Capitalist Myths

... is that much of the benefits paid are to foreign nationals who "export" the cash and it doesn't then recycle in our economy.

As an aside to this, even living here to work they will live either in "caravan" estates or many will share a single dwelling and thus pay litle council tax per head whilst putting a disproportionate drain on local health and education services. Also they have a tendancy to rape the rivers and hedges of anything edible so don't even contribute to the economy in that way.

That leads on to the fact why are we "importing" labour and paying our own people to live the life of Riley at the tax payers expense.This is the main reason: they can under-cut the indigenous work force as it is not a level playing field, it is the equivalent of other discussions on here about low balling in the profession by sausage factory accounts "sweat shops" . In the short term there is great benefit to a few, in the long run will will all suffer, as is happening, as our youth will not get trained and is why we have 1 million unempoyed young people.

I think Shirley has hit the nail on the head though, it is not the size of the salaries per se that is the problem, it is the fact the people earning them are as much use as a chocolate teapot for the most part!

On returning to the Victorian era, at least we had industry and a rail system that worked, Whilst not advocating a literal return to that era, there are many lessons forgotten from those times that we could do with re-learning.

only human, like the rest of us.

To tackle you're first question. If you follow what has been happening in the world you would have noticed a slight disagreement between the poor and the rich, some more extreme than others. This is due to the colapse of the two main influences, communism and capitalism.If Hitler were to be alive today he would "clean up" and that is somewhat frightening. If you notice none of the politicians have any idea of what to do, they are all stammering. Big change that we are experiencing at present can sometimes bring about astonishing results. The last big change was WW2 where the technological advancements (for the wrong reasons) were quite remarkable. There always has to be a difference between rich and poor otherwise there is no incentive. What we are seeing in the world today is a bit of an equalisation.

Your second question is a lot more difficult to answer. If tax money is spent on beaurocratic, unproductive legislation that stop business with getting on with the job of earning money then the country comes to a standstill (which is where we are now). The more money governments have the more they can't decide what to spend it on. GB was a fine example. He gave child benefits to those who didn't need it. The more tax payers have the more they will try to raise their standard of living which means more jobs less benefits and the country moves on. Obviously tax payers have to contribute to the welfare and well being of our country but when that contribution starts working against that well being then the black market will thrive. Someone somewhere actually did a study and came up with the percentage of earnings that was acceptable to contribute.

... are you going to sit there and take being called "first question" Shirley - lol :oP

This seems a very bold statement. Is there any evidence to back it up? Academia was never very well paid in the UK and look at the advances it has brought us. What motivated the academics? I never heard of Einstein getting mega-rich either. Perhaps non-financial incentives exist.

On top of that, if you are born poor, with very little chance of financial success, what incentive is there?

I have never heard any evidence to support either of the claims you mention, but I have seen studies that show that large inequalities of wealth are bad for society.

The second claim seems to be that of trickle-down economics, which claims that if the rich are not taxed at all (or very little), their wealth will trickle down (by their expenditure) to the poor. It doesn't seem to have a lot of support.

Did anyone else see Ian Hislop's prog on BBC 2 this evening "when bankers were good" It is really worth a viewing or just a read of the "more information" page.  Yes the victorian era and its explosion of financial markets and banking created incredible wealth and therefore huge inequality but many who commanded that wealth showed humanity and realised their responsibility for trying to redress the balance.

I wandered around the occupy london tent city this afternoon and, despite the obvious  diversity in beliefs and agendas there is a central message there, almost like a soft arab spring.  Unfortunately there are still too many of us that spout bile at bankers and the dark side of capitalism whilst making sure we have more than we need and so I don't see much changing.

I am pro-capitalism where the money generated is a representation of something of real value (ie what money was originally devised for) but have become anti-capitalism where its the money itself that is deemed to be of value, almost always to fulfil greed.

So, with regard to Shirley's Q1, I have no problem with anyone or any organisation leaving the UK where their prime motive is the retention of their wealth.  How many times do people on this site advice other accountants to dump clients whose prime motivation is low fees or tax saving.  These are greedy people and I'd rather send them elsewhere.

I feel I should record a rare disagreement with OGA over the "us & them" approach to those who want to do a day's work for more pay than they got last week in their place of origin. It makes no difference to me whether it's someone from Leeds or Lithuania, especially now in a global economy, where money that's taken back to Leeds or Lithuania is likely to recycle at some time or another.  It's our society/governments that have played a big part in creating a potential workforce that believes that certain work is beneath it.

