commissioner.org
| Source | Walt Byars |
| Date | 06/04/22/00:33 |
| Some economics students here at USF wrote a laughable rant praising
capitalism on dubious grounds in the student paper. I plan to write a letter to the editor in rebuttal. Tell me what you think and suggest changes if possible. I cant go over 400 words. The original article is here. http://tinyurl.com/s3sdq The letter to the editor on April 20th which defended capitalism made mostly dubious arguments. The authors are basically correct that income differentials under capitalism roughly reflect how much someone's performance appeals to the person(s) who pays them. But is this really good for society? Let's assume that managers who perform well (i.e. increase the firm's profits) do indeed get compensated for their superior performance. This feature of capitalism may give businesses the incentive to produce useful products using minimal resources. On the other hand, it can just as easily give those who produce environmentally damaging goods an incentive to ramp up their output. It may give bosses the incentive to implement fragmented labor processes because team production, even if it's more efficient, helps workers communicate and organize and thus lowers profits. It may also give an incentive to emphasize racial and sexual divisions among workers for this very reason. In economics courses, it is frequently said that technical progress will hurt some workers but benefit society as a whole. Of course, in systems in which one can experience huge changes in income there is an incentive for the "losers" to block the implementation of the welfare enhancing technology. But does capitalism even do a great of rewarding performance differentials? If workers aren't doing piecework, it is difficult to judge the effort of an individual laborer. If multiple people are working on the same project, who is responsible for the problems? As for managers, who monitors them in large corporations owned by thousands or millions of different shareholders? Does any individual owner have an incentive to monitor the bosses or will all of them wait for someone else to do it? The letter claims that workers in the public sector will perform poorly because those who do so aren't paid lower salaries than those who perform well. This argument makes the critical and unjustified assumption that people only will satisfy others if there is money in it for them. This is not really my experience even in the capitalist U.S., and I believe a convincing argument could be made that the institutions of capitalism themselves may socialize people to care more about money than they would otherwise. The letter emphasizes choice, but what about advertising? Does the person who buys Axe Body Spray because of the bombardment of advertisements really make a choice? If you answer yes, then surely you can't think that people choose to see all of the commercial images and peer pressure they are subjected to. The authors also confuse capitalism with free markets. Historically, people didn't choose to work in capitalist firms. However, the force of state frequently eliminated most forms of non-capitalist employment. |
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