The Instigator
wjmelements
Con (against)
Winning
29 Points
The Contender
Mr_smith
Pro (for)
Losing
24 Points

Government should intervene to right the economic wrongs of capitalism.

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Post Voting Period
The voting period for this debate has ended.
after 10 votes the winner is...
wjmelements
Voting Style: Open Point System: 7 Point
Started: 4/11/2009 Category: Politics
Updated: 5 years ago Status: Post Voting Period
Viewed: 6,405 times Debate No: 7797
Debate Rounds (3)
Comments (19)
Votes (10)

 

wjmelements

Con

I negate the above resoultion.

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FORMAT:
Because this debate will revolve around specific points, my opponent will list three 'wrongs' of capitalism that we shall debate specifically and present a case for each. I will in this round present a broad case this round.
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CLARIFICATIONS:
PRO has B.O.P.
This is over economic, rather than social policy.
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1. Government cannot produce wealth unless it owns an industry, and even then that is a monopoly.
2. Capitalism increases wealth for all over time.
3. Income inequality is just.
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Quick definitions:
capitalism- an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth http://dictionary.reference.com...
government- the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states; direction of the affairs of a state, community, etc. http://dictionary.reference.com...
Wealth- all things that have a monetary or exchange value http://dictionary.reference.com...
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1. Government cannot produce wealth....
Wealth is produced through voluntary trades in which the two parties involved benefit. If one of the parties did not benefit, then it would not have voluntarily engaged in this transaction.

During each transaction, more than the party end up benefitting. This is called an externality. When someone agrees to buy a bag of potato chips, the store owner profits directly; however, the gas companies profit because that person drove to make that transaction, the refineries benefit because they refined that gasoline, the scientists who explored for that oil benefit because their oil was used, the company that drilled the oil benefits, the farmer who grew those potatoes benefits, his workers benefit from their wages, the transporter of those potatoes benefits, the factor that made those potatoes into chips benefits, the driver of the truck that brought those chips to the store benefits, etc.
The money involved in that transaction is ultimately divided up between many people, all of which benefit from the transactions that got the bag of chips to the buyer and the buyer to the bag of chips.
So, in theory, all this wealth reinvests back to the various levels of industry to produce more and (if these transactions were profitable to all [they were, otherwise they wouldn't have happened] ) then more material is produced for transaction than before.

So, this individual transaction lead to the production of wealth.
Industries and business are involved in these transactions, not government.
Taxes are not a voluntary transaction. Neither are tolls, duties or tariffs.
The only way government could potentially produce wealth is by nationalizing an industry. In that case, government is a monopoly which controls and rations the wealth among the workers. Wages and prices are not negotiated between the workers and an employer or between the buyer and the seller, but between bureaucrats or politicians. Further, because government industries are a monopoly, there is no competition in the negotiation of price and no alternative choices for the customer.
Ultimately, because government is an object of authority, it forces the trade on society. So, government cannot produce wealth.

2. Capitalism increases everyone's wealth over time.
From the fundamental explanation of free market economics above, one can conclude that it is not one person that is ultimately benefiting, but the whole of society. Wealth is produced with every transaction. Over time, everyone voluntarily involved in the economy grows wealthier.
This has been backed by statistics on many occasions.
Writes economist Thomas Sowell, "The average real income per person in the United States rose by 51%" between 1969 and 1996. He sources the U.S. Cencus Bureau, whose website is: http://www.census.gov...

3. Income Inequality is just, for many reasons:
-What one puts in, one gets out (input leads directly to output)
-Hourly wage is determined by the value of a job
-The more people work, the more money they make
-People who take higher education can earn more
-Entrepreneurs who make more also took initial risks
My opponent is sure to contend this point, and I will go into further detail then.
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I await my opponent's argument.
Mr_smith

Pro

Thanks to my opponent for starting this interesting topic. Hopefully an interesting debate awaits.

I will accept the format my opponent has set forth, despite its strangeness. I will also negate the three points that he has proposed (I'm assuming that the purpose of those points is to negate the resolution, they aren't like anticipations of my points or something like that).

Some definitions and stuff:

I will accept my opponents definitions of capitalism and government

Wealth-All material things produced by labor for the satisfaction of human desires and having exchange value. (http://www.henrygeorge.org...)

