the
                        year, "Wages" is the wages expected to be paid to the workers in the
                        year, etc.
                        ASSUMPTION3: For discussion purposes only, we assume a single
                        machine is used in the production of the widgets.

                        Now, you have stated that cost of capital is included in overhead.
                        So:
                        Overhead = [A bunch of other stuff not germain to discussion] +
                        Capital Cost
                        Shorthand: o = x + cc

                        This also necessitates we make another assumption explicit:
                        ASSUMPTION4: In a capitalist system, the owner of the capital
                        expects to receive both the Surplus Value AND the Cost of Capital,
                        whereas the workers expect to receive only the Wages. In a communist
                        system, the owner of the capital is the collective, all returns are
                        expected to be received by the collective (workers), and you have
                        defined Surplus Value to be zero.

                        Plugging expanded overhead back into the surplus value equation:
                        sv = mv - (w + x + cc)

                        So far so good. Here's where we run into our little disagreement.
                        You claim that capital cost is only the amount invested in the
                        equipment divided by its useful life. So you would define:
                        cc = Cost of machine / Life of machine
                        Shorthand: cc = Cm/Lm

                        However, I wish to add the additional cost of a rate of return
                        sufficient to induce a capital owner to invest. The capital owner
                        expects to get his principle investment back + a rate of return that
                        is at least as attractive as current consumption. So I would define:
                        cc = (Cost of machine / Life of machine) + Market Rate of Return on
                        Investment.
                        Shorthand: cc = Cm/Lm + R

                        My formulation requires the specification of another assumption,
                        however it is one that can be proved with economics:
                        ASSUMPTION5: The Market Rate of Return on Investment will converge
                        to the average rate of return required to induce an owner of capital
                        to invest that capital rather than consume it.
                        One thing to be absolutely clear about in my formulation:
                        Cm/Lm is return OF capital
                        R is return TO capital

                        Plugging this all back in we have:
                        sv[Kevin] = mv - (w + x + Cm/Lm)
                        sv[Jason] = mv - (w + x + Cm/Lm + R)

                        At this point I believe all relevant independant variables are in
                        explicit terms: their economic definition is clear and they do not
                        contain any subcomponents of relevance to the discussion.

                        From the above formulations two things should also be clear:
                        CONCLUSION1:
                        sv[Jason] = 0
                        If you claim sv[Jason] is not zero, what additional economic
                        component is there that is not represented in my equation for sv
                        [Jason]? It will need to be defined explicitely in economic terms.

                        CONCLUSION2:
                        sv[Kevin] = R
                        Again, if sv[Kevin] does not equal R, what economic component other
                        than R are we talking about?

                        Just to be sure we're clear, let's try this with some fictional
                        numbers in a capitalist system.
                        Expected market value of a certain number of widgets produced in a
                        year is $400.
                        mv = 400
                        Wages for workers to run a widget-making machine are $180/year
                        w = 180
                        Other (non-capital) overhead costs involved with producing the
                        widgets are $20/year
                        x = 20
                        A $1000 widget-making machine with a 10 year life that can produce
                        the assumed widgets in a year has an investment cost (to avoid the
                        contentious term "capital cost") of $100 per year.
                        Cm/Lm = 1000 / 10 = 100

                        At this point we can calculate sv[Kevin]:
                        sv[Kevin] = 400 - (180 + 20 + 100) = $100

                        To calculate sv[Jason] we have to know one other item, the rate of
                        return required to induce a capitalist to invest, "R". The economic
                        derivation of R is fairly long and involved, but the end result is
                        that over the long run it is the same formula as sv[Kevin]:
                        R = mv - (w + x + Cm/Lm) = 400 - (180 + 20 + 100) = $100
                        (This is a 10% return on the original $1000 investment)

                        In simple terms, this is as stated becuase if the rate of return
                        required to induce investment were LOWER than what is left over after
                        wages, overhead, and principle costs are covered, more capitalists
                        would be induced to invest in widget production, thus increasing
                        supply and driving down the market value. The converse would be true
                        if the rate of return required to induce investment were HIGHER than
                        the formula: fewer capitalists would invest in widget production,
                        thus constricting supply and increasing market value.

                        So, plugging R into my version:
                        sv[Jason] = mv - (w + x + Cm/Lm + R) = 400 - (180 + 20 + 100 + 100) =
                        0

                        Is it now clear why I consider the terms "Surplus Value" and "Returns
                        to Capital" to be equivalent?

