[ExI] the formerly rich and their larvae...
avantguardian2020 at yahoo.com
Mon Feb 11 01:34:20 UTC 2008
--- Rafal Smigrodzki <rafal.smigrodzki at gmail.com> wrote:
> This is why I do think that "a continuously decreasing fraction of
> population continu[ing] to hold on to a continuously increasing
> fraction of the wealth" is not "capitalism in a nutshell".
Thanks for a cogent analysis of the data rather than simply a political
position. This is precisely the response I was hoping for. In your post
you said that, "Overall, capitalism does maintain segmentation of
economic networks to a much greater extent than other forms of economic
organization." While I would tend to agree in general with this
statement with the caveat of "other forms of economic organization
[attempted to date]." Capitalism might represent a local maximum rather
than a global one.
It seems to me that economies of scale decrease economic segmentation,
in a capitalist system rather than increasing it. There is no way an
entry level competitor could, for example, compete with Walmart in the
retail industry because they lack the sales volume in order to take
advantage of these said economies of scale. This in turn leads to
corporate take-overs and mergers that result in monopolies and other
forms of "wealth condensation".
Given the continuation of current trends, it seems likely that market
forces will in time result in a "winner take all" economic singularity
where no matter what you buy or where you buy it from, your money ends
up in the same "hands". This is far worse than a simple monopoly since
a classical monopoly only applies to a single commodity whereas an
economic singularity is not so restricted.
There may even be a theoretical threshhold of wealth that acts
analogously to an event horizon, where the economic entity in question
cannot spend money without generating a return of some form or other
for itself. For example, Megacorp paying wages to a worker who has no
place to spend his money except for a subsidiary of the Megacorps. Or
Megacorp paying taxes that it recovers through lucrative government
contracts via one of its subsidiaries. That there may be layers upon
layers of subsidiaries and holding companies involved only serves to
obfuscate the fundamental lack of true capitalist competition in such a
So is there truly any difference between such an entity and a communist
regime? Are there any condolences you could offer to the larvae of the
formerly rich that can ameliorate their disappointment at having been
sidelined from the "big game"?
alt email: stuart"AT"ucla.edu
"Life is the sum of all your choices."
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