The Instigator
goldman
Con (against)
Losing
0 Points
The Contender
Danielle
Pro (for)
Winning
57 Points

Free Market Capitalism

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Post Voting Period
The voting period for this debate has ended.
after 11 votes the winner is...
Danielle
Voting Style: Open Point System: 7 Point
Started: 7/11/2010 Category: Politics
Updated: 6 years ago Status: Post Voting Period
Viewed: 3,024 times Debate No: 12524
Debate Rounds (1)
Comments (13)
Votes (11)

 

goldman

Con

I strongly oppose the free market capitalism. Free market capitalism must be strictly regulated and controlled by the central government. I present two reasons.
Firstly, in the free market capitalism there is a fierce competition among business firms. Managers of those companies are strongly interested in enhancing competitive power in an age of global competition. To attain their purposes they try to reduce wages of their employees as much as possible and transfer manufacturing facilities to low-wage foreign countries. Therefore many workers find it very difficult to lead a comfortable and meaningful life. In the worst cases some of them lose their jobs. Human welfare is seriously damaged. Therefore the government must offer helping hand to help workers stem out of the difficult situation by introducing welfare programs. The government must play an important role to protect human dignity and welfare. Without government intervention free market capitalism would not function properly and would collapse in the long run.
Anti-government movement and social riot erupt. Secondly, many of the central government of the developed countries face a large amount of debt these days. Therefore they do not have sufficient financial resourcies to carry out welfare programs. To overcome this situation the tax increase is urgently needed. People are strongly against it. Therefore the government must explain the reasons for the general public why drastic tax increase is necessary and how and in what fields it is used for. Promoting the collaboration and creating the dialog with the voters are urgently needed for most of the government leaders and policy makers. The government must shoulder a heavy social responsibility to make free market capitalism function more effectively and efficiently than ever before.
Danielle

Pro

Many thanks to my opponent for beginning this debate.

As many of you know, I can and have debated this issue (laissez-faire capitalism) from both sides. I love playing devil's advocate; my real views are probably somewhere scattered about the various debates I've done. Nevertheless, I'd appreciate all bias be put aside and for people to vote based on who performed overall better in the debate. Thanks and let's begin :)

My opponent essentially has a few main arguments:

1. In order to remain competitive (profitable), company management keeps employee wages low

2. It is the government's responsibility to ensure employees have a decent living wage

3. Without government, free market capitalism would fail

4. The government must make sure its citizens know why it should expand and increase taxes

If we look at the first point, it is absolutely true (and a fundamental law of economics) that one way to maximize monetary gains is to spend as little as possible. As such, it makes perfect sense for the CEO of a company to retain as much money as possible for himself. If he is able to do this (by negotiating low wages for his employees), he can invest his profits in other ventures - ventures that give people jobs - jobs that they can do in order to earn a living (monetary wage) that ensures and funds their survival [1].

Further, Con suggests that management "keeps" employees wages low, but how so? If an employee was not willing to work for a certain wage, he could refuse his labor and take a different job - or decide which was the better choice: taking the job, or trying to find his own way to survive.

This seguways nicely into Con's second argument - that it is the government's responsibility to ensure that citizens have a decent living wage. The bare assertion fallacy tells us that we should not accept a statement to be true merely because it says it is true [2]. Why is it the government's responsibility to take on this task? Afterall, the U.S. is still a democratic nation (democratic republic, but still) involved in its government. In other words, we are the government, so who burdened us all with this responsibility? Who is to say that we are not solely responsible for our person?

Moreover, I see no need for the 'government' to burden itself with something that the people can regulate (and regulate better) themselves. For instance, if an employee thinks that the employer's offered wage is too low, then he can negotiate a higher wage or choose a different employer. Because employees are essential to a profitable business, a mutual exchange with both satisfied parties can best determine the most appropriate wage between a group of individuals.

Additionally, if employees are competing for employment, then an employer has the opportunity to hire the most qualified (or desired) employees to suit the needs of the public (customers) a.k.a. $$$. In this scenario, everyone wins. The customers enjoy the product and service so they spend money; the owner of the company profits; he or she is in turn able to compensate the employees for helping to generate profit.

If the government intervenes in this simple process, it can wind up having worse rather than better effects. For instance, suppose the government tries to intervene at the lowest level and demands higher wages for the employees. Considering profit for the owners comes from investment, and investment is possible because of profit, then they are going to have to ensure they still profit enough to invest. In order to do this, they are going to have to charge higher prices for the goods and services they provide. This will have a domino effect that increases the prices of other goods and services in the market. As such, inflation occurs devaluing the newly raised minimum wage established for the employees. The result is a continuous cycle that inflates value and does not reflect a true and pure market [3].

So, let us suppose you want the government to step in at the intermediate level and set a specific price for goods - a.k.a. price ceiling. This has several negative repercussions on the market. First, it fails to allow the owner's to maximize their profts, which limits investment, which limits jobs (labor... for goods... to fuel the market). Second, when a price ceiling is set, a shortage occurs. For the price that the ceiling is set at, there is more demand than there is at the equilibrium price. There is also less supply than there is at the equilibrium price, thus there is more quantity demanded than quantity supplied. An inefficiency occurs since at the price ceiling quantity supplied the marginal benefit exceeds the marginal cost. This inefficiency is equal to the deadweight welfare loss [4]. Worse, a way to recover from this economic loss is for citizens to establish illegal trading on the black market. This just perpetuates crime which is bad for society and tax payers.

As you may have already guessed, having the government intervene at the highest level and put a limit on a company's profit also hurts the market. It stifles competition which in turn does not guarantee the most productive (or best) quality of goods and services. It also interferes with determining the value of human capital. Furthermore, without compeition there is little incentive to improve and be efficient and effective. I will address any comments and criticism as they come up. For now, I'll address the third point: that capitalism would fail without the government. Of course, Con needs to expand on this point in order for me to refute it properly.