                        --Jason Auvenshine
                      • thekoba@aztec.asu.edu
                        ... Any R is compensated by Cm/Lm. The Cm/Lm covers the cost of the initial investment. These terms refer to ACTUAL values, not EXPECTED values. If the
                        Message 11 of 26 , Jan 10 8:00 AM
                          >
                          >--- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                          >> >OK, well at least now our difference is clearly defined. You do
                          >not
                          >> >include a rate of return sufficient to induce a decision to invest
                          >in
                          >> >the cost of capital, rather you label such a return "surplus
                          >value".
                          >> >This is what I thought the communist position would turn out to
                          >be,
                          >> >but wanted to be certain by getting a complete definition. Such a
                          >> >position is consistent with my understanding of the labor theory
                          >of
                          >> >value. I hope my position is also now clear -- by including a
                          >rate
                          >> >of return in the cost of capital, the expected surplus value would
                          >in
                          >> >fact be zero over the long run. But as returns to capital are
                          >> >specifically what you wish to exclude from necessary value, for me
                          >to
                          >> >use a term like "surplus value" as I define it would be
                          >> >counterproductive.
                          >> >
                          >> >"Returns to capital" and "surplus value" are thus equivalent.
                          >>
                          >> No, I thought I made it clear that surplus value was only part of
                          >the
                          >> returns to capital. Necessary value is the part that goes to the
                          >proletariat.
                          >
                          >If we can't agree on definitions then we can't have a productive
                          >discussion. Let me try it again in more concrete terms. You've
                          >defined surplus value as follows:
                          >
                          >Surplus Value = Market Value - (Wages + Overhead)
                          > Shorthand: sv = mv - (w + o)
                          >
                          >Right away we have to qualify this equation with some assumptions,
                          >only one of which we've touched on previously:
                          >ASSUMPTION1: Equation represents expectations for decision making
                          >purposes, since the costs/values are determined at different times
                          >after the decision to produce has been made. Once production occurs,
                          >the actual values probably will be different from expected values.
                          >But it is the expected values which affect decision making.
                          >ASSUMPTION2: All variables in this equation are based on common
                          >units, for purposes of discussion these can be units of time only if
                          >we assume a certain production rate. If we assume we're talking
                          >about one year, and producing "widgets", then "Market Value" is
                          >really the expected market value of all the widgets produced in the
                          >year, "Wages" is the wages expected to be paid to the workers in the
                          >year, etc.
                          >ASSUMPTION3: For discussion purposes only, we assume a single
                          >machine is used in the production of the widgets.
                          >
                          >Now, you have stated that cost of capital is included in overhead.
                          >So:
                          >Overhead = [A bunch of other stuff not germain to discussion] +
                          >Capital Cost
                          > Shorthand: o = x + cc
                          >
                          >This also necessitates we make another assumption explicit:
                          >ASSUMPTION4: In a capitalist system, the owner of the capital
                          >expects to receive both the Surplus Value AND the Cost of Capital,
                          >whereas the workers expect to receive only the Wages. In a communist
                          >system, the owner of the capital is the collective, all returns are
                          >expected to be received by the collective (workers), and you have
                          >defined Surplus Value to be zero.
                          >
                          >Plugging expanded overhead back into the surplus value equation:
                          >sv = mv - (w + x + cc)
                          >
                          >So far so good. Here's where we run into our little disagreement.
                          >You claim that capital cost is only the amount invested in the
                          >equipment divided by its useful life. So you would define:
                          >cc = Cost of machine / Life of machine
                          > Shorthand: cc = Cm/Lm
                          >
                          >However, I wish to add the additional cost of a rate of return
                          >sufficient to induce a capital owner to invest. The capital owner
                          >expects to get his principle investment back + a rate of return that
                          >is at least as attractive as current consumption. So I would define:
                          >cc = (Cost of machine / Life of machine) + Market Rate of Return on
                          >Investment.
                          > Shorthand: cc = Cm/Lm + R
                          >
                          >My formulation requires the specification of another assumption,
                          >however it is one that can be proved with economics:
                          >ASSUMPTION5: The Market Rate of Return on Investment will converge
                          >to the average rate of return required to induce an owner of capital
                          >to invest that capital rather than consume it.
                          >One thing to be absolutely clear about in my formulation:
                          > Cm/Lm is return OF capital
                          > R is return TO capital
                          >
                          >Plugging this all back in we have:
                          >sv[Kevin] = mv - (w + x + Cm/Lm)
                          >sv[Jason] = mv - (w + x + Cm/Lm + R)
                          >
                          >At this point I believe all relevant independant variables are in
                          >explicit terms: their economic definition is clear and they do not
                          >contain any subcomponents of relevance to the discussion.
                          >
                          >From the above formulations two things should also be clear:
                          >CONCLUSION1:
                          >sv[Jason] = 0
                          >If you claim sv[Jason] is not zero, what additional economic
                          >component is there that is not represented in my equation for sv
                          >[Jason]? It will need to be defined explicitely in economic terms.
                          >
                          >CONCLUSION2:
                          >sv[Kevin] = R
                          >Again, if sv[Kevin] does not equal R, what economic component other
                          >than R are we talking about?
                          >
                          >Just to be sure we're clear, let's try this with some fictional
                          >numbers in a capitalist system.
                          >Expected market value of a certain number of widgets produced in a
                          >year is $400.
                          > mv = 400
                          >Wages for workers to run a widget-making machine are $180/year
                          > w = 180
                          >Other (non-capital) overhead costs involved with producing the
                          >widgets are $20/year
                          > x = 20
                          >A $1000 widget-making machine with a 10 year life that can produce
                          >the assumed widgets in a year has an investment cost (to avoid the
                          >contentious term "capital cost") of $100 per year.
                          > Cm/Lm = 1000 / 10 = 100
                          >
                          >At this point we can calculate sv[Kevin]:
                          >sv[Kevin] = 400 - (180 + 20 + 100) = $100
                          >
                          >To calculate sv[Jason] we have to know one other item, the rate of
                          >return required to induce a capitalist to invest, "R". The economic
                          >derivation of R is fairly long and involved, but the end result is
                          >that over the long run it is the same formula as sv[Kevin]:
                          >R = mv - (w + x + Cm/Lm) = 400 - (180 + 20 + 100) = $100
                          >(This is a 10% return on the original $1000 investment)
                          >
                          >In simple terms, this is as stated becuase if the rate of return
                          >required to induce investment were LOWER than what is left over after
                          >wages, overhead, and principle costs are covered, more capitalists
                          >would be induced to invest in widget production, thus increasing
                          >supply and driving down the market value. The converse would be true
                          >if the rate of return required to induce investment were HIGHER than
                          >the formula: fewer capitalists would invest in widget production,
                          >thus constricting supply and increasing market value.
                          >
                          >So, plugging R into my version:
                          >sv[Jason] = mv - (w + x + Cm/Lm + R) = 400 - (180 + 20 + 100 + 100) =
                          >0
                          >
                          >Is it now clear why I consider the terms "Surplus Value" and "Returns
                          >to Capital" to be equivalent?
                          >
                          >--Jason Auvenshine

