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Possible LD topic: Should limiting economic inequality be a more important social goal than maximizing economic freedom?
Economics

thethinker
Aug 13, 2007
3 votes
3 debaters
4
3


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3
Limiting Econ Inequality > Maximizing Econ Freedom


henthorn
Aug 14, 2007
2 convinced
Rebuttal
Rebuttal to: thethinker Show

"After we all have enough A we can produce C or D, whichever we are good at"

No; somebody else is already very good at C and D, and has been doing it for a long time and (guess what) is beginning to establish monopoly. Can you compete? Possibly, but it's unlikely.

"by reaching saturation point we can have more happy people"

Only if you ignore my other arguments.

"the demand for labour will go up, and thus the pay will go up"

Only if there is an infinite market can their be an indefinite demand for an increase in labour, and thus wages. Basically then, you need wages to be high enough to allow the market to survive, so the higher labour demand exists. Since the demand for labour cannot exist without the expanding market, and the market cannot expand without more consumers, and consumers are created by increasing wages, which relies on labour demand... Essentially, you have to have an increase in wages before that increase is warranted. Vicious circle time.

"monopoly is discouraged as a part of maximizing economic freedom"

Freedom would imply an unimpeded Darwinian economic system. If you start imposing restrictions to prevent the development of monopolies, then the freedom vanishes entirely. Free, but not free enough to take over everything? Just for a minute there, it sounded like you were saying that you'd like to limit economic freedom because of the potential damage to economic equality...

 
thethinker
Aug 13, 2007
1 convinced
Rebuttal
The poor needs help! The rich will get richier and the poor will get poorer unless we intervene. And having poor people exploited is bad for society. No heathcare, no political and legal representation, and there will be blood spilled with a revolution (as we have seen in Cuba, Russia, and China), and it will usually result in a dictatorship. This does not mean taxing people 20%, rather, it just means making it a societal goal to help the poor and invest in the people.

 
henthorn
Aug 14, 2007
1 convinced
Rebuttal
Rebuttal to: thethinker Show

There is a very dangerous aspect of your argument that you seem to have sidestepped quite nicely; how do you propose to generate further wealth? And, incidentally, why would a greater volume of wealth necessarily be spread over a demographic which would do away with absolute poverty without intervention? I'm willing to bet that these questions answer each other if explored honestly.

The initial question one must ask is this; where does material wealth come from? Well, to gain something, you either gather it from a natural source (primary industry) or you perform a service for others with material wealth (all other forms of industry). One must assume therefore, that all material wealth eventually traces back to those in control of natural resources, since that is the only source of material gain that does not come from another person who already has material wealth. The problem we immediately run into is that natural resources are finite. There will come a time (and I believe we have already reached it) where natural resources are owned and marketed to saturation point, and thus market competition that governs how such resources are used and exchanged hits the maximum amount of material wealth that can be gained from each measure of natural resource. The issue with this, exemplified by rising oil prices, is that the conversion of the value of natural resources into other material wealth by its sale becomes more efficient; thus less oil is being sold for more money. Despite market freedom in this area, there is less product, and more wealth. So the increase in value of the oil has not benefited anyone at all - whilst the material wealth of owning an amount of this natural resource has increased, its utility has not. Clearly then, and increase in the material wealth of a vast number of people has not benefited them, since the material wealth cannot account for utility.

So the source of all material wealth has a saturation point. There will, of course, come a second level of saturation where the market value of a natural resource will outweigh its utility value (eg: oil will become so expensive that the price of petrol will be far beyond the means of most people and driving to work work out at a loss, and therefore become pointless). It's worth noting that this is almost a mirror image of the farming crisis of 1920s America - instead of overproduction making produce worthless, chronic underproduction would make produce impossibly expensive. Interestingly, this issue is possibly most worrying in terms of agriculture, since the produce saturation point is far more imminent that that of power sources or means of transport. Also, the massive corporatisation of world farming means that even fairly minor hiccups in the international economy could spell disaster for entire nations.

One of the central thoughts in my mind when you mention 'economic freedom' and 'economic prosperity through growth' is the bane of the (laughably named) free market system - monopolisation. I've almost certainly dug into this before on convinceme.net, but briefly; where you have competition, you have growth in monopoly. With monopoly comes a complete halt to competition, and thus all the benefits that those who like the idea of economic competition regularly spout (whether they are valid or not is an entirely different matter, and one which would take far too long to go into). Who benefits from privately owned monopoly? Well, only those that own clearly. If you have no market competition, is there a need to innovate, to develop, to improve? Once monopoly is established, no competition can hope to exist, since the means of gaining the resources needed to grow into the monopolised market sector will be fully owned or source-saturated by the monopoly itself. Monopoly then, grown from free economic competition benefits only the owners. From this it is easy to see why state monopoly, run for the benefit of all, at the hand of all (through democratic means) is entirely preferable to privatisation.

