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donnywithana

Inheritance, Monopoly, Etc

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I'm new to this board, so I don't know if this topic has been discussed, but...:

In order for a objectivist society to function in the best way, it is necessary that merit be the sole basis for advancement and reward. The enemy of such a system would be any way that someone could achieve success without themself earning it, or any way that someone with ability and merit would be hindered in achieving success. Two ways that someone could undermine the structure of the system while operating within the parameters of objectivism, as I understand it, are inheritance and monopoly.

First, inheritance. Case and point: the Bush family. George W. Bush was born to a wealthy family, was grandfathered into Harvard, and now is fabulously successful despite never producing anything of consequence for anyone, ever. A system where a successful and talented parent might produce an inept child who would have an advantage over others to begin with, is the enemy of a meritocracy. The root of this is inheritance of any kind. Any way of gaining power in society, without earning it, is the reason that exploitation has led to the degradation of our system in America. This must be coupled with some uniform education system, which allows the talented, regardless of background, to excell and rise to the top. Thoughts?

The other enemy, as I can identify, is monopoly. In capitalism, the ideal end of an individual more talented than his peers, would be that he could rise to the top of his field. If the less capable competition couldn't survive, it would die, leaving only the best to survive. However, due to economies of scale and the eventual ability to run temporarily at a loss, it would be, and is, possible, once on top, to prevent anyone else from entering one's field. This destroys the concept of a meritocracy, because someone with more talent might not be able to enter the field of his talent, due to the monopolist's ability to lower their prices until the virtuoso can no longer afford to stay in business, then subsequently reraising them. Or, the monopolist could operate at a higher profit margin, and offer lower prices, simply because he benefits from bulk production. The current solution is flawed, in that monopolies are simply illegal, because they limit one's ability to succeed ultimately, based on merit. How is it possible to avoid monopolistic actions while simultaneously giving the best in their field the ability to rise to the top?

The combination of these two enemies leads, almost unavoidably, to exploitation of the disadvantaged. It's not always the incapable who are complaining about their plight, but those not given an equal chance to succeed due to their inability to compete with the wealthy from the very beginning. If I own a chair factory my father started, and you are a poor worker better at chairmaking than me, I still have the ability to predate upon you because you may have less access to the means of production than I do, independent of your superiority. How does one close these loopholes without infringing on the beneficiaries' right to succeed?

Thanks!

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How does one close these loopholes without infringing on the beneficiaries' right to succeed?

Thanks!

They're not loopholes. Inheretence doesn't matter much because if you are unproductive and don't actively work to *add* to your wealth, you will eventually lose it. The market takes care of undeserving descendants.

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In order for a Objectivist society to function in the best way, it is necessary that merit be the sole basis for advancement and reward.

I think it is critical to examine this thought, because it sets the context for the rest.

What do you mean by "the best way"? How do you judge best? By what standard?

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What do you mean by "the best way"? How do you judge best? By what standard?
By the standard of survival of the fittest. If the best do not have the opportunity to succeed, then a meritocracy can not exist.

They're not loopholes. Inheretence doesn't matter much because if you are unproductive and don't actively work to *add* to your wealth, you will eventually lose it. The market takes care of undeserving descendants.

This seems true initially, but further examination is warranted. Say you inherit a factory. You might not be the best at running that factory, but you are in a position of power, because the factory belongs to you. Now let's say I'm a worker starting out with nothing. I am talented and would be better at running the factory than you if I had the opportunity. We live in a world where transportation, communication and location are factors. In a perfectly competitive market, I could find a job where my talents would lead me to the top of the food chain, and would eventually lead to your downfall. However, perfection is in this case compromised by the fact that you're the only factory in town and I can't afford to move elsewhere. If I want to maximize my profit, given my options, I have to work for you. Since you own the factory, you can pay me less than my work may be worth on the open market because you have a quasi-monopoly on jobs in my field that are accessable to me. You can take advantage of my skill and profit from my ability, not your own. Because you didn't put yourself into the position to do this, you have not earned the right to this profit. Thus, a loophole exists. Capitalism relies on everyone doing what's best for them, but it's an incomplete ideology without the addition of "as long as it does not impede anyone else." The only way to achieve capitalistic harmony is with perfect communication and no monopolistic surplus. Since this is next to impossible, we need to work towards creating artificial models of them that would make it possible for workers not to be taken advantage of by their employers.