                          Any R is compensated by Cm/Lm. The Cm/Lm covers the cost of the initial
                          investment. These terms refer to ACTUAL values, not EXPECTED values.
                          If the actual values fall substantially below the expected values, the
                          business often fails, as has often been the case.

                          What if the surplus value is at too low a rate to be attractive (e.g.
                          for $1000 investment, investor gets back $1010)? If it is anticipated,
                          the investment does not happen. If not, the investor may lose interest
                          and sell. Nonetheless, that $10 is surplus value, because if the
                          investment does happen, the investor gets that money.

                          In the same way, if both the anticipated and actual return is very high
                          (e.g. for $1000 investment, investor gets back $10,000), and that investor
                          was very greedy and would only have invested if the return was at least
                          $5000, the surplus value is still $9000, and not $5000, because all
                          $9000 goes to the investor. The other $4000 doesn't just disappear.

                          --Kevin
                        • auvenj <auvenj@mailcity.com>
                          ... and Returns ... initial ... values. ... the ... Actual values are what you get when the period under consideration is complete. However, only expected
                          Message 12 of 26 , Jan 11 10:10 PM
                            --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                            > >Is it now clear why I consider the terms "Surplus Value"
                            and "Returns
                            > >to Capital" to be equivalent?
                            > >
                            > >--Jason Auvenshine
                            >
                            > Any R is compensated by Cm/Lm. The Cm/Lm covers the cost of the
                            initial
                            > investment. These terms refer to ACTUAL values, not EXPECTED
                            values.
                            > If the actual values fall substantially below the expected values,
                            the
                            > business often fails, as has often been the case.

                            Actual values are what you get when the period under consideration is
                            complete. However, only expected values can be used by real human
                            beings to make decisions, because it is impossible to know what the
                            actual values are until after a decision to produce has been made.
                            It is the decision to invest (or not) and produce (or not) which is
                            of consequence. The outcome of a particular decision is important
                            insofar as it may influence expected values for the future.

                            > What if the surplus value is at too low a rate to be attractive
                            (e.g.
                            > for $1000 investment, investor gets back $1010)? If it is
                            anticipated,
                            > the investment does not happen. If not, the investor may lose
                            interest
                            > and sell. Nonetheless, that $10 is surplus value, because if the
                            > investment does happen, the investor gets that money.
                            > In the same way, if both the anticipated and actual return is very
                            high
                            > (e.g. for $1000 investment, investor gets back $10,000), and that
                            investor
                            > was very greedy and would only have invested if the return was at
                            least
                            > $5000, the surplus value is still $9000, and not $5000, because all
                            > $9000 goes to the investor. The other $4000 doesn't just disappear.

                            No, of course it doesn't disappear. But if $5000 was required to
                            induce the investor to invest, and the investment actually returned
                            $9000, then the value returned to the investor above and beyond what
                            which was required, "surplus" as most people would define it, was
                            only $4000.

                            "Surplus" is generally recognized as unnecessary, something that
                            doesn't have to be there to get the desired output.

                            You define any return to an investor above the amount originally
                            invested as "surplus". But to do so assumes a communist system. In
                            a capitalist system, a return on investment is NOT surplus, because
                            if the return is not there then the investment won't be made and the
                            product cannot be produced.

                            The same allegation can be made against me -- that I assume a
                            capitalist system by including returns to capital in the cost of
                            capital. This is also true, because under communism a return on
                            investment is ineed "surplus". But I'm not the one who chose to use
                            a term with implied conclusions like "surplus value" in the first
                            place. This is also why I proposed the accommodation that "returns
                            to capital" R be accepted as equivalent to "surplus value" sv[kevin].

                            If you'd like to argue the point that one of the _benefits_ of
                            communism is that under such a system returns to capital are surplus,
                            that is a reasonable approach and we can have a discussion of that
                            point. However, to use a term like "surplus value", define it in
                            such a way as to assume a communist system from the outset, as you
                            have done, and then presume to have a discussion about the merits of
                            communism vs. capitalism utilizing this definition of surplus value
                            is a faulty logical procedure. You have assumed your conclusion that
                            returns to capital are surplus in your definition of terms, which is
                            circular reasoning.

