From: Miriam English (miriam@werple.net.au)
Date: Thu Aug 23 2001 - 18:29:22 MDT
At 10:11 AM 23/08/2001 -0400, Dickey, Michael F wrote:
Miriam wrote:
>"Don't they remember why public
>school exists? There is this waving of arms and saying "Leave it to the
>magic of the free market -- that will fix it." But all it will fix is that
>the rich will have less tax to pay and the poor will go without
>education... "
>
>Do you actually think that is what happens? In fact free markets limit the
>wealth someone, such as a CEO could accumulate, mainly because if a company
>pays too much out to a CEO they are necessarily charging more for thier
>product and will be undersold by a competeing company that pays thier CEO
>less. If they pay thier CEO too little, he has no incentive to make sure
>the company excells. In this way the market stabalizes on a value that a
>company places on a good leader. They cant pay them too much, and they cant
>pay them too little.
OK... that is the theory, now look at the practice. If companies worked
upon purely economic lines then this might happen, but what actually
happens is that management always forms cliques where the executives have a
say in how much they are paid. Status and power play a very large part in
such decisions. Many companies feel they have made a great coup if they can
attract a VIP to their corporation... even if they are on the boards of a
dozen other companies. (I don't believe anybody can successfully operate on
the boards of more than a few companies.) This makes for great waste.
Why don't these companies fail and the more efficient ones take over?
Because in reality simple economics doesn't seem to matter much. Marketing
and economies of scale seem to have more effect on profits than whether a
company is good at what it does or not. (Economies of scale don't work
really well in the information age so we may find this changing a little in
future.)
It is great to talk about a theoretically pure and free market... but it
can't exist. We can only have degrees of freedom.
Please note that I am NOT arguing that free markets are a hopelessly lost
cause and we should give up on them -- I actually think they are very
useful, so long as we don't focus entirely on the unattainable, pure,
simple, theoretical version and lose sight of the practicality of the
situation. Companies need to be regulated because they often operate
without regard to human values. Governments, too, need to be regulated to
ensure they don't operate without regard for the people they are meant to
serve. These are simply feedback mechanisms. To remove feedback leads
rapidly to things spiralling out of control, as we have seen so many times
in the past.
>Your objections to free markets are more based on your philosophical
>opposition to it the to factual objections.
No. Mine are practical concerns. I don't start from any philosophical base.
I consider myself a technician. I never was taught the theoretical
philosophies. I read a little of them but was never impressed by any of
them because they all seem to make the same mistakes of losing sight of
practical reality. I start from 3 simple values:
- life is valuable
- intelligence is valuable
- knowledge is valuable
My thoughts are based on practical concerns in trying to further those 3. I
have no allegiance to any philosophy.
I am not opposed to using free markets for what they can give us. I am
opposed to corporations ushering in a new feudal society.
>You often hear in the media and by
>people on the street the phrase "The rich are getting rich and the poor are
>getting poorer" this is not the case. The Rich are getting richer, but the
>poor are as well. Just look at the poverty level in the US right now and
>compare it with the poverty level in the 1950's, and then in the early
>1900's, then to the poor farmers that made up 85% of the population in 1850.
>Everyone lives longer healthier lives. The rich are getting richer, but so
>are the poor. Its just the rich may get richer faster, but the entire
>global standard of living is increasing
I agree almost completely... although next time I see a homeless kid, or a
starving person (rare in Oz) I don't think I shall bother trying to
convince him that he is better off than his ancestors. (I am not being
sarcastic here -- I really do largely agree -- I am just cautioning that it
doesn't apply across the board.)
> and this is directly because of
>capitalistic competition.
No. It is also due to people becoming smarter and well educated, more
tolerant, and healthier. Capitalism has a part to play in that change, but
beware of overstating its contribution.
>If there are people out there who want to be educated, there will be
>companies out there willing to educate them, poor or not. And they could do
>it better, cheaper, and faster.
If that was the case then that is what would happen. So why doesn't it? I
don't have anything against private schooling. I think it would be
wonderful if it became as cheap and accessible as public schooling
currently is.
Capitalism works very well if you are rich. If you are not then you need
other means. The biggest mistake rich classes make is in supposing that
they don't benefit from the poor improving their lot. If poorer people are
helped out of deep poverty with access to wider society then the richer
classes gain more smart minds (the most valuable resource of all), less
disease, less violent crime.
Pulling the plug on public schooling benefits nobody.
Cheers,
- Miriam
---------=---------=---------=---------=---------=---------=------
Q. What is the similarity between an elephant and a grape?
A. They are both purple... except for the elephant.
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