# Capitalism Exploits the Poor



## Melensdad

Wow, just wow.  Great defense of a great system   Oh, and its backed up with hotlinks to other sources, footnotes, etc.


> *Capitalism Exploits the Poor*
> 
> You have probably heard it said that under capitalism, "the rich get richer while the poor get poorer." This is simply false.
> 
> It was actually a prediction of classical economics that incomes would accrue primarily to the owners of land and capital. In his 2007 book, A Farewell to Alms, economic historian Gregory Clark points out that if you look at real returns to land (rental rates), they have fluctuated but remain virtually unchanged. The same holds true for capital (interest rates). Real wages for unskilled workers, meanwhile, have exploded.
> 
> Sources of mortality have also fallen: infant mortality and maternal mortality are miniscule fractions of what they used to be, and life expectancy has increased radically. It was 24 at the height of the Roman Empire, 30 in Britain at the end of the 15th century, 45 in the United States at the beginning of the 20th century, and it is pushing 80 today.
> 
> Joseph Schumpeter once wrote that capitalist progress does not consist of more silk stockings for the queen of England but of reasonable substitutes for them for poor workers in exchange for progressively less labor. Further, he argued that the key beneficiaries of changes in material standards of living would be the poor at the expense of the rich. Cheap electric lighting was an absolute boon for the very poor, while the very rich could have paid flunkies (or forced slaves, in some cases) to stand around holding torches.[1]
> 
> *Capitalism Is Structurally Racist and Sexist*
> 
> As Walter Block will talk about (video) and as I've written about on Mises.org, this probably isn't the case. Capitalism punishes sexism and racism. Are we playing with a historically stacked deck? I think so. I also believe that there's good evidence that people are inherently tribal, and this manifests itself in racism and sexism.
> 
> I'm also willing to believe that hidden biases are part of our psychological makeup. This reinforces rather than undermines the case for capitalism, however, and it undermines rather than reinforces the case for the state.
> 
> Suppose we take two societies that are equally racist, equally sexist, and alike in every possible respect. Suppose we give free-market capitalism to one society and antimarket statism to the other. I would expect that over time, we will observe less racism and sexism in the capitalist society.
> 
> I also think there is much truth to what Milton Friedman said about politics, commerce, and differences: commerce reduces and harmonizes our differences while politics turns those differences into a source of tension and violence.
> 
> Unsurprisingly, granting a monopoly on force to local police departments and insulating them from the pressures of the market magnifies embedded racist assumptions. Consider the Henry Louis Gates debacle from this past summer. Professor Gates apparently broke into his own home and was arrested after it was established that he was, in fact, legally in his own home.
> 
> I'm willing to believe that Gates wouldn't have been arrested if he had been white, but the essential institutional problem is not the existence of tacit racism or unspoken social assumptions about black and white per se, but the fact that the Cambridge Police Department had a local monopoly on law enforcement. Professor Gates's exit options were limited, and to the degree that he didn't want to actually move out of Cambridge, he didn't have the option of taking his law-enforcement business elsewhere.
> 
> *Capitalism Deadens the Soul*
> 
> Perhaps you have heard a critic wax rhapsodic about the noble virtues of pastoralism or agrarianism and claim that capitalism delivers the goods but at the price of our aesthetic and social inclinations. Doesn't capitalism deaden our souls?
> 
> Deirdre McCloskey says no, and some of my research on Wal-Mart with Charles Courtemanche of the University of North Carolina-Greensboro supports McCloskey's essential criticism. She actually takes this a step further and argues that capitalism makes us better people by allowing us to live longer and by giving us the leisure for artistic pursuits.
> 
> But doesn't capitalism produce all sorts of nasty, degrading stuff like cigarettes, alcohol, pornography, and violent movies and video games? I'm going to digress for a little bit on how to use economics to inform empirical inquiry. A lot of psychological studies argue that sex offenders are avid users of pornography, and conservative social critics seize on this to argue that pornography causes sex crimes. As we all know, correlation is not causation, and we can tell a theoretically plausible story in which pornography is a substitute for sex crimes rather than a contributor.
> 
> "I find the assumption that aesthetic elites should be able to veto others' voluntary choices morally suspect."
> 
> A couple of empirical papers show that increased access to pornography leads to reductions in rape and divorce. I discussed this in a Mises Daily article last year and explored similar themes in an article about violence and video games recently.
> 