                            To make this more concrete, consider two factories each making
                            circular plastic parts (wheels for simple toy cars...whatever).
                            Factory A has a circular mold into which molten plastic is poured and
                            then the circular pieces are ejected after the plastic has
                            solidified. Factory B has a circular cutter which cuts out the
                            circular pieces from solid square sheets of plastic. Of course,
                            simple geometry dictates that circles do not cut from square sheets
                            of plastic without also leaving some plastic behind. From the
                            perspective of Factory A, the plastic left behind by Factory B's
                            cutting process would seem to be "surplus". After all, Factory A
                            leaves no such plastic and is able to produce the same circular parts
                            as Factory B. Yet from the perspective of Factory B, the plastic
                            left behind is not "surplus" at all -- it is an absolutely necessary
                            part of Factory B's production process even though it may simply be
                            discarded as waste once the circular pieces have been produced.

                            The manager of Factory A and the manager of Factory B cannot have a
                            productive discussion about the relative merits of their differing
                            production processes if they assume from the outset that any plastic
                            remnants are defined to be "surplus". The two managers need to
                            discuss matters such as total material input costs, capital costs,
                            labor costs, energy costs, maintenance costs, etc. in order to
                            determine which process is really more efficient. Certainly, the
                            manager of Factory A can cite as a benefit of his process that it
                            generates no plastic remnants, thus reducing the amount of plastic
                            required to produce a given number of circular plastic parts to its
                            absolute minimum. But it may well be that the energy costs of
                            melting the plastic, and the cleaning/maintenance costs of the molds
                            incurred by Factory A far exceed the costs of Factory B's process
                            even when the cost of the discarded plastic is included. The two
                            managers will never find out which process is superior if the
                            discussion starts out with the assumption that any plastic left
                            behind is "surplus" and thus any process which generates them is
                            definitionally inferior to any process that doesn't generate them.

                            I hope you can see how our situation mirrors that of the two factory
                            managers. To be useful, our discussion must utilize terms which do
                            not presume a conclusion to our disagreement from the outset.
                            If "returns to capital" still seems too presumptuous to you, perhaps
                            the term "value paid to investors beyond their original investment"
                            is acceptable to you? I'm open to suggestions, but we cannot simply
                            presume that such value is EITHER surplus OR necessary in our
                            definition of terms.

                            --Jason Auvenshine
                          • auvenj <auvenj@mailcity.com>
                            ... causes. ... It proves no such thing. The fact that rapists succeed in their aims by holding a knife to their victim s throat doesn t prove that the
                            Message 13 of 26 , Jan 12 9:15 PM
                              --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                              > >> This is entirely true. Nonetheless the benefits or pursuing
                              > >aggressive
                              > >> class struggle ultimately outweigh the harm that aggression
                              causes.
                              > >
                              > >I do not see convincing evidence of that.
                              >
                              > That classes succeed in their aims by so doing is proof of that.

                              It proves no such thing. The fact that rapists succeed in their aims
                              by holding a knife to their victim's throat doesn't prove that the
                              benefits of doing so outweigh the harm that it causes. Success in
                              one's aims is entirely independant from whether or not those aims are
                              beneficial or harmful.

                              > >No, it would not. Voluntarily contracted obligations are not an
                              > >infringement of rights. "I agree to do X, Y, and Z in return for
                              the
                              > >current owner (in this case the government) selling me the road"
                              is a
                              > >fair contract. If the owner didn't want to do X, Y, and Z as
                              > >specified in the contract, he shouldn't have bought the road.
                              > >
                              > >This is the primary reason that most such roads would be purchased
                              by
                              > >homeowner's associations. The implicit contracts existing with
                              > >current roads are such that ownership is naturally most beneficial
                              to
                              > >the property owners served by the road.
                              >
                              > If one can purchase property only if one agrees to use it a certain
                              > way, a portion of that property right is retained by the seller, and
                              > only a portion of the property right is purchased. If the road is
                              > completely owned by a private party, he or she can do what he or she
                              > likes with it--destroy it, charge extreme tolls, charge no tolls,
                              fail
                              > to maintain it, etc. If the new owner of the road is required to
                              > maintain it by contract and to charge as fees and tolls no more than
                              > 110% the cost of maintenance, that "owner" is in fact no more than a
                              > contractor-for-life. The real owner remains the public, and
                              therefore
                              > the government, because it retains the right to control how that
                              road
                              > is maintained and what fees can be charged. It seems, therefore,
                              that
                              > you do not in fact advocate privatizing the roads only the
                              maintenance
                              > contracts of them.

                              The new owner is bound by a contractual obligation, and in that sense
                              is a "contractor for life". Many new homes are built with CC&R's
                              that require the owners to keep the property up to rather strict
                              aesthetic standards. The principle is the same. In this case, the
                              property owners served by the road bought their property with an
                              (admittedly implicit) contract with the government that they would
                              have access to their property via the road. It is the current
                              owner's (government's) responsibility to uphold that contract, and
                              insure that it is upheld by any successor owners.

                              That the existance of such implicit contracts makes unattractive the
                              purchase of many if not most existing government roads by entities
                              other than those directly benefitting from their existance and upkeep
                              is my whole point.