Finally, Con mentions that the government must educate their people on why they must be stolen from (in the form of mandated taxes). While I agree that the people have every right to access this information, I'm more concerned as to the forced charity Con advocates on a nation. Nevertheless, that does not have much to do with the resolution: free market capitalism. So, to take a look at Con's burden in this debate, he must expand on why competition is a bad rather than good thing (he said compeition was bad in R1). He must also explain why the government is responsible for human welfare, and how the government can intervene and improve the process. If he fails any of these burdens, he cannot win this debate.

That said, many thanks again to my opponent and good luck!

[1] http://www.econlib.org...
[2] http://en.academic.ru...
[3] http://economics.fundamentalfinance.com...
[4] http://economics.fundamentalfinance.com...
Debate Round No. 1
13 comments have been posted on this debate. Showing 1 through 10 records.
Posted by goldman 6 years ago
goldman
Dear,theLwerd
I thank you for accepting my first debate on the Internet. You have presented a number of questions which i must challenge. The first task is that why competition is bad rather than good thing. My opinion is that competition is not necessarily bad thing in the free market capitalism. Competition must be promoted in the capitalism. It contributes to producing innovative products and technologies and enhancing competitive power of nations. Free competition is a core element of free market capitalism. However, if competition goes to extrems, a number of companies which have supreme competitive power in core areas like production , sales and technology dominate the market. They set price and production level among big companies. Cartel and trust are formed. This situation disrupts market mechanism and free competition. Therefore, the government must intervene in the market to remedy the defects in the market. The government try to establish the rules of the game. For example, anti-trust legislation plays an important role to omprove the situation. The second task is that why the government is responsible for human welfare. With the development of globalization and spreading the idea of neo-liberalism government and political leaders have become interrested in stregthening competitive power of their economies. From competition of ideology to that of economic power has emerged. Therefore they tend to pay less attention to the people who are suffering from loss of job caused by the globalization of economy. However, if they do not turn their eyes to the serious situation of the people, they will lose support from among them in the election. Therefore, they must pay attention to human welfare seriously. Political leaders must keep in mind that government of the people, by the people , for the people have the highest value in the free capitalist society. I wonder if my arguments can meet your expectations. So I want to invite your comments. Good luck.
Posted by gusgusthegreat 6 years ago
gusgusthegreat
Paradigm_Lost, yeah, I think there is. I'm pretty sure you re-select the options you'd like in the vote box and recast your vote.
Posted by PARADIGM_L0ST 6 years ago
PARADIGM_L0ST
Lwerd, I meant to vote for you but f*cked up (you destroyed him)... I frantically tried to hit the back button but it was too late.

This goes for anyone who knows: Is there anyway to retract your vote and start over?
Posted by Rob1Billion 6 years ago
Rob1Billion
Yeah. Con.
Posted by Rob1Billion 6 years ago
Rob1Billion
I'll go pro then.
Posted by Danielle 6 years ago
Danielle
Yes, I'd like to debate both sides :)
Posted by Rob1Billion 6 years ago
Rob1Billion
Lwerd would you like to debate me in capitalism soon? Either side.
Posted by ProHobo 6 years ago
ProHobo
Goldman,

While I disagree with you, I also believe your arguments were weak and based on assumptions and ideology, rather than fact.

Your first argument is very weak and assumes that business TRY to reduce wages as much as possible. The problem is that they are not trying to reduce wages, but rather increase productivity. This comes in all forms, however for companies to compete they OVER pay the current rate to get the best and brightest and try to cut the pay of the "unskilled labor" or contract it out.

The point you are trying to make focus on "unskilled" labor only. The reason for this is "productivity" value. Companies measure production cost, part of that is unskilled labor.

In order for you to buy the $6 dollar shirt at Wal-mart, that shirt is made in a nation in which $5 a day is the standard of living in that particular country. While it seems very low to us (and is), in their nation their cost of living is so much lower. But in that nation a cell phone may cost $20, a new car $3000, dinner $1, etc.

I am not defending lower pay, political systems, or ideology. What I am trying to explain is that productivity and "unskilled" labor costs are a function of manufacturing. When we are talking about "skilled" labor and professionals, the exact opposite is true as companies pay to get the best and brightest.

Usually, when I hear blank generalized statements like "I strongly oppose the free market capitalism!" – they usually don't fully understand what they are saying and usually make sweeping generalizations.

Additionally, it does come off a little hypocritical as well – since we are a consumer nation, which means credit, low prices, and freedom of choice - are paramount. None of it we would be able to afford if we had central government planning. I bet you are wearing something made in China, obviously are using a computer (with parts made overseas), have the freedom to choose what to eat, buy, wear, etc. - hypocrisy reigns supreme in this
Posted by Pirate 6 years ago
Pirate
Maybe you could have won if you had mentionned environemental impact of capitalism. With free-market capitalism, companies go for maxed-out productiveness to increase profit. They also advertise to make people buy their items. People end up buying many objects they did not want in the first place.

As you probably know, and as kids my age don't seem to, objects don't appear by magic in supermarkets. They are first produced in mass, using the cheapest possible means to maximize profit, generating tons of CO2, chimical dejects which are then sent into rivers or sea. That's just one part. Then they transport it in trucks, by airplane or in boats, which burn a lot of fuel. Then you can buy your shiny MP3, television, or cellphone.

And the worse of all, is the profit will be used for nothing, only for one human's "happiness", the person ends up realizing that money is useless, and that he was destroying the landscapes for some years of joy. For one person.

Just saying.
Posted by Danielle 6 years ago
Danielle
Omg I had no idea that this was a one round debate lol...
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