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What is Going On With The Economy?

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LeoPTY

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And therein lies the real sticking point for socialists: "What right does the factory owner have to concentrate and control so much wealth?"

The answer, very simply, is that his "right" derives from his proven ability to maximize the productivity (and thus pay) of workers, while minimizing the cost of products to consumers, as evidenced by his profits. No other form of economy can claim such a straightforward and effective mechanism for optimizing what the socialists call "the common good."

This is a dangerous mistake. The factory owner derives the right to concentrate and control so much wealth because he made it, not because he maximizes productivity, not because he maximizes pay, not because he minimizes prices and most importantly not because he helps to acheve a "common good".

While all those consequences are true, they are not the basis for his right. To argue so is utilitarianism, a form of pragmatism where whatever "works" is right. Such a moral theory is flawed, how do you determine what "works" means if you depend on it to define what is right, and therefore good?

Objectivism derives the right to property from man's nature and means of survival. The right is not limited in absolute or relative amount. The right to property is merely proper regard for causality. The factory exists because the factory owner made it, that is why it is his.

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What about the critique coming up in the "Too Big to Bail" thread -

That a big problem with the economy is that we have "welfare/socialism for the rich" which has resulted in wealth gravitating to the incompetent.

We should remember that the government doesn't simply interfere in the economy to take from the rich and give to the poor, it also interferes to transfer money from rich to rich, and the people getting the money, while they have political pull, don't necessarily have economic smarts.

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This is a dangerous mistake. The factory owner derives the right to concentrate and control so much wealth because he made it, not because he maximizes productivity, not because he maximizes pay, not because he minimizes prices and most importantly not because he helps to acheve a "common good".

While all those consequences are true, they are not the basis for his right. To argue so is utilitarianism, a form of pragmatism where whatever "works" is right. Such a moral theory is flawed, how do you determine what "works" means if you depend on it to define what is right, and therefore good?

Objectivism derives the right to property from man's nature and means of survival. The right is not limited in absolute or relative amount. The right to property is merely proper regard for causality. The factory exists because the factory owner made it, that is why it is his.

You're right. I fell into the trap. But then, I'm in good company:

Capitalism has created the highest standard of living ever known on earth. The evidence is incontrovertible. The contrast between West and East Berlin is the latest demonstration, like a laboratory experiment for all to see. Yet those who are loudest in proclaiming their desire to eliminate poverty are loudest in denouncing capitalism. Man's well-being is not their goal.

-Ayn Rand, "Theory and Practice," Capitalism: The Unknown Ideal, 136.

Is it capitalism's?

Capitalism...

... is the only system that drew men to unite on a large scale into great countries, and peacefully to cooperate across national boundaries... [why is this "good?"]

... is the system that raised the standard of living of its poorest citizens to heights no collectivist system has ever begun to equal, and no tribal gang can conceive of. [why does the capitalist care about the poor?]

... is the only system that banished ethnicity, and made it possible, in the United States, for men of various, formerly antagonistic nationalities to live together in peace. [why should I care?]

... brought such hope, progress and general good will that the young people of today, who have not seen it, find it hard to believe. [is this an Objectivist speaking?]

-Ayn Rand, "Global Balkanization," The Voice of Reason, 129.

This is a sticking point I have with "pure" Objectivist ideology. (not a show-stopper, by any means, though)

Why does Ayn Rand include these defenses of capitalism if the only relevant argument is the right of property? It is clear that Objectivism, in congress with caring about the individual, cares about the rights and well-being of all individuals. The "rational" part of "rational self-interest" implies that one cares about others' rights, but is that interest based on a rational judgment that the good of others reflects back on your own good? It seems there's a circular flow of understanding in Objectivism that recognizes the value of others to oneself, and by extension, the value of self to others.

It's a conceptual leap that I just can't seem to make.

Edited by agrippa1
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Why does Ayn Rand include these defenses of capitalism if the only relevant argument is the right of property?
Man's rights are most definitely not the only relevant argument for Capitalism. Whether or not Capitalism is practical is an extremely important argument. Edited by softwareNerd
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Man's rights are most definitely not the only relevant argument for Capitalism. Whether or not Capitalism is practical is an extremely important argument.

I would say that whether or not man's rights are practical is an extremely important argument. Capitalism is merely an implementation of man's rights. Those who think that capitalism is impractical, think that rights are impractical.

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