                              Your objection to private roads boils down to nothing more than an
                              assumption that the new property owner can violate at will the
                              implicit contract you made with the government when you bought your
                              property. Selling single-access roads without the contract would
                              amount to a breach by the current owner, which is not what
                              Libertarians such as myself advocate.

                              Thus "privatizing the roads" amounts in practice to transferring both
                              ownership and responsibility for most existing roads to entites owned
                              by those who benefit from the roads most directly -- those who rely
                              on the raod for access to their property. More importantly, it also
                              means that the government does not build any new roads.

                              I always find it curious how fixated people are on the topic of road
                              privatization. To my knowledge, no Libertarian ever ran for office
                              stating that the first thing he or she planned to do upon being
                              elected and assuming office is privatize all of the roads. Private
                              roads are indeed implied by libertarian principles, and I am
                              confident that the concept is workable. But it's something that
                              would be done later rather than sooner. We'd start privatization
                              with such obvious targets as the Post Office and Amtrak, move on to
                              Social Security, as well as the banking, health care, and insurance
                              activities currently engaged in by the government. If we got through
                              all of that and were still in office, then maybe roads would be on
                              the agenda.

                              > In fact it is inevitable that military force is used on those who
                              > refuse to trade when the [economic] imperialist powers think it
                              > worthwhile. You may not approve of it, but it happens every time.

                              Because the initiation of military force has always been viewed as
                              acceptable, particularly by the politicians. That is precisely what
                              I am attempting to change.

                              > >As a result, the average citizen of a kleptocracy has little
                              > >incentive to accumulate any property whatsoever. As a result,
                              they
                              > >don't. Economically what this does is artificially create a steep
                              > >economy of scale in the ownership of property -- it's relatively
                              easy
                              > >on a proportional basis to acquire and maintain ownership of a lot
                              of
                              > >property, but relatively hard to acquire and maintain ownership of
                              a
                              > >little property. This in turn creates a stark divide between the
                              > >wealthy, who own a lot, and the poor, who own (essentially)
                              nothing.
                              >
                              > This is absolutely untrue. There is a large petit-bourgeoisie in
                              > every capitalist third world country. Sure they pay some bribes
                              > that Americans might not, but they generally pay smaller taxes.

                              You missed the forest for the trees. Taxes are both proportional and
                              predictable. Bribes are much less predictable -- they depend on the
                              daily whim of bureaucrats and politicans rather than a public
                              deliberative process like legislation. They are also much less
                              proportional -- often a flat "fee" is required to get something done
                              regardless of whether your income/investment is large or small.

                              It is reasonable to invest capital knowing that a certain percentage
                              will be confiscated by taxation. You simply figure it as a cost in
                              your decision making. It is much less reasonable to do so when
                              bribes are required, because you don't know what it will take in
                              advance, making it hard to determine whether or not the investment
                              will be profitable. Furthermore, it is much more likely that a large
                              investment will be profitable than a small one, simply because bribes
                              will take a smaller percentage.

                              The "large petit-bourgeoisie" you speak of are not actually so. When
                              and if such people of average means acquire property that is of value
                              to the very wealthy/kleptocrats, it is simply taken, perhaps after a
                              small (proportional to wealth) bribe is paid by the person who wants
                              it. The petit-bourgeoisie "own" what they own only simply because it
                              is not of interest to the wealthy and powerful. There is little to
                              no upward mobility as a result. As I said, sadly this practice is
                              increasingly becoming the case in the first world capitalist
                              countries as well.

                              > The disappearance of the American "middle class" has a lot more to
                              > do with shipping jobs overseas for cheap labour than with any
                              > domestic tax policy or bribery problem. In other words it is
                              > [economic] imperialism that is destroying our own middle class.

                              Such is the leftist party line. Economic data do not appear to
                              support this contention. The median wage in this country has tracked
                              relatively close to inflation for decades. It outpaced inflation a
                              bit from WWII until the early 70's, then inflation outpaced it a bit
                              for a while in the late '70s and early '80s, but then it outpaced
                              inflation again throughout much of the '90s. Where we are now in
                              terms of gross earnings for the average worker is better in real
                              dollar terms than where we were several decades ago. Furthermore,
                              real household income has risen substantially over the same period
                              due to increasing numbers of dual income households. However, there
                              is a stark difference in the amount of taxes paid by the average
                              worker/household. The combined impact of payroll tax, sales taxes,
                              federal, state, and local income taxes, property taxes, and excise
                              taxes hit the average worker at combined rates exceeding 50%. Prior
                              to and shortly after WWII the combined rates were 25% or less.
                              Simultaneously with the tax increases on the middle class, the
                              government has subsidized both the poor and the very rich -- the poor
                              with increasing "free" services, direct and indirect cash payments,
                              and the very rich with corporate welfare and the ability to shut out
                              competition with burdensome red tape that constitutes barrier to
                              market entry.

                              It is an economic fact that taxing something results in less of it,
                              and subsidizing something results in more of it. Quite predictably,
                              we've seen a shrinkage of the middle class. Concurrently we've seen
                              a growth in the numbers of the poor, and in the magnitude (if not raw
                              numbers) of the very rich.