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In order for a objectivist society to function in the best way, it is necessary that merit be the sole basis for advancement and reward.  The enemy of such a system would be any way that someone could achieve success without themself earning it, or any way that someone with ability and merit would be hindered in achieving success...

Hmm. That's not quite the objectivist ideal society. It'd be more appropriate to say that an ideal objectivist society would be one in which individuals are free to pursue their desires, with the notable restrictions on initiation of force. The enemy of such a system wouldn't be unearned rewards, but unitiated force.

First, inheritance... Any way of gaining power in society, without earning it, is the reason that exploitation has led to the degradation of our system in America.  This must be coupled with some uniform education system, which allows the talented, regardless of background, to excell and rise to the top.  Thoughts?

Yeah, your "system" sounds awfully strict :lol: Nothing'd be (legally) wrong with a person giving their money to a worthless relative in the ideal society. Even if preventing the unworthy from prospering were a valid goal, using force would negate whatever advantage was to be gained.

In capitalism, the ideal end of an individual more talented than his peers, would be that he could rise to the top of his field.

...due to economies of scale and the eventual ability to run temporarily at a loss, it would be, and is, possible, once on top, to prevent anyone else from entering one's field.  This destroys the concept of a meritocracy, because someone with more talent might not be able to enter the field of his talent

...How is it possible to avoid monopolistic actions while simultaneously giving the best in their field the ability to rise to the top?

The simple fact of economies of scale and large amounts of cash don't make entering a field impossible. It might make this "talented" person have to work harder than he wishes, but it's not monopoly. Monopoly only exists when it's impossible for competition, not merely difficult or even highly unlikely.

How does one close these loopholes without infringing on the beneficiaries' right to succeed?

The things you've said may make things difficult for the "talented," but nothing about meritocracy says that the talented should have their disadvantages forced away. Ultimately, it sounds like a bizarro entitlement. :)

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Donnywithana had two main problems, based on the premise: An Objectivist society is a meritocracy.

Problem one: Inheritance conflicts with meritocracy.

Problem two: Monopolies exists in an Objectivist society - wich conflicts with the idea that this society is a meritocracy.

Objectivism proposes a society based on individual rights. Primarily, the political system based on individual rights is concerned not with merit, but with justice.

If all men are rational, this will lead to a meritocracy. But this is secondary, and even merit can be interpreted differently, by different men.

It is important to note that, once someone acquires property, the sole responsibility for dispensing with that property lies with the owner, whether or not the beneficiary has merit. But merit, in this case, is determined by the benefactor - It is not just to force the benefactor to choose to make decisions regarding the distribution of property after death, using someone else's values. This leaves the benefactor free to make decisions as he sees fit; on non-political, non-economic merit, such as the familial value a father places in a son, if he so chooses. This, I believe, addresses your first problem.

Your second problem regarding the monopoly, is based on another the false premise: economic pressure is equivalent to political pressure. In other words, business strategies are tantamount to coercion at gunpoint.

True coercive monopolies exist only by government sanction. The only way a company can use force to expand and control it's market share is with government permission, or through government neglect. In an Objectivist society, coercion is banned from economic activity.

Example: While one person might be disappointed that he can't sell the best chairs at a high price because of a larger companies business tactics, the consumer will still benefit from cheaper chairs. Isn't a company that sells cheap furniture "getting by on it's merits?" Regardless of how you answer this question, nobody's rights are being violated, and people still have the opportunity to buy higher priced chairs of better quality if they want to.

I also suggest reading Objectivist material on the nature of market value. I gave a quick scan of Capitalism: The Unknown Ideal but I couldn't find it. If anyone could find that reference it could be helpful for Donny.

-Edited for punctuation and clarity.

Edited by FeatherFall

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Objectivism proposes a society based on individual rights. Primarily, the political system based on individual rights is concerned not with merit, but with justice.

FeatherFall, that is one impressive post for someone who just joined up. Cuts right to the bad premise at the heart of the matter. The rest of the task at hand is simply dispelling the economic myth that a non-coercive monopoly can be maintained by a man of inferior ability. It can't and any economist worth his salt should be able to clear that one up in a hearbeat.

Any takers?

Edited by Inspector

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Ok, that makes a lot of sense, thank you. The reason behind this post was that I participated in a debate with four Socialist supporters, and I couldn't satisfactorily explain to them why they were incorrect in certain matters (these being the ones I struggled most with). Thanks to everyone who helped clarify this with me!

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I also suggest reading Objectivist material on the nature of market value. I gave a quick scan of Capitalism: The Unknown Ideal but I couldn't find it. If anyone could find that reference it could be helpful for Donny.