> Some of the families of the victims of the 1999 Columbine massacre sued the companies that make and distribute the Doom game series because it was alleged to have influenced the killers. This is an important question, because lives are at stake. If the porn findings are right, then it isn't crazy to think that violent games like Quake and Doom might actually have prevented similar massacres.
> 
> *Capitalism Destroys the Environment*
> 
> My lecture on environmental and resource economics suggests that capitalist institutions (i.e., secure private property rights) protect rather than destroy the environment, but here I will offer some additional links that support my point. First, a couple of pictures are worth a thousand words. Undermining private property rights in Zimbabwe led to environmental degradation. And here's Craig J. Richardson with more on Zimbabwe's experience with "land reform."
> 
> *Capitalism Is Inherently Unstable and Prone to Recessions*
> 
> As the Austrian/Hayekian theory of the business cycle illustrates, this isn't actually the case. On the Mises Institute's YouTube channel and Media page, you can find lectures by Robert Murphy, Douglas French, and Roger Garrison explaining why this objection doesn't hold water. To make a long story short, growth will be sustainable if prices (interest rates in particular) aren't distorted by government intervention.
> 
> *Capitalism Is Prone to Resource Monopoly*
> 
> It isn't, but let's assume that it is. If this were true, it is hardly clear that the solution is to replace a monopoly that is responsive to and constrained by market forces with a different monopoly that isn't and that has guns to boot.
> 
> Be That as It May, Some Things Are "Just Too Important" to Be Left to the Market."
> 
> "Capitalist progress does not consist of more silk stockings for the queen of England but of reasonable substitutes for them for poor workers in exchange for progressively less labor."
> 
> Consider health care, which is the topic du jour and the foremost example of something that is "too important to be left to the market." First, health care is defined and revealed by the market process, and second, we can't know how much is "enough" without prices, profits, and losses. As always, claims like this are exercises in robust political economy: even if we grant the ethical assumption that health care occupies a different moral category than other goods and services, it isn't clear that a government monopoly will do better than a free market.
> 
> My recent experience as a participant in an extended moral economy (as a husband and a father) has brought this into high relief. I'm very sensitive to the limitations of the way health care is delivered in the United States.
> 
> Consider the discrepancy between reality and the logic of regulation. You can pay a price of zero for information from a friend or relative, and you are free to treat your children using folk wisdom and home remedies. However, you aren't allowed to pay a positive price for health care provided by someone who has some expertise but not expertise of the quantity and quality demanded by regulatory and licensing bodies.
> 
> Here again I borrow from Walter Block: it's like a regulation saying you can only buy Armani suits or luxury cars. I don't see why we shouldn't be allowed to have health care Hondas.
> 
> Medical licensing also illustrates what F. A. Hayek called "The Fatal Conceit," albeit here in a morbidly vivid manner. Markets will produce their own regulatory institutions in the form of private certification agencies like the Underwriters' Laboratory and the Good Housekeeping Seal of Approval. Once again, what constitutes "good" medical practice will emerge from the market process.
> 
> Current medical licensing suffers from the presumption that there are objectively correct and universal categories that constitute "health care"; that these can be known and understood by panels of experts; and that these experts can wisely exercise judgment on behalf of everyone else.
> 
> *Well, Capitalism Is Just Ugly*
> 
> According to some, capitalism is neither beautiful nor noble, because it rewards people not for transcendent values, but for materialism. When I discuss my Wal-Mart research with people, I often get a response to the effect of, "Have you ever been to a Wal-Mart?" followed by a recounting of the ugly people, cheap products, and mundane baubles one can find at America's largest retailer.
> 
> There are a lot of good reasons not to shop at Wal-Mart -- it isn't particularly pleasant if you're in a hurry or if you really value excellent service, for example. But the fact that Wal-Mart doesn't serve your particular preferences about the kind of shopping environment you want doesn't make the company "evil" in any meaningful sense. Efficiency aside, I find the assumption that aesthetic elites should be able to veto others' voluntary choices morally suspect.
> 
> *Conclusion*
> 
> The system of voluntary exchange and experimentation based on secure private-property rights -- what we loosely call "capitalism" -- expands rather than restricts our material and nonmaterial opportunities. Substituting elite power for voluntary exchange invites all sorts of epistemological problems and moral disasters. For these reasons, capitalism deserves to be defended.
> 
> This article is based on Professor Carden's lecture "Common Objections to Capitalism," given at the 2009 Mises University Summer Program on July 30, 2009, and available as an MP3 download.
> 
> This originally ran at Mises.org.​