Intervene (as a verb, not an intransitive verb)- to involve oneself in a situation, esp. to prevent conflict (http://www.thefreedictionary.com...)

This may sound obvious, but I assume that my opponent advocates a laissez-faire stance towards government and the economy. My attacks will be directed against laissez-faire capitalism then.

Points:

Capitalism strike 1: The natural tendency towards monopoly

One of the pillars of capitalism is competition. Supporters of the free market assert that having competition between many different business's will keep things fair and keep the market honest. However, every competition has a winner. While supporters of the free market enjoy competition, members of the free market do not. It is natural for a business to make every attempt to defeat and destroy the competition. In a purely free market, a few companies will eventually emerge supreme, destroying competition and the merits that come with it. It is also common for these dominant companies to form alliances with each other, known as 'trusts', and use these alliances to dominate the market further.
I will provide some historical examples. Prior to 1890, there were no anti-trust or monopoly law in the United States. As a result, there were plenty of monopolies and trusts. Perhaps the most famous was the Standard Oil Company, notorious for aggressively destroying its competitors, and eventually controlling 88% of all refined oil flows in the United States (http://en.wikipedia.org...). Competition in the oil industry was virtually impossible. What defeated the Standard Oil Company? Government intervention, which broke the company up into 34 different companies. Other monopolies included the Northern Securities Company, American Tobacco company, and national Linseed Oil trust. Even today, companies such as Microsoft have been accused of monopolizing, destroying competition, and simply dominating the markets.
Some natural causes of monopoly are (http://www.pinkmonkey.com...):
1.) Limited natural resources (not everyone can just drill for oil)
2.) Massive capital is required to enter many investments (most people didn't have the money to compete with the standard oil company)
3.) Special technical resources. As long as one group has all the skills, they have all the power
The negative effects of monopoly are many. Monopolies can price gouge (they have total freedom to set the price), they tend to treat their employees very poorly, they typically lead to corruption, and they prevent small start-ups. They are a side effect of the free market, and the government should intervene to prevent and destroy them.

Capitalism strike 2: the inability to deal with recession

This can cover a lot of things, but for the moment, I will focus on one specific aspect: The inability to deal with what is known as a 'general glut'. There are times when consumers will choose to save excessively, possibly to due business failure or lack of demand. This is 'money hoarding'. This results in overproduction, as there is no longer demand to meet the supply. In order to make up for the lack of revenue, there is even more production, creating the 'general glut', when there is an unwanted accumulation of inventories. This leads to recession, as the glut causes unemployment and business losses. The market alone cannot deal with this effectively. Government must intervene in the form of tax cuts and stimulus spending to pump more money into the economy, convincing consumers to spend again.

Capitalism strike 3: inherent inequality of opportunity

This clashes with my opponents third point, so I'll rebut that here. My opponents point about income inequality is that it is just because the people who make more do more important things and work harder. This point would be valid if everyone had the same skills, same education opportunities, and could invest the same amount of money. However, none of these things are true. Not everyone starts the race from the same starting line. Those who are born poor must work considerably harder for equal or sub par wages to those who are born wealthy. Input may lead to output, but some people get more output for less input. Also, not everyone has the same higher education opportunities. Higher education costs heavy tuition, and people who go to poor elementary and high schools may not reach their full potential in reaching high education. Because there is no true equality of opportunity without any government intervention, income inequality isn't justified with laissez-faire capitalism. Income inequality is only justified when everyone starts on the same starting line, and that requires government intervention.

Refutations and stuff:

1. "Government cannot produce wealth"
My opponent asserts that "Wealth is produced through voluntary trades in which the two parties involved benefit." This is false. Wealth is produced through labor. However, even if it was true, my opponent's point would not be. My opponent presumes that government cannot engage is a voluntary transaction. What then, is defense contracting? Last time I checked, the government pays businesses to build their weapons. That's a voluntary transaction. According to my opponent, voluntary transactions produce wealth. Therefore, government can produce wealth. Moreover, since wealth is actually produced by labor, not 'voluntary transactions', it can produce wealth. It just has to do some labor. If the government just started mining for coal one day, it would be producing wealth. And since there are private business's that also mine coal, it would not be a monopoly. Point negated.

