Why We Need Capitalist Societies to Develop a Social Conscience

[Sukerkin]

This is a wonderful piece on poverty. It's well written and most illuminating in a couple of places as to why it is that societies that depend upon competition and growth for their wealth also need to have a social conscience or they will sow the roots of their own rot:

http://www.bbc.co.uk/news/magazine-20517171

I feel that this is another aspect of the 'problem with democracy' discourse that TG brought up in his Bread and Circuses thread - http://www.martialtalk.com/forum/showthread.php/106455-‘Bread-and-Circuses’.

The core system of democratic politics and capitalist economics is a good one but it has shown itself to be a two-edged sword if it is not carefully watched and handled.

 

[Steve]

I wholeheartedly agree.

I'm encouraged, however, when I see private enterprise endorsing and encouraging R&D projects that are not strictly for financial gain. I'm also encouraged by organized efforts, such as Buffet's "Giving Pledge" or William H. Gates Sr as he discusses his wealth and the social obligations inherent in it.

http://en.wikipedia.org/wiki/The_Giving_Pledge

 

[billc]

Hmmm...considering that when you look at charitable giving in terms of both money and time, the capitalist leaning United States gives more to charity than other countries, perhaps the countries with centralized control of social services should look at giving more of what they earn to charity. As far as buffet and gates, they start those charities so that they can control their own money and how it is spent vs. giving it to the government in taxes, which they both agree should be higher on the likes of themselves, yet they then shelter in their charitable foundations.

http://www.forbes.com/2008/12/24/america-philanthropy-income-oped-cx_ee_1226eaves.html

The

Comparative Nonprofit Sector Project at the Johns Hopkins Center for Civil Society Studies compiled a ranking of private philanthropy in 36 countries from 1995 to 2002. Based on giving alone, the U.S. comes first, giving 1.85% of GDP, followed by Israel at 1.34% and Canada at 1.17%. But based on volunteerism alone, the Netherlands comes first, followed by Sweden and then the U.S. The more studies you read about motivations for philanthropy, the murkier they become. One fact, though, does stand out: Among developed nations, those with higher taxes and bigger social safety nets tend to have lower rates of giving. In charitable giving as a percentage of GDP, nations with cradle-to-grave welfare systems rank far down the Johns Hopkins list: Sweden 18th, France 21st, Germany 32nd.

When governments suck up more and more tax money from individuals in the form of payroll taxes, and every other fee and tax imaginable, there is less money for those individuals to give to help their fellow man, let alone their own family. Also, when the government takes over all the activities that use to be motivated by love of ones fellow man, through welfare programs, societies stop caring for their neighbors because they figure, I have my money taken by the government to get these things done, I don't need to give anymore to charity.

When a society is wealthy, they take care of the poor much more readily and with much more ease. When the government crushes the citizens with taxes and fees, and lowers the standard of living by killing off economic growth and creativity, the poor suffer more.

 

[Steve]

Hmmm...considering that when you look at charitable giving in terms of both money and time, the capitalist leaning United States gives more to charity than other countries, perhaps the countries with centralized control of social services should look at giving more of what they earn to charity. As far as buffet and gates, they start those charities so that they can control their own money and how it is spent vs. giving it to the government in taxes, which they both agree should be higher on the likes of themselves, yet they then shelter in their charitable foundations.

So, you're using the extremely generous charitable and philanthropic contributions of people like the Gates and Warren Buffet to support your assertion that the USA "gives more to charity than other countries." BUT THEN you criticize them for.... giving generously to charity? Truly, you have a dizzying intellect.

 

[billc]

No, I'm criticizing their call to increase the taxes on other people, especially people who make around 250,00 dollars a year, while they shelter their money from those same taxes in their foundations, and then get to keep control of their money, and get the pat on the back for giving to charity. They want the money and the applause...

Before you praise these guys think about how they cheat the tax system...

http://www.americanthinker.com/2011/09/private_foundations_benefactors_or_malefactors.html

The "Super Committee" charged with deficit reduction should take notice of a tax policy that permits the wealthiest Americans to divert a third of their tax obligations away from the Treasury and to causes of their own choosing. The same system also subsidizes conversion of taxable investment income to tax-free income and removal of billions in investment assets from the reach of estate and gift taxes.
The system at work lies in the intricate body of tax law that subsidizes the creation and perpetuation of so-called "private foundations." Briefly described, these are trusts or similar entities that control hundreds of billions of dollars in investment securities in the form of "endowments." Although they are accorded the status of "charities" under section 501(c) of the Internal Revenue Code, they do not meet any accepted definition of a charity. They do not raise money from the general public, but are instead the creatures of wealthy families and their corporate affiliates. Nor do they actually perform charitable works. Rather, they make discretionary "grants" to actual "operating charities" selected by trustees, as and when they see fit.
As of 2008, private foundations controlled $650 billion, two-thirds of which was made up of investment securities that earned investment income of over $60 billion. No income taxes were paid on these revenues. Neither the assets nor the earnings are subject to death taxes.