Shirley's Q2:  Why do people feel the need to operate in the black economy?  Those at the bottom end will include people who have no other choice but to accept what they are given "cash in hand" from those at the top end whose motive, again, is personal greed.  Such a system can never benefit society.

has accumulated vast wealth but he might just use it to eradicate Maleria as a human disease in one generation where governments have failed for a century. If his wealth had been distributed more evenly would there have been a collective will to do the same?

Having said that, I accept this is an anomaly and clearly remuneration is out of control. I don't accept the arguments about needing to pay more to get the top talent for a number of reasons:

The argument is always put forward by those to seek to gain.

The same argument is used in the public sector despite the fact that there is not an open market ... just the same group of people moving around.

As Shirley said ... the answer is simple .. if the potential employers show leadership then they could kill the problem over night.

I am not, however, in the least convinced that we should all be equal in some way. There does have to be incentive to work hard and study well. If we all get the same council house then stuff it, I'll do the minimum or more likely work out ways to beat the system. Neither of which is an optimal way to run a country or economy.

@ Chatman ... born poor ... then do something your parents didn't (like go to school, get a job, don't have kids when your are in your teens, don't do drugs and select your friends carefully). Make good choices and that way you might not stay poor.

at apostrofees, OGA.

If it were that easy, we wouldn't have some of the worst social mobility in Europe http://www.equalitytrust.org.uk/why/evidence/social-mobility

This site also explains why inequality is not good for a society http://www.equalitytrust.org.uk/why . I posted it before and no-one said they found any fault with it's studies or findings.

have some of the worst social mobility in Europe.

Most of the other countries are much poorer than the UK but their people manage to come to the UK to do the work that people here are not willing to do!

This is probably true Steve, but I do not see how it refutes the points made by The Equality Trust, including that social mobility is not as easy in the UK as you imply.

Do you mean between different countries Shirley, or between the government of a country and its people?

countries there are rich and poor. The main difference appears to be that the poor are happy being poor because they really don't want the hassle of being rich. However in the UK some of the poor want to be richer without doing too much, so they find the easiest ways of raising their standard of living.

I have friends in Austria who used to live off the land before Euroland pounced. They weren't poor but they didn't have a lot of goodies and were happy. Now with EU saying you can't do this you can't do that they are not happy bunnies and poor. I won't even start on Greece. So Shirley the answer to your question is  - It is the governments (or EU's we are Europeans) attitude towards its population that makes the difference. Prior to GB's era (error) business in general weren't hassled too much and Tax was coming in quite nicely and regularly. Then big surge in tax now coffers bare and not many people happy including the rich..

In countries where there is little difference between rich and poor it is easy to move from being poor to being rich. Where there is a big difference it is much harder. Well dur .. you need more money to make the move.

Put another way ... in a flat country like Holland it is easy to cycle from one town to another. In a hilly country it takes more effort. 

No doubt I am missing the point but it sounds like one of those silly TV surveys e.g. Mortality rates are higher in poorer areas. Shock and outrage. Smoking rates are almost three times as high amongst manual workers than white collar staff. The answers to all things are all out there if you look beyond the Breakfast News headlines!

Propaganda. Whether from the government-controlled media (BBC, Pravda etc) or the government-controlling media (Rupert Murdoch etc), that is where the population get its views. OK, there are some people that think for themselves, but how many have you ever come across?

It is not talking about getting from the bottom to the top; it is about making any upward movement at all.

it says ..  Can children of poor parents become rich?  And concludes that it will be most difficult where the gap to be overcome is largest. That was my 'dur' comment.

As an experiment, I wonder how AWEB scores on the social mobility from. I was brought up on a council estate and was the first in my family to enter further education. I think I have proven it is possible to move from poor to at least comfortable. Anyone else confirm or buck the trend here?

I am no expert, but I think a sample size of one person is considered statistically insignificant, even if it could be confirmed. No-one is saying it is impossible; they are saying it is very unusual.

I have to say that if you believe that a wide gap between the have & have-nots is inevitable, acceptable or even healthy, then you will not "get" this debate. 

It's all too easy to see this just in terms of money but money brings with it power, influence and opportunity on one side and lack of opportunity, vulnerability and a feeling of worthlessness on the other.  So you can get the situation of two people, equally matched in terms of intelligence, intellect and potential, where one is wasted purely because of their financial inequality.  Worse, as has been pointed out before, both can be wasted if the richer is a waste of space anyway.

If you look deep enough at the majority of social ills you will almost always hit inequality as a prime factor. So, is this OK or should we look beyond what Steve regards as obvious for another system or (to start it) ethos?