2. "Capitalism increases everyone's wealth over time."
This is true if the market is doing well. Capitalism can have the opposite effect if the market is doing poorly. In the event of a recession, capitalism can actually decrease everyone's wealth. The free market doesn't do a very good job of getting itself out of recessions. The results of things like bank failure will hurt everyone especially badly if the banks are not insured by the government (which is government intervention in the economy).

3."Income Inequality is just"
I covered this in my third point

Anyway, that's my opening. I'm sure that I will have plenty to add and clarifications to make later. I look forward to my opponent's response.
Debate Round No. 1
wjmelements

Con

I thank my opponent for his response.
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SUMMARY RESPONSE:
In all cases, government intervention makes things worse than before.
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DEFINITIONS:
I accept my opponent's definitons and offer new ones to clarify parts of my case:
"positive-sum"- When a transaction results in new wealth
"negative-sum"- When a transaction results in less wealth than before
"zero-sum"- When a transaction results in no change of total wealth between both parties
Source: Economic Facts and Fallacies, by Thomas Sowell (Synopsis: http://search.barnesandnoble.com... )
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MONOPOLY:
I would like to call for clarification as to what my opponent considers to be a monopoly before I contend this point.
1. At what pont is a company a monopoly? (please be specific)
2. How do you propose that government intervenes? (there are many ways, and it would be tiresome to debate all)
3. How should the government divide assets between the various new sub-companies?
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RECESSION:
My opponent brings to point market failures.
"The market alone cannot deal with this effectively. Government must intervene in the form of tax cuts and stimulus spending to pump more money into the economy, convincing consumers to spend again."

a. However, market failures are not as harmful to the economy as 'government failure'.

b. Industries that do not produce wealth through voluntary transactions should fall out of a market economy because they are not producing the wealth that capitalism requires to succeed.

c. Recession is a natural part of the business cycle. Businesses change or fall during recessions, and other businesses take their place and fill the void. Recession is the time for businesses to adapt to market change. http://www.referenceforbusiness.com...

d. Often times, government intervention tips a market so that it recedes, through inflation, deflation, regulation, changed taxation, changed minimum wage or other problems. http://recession.org... http://www.wisegeek.com...

e. Recessions end up righting themselves as long as the government does not intervene (as they have throughout history). (32 recession cycles in U.S. history: http://www.nber.org... )
It was government intervention during recession that caused the Great Depression to last so long (Says economist Thomas Sowell: http://www.redding.com... ) Unemployment was low, until the passage of tariffs during this recession lead to the depression (same source).

My opponent proposes that government gives:
a) tax cuts
b) stimulus spending

First, because taxes are a form of government intervention in the economy, a tax cut would be a reduction in government intervention, and would not coincide with my opponent's case.

Finally, stimulus spending is uncapitalistic.
- Government money can either be taxed, printed or borrowed. If printed, it creates another problem (inflation), and if borrowed, debt grows and can be a future problem.
- To give it to consumers will not necessarily lead them to spend it. Most people took their stimulus checks and used them to pay debts or added them to their savings accounts (which diminished in value because of inflation). Taxing and redistributing is zero-sum.
- To make transactions involving the government with the money would lead to negative-sum transactions in which money is spent unnecessarily. Again, in economics, wealth is produced from voluntary trades in which both sides benefit (positive-sum). Unnecessary spending does not create wealth as voluntary spending does, and ultimately the wealth is lost.
- Unnecessary infrastructure projects (as proposed by John Maynard Keynes) not only take land away from private enterprises (further hindering the system), but also create unnecessary transportation routes. Again, if they had been necessary, they would not have been done otherwise. All of such projects are ultimately negative-sum.

CONCLUSION: Spending just to spend makes a depression worse.
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INEQUAL OPPORTUNITY:
"Because there is no true equality of opportunity without any government intervention"
Again, my opponent argues that the government is the solution without explaining what the government would do to solve such a problem. So, I cannot contend yet.
1. Pick an example that can be specifically argued.
2. Show how you propose that government solve this example.
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REFUTATIONS OF MY CASE:
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1. "Wealth is produced through labor"
Labor produces wealth through voluntary transactions. People are hired and they exchange their work for wealth. Ultimately, both sides benefit because the person who hired the worker must have benefitted (or he/she would not have agreed to do so) and the worker benefits because he/she obtains wealth that he/she felt was fair.