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I have no problem with these guys keeping as much money as they can, after paying 15-20 percent in a flat tax, with the first 30-40 grand tax free. My problem lies solely with their pushing to increase the taxes of other people, while they use their power to hide their money from those same taxes...

 

[billc]

If Bill Gates and Warren Buffet stopped demanding higher taxes on other people, while they hide their money from those taxes, and then go on to earn a profit on that hidden money, I would praise them for their charitable giving. In fact, I still do. I just think they are low lifes for trying to get the government to take other peoples money.

More reasons why Gates and Buffet have "foundations," for their money...

It goes without saying that private foundations are huge players in the world's financial markets, as venture capitalists, real estate developers, futures traders, and investors in stocks and bonds. Although discouraged from lobbying, they do in fact lobby prodigiously at all levels of government. But their greatest influence on the national agenda is promoting and funding research, public opinion polls, academic studies, advocacy groups, and other intellectual fodder in support of their pet causes. These activities are designed to "leverage" tax dollars in furtherance of their agendas. The names MacArthur, Pew, Kaiser, Koch, and Ford are the most familiar, but these "persuaders" number in the scores if not hundreds.

The modern system, in summary, works like this. A rich family or corporation creates an endowment to further "charitable" causes selected by the founder, subject only to extremely loose standards of public good. By way of example, the charitable purposes of foundations established by the Buffett family promote abortion rights, education of poor children, nuclear non-proliferation, environmental protection, and human rights. The endowment is donated free of gift tax, and is also removed from the reach of otherwise applicable death taxes. Moreover, the founder receives an immediate deduction from his income taxes for the gift, in effect getting 35% or more of it back from the taxpayers.
The foundation invariably takes this money and invests it. Although foundations do have to pay taxes on so-called "unrelated business income" (UBI), investment earnings are not considered UBI and thus are free from income tax. If, as some politicians argue, lower taxes on capital gains, interest, and dividends constitute a subsidy for the rich, this tax-free universe for foundations is Valhalla itself.

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Buffet isn't such a nice guy after all...according to those who want to soak it to the rich...but he gets to hide his money and get the credit for being "charitable," to the less fortunate...
Read more: http://www.americanthinker.com/2011...benefactors_or_malefactors.html#ixzz2DXNqfzqg
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[Sukerkin]

Those that give to charity at the call of their conscience are to be praised, no doubt.

Even those that give to charity for the tax relief profit they gain from it do some good and I won't knock them for it in the broader context (tho' it is a bit much to expect to be lauded for doing yourself a favour ).

But the real problem is that the system as it is at present results in most of the wealth ascending to the 'top' where much of it stays, becoming economically dead money i.e. it is unproductive in the real economy. That means that you have widespread poverty in countries that are allegedly the richest in the world and that sort of imbalance is what leads to high crime and the 'black economies' that draw most of their sustenance by eating away at the lower underpinnings of the economic machine.

So charity is not to be scorned but it is, I would contend, far from enough to ensure that the society endures at a high level of economic attainment for as long as possible. I would like to see some hard numbers on the amounts needed to maintain and expand infrastructure and ensure that living standards for most do not fall to Third World levels in supposedly First World nations. My instinct is that the patchy coverage of charities is inadequate but it'd be nice to have some solid figures to talk about.

 

[billc]

I'm encouraged, however, when I see private enterprise endorsing and encouraging R&D projects that are not strictly for financial gain.

Do you now see where the "financial gain," actually is?

Once again, I'm not against them paying lower taxes on their hard work and ingenuity. I just think it is wrong for them to try to burden other people with higher taxes, that these people can't avoid by starting "charitable foundations," and so are stuck paying taxes while buffet and gates get praised as wonderful people...

 

[WC_lun]

History can be a great teacher on this subject. At one time we had no safety nets in our society. Those who were in need depended upon charity. It was not nearly enough. This caused a drain on the economy and loss of life. The safety net we now have requires taxes to pay for it. That is just how it is.

The economy in this country has been at its' best when taxes on the rich were very, very, high. While I am not advocating returning to 93% tax rate on the rich, I think it does point out the fallacy that the tax rate on the rich has much of an effect as an economic driver. The middle class however is the driver of the economy. Increase taxes on the middle class, such as what would happen if a compromise is not reached by Jan 1st, and the economy will be negitively effected.

 

[Steve]

Do you now see where the "financial gain," actually is?

Once again, I'm not against them paying lower taxes on their hard work and ingenuity. I just think it is wrong for them to try to burden other people with higher taxes, that these people can't avoid by starting "charitable foundations," and so are stuck paying taxes while buffet and gates get praised as wonderful people...

So, you're now arguing that the rich should pay their fair share? I'm seriously not understanding your point. It sounds like you're taking a position that is diametrically opposed to your typical dogma.

I agree with you that the rich should pay their fair share. I also agree with you that the rich should be encouraged by the government to be innovative and entrepreneurial where it benefits the USA. I don't believe we should be rewarding companies for making money at the expense of the USA, which is often what we do.

This includes reinvesting in American production and manufacturing, reinvesting in American companies which are actually creating jobs in America, and creating charitable and philanthropic programs that support American causes and address American needs.