FeatherFall, is this what you were looking for?

The free market represents the social application of an objective theory of values. Since values are to be discovered by man's mind, men must be free to discover them-to think, to study, to translate their knowledge into physical form, to offer their products for trade, to judge them, and to choose, be it material goods or ideas, a loaf of bread or a philosophical treatise. Since values are established contextually, every man must judge for himself, in the context of his own knowledge, goals, and interests. Since values are determined by the nature of reality, it is reality that serves as men's ultimate arbiter: if a man's judgment is right, the rewards are his; if it is wrong, he is his only victim.

It is in regard to a free market that the distinction between an intrinsic, subjective, and objective view of values is particularly important to understand. The market value of a product is not an intrinsic value, not a "value in itself" hanging in a vacuum. A free market never loses sight of the question: Of value to whom? And, within the broad field of objectivity, the market value of a product does not reflect its philosophically objective value, but only its socially objective value.

By "philosophically objective," I mean a value estimated from the standpoint of the best possible to man, i.e.., by the criterion of the most rational mind possessing the greatest knowledge, in a given category, in a given period, and in a defined context (nothing can be estimated in an undefined context). For instance, it can be rationally proved that the airplane is objectively of immeasurably greater value to man (to man at his best) than the bicycle—and that the works of Victor Hugo are objectively of immeasurably greater value than true-confession magazines. But if given man's intellectual potential can barely manage to enjoy true confessions, there is no reason why his meager earnings, the product of his effort, should be spent on books he cannot read—or on subsidizing the airplane industry, if his own transportation needs do not extend beyond the range of a bicycle. (Nor is there any reason why the rest of mankind should be held down to the level of his literary taste, his engineering capacity, and his income. Values are not determined by fiat nor by majority vote.)

Just as the number of its adherents is not a proof of an Idea's truth or falsehood, of an art work's merit or demerit, of a product's efficacy or inefficacy—so the free-market value of goods or services does not necessarily represent their philosophically objective value, but only their socially objective value, i.e., the sum of the individual judgments of an the men involved in trade at a given time, the sum of what they valued, each in the context of his own life.

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I'd just like to mention that the term "meritocracy" is an anti-concept used by Egalitarians to equate someone's desert of something with the idea that they have automatically harmed those that failed to deserve it.

The ideal Objectivist system is NOT a "meritocracy" . . . it is laissez-faire Capitalism.

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That is an important thing to consider. One, meritocracy implies a "clear playing field" in all things - something no human agency can guarantee. It is ascribing the power of omnipotence to government, saying that (somehow) the government can "level the playing field" and make everyone start from the same "fair" position.

Who judges what is 'fair' and how a government accounts for all the random obstacles one would encounter in one's life is, of course, up to whichever beurocrat ends up in charge. In the end, its just a fascist dictatorship, not a capitalist economy.

'Meritocracy' is not the goal of any rational system of politics.

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On 9/12/2005 at 8:19 AM, JMeganSnow said:

I'd just like to mention that the term "meritocracy" is an anti-concept used by Egalitarians to equate someone's desert of something with the idea that they have automatically harmed those that failed to deserve it.

 

The ideal Objectivist system is NOT a "meritocracy" . . . it is laissez-faire Capitalism.

 

For reference:

An anti-concept is an unnecessary and rationally unusable term designed to replace and obliterate some legitimate concept. The use of anti-concepts gives the listeners a sense of approximate understanding. But in the realm of cognition, nothing is as bad as the approximate . . . .

One of today’s fashionable anti-concepts is “polarization.” Its meaning is not very clear, except that it is something bad—undesirable, socially destructive, evil—something that would split the country into irreconcilable camps and conflicts. It is used mainly in political issues and serves as a kind of “argument from intimidation”: it replaces a discussion of the merits (the truth or falsehood) of a given idea by the menacing accusation that such an idea would “polarize” the country—which is supposed to make one’s opponents retreat, protesting that they didn’t mean it. Mean—what? . . .

It is doubtful—even in the midst of today’s intellectual decadence—that one could get away with declaring explicitly: “Let us abolish all debate on fundamental principles!” (though some men have tried it). If, however, one declares; “Don’t let us polarize,” and suggests a vague image of warring camps ready to fight (with no mention of the fight’s object), one has a chance to silence the mentally weary. The use of “polarization” as a pejorative term means: the suppression of fundamental principles. Such is the pattern of the function of anti-concepts.

 

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