However, with government, people do not produce anything that society ultimately needs (other than the justice system and the military, bot necessary transactions of government).
Ultimately though, if the government makes unnecessary courts, it is not producing wealth, because society does not benefit. If the government expands the military to an unnecessary point, society no longer benefits.
It is because of this that government cannot produce wealth and expand as companies can.

"If the government just started mining for coal one day, it would be producing wealth."
Not necessarily. The money it gets to fund this coal industry would ultimately come from money involuntarily taken from taxpayers. The transaction was not voluntary; therefore, it did not produce wealth (the miner makes wealth, but society loses it).
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2. My opponent contends that markets only produce wealth in times of non-recession.
"The free market doesn't do a very good job of getting itself out of recessions"
False. Recessions occur naturally when the market is changing (already sourced). The free market has gotten out of recessions. The United States has gone through 32 recession cycles. http://www.nber.org...

"The results of things like bank failure will hurt everyone especially badly if the banks are not insured by the government"
Actually, government intervention makes the problem worse than it would have been. When banks are insured, they feel that they can lend more money than they actually can. The ultimate result is irresponsibility and then failure.
When government regulates banks, they also feel safer, so they take more risks. When banks take more risks, they can make more failures. The increase in risk that businesses take when they are regulated is called regulatory arbitrage. In regulatory arbitrage, a business treats risks differently because they mistake regulated limits with true economic limits. Regulatory arbitrage leads to more high risk loans, more sub-prime lending, and other unsafe banking practices. http://www.businessinsider.com...
Ultimately, government regulations do more harm than good to banks. Society suffers as a result, as we have seen with the "Sub-prime mortgage crisis".
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3. (see above)
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CONCLUDING THOUGHTS:
While there are problems with capitalism, government operations are incapable of solving them without creating greater problems.
I will leave it as that, and turn it over to my opponent.
Mr_smith

Pro

I thank my opponent for his response.

For the sake of clarity, I must point out a misconception that may form the in minds of voters. I am not here to support 'bailouts'. I do not endorse the government bailouts of car companies, and I am not here to defend them. I don't have to defend every single government intervention that has ever taken place.

Regarding Monopoly:
1.) A monopoly "exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it." (http://en.wikipedia.org...).
2.) Once it has been determined that a monopoly exists, the company should be broken down into a number of smaller companies capable of actively competing with one another. Each company should be independent. Ideally, the sub-companies should be equal, but this is not absolutly necessary. However, the companies should still be equal enough to compete effectively.
3.) Assests (and possibly debts) should be divided propotionally between the sub companies. Of course, a certain degree of practicality should be taken into account. The important thing is that the companies be able to compete on a fairly equal level.

Regarding Recession:

My opponents assertion that "market failures are not as harmful to the economy as 'government failure'." is highly unclear. This is dependent upon the situation and facts at hand. Moreover, the government is not necessarily destined to fail.

My opponents then says "Recession is a natural part of the business cycle." I never said that it isn't. Additionally, simply because recessions are natural does not mean that they are not highly damaging or detrimental. They cause high unemployment rates (as well as loss of income), death of business's that would not have died otherwise, and if they are severe enough, a general loss of lifestyle conditions. Recessions are not necessary to change or adapt the structure of the market either. Plenty of new business's and markets can open up in times of prosperity as well.

He states "Often times, government intervention tips a market so that it recedes, through inflation, deflation, regulation, changed taxation, changed minimum wage or other problems." This statement is not supported by the sources that he cited here. One source (http://www.wisegeek.com...) said nothing. The other said that government must carefully watch the balance of inflation, money supply, etc., and sometimes that balance tips. The article doesn't say that government tips the balance. Even so, many possible government "tips" may occur because of necessary reasons, such as increased taxes (to support a war effort) or a cut in spending (to balance the budget).

My opponent finally says that recessions will always right themselves. This is true. However, it may often take an exceedingly long time. Government intervention can help shorten recessions, and in the long run, the hardships sustained are not worth the wait. Also, we have not had a major depression since WWII (depressions occured much more frequently before it). What has changed? The level of government intervention (http://www.referenceforbusiness.com...).
My opponent cites Thomas Sowell. I must point out that Thomas Sowell's opinion on the depression is a minority opinion (http://en.wikipedia.org...)

My opponent claims that tax cuts are not gov't intervention. I define intervention as 'to involve ones self in'. When the gov't cuts taxes, it involves itself in the state of the nation's economic health, thus intervening in the economy.