                              Certainly, some middle class folks such as factory workers lose their
                              jobs and become impoverished because it's cheaper to hire someone
                              overseas. On the other hand, our economy seems to keep producing
                              many jobs that replace ones which were lost, on pay scales that are
                              comparable. The key difference between the new jobs and the old ones
                              is that the new ones require increased skills. Most of the folks I
                              hear whining about losing their job to cheaper labor simply don't
                              want to invest the time and money to improve their own skills. In a
                              society which produces rapid technological progress (a very desirable
                              thing, I hope you agree) it is simply not reasonable to expect to go
                              to school, learn a job, and then do that job and be paid well at it
                              until you retire. Yesterday's skills simply aren't as economically
                              valuable as today's skills, whether those skills are found locally or
                              halfway around the world. Once you factor in relative skills, the
                              real results on middle class incomes from "globalization" are
                              miniscule.

                              --Jason Auvenshine
                            • thekoba@aztec.asu.edu
                              ... Actual values of the past can be used to predict expected values of the future (combined with other anticipated factors), and they are the only means by
                              Message 14 of 26 , Jan 12 9:51 PM
                                >Actual values are what you get when the period under consideration is
                                >complete. However, only expected values can be used by real human
                                >beings to make decisions, because it is impossible to know what the
                                >actual values are until after a decision to produce has been made.
                                >It is the decision to invest (or not) and produce (or not) which is
                                >of consequence. The outcome of a particular decision is important
                                >insofar as it may influence expected values for the future.

                                Actual values of the past can be used to predict expected values of
                                the future (combined with other anticipated factors), and they are the
                                only means by which the performance of the economy can be evaluated.
                                Expected values induce investment, but actual values show whether or
                                not surplus value has accrued.

                                >No, of course it doesn't disappear. But if $5000 was required to
                                >induce the investor to invest, and the investment actually returned
                                >$9000, then the value returned to the investor above and beyond what
                                >which was required, "surplus" as most people would define it, was
                                >only $4000.
                                >
                                >"Surplus" is generally recognized as unnecessary, something that
                                >doesn't have to be there to get the desired output.

                                I differ with you on that point. The fact that it all comes back
                                shows it to be surplus. To illustrate this point, consider the
                                same greedy investor, only this time let's make him overly optimistic.
                                He invested $1000 expecting $10,000 to come back, thus meeting his
                                threshold of $5000. But let's say this time he was unjustified,
                                and only $4000 came back. By Jasonian rules, he's lost $1000,
                                but most people would say he made $3000. He may sell out and
                                invest elsewhere, but he still accrued $3000 of surplus value.

                                >You define any return to an investor above the amount originally
                                >invested as "surplus". But to do so assumes a communist system. In
                                >a capitalist system, a return on investment is NOT surplus, because
                                >if the return is not there then the investment won't be made and the
                                >product cannot be produced.
                                >
                                >The same allegation can be made against me -- that I assume a
                                >capitalist system by including returns to capital in the cost of
                                >capital. This is also true, because under communism a return on
                                >investment is ineed "surplus". But I'm not the one who chose to use
                                >a term with implied conclusions like "surplus value" in the first
                                >place. This is also why I proposed the accommodation that "returns
                                >to capital" R be accepted as equivalent to "surplus value" sv[kevin].
                                >
                                >If you'd like to argue the point that one of the _benefits_ of
                                >communism is that under such a system returns to capital are surplus,
                                >that is a reasonable approach and we can have a discussion of that
                                >point. However, to use a term like "surplus value", define it in
                                >such a way as to assume a communist system from the outset, as you
                                >have done, and then presume to have a discussion about the merits of
                                >communism vs. capitalism utilizing this definition of surplus value
                                >is a faulty logical procedure. You have assumed your conclusion that
                                >returns to capital are surplus in your definition of terms, which is
                                >circular reasoning.

                                In the first place, it is Karl Marx who deserves credit for this
                                analysis, not I, though I have the privilege of defending it in this
                                forum. Your use of the term R in the equation is nothing but double-
                                dipping. Sure, the capitalist expects a return, but the return R
                                is not consumed but goes as surplus value to the capitalist. It is
                                this use of the term R to add a cost to the equation which does not
                                in fact exist that is circular reasoning.

                                >To make this more concrete, consider two factories each making
                                >circular plastic parts (wheels for simple toy cars...whatever).
                                >Factory A has a circular mold into which molten plastic is poured and
                                >then the circular pieces are ejected after the plastic has
                                >solidified. Factory B has a circular cutter which cuts out the
                                >circular pieces from solid square sheets of plastic. Of course,
                                >simple geometry dictates that circles do not cut from square sheets
                                >of plastic without also leaving some plastic behind. From the
                                >perspective of Factory A, the plastic left behind by Factory B's
                                >cutting process would seem to be "surplus". After all, Factory A
                                >leaves no such plastic and is able to produce the same circular parts
                                >as Factory B. Yet from the perspective of Factory B, the plastic
                                >left behind is not "surplus" at all -- it is an absolutely necessary
                                >part of Factory B's production process even though it may simply be
                                >discarded as waste once the circular pieces have been produced.
                                >
                                >The manager of Factory A and the manager of Factory B cannot have a
                                >productive discussion about the relative merits of their differing
                                >production processes if they assume from the outset that any plastic
                                >remnants are defined to be "surplus". The two managers need to
                                >discuss matters such as total material input costs, capital costs,
                                >labor costs, energy costs, maintenance costs, etc. in order to
                                >determine which process is really more efficient. Certainly, the
                                >manager of Factory A can cite as a benefit of his process that it
                                >generates no plastic remnants, thus reducing the amount of plastic
                                >required to produce a given number of circular plastic parts to its
                                >absolute minimum. But it may well be that the energy costs of
                                >melting the plastic, and the cleaning/maintenance costs of the molds
                                >incurred by Factory A far exceed the costs of Factory B's process
                                >even when the cost of the discarded plastic is included. The two
                                >managers will never find out which process is superior if the
                                >discussion starts out with the assumption that any plastic left
                                >behind is "surplus" and thus any process which generates them is
                                >definitionally inferior to any process that doesn't generate them.
                                >
                                >I hope you can see how our situation mirrors that of the two factory
                                >managers. To be useful, our discussion must utilize terms which do
                                >not presume a conclusion to our disagreement from the outset.
                                >If "returns to capital" still seems too presumptuous to you, perhaps
                                >the term "value paid to investors beyond their original investment"
                                >is acceptable to you? I'm open to suggestions, but we cannot simply
                                >presume that such value is EITHER surplus OR necessary in our
                                >definition of terms.
                                >
                                >--Jason Auvenshine