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## SShepherd

you should post this in the political forum, and see what the reaction is..I bet it will be nill


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## Melensdad

SShepherd said:


> you should post this in the political forum, and see what the reaction is..I bet it will be nill



Well as this discusses a form of business and economics I figured it could go here, but the reality is that anyone who agrees or disagrees with this can easily reply to it here.  

I suspect those who disagree with Capitalism because it holds a boot down on the throats of the workers will find that it is simply easier to ignore this thread than to reply to it with any factual information.


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## Wart

SShepherd said:


> you should post this in the political forum, and see what the reaction is..I bet it will be nill



Probably because it's pap and makes as much sense as Glen Beck.


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## SShepherd

Wart said:


> Probably because it's pap and makes as much sense as Glen Beck.


 

so think that capitalism exploits the poor?


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## loboloco

Good post Mel.  You're right, those who disagree will ignore or make unintelligible cheap shots to distract people from the meat of the article.


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## jimbo

The good thing about being a liberal is that you are under no obligation to let facts get in your way.


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## Wart

SShepherd said:


> so think that capitalism exploits the poor?



LOL!

Capitalism exploits _everyone _and _everything!!_

And thats unfair to capitalism which is nothing more than an economic theory.


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## Wart

loboloco said:


> Good post Mel.  You're right, those who disagree will ignore or make unintelligible cheap shots to distract people from the meat of the article.
> 
> 
> 
> jimbo said:
> 
> 
> 
> The good thing about being a liberal is that you are under no obligation to let facts get in your way.
Click to expand...


OOoo, it's implied I'm a liberal ... that hurts so much ... Waaaaaaa!

LMAO!!

Whats next? Gonna call me French? 

And letting facts get in the way? You know if your a Rightie you really have no room to talk. Fact is it was the outright an ongoing refusal to accept facts that drove me away from the Republican party.


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## loboloco

Wart said:


> OOoo, it's implied I'm a liberal ... that hurts so much ... Waaaaaaa!
> 
> LMAO!!
> 
> Whats next? Gonna call me French?
> 
> And letting facts get in the way? You know if your a Rightie you really have no room to talk. Fact is it was the outright an ongoing refusal to accept facts that drove me away from the Republican party.


first, I did not call you liberal.  Second, you have already proven my post.


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## Wart

loboloco said:


> first, I did not call you liberal.  Second, you have already proven my post.



First, never said you called me one.

Second, Nothing like your running away from your own post (which reinforces my beliefs of Righties intestinal fortitude).


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## loboloco

Most people who believe agrarianism is not exploitative of the workers has never studied history.  I can find no example of an agrarian society which was not horribly repressive to the average peasant (worker) and extremely lucrative for the elite.


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## IRIS

does the poor have a choice? why do they let themselves get exploited? though I believe in egalitarianism, in the real world there will always be social inequality. we've had slaves since the beginning of ancient civilizations. I think technology can solve this problem, if we can use more machines and robots, then there is no need for human slave labor. isn't that where we are headed? I watched a video about this, called the _resource based economy_...very interesting vid.


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## waybomb

Holy cow. 




Yup, the Polish, Czechs, Yugoslavs, Hungarians, Russian, Cubans, Venzuelans, Chinese, etc, the poor are/were not exploited. 

Can we have a whacko filter?


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## Melensdad

IRIS said:


> does the poor have a choice?


In fact as long as the government doesn't oppress them then yes they do have a choice.  I'm the son of an immigrant.  My father came here with nothing but clothes, died a multi-millionaire.  His father was also a poor immigrant_ (they came to the USA at different times) _and did well for himself by building a couple small apartment buildings with his own hands. 

Yes, the poor have a choice.  Sadly it is often the government that holds them down with their poverty programs that do nothing but create a system of entitlement slavery.


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## Wart

In these last four experiments, Lammer also found the opposite  effect, where the ‘powerless’ groups (and the illegitimately powerful  one) showed a sort of anti-hypocrisy. They were harsher about their own  transgressions than those of other people’s. Lammers refers to this as  ‘hypercrisy’, from the Greek for ‘too much criticism’.
 You can easily imagine how this combination of hypocrisy and  hypercrisy fuels the gap between the haves and the have-nots in human  societies. The powerful impose their strict standards on other people  while acting with greater abandon themselves. *The powerless follow their  own rules more rigidly, even though they are less willing to impress  those rules on others.*​*Cite. *Quoted section is at the bottom of the article.

Then there is : *5 Scientific Reasons Powerful People Will Always Suck*

Yes, it's on Cracked. Interesting thing about Cracked though. As they have done in this article Cracked mostly supplies links to support their thesis.

Basically, those in the lower classes are not willing to violate their morals to get ahead while those in power will do whatever is needed to retain or gain more power.