My opponent attacks spending. He says that spending money that has been taxed is pointless (zero sum). However, prior to taxation, that money would've been rotting away in people's savings accounts. When the government spends the money, it puts it to some use. Additionally, stimulus money can be borrowed. The deficeits created during a recession can be fixed in times of prosperity. My opponent says that giving people money does not mean that they will spend it. Even if someone uses stimulus to pay debt, that is beneficial, as it encourages future spending (their debt it gone). Moreover, People's spending depends on their income, or their perceived income. If people seem to be getting more money, there is more chance they will spend it. What else is money for but to be spent? Money itself is not wealth, it is a means of attaining wealth.

My opponent is also critical of building unncessary infrastructure. I would like to point out that there is plenty of 'necessary infrastructure' to be built first. There are tons of crumbling roads, sewage systems, and public buildings across the country. Additionally, government can create work without "crowding out" business. Gov't can provide subsidies to business's to hire extra workers for the duration of the recession. This gives people work and allows business's to increase productivity. Also, unnecessary infrastructure doesn't have to hurt private enterprise. We can hire people to install fluorescent lightbulbs in government building (of course, one could argue that that's not 'unncessecary'). Spending gives people jobs, gives people cash to spend, and helps business's get back on their feet, as well as allowing us to make much needed renovations and infrastructure repairs.

Regarding Inequality of Opportunity:

In order to give people of a weaker socioeconomic status a better chance to succeed from a lower starting position, government should make investments in social programs designed to give poorer people the skills to succeed. Heavy investments in education, and help with college tuition, as well as aid with housing and development allow poorer people to focus more on acquiring a steady job and making business investments, rather than having to live from paycheck to paycheck. My opponents point that those who put in the most get the most benefit is not valid without such programs. If I am born to an alcoholic in an inner-city district with very poor schools, I will have to work significantly harder to reach a wealthy status than someone born to an upper-middle class family attending a quality private school.

Other:

My opponent seems to be under the misconception that money is wealth. Money is not wealth (http://www.yesmagazine.org...). If the government takes money out of society, it has technically taken no wealth from society. Additionally, the money taken from society will be used in some way for the benefit of society. The government would not mine coal for fun. It could sell the coal to someone else and make a profit. Moreover, my opponent has not addressed my example of defense contracting, which is one of his 'voluntary transactions'. And government contracts don't just stop at defense. The government can pay people to build its building, sculptures, and roads. All voluntary transactions. My opponents argument is pretty much ground in the idea that taxes can only hurt society. Well, I'd like to point out that the purpose of taxes is to allow government to do something useful for society.

My opponent thinks that just because recessions end, it's okay to sit through them sitting on our hands, watching people get laid off. Just because recessions aren't infinite doesn't mean that the market is good at ending them.

My opponent seems to think that we'd be better off if banks weren't insured. If banks weren't insured, the current crisis would probaly be a Depression. I would like to point out that banks would take plenty of risks even without gov't insurance, as they did before the Great Depression.

For the sake of space, I must stop here. Some of argument in this rebuttal may have been a little disorganized or long-winded. I apologize, as I'm short on time.

Thank you.
Debate Round No. 2
wjmelements

Con

I thank my opponent for this debate.

MONOPOLY:
1) 'Significantly' is a very broad term. We cannot have a subjective government. Should an objective percentage or number be used, a corporation would merely straddle the line between monopoly and non-monopoly.
2&3) Because companies are private property and the property of these companies are private property, the question remains as: who deserves this property? Who is to recieve these new companies?

Ultimately, people will be less likely to effectively compete and more likely to do otherwise when they realize that government will divide up their property the moment they succeed.

All in all for this point, my opponent has not been specific as to how the government would intervene for this for me to effectively contend. I apologize.
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RECESSION:
On government failure:
Government failure is not the collapse of the government but when government intervention causes a market situtation to become worse than it would have been. http://en.wikipedia.org...
My opponent heavily used wikipedia, but did not care to look this up.
Examples of government failure include:
-When government spending replaces voluntary market spending
-Regulatory Arbitrage (already discussed)
-Government regulations that ultimately harm business
And many other problems.

All in all, the attempts of government to influence the market lead to unexpected results, often already discussed.