The Scandanavian countries have been mentioned and I would lump in Japan, as well as all hunter-gather societies and suggest that a common ethos in all these is a feeling of and belief in community.  This is not the flag waving last night of the proms stuff that exists for 5 minutes once a year (twice if there's a wedding) but an inbuilt feeling that the wellbeing of your country, community, or just "fellows" is as "obvious"a requirement as your own wellbeing.

The dark side of Capitalism has accelerated in this country for the past 30 years and, as Marx predicted, it's eating us alive.  His extreme solution, communism, is unworkable but a milder version might work but you have to open people's eyes to what's really going on in their relentless striving for more.

House! You were lucky to live in a house! We used to live in one room, all twenty-six of us, no furniture, 'alf the floor was missing, and we were all 'uddled together in one corner for fear of falling.

... agree with much of what you say, but there are two debates on the labour rate.

Yes there are those who won't take jobs that are "beneath" them, or are too low paid and I agree to a great extent on that, but, there are many skilled trades and professions (accountants included) where it is ludicrous to allow migrant worker to take work from indigenous people just because they don't have the same overheads (cost of living). So twelve Polish bricklayers share a house, claim child benefit can undercut a UK brickie who lives in an identical house but has to met all the running costs himself, not just a twelfth, his family live here so has the higher associated costs, and I fail to see much of that money coming back here other than via China at commercial lending rates!

And the big problem with the "global economy" argument is that inevitably all that happens is a very small minority get richer and richer by driving labour costs down - so we all get dragged down to the base level, rather than hauling everyone up to a more equal better level, you just have to look at Dell as a perfect example.

I think the current health care furore highlights what you are saying about (lack of) community though!

you've been watching John Cleese new video - from the inner workings of an extinct beetle dung no doubt.

When the politicians of EU are calling us Europeans, spending our money like there was no tomorrow, expect us to pay for the financial institutions institutionalised blunders, victims of crime are treated like dirt, human rights are only for criminals, is it little wonder there is not much well being feeling. Sorry Shirley but at least with maggie we had a real feel good factor. I agree OGA, but perhaps that is what the richer want. Then they should take note of what is happening elsewhere in the world.

On a lighter note. Change is on the way big time.

I don't see what else he could have done. She was closing all the mines.

Incidentally, regarding my previous comment about propaganda, that was when the BBC doctored footage to make it look like the miners were charging the police, when it was the other way round. They admitted it later, after the strike had been lost, but of course the propaganda war had been won by then.

I must have missed that. What was it?

Good point. I think the description above the graph is not accurately worded; in an attempt to put it in layman's terms some of  the accuracy has been lost.  Below the graph, in the "sources of data.." section, it says

Social mobility

Correlation between father and son’s income

30-year period data from 8 cohort studies

London School of Economics20

so it is not simply moving from rich to poor as the narrative above suggests.

Wouldn't dream of it; he hasn't been funny for years. it's the same with all these comedians (eg Billy Connolly) ; they get therapy and they're not funny any more. I wonder when Ben Elton had therapy.

we've identified where the capitalist society has gone wrong. I don't share your idea that it all went wrong when Maggie took over, Shirley. I firmly believe that it all went wrong when they kicked her out. I remember watching "undoctered" footage of peolple turning over police cars in the riots of the poll tax. I also firmly believe that if the poll tax had gone through we wouldn't have as much binge drinking and associated problems. Is that the Richard Branson who allegedly ripped off Customs & Excise many years ago? I was privy to lots of money (cash) being taken out of bank accounts during the miners strikes and not being put back 100%. So yes Shirley you're right it is approaching dog eat dog, but has it really changed? One thing is for sure it is going to change and soon.

OGA - I think we are actually on the same track here, my main problem with the "migrant" workers example is that it encourages the racist lobby and risks putting the blame at the door of the migrants rather than the people who send or pull them here with promises of unrealistic wealth.  For genuine employers (in farming for example) and those who have travelled far, under their own volition, to get to their doors it is regularly reported (and has been my experience) that the relationship works well.

The other difficulty with the "migrant" label is that it also happened, and happens, with people from Leeds, Belfast, Glasgow etc etc "coming over here (London) to take our jobs" and we tend to forget that Government & large organisations "export" jobs "up North" to incentive zones and high unemployment areas thus, I suppose, saving the people from being labelled as "migrants".

Where I agree with you, and the people in the tent city, is that globalisation has allowed huge exploitation of millions of people and communities resulting in a wealth gap way above anything we see within our shores.  We buy our computers from companies in the Far East who get their workers to sign non-suicide agreements (the suicide rate being high due to poor working practices) why should that be OK? The  Fair Trade ideal has been spoiled by some operators but is still a great ideal.