Unless I'm completely misunderstanding your points, which is possible, I think we agree. I admit that I'm reluctant to say that, because there is a part of me who believes that I am, in fact, completely misunderstanding your points.

 

[James Kovacich]

We as a country do give to other countries more than anyone else. And that proves that our country isn't broke. We have money to give away. The world runs on credit. Nixon must of known that when he started selling bonds to the financial markets. Im not saying that we don't have to many bonds out there, just that we aren't really broke.

How would it affect the world if we just flat stopped giving money and support to other countries? It cost big bucks to be Americans.

Sent from my DROID3 using Tapatalk 2

 

[granfire]

We as a country do give to other countries more than anyone else. And that proves that our country isn't broke. We have money to give away. The world runs on credit. Nixon must of known that when he started selling bonds to the financial markets. Im not saying that we don't have to many bonds out there, just that we aren't really broke.

How would it affect the world if we just flat stopped giving money and support to other countries? It cost big bucks to be Americans.

Sent from my DROID3 using Tapatalk 2

you have read the thingey on how China is gaining influence in Africa, right?

It is a fallacy that giving other countries money burdens the economy.

Now, the other kind of aid, in form of lead and tanks, other countries can very well do without, the payback on those investments is only lucrative for a select few. not to mention one bomb dropped costs probably more than the combined aid for the area.

 

[billc]

The economy in this country has been at its' best when taxes on the rich were very, very, high.

This myth was addressed in another thread. The reason our economy was so successful then is that we didn't have the welfare programs that we have today, (social security had 40 workers paying for every retired person then, now we have 2 workers, and we didnt have medicaid and medicare and the great society damage) and the rest of the world had been ruined by the second world war, with vast numbers of foriegn young men killed during the war. Sooo...we just need to get rid of our social welfare programs, destroy the industries of the rest of the world through massive bombing and warfare, and kill off their workers...and then we can sustain incredibly high tax rates...

As to actually helping people, I heard this writer on the Dennis Miller show today and he looked at Texas, and its low tax low regulation, business freindly policies vs. California with its high taxes, heavy regulations and hostitilty to business policies and how they affect education, poverty rates and taking care of the needy was one aspect also covered...

Let's just say the conservative, capitalist leaning policies come out on top in the helping people department...

Rea​

Note the job growth and poverty rates. It is easier to give to charity when you have a job, and the poverty rate is lower when the economy is actually good, and there are jobs for people to work at...

If anyone is interested in the argument that debunks the high taxes and a good economy argument here is the link...

http://newsbusters.org/blogs/dustin-siggins/2012/11/20/debunking-paul-krugmans-beloved-91-percent-tax-myth#ixzz2CoN3NUvs
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[Sukerkin]

You are missing the point I think, Bill. It is not about charity versus taxation; that would be simple.

The very nature of the operation of the capitalist mode of economics has to adapt or the nations that make use of it will shrivel and die. It cannot just be about siphoning off as much profit as possible for the least amount of effort and the least amount of 'return' to the supporting society - that is the methodology that has gotten us back to Victorian standards of inequality and social dislocation (without the Victorian mores and customs of public works and sense of responsibility).

But how do we affect a change without making things worse still? As in TG's thread, if the truly indolent can vote for Bread and Circuses, what can be put in place to prevent that as well as preventing the exploitation of labour for the enrichment of just a few?

It's an important question because, I assure you, if it's not addressed then, quick or slow, the decline of the West is certain. It's not a matter of partisan politics, it's economic and social survival that is at stake.

 

[Steve]

http://consciouscapitalism.org/

Agreed, and sukerkin, there are movements in that direction. One is called Conscious Capitalism, which intends to blend philanthropy with profit.

Conscious Capitalists are enthusiastic advocates for free markets, entrepreneurship, competition and voluntary trade. They recognize that capitalism thrives in environments that foster property rights, freedom to contract, and the rule of law. And, they are aware that trust, compassion, collaboration, and value-creation are essential elements of healthy, functioning economies.

Another term for pretty much the same thing is "connected capitalism." http://csis.org/event/connected-capitalism-and-opportunities-united-states

Former Coca-Cola CEO and CSIS trustee Neville Isdell spoke at CSIS about “connected capitalism” and the need to bring long-term social responsibility into the corporate bottom line. Amb. Stuart Eizenstat said governments play a key role incentivizing such behavior and establishing a framework that allows connected capitalism to work. Dan Runde, director of the CSIS Project on Prosperity and Development, moderated the discussion.

 

[billc]

To make society work, the amount of government involvement in the economy has to be reduced. The more power the government has, to give gifts to the friends of politicians, the more wealth will be directed to the few, and the poorer the rest of the people will be. Limiting government power, by getting them out of the tax code as much as possible creates a society in which individuals can succeed, and the wealth they create will raise the living standard of everyone in the society. The government needs to be a referee, and not a director of charitable behavior. If people cheat, the government needs to step in, otherwise they shouldn't direct who gets government largess and who doesn't.

On the citizens, the education system needs to be geared to teaching people that the government isn't there to take things from one group of citizens and give it to another group of citizens. That kind of thinking just fuels the politicians to give things away for votes.