                                The analogy of the plastic parts is quite plainly inapplicable. Unlike
                                the plastic of the analogy, the R term is not wasted. It goes back
                                to the investor. As I have told you repeatedly, the cost of the
                                initial investment is covered by the capital over useful life portion
                                of the equation. Anything over and above that is surplus value,
                                regardless of how little or great the threshold needed to induce
                                investment. If it all comes back, it's all gain for the capitalist,
                                wealth obtained without work, hence surplus value.

                                --Kevin Walsh
                              • thekoba@aztec.asu.edu
                                ... That most people prefer to get sex in some other way than rape shows that this is not the case, but those who obtain economic success find class struggle
                                Message 15 of 26 , Jan 13 12:25 AM
                                  >
                                  >--- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                                  >> >> This is entirely true. Nonetheless the benefits or pursuing
                                  >> >aggressive
                                  >> >> class struggle ultimately outweigh the harm that aggression
                                  >causes.
                                  >> >
                                  >> >I do not see convincing evidence of that.
                                  >>
                                  >> That classes succeed in their aims by so doing is proof of that.
                                  >
                                  >It proves no such thing. The fact that rapists succeed in their aims
                                  >by holding a knife to their victim's throat doesn't prove that the
                                  >benefits of doing so outweigh the harm that it causes. Success in
                                  >one's aims is entirely independant from whether or not those aims are
                                  >beneficial or harmful.

                                  That most people prefer to get sex in some other way than rape shows
                                  that this is not the case, but those who obtain economic success find
                                  class struggle useful, and it is backed by at least the threat of force.

                                  >The new owner is bound by a contractual obligation, and in that sense
                                  >is a "contractor for life". Many new homes are built with CC&R's
                                  >that require the owners to keep the property up to rather strict
                                  >aesthetic standards. The principle is the same. In this case, the
                                  >property owners served by the road bought their property with an
                                  >(admittedly implicit) contract with the government that they would
                                  >have access to their property via the road. It is the current
                                  >owner's (government's) responsibility to uphold that contract, and
                                  >insure that it is upheld by any successor owners.
                                  >
                                  >That the existance of such implicit contracts makes unattractive the
                                  >purchase of many if not most existing government roads by entities
                                  >other than those directly benefitting from their existance and upkeep
                                  >is my whole point.
                                  >
                                  >Your objection to private roads boils down to nothing more than an
                                  >assumption that the new property owner can violate at will the
                                  >implicit contract you made with the government when you bought your
                                  >property. Selling single-access roads without the contract would
                                  >amount to a breach by the current owner, which is not what
                                  >Libertarians such as myself advocate.
                                  >
                                  >Thus "privatizing the roads" amounts in practice to transferring both
                                  >ownership and responsibility for most existing roads to entites owned
                                  >by those who benefit from the roads most directly -- those who rely
                                  >on the raod for access to their property. More importantly, it also
                                  >means that the government does not build any new roads.
                                  >
                                  >I always find it curious how fixated people are on the topic of road
                                  >privatization. To my knowledge, no Libertarian ever ran for office
                                  >stating that the first thing he or she planned to do upon being
                                  >elected and assuming office is privatize all of the roads. Private
                                  >roads are indeed implied by libertarian principles, and I am
                                  >confident that the concept is workable. But it's something that
                                  >would be done later rather than sooner. We'd start privatization
                                  >with such obvious targets as the Post Office and Amtrak, move on to
                                  >Social Security, as well as the banking, health care, and insurance
                                  >activities currently engaged in by the government. If we got through
                                  >all of that and were still in office, then maybe roads would be on
                                  >the agenda.

                                  Maintaining contracts as a perpetual condition of property ownership
                                  does in fact transfer only part of the property. Just as the home
                                  owner's association retains part of the property and some control
                                  over it, so would such an agreement for road maintenance. Calling it
                                  private ownership with such severe restrictions would be disingenuous.

                                  >> In fact it is inevitable that military force is used on those who
                                  >> refuse to trade when the [economic] imperialist powers think it
                                  >> worthwhile. You may not approve of it, but it happens every time.
                                  >
                                  >Because the initiation of military force has always been viewed as
                                  >acceptable, particularly by the politicians. That is precisely what
                                  >I am attempting to change.