A push for economic expansion through economically free means, which ever way you turn, inevitably leads to market stagnation. Not only undesirable, but very very dangerous.

To attack the second problem raised earlier on; why would greater economic wealth mean that the universal level of wealth had risen, and done away with absolute poverty? From looking at the problems encountered by economic freedom and market saturation above, the answer is immediately apparent. It wouldn't. Since the means of procuring all wealth cannot be expanded (natural resources are limited) how else could the push for economic growth be achieved? Well, either through greater gains or greater savings. Almost the only course for greater gains (or savings) to be achieved would be to establish a higher rate of work to wage ratio. So either make workers work harder, or pay them less for the same work. We can disregard the latter immediately; this practice was almost solely responsible for the collapse of the consumer goods industry in the US, since the vast majority of the population were unable to afford what they produced, and overproduction on a huge scale became inevitable. Another 20's style depression is not a good idea.
But what about keeping wages the same, but for more work? The fault here is obvious - there is again a limited number of worker-hours that could be feasibly supported by a company, and indeed by the worker themselves. The truth is that labour is a natural resource in its own right, and has both produce saturation point, and utility-market saturation point.

If we really want a good world to live in, the leaders of great countries need to start thinking outside of the narrow confines which have caused civilisations to rise and fall dramatically over millennia. We have the chance to sustain and grow to the saturation point of necessity, rather than to the point of collapse.

 
rhys
Aug 14, 2007
0 convinced
Rebuttal
Research shows us that peoples level of satisfaction is measured against others.
So If someone is filthy rich, but their neighbor is more filthy rich, he will be less satisfied with his wealth than a woman who lives in Cambodia and is the only woman who owns a sewing machine in her village.
It is all comparative.
Therefore by limiting economic inequality you draw everyone closer together and there is more general satisfaction with financial status. And after all, the reason we have money is to pursue satisfaction.

generally, the people living in a "society where there are a bigger disparity but everyone is in material abundance" would be less satisfied with their lives then those who are all relatively poor by global standers but are equal among their peers, which is what we measure our worth by!


 
henthorn
Aug 14, 2007
0 convinced
Rebuttal
Rebuttal to: thethinker Show

"we can focus on A and B to increase the total amount produced"

Right, but there is a saturation point, both in terms of market and in resources. Eventually, there will be no more natural resources to produce B; then what? If everyone has as much A as they can afford, why increase production?

Also remember that these issues intertwine; if your already selling on a balancing point, or possible overproducing, why employ more people? Profits down, wasted produce up, great idea! You can only sell a certain amount of stuff, therefore will only produce a certain amount of stuff, and employ a certain number of people. There is no limitless marketplace for anything.

Your current argument seems to be 'it's okay that lots of people are poor and will stay poor forever because they'll be so much excess wealth that they'll have more comfortable lives anyway'. Back-to-basics anti-competition argument then...
If you want to make the money from a company, it makes sense to employ workers at the lowest possible wage - thus the lowest quantity on which they can hope to survive (potentially less if labour is that expendable). If production of an essential item (eg, food) reaches a level at which it becomes cheaper, wages would drop in accordance because it makes no sense to keep paying workers more when they can survive on the lower wage, and you can save more money.

Hence, more wealth produced does not mean universal improvement, just more savings for the owners.

"in a rich society where scientific advances are rapid"

As I noted previously, monopoly eliminates the owners need to advance and develop, and thus removes the resources (principally funding) for research to take place. Thus, the natural growth of monopoly brings advancement to a standstill, except that which will perpetuate the prevalence of the owners, who can afford to fund research into areas that sustain their supremacy (replacing natural resources, but only to continue control over the energy market, for example).

 
rhys
Aug 14, 2007
0 convinced
Rebuttal
Rebuttal to: thethinker Show

Erm.... i dont understand you...
The reason people have money, spend money is to better their lives, to increase their personal satisfaction. that is their ultimate goal. i just stated how to reach that...
and you responded with: "We should value life over satisfaction".

how am i not valuing life?

 
henthorn
Aug 23, 2007
0 convinced
Rebuttal
Rebuttal to: thethinker Show

"I am sure it is better if we all had lot of bread and have bread at a saturation point than if we had little or no bread with bread at a nonsaturated production point"

Do you know how the Great Depression of the 20's came about? Overproduction of products with a limited market (especially food) lad to a lowering in the value of producing that item. In order to continue making a living from producing, prices are undercut and overproduction continues until the value of produce is essentially worthless. It is more beneficial to the producers to stop producing.

