View Single Post
Old 11-14-2012, 01:31 AM   #46
joe
College superstar
 
joe's Avatar
 
Join Date: Jan 2007
Posts: 4,599
Default Re: Hey you! Yeah, you, conservative person.

Quote:
Originally Posted by MavsSuperFan
The problem with your ideas of weening us off social welfare, is that a fully capitalist economy without any social safety nets has been tried before.

It resulted in people making pennies a day working them selves 16 hours doing backbreaking labor. It was just 1 step above slavery. Child labor was also common place.

2nd Edit: this meant that under this system these people had almost no shot at improving their lives. This is the reason for welfare programs to give everyone a shot. so that you arent so poor that you have zero chance of improving your circumstances.

The fact that people were poor in the economies you are talking about was not because they lacked welfare, It was because the capital equipment and production levels were still developing. Those people were poor because the number of aggregate consumer goods was much less than the number of people. The only way to fix that problem is to increase the amount of capital equipment and the amount of consumer goods, to the point that we have so many televisions, so many computers, so much food, that the prices come down. That is how you end poverty. There is no short cut.

What those people needed was more STUFF, and higher wages. Well, how do wages rise? Wages rise as capital equipment improves. For instance, imagine life without tractors. You've got 50 guys out there plowing a field with their bare hands. You can't afford to pay these guys much, because they simply just can't produce that much for you with their bare hands. But then the tractor comes along, and now one guy can do the work of 50. Thanks to the tractor, this worker has become much more productive, and the business can now afford to pay him more. His wage rises, and the amount of goods in the economy increases, lowering the price of food in the economy as a whole. As more tractors are built, there will be more food, and the prices will come down even more. Eventually it reaches a point where food becomes so cheap, you don't even need to farm anymore. You can go down to the local grocer and just buy some.. paid for with the money you earn operating a forklift at the local factory.

Meanwhile, instead of having 50 workers plowing a field, you only need to hire one, and that frees up 49 other people to do something else in the economy. Their labor is freed up to be hired by other businesses, which will only add more production and value to the economy. Before the tractor, these workers were all sucked into the farming business. But thanks to the tractor, they can be put to better use somewhere else.

What would happen if you added our version welfare to those developing economies? It wouldn't work. Why? There was simply not enough wealth available to support an entitlement system. The problem wasn't that the rich were hoarding all of the tv's and computers and money, the problem was that those things didn't exist. Even if you took all the money from all the rich people in those days, and divided it evenly among the poor.. they would still be poor. The money and wealth was just not there yet.

Not only would our current welfare system not have helped those people, it would have stagnated the growth of those economies tremendously, maybe even crippled them. In such an undeveloped economy, it's hard enough to afford the capital equipment, pay your workers, and still turn a profit. If we applied the taxes and regulations that we have today on those economies, they probably couldn't have even got off the ground. We'd still be living in the 19th century.

Last edited by joe : 11-14-2012 at 05:21 AM.
joe is offline   Reply With Quote