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## jpr62902

Wart said:


> In these last four experiments, Lammer also found the opposite effect, where the ‘powerless’ groups (and the illegitimately powerful one) showed a sort of anti-hypocrisy. They were harsher about their own transgressions than those of other people’s. Lammers refers to this as ‘hypercrisy’, from the Greek for ‘too much criticism’.
> You can easily imagine how this combination of hypocrisy and hypercrisy fuels the gap between the haves and the have-nots in human societies. The powerful impose their strict standards on other people while acting with greater abandon themselves. *The powerless follow their own rules more rigidly, even though they are less willing to impress those rules on others.*​*Cite. *Quoted section is at the bottom of the article.
> 
> Then there is : *5 Scientific Reasons Powerful People Will Always Suck*
> 
> Yes, it's on Cracked. Interesting thing about Cracked though. As they have done in this article Cracked mostly supplies links to support their thesis.
> 
> *Basically, those in the lower classes are not willing to violate their morals to get ahead while those in power will do whatever is needed to retain or gain more power*.


 
This summary seems to be mixing conclusions of the studies you cite with your own.


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## CityGirl

I suppose it depends on what kind of "capitalism" is being discussed.
My understanding is that there are several types of capitalism and labeled differently and slightly differing in definition
Oligarchichal, state-guided, big firm and entrepreneurial (https://www.businessgrowthinitiative.org/SiteCollectionDocuments/CIPE%20Economic%20Reform.pdf a good read titled Good Capitalism-Bad Capitalism)

Shaw and Barry list the types as Mercantile, Industrial,Financial and State-Welfare Capitalisms. 
http://teachingbe.blogspot.com/2008/07/5-types-of-capitalism.html

There are a host of other classifications for capitalism and it appears that capitalism is not only an economic system but a philosophical and social system, as well. I think it is far too complex for there to be any absolutes attached to it.

According to Robert Litan, PhD who wrote Good Capitalism-Bad Capitalism:What is a Market Economy and How Can It Deliver?, 

"Entrepreneurial capitalism is the most effective driver of economic growth because it provides opportunities for new firms to innovate and create new markets."

From the little I have read, it looks like there is a good bit of overlap in the forms of capitalism. What I see in our country is more corporatism that seems to be driving out entrepreneural capitalism and the entrepreneurial capitalism that is worthy of being defended, is being bastardized by politicization. 

This quote seems to sum it up best- that _political_ entrepreneurs become wealthy at the taxpayers’ expense and use the power of government to protect that wealth, while _free-market_ entrepreneurs become wealthy only when they successfully meet their customers’ demands. http://www.thenewamerican.com/index...lroads-robber-barons-and-unbridled-capitalism

I'm merely putting out information I have found in order to further discussion. I've had a fairly rudmimentary understanding of capitalism as I suspect is the case for most Americans.


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## Doc

Wart said:
			
		

> Basically, those in the lower classes are not willing to violate their morals to get ahead while those in power will do whatever is needed to retain or gain more power.



Interesting Wart.
But thinking about it, I know plenty of what I would consider middle class who have integrity / morals.  I'm sure their are poor with morals also, but quite a few poor absolutely do not have morals.  The drug pushers on the street, the hold up thugs, the folks who break into cars etc.

I suspect we have the same in the rich folks also, there are those with morals and those without, who have cheated to get where they are.  

I read something one time and I believe it to be true, a successful businessman is one who can craft deals where everyone walks away happy.  No losers.  These are the ones who will get repeat business and more likely to become a success.  You can pull the wool over someones eyes for awhile but your true side eventually shows through.  Don't ya think?


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## CityGirl

Doc said:


> Interesting Wart.
> But thinking about it, I know plenty of what I would consider middle class who have integrity / morals. I'm sure their are poor with morals also, but quite a few poor absolutely do not have morals. The drug pushers on the street, the hold up thugs, the folks who break into cars etc.
> 
> I suspect we have the same in the rich folks also, there are those with morals and those without, who have cheated to get where they are.
> 
> I read something one time and I believe it to be true, a successful businessman is one who can craft deals where everyone walks away happy. No losers. These are the ones who will get repeat business and more likely to become a success. You can pull the wool over someones eyes for awhile but your true side eventually shows through. Don't ya think?


 

Hey Doc, those drug dealers are entrepreneurs, too!


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## Doc

CityGirl said:


> Hey Doc, those drug dealers are entrepreneurs, too!


Very true CG ...that is why I said drug pushers ...the low lifes on the street trying to sell the drug dealers stuff.  While the dealer is most likely rich (until he gets caught, ripped off or killed) the pusher is a user also so he never makes any money, he simply gets his drugs as pay for his work and sells / pushes drugs on others


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