Yes, in the VERY long run, this is self healing, but if you really believe that lurching from one humanitarian disaster to the next is a prosperous way of living, then you are sorely deluded.

Note that the crisis in farming was not fixed until the AAA was established by Roosevelt, which paid farmers to under-produce until the market value of produce righted itself. Direct interference by the government.

 
+ Add Argument

0
Limiting Econ Inequality < Maximizing Econ Freedom


thethinker
Aug 13, 2007
1 convinced
Rebuttal
Alright people, I probably shouldn't do this but I will do it anyway (if this is against the rule, please tell me and I promise I won't do it again!).

Limiting economic inequality is better done by economic growth, promoted by economic freedom. By generating more wealth we can provide more to people, have more jobs etc. I mean, would you like to live in a society where everyone doesn't have much money, with life expectancy of 30 years, and everyone living in day-to-day poverty, or a society where there are a bigger disparity but everyone is in material abundance, nice streets, good libraries, and superb healthcare? I hope the answer is obvious.

 
thethinker
Aug 14, 2007
1 convinced
Rebuttal
Rebuttal to: henthorn Show

Economic freedom generates more wealth because in economic freedom people can produce what they are good at (If I was good at producing A and you B, then we can focus on A and B to increase the total amount produced).
More wealth means more although some people will have a lot of money, the lives of the pooerer people aren't all that horrible. It means making a society that some lives on $100 a day and others $50 and some others $25 rather than a society where everyone lives on $1 per day.
As of the limits of market and resources, if we have a poor society of course we will run out. However, in a rich society where scientific advances are rapid, there are ways to procduce more resources. With machines, space exploration (ok maybe that's a little crazy), synthetic materials etc, we can find more resources. And if a company needs more labor, the people who are starving would then get a job and not starve any more. That is a better way than the governmental intervation becuase the active exchange encourages effective use of resources.

 
thethinker
Aug 14, 2007
1 convinced
Rebuttal
Rebuttal to: rhys Show

We should value life over satisfaction, and I prefer exploring the bound of human potential than soaking in the bliss that comes with too much price.

Also, people in America won't say "I am unhappy because Bill Gates is richier than me."

 
thethinker
Aug 14, 2007
0 convinced
Rebuttal
Rebuttal to: henthorn Show

Produce more A, we trade. Profit goes up. After we all have enough A we can produce C or D, whichever we are good at. Besides, we are not at a saturation point right now, and by reaching saturation point we can have more happy people, so let's go for it with a free economy.

Yes, they do want to hire at the lowest wage. However, as the economy becomes freer, the economy grows, and the demand for labor will go up, and thus the pay will go up. That is a better way to help people.

Monopoly is not a free economy, and therefore monopoly is discouraged as a part of maximizing economic freedom.


 
thethinker
Aug 14, 2007
0 convinced
Rebuttal
Rebuttal to: henthorn Show

If people are good at C and D, then we will produce E and F. There are always things produce, and there will be useful inventions. With those invention the market will rise, so if the creativity of humanity is infinite (I don't know if it is, but we surely haven't reached the limits) then the market would be infinite (Please excuse my lack of knowledge of the economy if I am wrong.)

I wasn't exactly ignoring your arguments, but I am sure it is better if we all had lot of bread and have bread at a saturation point than if we had little or no bread with bread at a nonsaturated production point.

With freer economy, there will be more avaliable resources (acquired via technology of effiency and possibly space exploration), therefore more people, and more demand. I also think that increasing any point on the vicious cycle can speed it up, and corporate expansion is certainly one way to speed it up.

No, a free economy is not an anarchy. There will still be limits to individual freedom to ensure a greater freedom.

 
thethinker
Aug 14, 2007
0 convinced
Rebuttal
Rebuttal to: thethinker Show

We help the poor more effectively by putting more resources in circulation via econ freedom.

 
thethinker
Aug 14, 2007
0 convinced
Rebuttal
Rebuttal to: rhys Show

Because if everyone was dirt poor and died at 30 people would be satisfied but lifeless, and by maximizing economic freedom we get to save more lives.

No so convincing now that I am arguing the opposing side in the competitive debate.

 


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