"Government intervention can help shorten recessions"
This is false, and my opponent has not sourced this.

"What has changed? The level of government intervention"
And technology, the stability of trade, globalization...

"My opponent cites Thomas Sowell. I must point out that Thomas Sowell's opinion on the depression is a minority opinion"
However, Thomas Sowell used facts to back up his thesis as these people do not. 49% is not a significantly small minority anyways. For an education department, one would expect the New Deal supporters to make up more than 51% of the population because of liberal bias. However, because the truth is on Sowell's side, many liberal professors are more likely to admit that the New Deal prolonged the Depression and not vice-versa.

"I define intervention as 'to involve ones self in'"
Indeed, to involve one's self less would be the opposite of the point my opponent is trying to make. Tax cuts are indeed not government intervention, but a reduction of it.

"He says that spending money that has been taxed is pointless (zero sum). "
I didn't say that it was pointless; I said it was zero-sum. Indeed, it is ultimately taking from one and giving to another for doing something that ultimately didn't contribute to society.

"If people seem to be getting more money, there is more chance they will spend it."
This is a purely Keynesian fallacy: When people have money in their hands, they spend it. The actual result during a recession is quite different, as people reduce their spending and save this new money for harder times.

"Money itself is not wealth, it is a means of attaining wealth."
Actually, by your definition: "All material things produced by labor for the satisfaction of human desires and having exchange value"
Money has value because it has exchange value. This silly argument is the basis of much of my opponent's case.

"I would like to point out that there is plenty of 'necessary infrastructure' to be built first. There are tons of crumbling roads, sewage systems, and public buildings across the country."
That's besides the point. What I was criticising was new infrastructure projects: New roads and monorails that are only being built to spend money and will ultimately not be used.

"Gov't can provide subsidies to business's to hire extra workers for the duration of the recession."
And these subsidies come from other people who cut their expenditures to these companies, and the market weakens. The Keynesian alternative would be to print money for this purpose, but that leads to inflationary problems, such as high interest rates, decreased value of savings, and less consumer confidence.

"Spending gives people jobs"
Free market spending does this in the long range of things. Government spending creates temporary jobs for some while weakening the economic strength of the rest.

"helps business's get back on their feet"
With higher interest rates or customers with less confidence, this can only hurt businesses. Taking money from people and giving it back to them later only creates a period of time in which nobody could exchange that wealth (and these transations contribute to the wealth of the whole).

"allowing us to make much needed renovations and infrastructure repairs."
Infrastructure projects most often do not include renovations and repairs, but unnecessary new construction which demolishes needed companies and pays them unjust compensation.
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INEQUALITY
Summary response:
Money allocated to inner-city school districts often does not result in an improved education system but is allocated for different purposes. Further, money dedicated to inner city schools comes from inner city taxpayers, who often have little more money to give into such 'heavy investments' which will ultimately be misused. Further, to increase a college fund in an inner city are would also require a much more substancial tax increase than in more affluent neighborhoods.
One cannot abusively tax the poor for their own befenit.
I remind my opponent that public schooling is a local function.
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"OTHER"
My opponent sources a magazine article criticizing the fact that printing money does not increase the wealth of a nation (that it only inflates the dollar) to claim that money is worthless and that when governmennt tax society, they take no wealth from it. This argument is clearly fallacious, as if government money spent was also worthless and not wealth just because it 'just money'.
In reality, the value of currency is determined by dividing the wealth of the monetary system by the units of currency in circulation. http://www.reciprocalsystem.com...
Again, by my opponent's definition, money is wealth, because it has exchange value in the private sector.

"It could sell the coal to someone else and make a profit"
Government interference in the private sector would ultimately drive private companies out of business and lead to a government monopoly. As an alternative approach to government industry, a government nationalizes an entire industry. This ultimately has the same effect, resulting in a government monopoly with no competition and ultimately no innovation.
Government cannot effectively compete with the private sector at a fair level because it has all the resources of the private sector and public sector and can sell its product much cheaper than any other private sector entity. Should government try to do else, it would have the opposite effect and not produce a profit. Anything that doesn't produce a profit in the private sector ultimately drains wealth from the system, so government has ultimately hindered the economy by trying to make a profit.

As for defense, the transaction is not voluntary because while one group agrees to it, the other (society) must pay for it through involuntary taxation.