                                  Lot's of luck, but I doubt you will be able to do so without yourself
                                  engaging in force.

                                  >You missed the forest for the trees. Taxes are both proportional and
                                  >predictable. Bribes are much less predictable -- they depend on the
                                  >daily whim of bureaucrats and politicans rather than a public
                                  >deliberative process like legislation. They are also much less
                                  >proportional -- often a flat "fee" is required to get something done
                                  >regardless of whether your income/investment is large or small.
                                  >
                                  >It is reasonable to invest capital knowing that a certain percentage
                                  >will be confiscated by taxation. You simply figure it as a cost in
                                  >your decision making. It is much less reasonable to do so when
                                  >bribes are required, because you don't know what it will take in
                                  >advance, making it hard to determine whether or not the investment
                                  >will be profitable. Furthermore, it is much more likely that a large
                                  >investment will be profitable than a small one, simply because bribes
                                  >will take a smaller percentage.

                                  Bribes are, in fact, predictable, once you've gotten to know the
                                  country and the bureaucracy, and people do manage to do business and
                                  reap huge profits in such environments.

                                  >The "large petit-bourgeoisie" you speak of are not actually so. When
                                  >and if such people of average means acquire property that is of value
                                  >to the very wealthy/kleptocrats, it is simply taken, perhaps after a
                                  >small (proportional to wealth) bribe is paid by the person who wants
                                  >it. The petit-bourgeoisie "own" what they own only simply because it
                                  >is not of interest to the wealthy and powerful. There is little to
                                  >no upward mobility as a result. As I said, sadly this practice is
                                  >increasingly becoming the case in the first world capitalist
                                  >countries as well.

                                  That is quite simply false. The only block to upward mobility of
                                  the third world petit-bourgeoisie is competition from multinational
                                  capital.

                                  >> The disappearance of the American "middle class" has a lot more to
                                  >> do with shipping jobs overseas for cheap labour than with any
                                  >> domestic tax policy or bribery problem. In other words it is
                                  >> [economic] imperialism that is destroying our own middle class.
                                  >
                                  >Such is the leftist party line. Economic data do not appear to
                                  >support this contention. The median wage in this country has tracked
                                  >relatively close to inflation for decades. It outpaced inflation a
                                  >bit from WWII until the early 70's, then inflation outpaced it a bit
                                  >for a while in the late '70s and early '80s, but then it outpaced
                                  >inflation again throughout much of the '90s. Where we are now in
                                  >terms of gross earnings for the average worker is better in real
                                  >dollar terms than where we were several decades ago. Furthermore,
                                  >real household income has risen substantially over the same period
                                  >due to increasing numbers of dual income households. However, there
                                  >is a stark difference in the amount of taxes paid by the average
                                  >worker/household. The combined impact of payroll tax, sales taxes,
                                  >federal, state, and local income taxes, property taxes, and excise
                                  >taxes hit the average worker at combined rates exceeding 50%. Prior
                                  >to and shortly after WWII the combined rates were 25% or less.
                                  >Simultaneously with the tax increases on the middle class, the
                                  >government has subsidized both the poor and the very rich -- the poor
                                  >with increasing "free" services, direct and indirect cash payments,
                                  >and the very rich with corporate welfare and the ability to shut out
                                  >competition with burdensome red tape that constitutes barrier to
                                  >market entry.
                                  >
                                  >It is an economic fact that taxing something results in less of it,
                                  >and subsidizing something results in more of it. Quite predictably,
                                  >we've seen a shrinkage of the middle class. Concurrently we've seen
                                  >a growth in the numbers of the poor, and in the magnitude (if not raw
                                  >numbers) of the very rich.
                                  >
                                  >Certainly, some middle class folks such as factory workers lose their
                                  >jobs and become impoverished because it's cheaper to hire someone
                                  >overseas. On the other hand, our economy seems to keep producing
                                  >many jobs that replace ones which were lost, on pay scales that are
                                  >comparable. The key difference between the new jobs and the old ones
                                  >is that the new ones require increased skills. Most of the folks I
                                  >hear whining about losing their job to cheaper labor simply don't
                                  >want to invest the time and money to improve their own skills. In a
                                  >society which produces rapid technological progress (a very desirable
                                  >thing, I hope you agree) it is simply not reasonable to expect to go
                                  >to school, learn a job, and then do that job and be paid well at it
                                  >until you retire. Yesterday's skills simply aren't as economically
                                  >valuable as today's skills, whether those skills are found locally or
                                  >halfway around the world. Once you factor in relative skills, the
                                  >real results on middle class incomes from "globalization" are
                                  >miniscule.
                                  >
                                  >--Jason Auvenshine

                                  The facts do not bear out your taxation hypothesis. The upper brackets
                                  of the income tax were reduced substantially 20 years ago. Any "shrinking"
                                  of the middle class since that time can't have been due to overtaxation.
                                  The real difference between old and new jobs is that the new jobs are
                                  parasitical, largely consisting of shuffling papers and herding electrons.
                                  They only manage the wealth of the transnationals, not creating any.
                                  Other new jobs are largely in the low-paid service sector.

                                  --Kevin
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