Having said all that, it's not new, the UK and other "civilised" countries pretty much invented the exploitation of foreigners hundreds of years ago, it's just nowadays it's difficult to hush it up.

I admired Tony Blair (calm down, calm down). His only mistake was to not get rid of GB when he came to power. Let's face it anyone who has a legal pacifist wife, then goes to war on the flimsiest of evidence (that's only what we were told) has to have passion for his country and the future.

... puts me in mind of what my son said last week, in that the pushishment for attempted suicide was hanging!

I think to blame Maggie is simplistic, I agree with the sale of council housing stock being her biggest and inexcusable error, but the rot had set in long before, and I still believe we had gone through all the pain of shedding the excesses of the previous socialist government and were poised to rebuild things on a sensible footing when TB conned the voters to gain power.

Much of the blame goes to the unions, they are as much to blame for the demise of our industrial base as any, our children might now still have the ability to have a proper apprenticeship if not for them.

Don't forget, the electorate didn't vote Maggie out, and John Major would have been a far better prospect than that which I had foisted on me!.

Now we have come full circle and the current government have to dig us out the mess of another failed socialist tax and spend government.

EDIT

Unfortunately though, as ever, voting in this country involves not voting for the best, but the least worst!

Why's that John?

I disagree Shirley. The media is owned by Rupert Murdoch and the electorate is denied sufficient education to make an informed voting decision. How can it be a democracy when the electorate is denied the means of knowing what they are voting for?

I am expecting a few "if you don't like it then go and live in Russia" type responses. Who knows, I might get some logical ones too.

pay more poll tax than anyone else. He pays vast amounts of tax on the money he earns but doesn't receive any more council services than other folk.

I don't see how the sale of council houses was an error. It doesn't matter if the people are buying or renting they will still be living there. The idea was that children would be able to buy rather than rent so as to bring more people into the Middle/upper class band (i know I'm going to get hung for that one). This would close the gap between rich and poor and actually stop people falling into the poor bracket. Heyho then along comes messrs Major and Lawson to decimate the property market. Then the financial institutions, having lost loadsamoney to 3rd world countries (this time it was western countries) decided to get back what they lost from business. We have never really recovered from that cos hey presto here we are again. Same smelly stuff (unless your Maggie lol Shirley) different day.

@OGA Don't you think making kids go to school and uni instead of letting them leave at 15 (as some of my mates did) to take on a trade is making it more difficult for them?

Would you like to be in RM's shoes right now? We don't actually need to know what we are voting for. The results can be seen PDQ, and don't forget the monarchy can disolve parliament so our democracy is pretty safe. Anyway this time next year we will have another election and another hung government (maybe con/lab) (oh no, I hear Shirley crying).

... John, I agree regarding square pegs and round holes in respect of making kids stay at school - personally I think our whole education system needs an overhaul, we need technical schools majoring on trades with minimal academic work, but at least teach them about the rudiments of the tax system, paye codes, how to read a payslip etc. but in my view the age ranges of schools is not correct. I think too that industry should be encouraged to become more involved in schooling so that school output better meets the requirement of business intake.

There is also too much choice in schooling, if we could encourage decent teachers then children could be guided to the best school for their abilities and not have the shambles we have at present.

The main problem with the sale of council housing stock is that it gave big discounts to the purchasers, which, imao subsequently caused the boom and bust.

Shirley, re coalitions, they have merit, but it also means some policies get enacted that no one voted for as a sop to the minority member in order to get other policies through, and they give the balance of power to those with the smallest number of votes.

I do agree with the "with wealth comes responsibility" ethos that should exist in a mature civilized society, and the Rowntree and Cadbury families showed that well. I would have more truck with Tesco if they built low cost housing and playgrounds etc round their large outlets.

I am just of the opinion people know how better to spend money effectively than governments, and governments role should be making it more attractive and easier for them to do so for the public good. 

... party politics stink! MP's for an area should be respected as a community leader in the area they represent, before the become an MP!

Why on earth would you think that? And which people are you thinking of?

Lawson did the damage in 80's by withdrawing the pooling of miras. This had the effect of raising house prices sharply then of course, surprise surprise they all came tumbling down. However I do agree that we can spend money more wisely than governments.

@Shirley. I go back to my previous post. When tax payers see their hard earned money being frittered away on foreign benefit payments, euro fantasies, feeding and clothing people that shouldn't be here etc. etc. is it little wonder that they want to keep a bit more for themselves?

If the government had a little less money maybe they would have to think about what they spend it on. If they didn't spend it wisely then we kickem out.