It is better to sit on one's hands than to use them to strangle.

My opponent contends that we'd be in depression if bank loans and savings accounts were not insured that we'd be in depression. On the contrary, (as I have argued and my opponent has not contended) when government has less influence in the banking system, there is less regulatory arbitrage which leads to risky decisions that ultimately society must pay for.
------------
I thank my opponent for this debate.
Government intervention in the capitalist system ultimately does more destruction than good, as I have argued.
Vote CON.
Mr_smith

Pro

I thank my opponent for this highly interesting debate. I've find it to be highly interesting.

I think I got a little too specific in my last rebuttal. I'm going to try and be more general here (I ran out of characters on my last rebuttal).

Monopoly:

My opponent's attack on government intervention against monopolies is based on the idea that it is too difficult to decide when a monopoly is officially a monopoly. He says that "We cannot have a subjective government." We can rest assured that before the government splits up a monopoly, there will be plenty of public trials to decide that there is in fact a monopoly. All involved parties, including those affected negatively and positively by the monopoly, are going to have a say in whether the monopoly in question is hurting the market. Resources will be distributed equally among child companies.

My opponent also says that "people will be less likely to effectively compete and more likely to do otherwise when they realize that government will divide up their property the moment they succeed." This statement merely underscores a fundamental flaw of capitalism. If people don't compete, necessary market niches are not filled. If people do compete, we run into monopolies. The free market has no way of fixing this problem.

Recession:

My opponent has has shifted his attack away from infrastructure and has redirected it more towards spending in general. He really has not refuted my point that there is plenty of necessary infrastructure that needs fixing.

My opponent's attack against spending is grounded in the idea that all government spending is "zero-sum", that if we tax and then spend, we have only put the money back where it was. However, the money used for government spending does not necessarily come taxes. The government has the ability to borrow money. The money that has been borrowed can be steadily payed back in times of prosperity, when taxes do not have as negative of an impact on the economy. Moreover, the important thing about money isn't just where it is, but what its doing. When money is sitting in a savings account, it is little of value. When the money raised from taxes is spent, it is put to better use than when the money is simply being saved.

My opponent continues to claim that tax cuts are not a form of gov't involvement. When the gov't cuts taxes, it involves itself with the economic health of the nation.

Another of my opponent's major points is that people will not spend money if they have more money. However, how much people spend is highly dependent on people's incomes and their idea of how well the economy will do. When the government increases peoples incomes and makes people think that things will get better (gives them a placebo, if you will), people will go out and spend more, and things actually will get better. The government can improve the Marginal Propensity to Consume, and in the process, increase the effect of its spending multipliers (http://en.wikipedia.org...).

My opponents attacks my statement that "Money itself is not wealth, it is a means of attaining wealth." Even classical economists, who subscribe to Say's Law (http://en.wikipedia.org...'s_Law) will agree that money itself is not wealth. When my definition refers to things of exchange value, it does not refer to money. Money is a medium of exchange, not something of exchange value.

My opponent also continues to argue that the free-market will save everyone in the long-term. It will, if you're willing to lose your job, your house, your income, and sacrifice your lifestyle. Sometimes, we cannot afford to wait for the long-run scheme of things.

I would like to point out that the great depression was ended by WWII, which was pretty much MASSIVE government spending (http://en.wikipedia.org...).

Inequality:

My opponent's attacks against my points on inequality are grounded in two ideas: Money spent on inner-city social programs must come from inner-city residents and Money spent by the government will ultimately be misused.

My opponent's point that funding for inner-city programs must come from inner-city residents is based on the assumption that we are referring exclusively to the U.S.. He says "I remind my opponent that public schooling is a local function." This is true--in the United States, which uses a federal system. Therefore, since we are not referring exclusively to the U.S., the point is irrelevant. Even if we are to remain within the constraints of the U.S., I must point out that not all residents of one city district will be poor. There will be those within a city with the ability to pay a reasonable share of taxes.

The assertion that money will always be misused is unreasonable and unsourced. My opponent seems to be heavily influenced by the preconceived notion that government is always doomed to fail. Why should government fail any more frequently than business?

Other:

The value of currency today is relative, it not is it fixed. We can change it's relative value by changing the amount of money in the monetary system, but there is no lasting exact or fixed value of money.

My opponent continues to make the "crowding out" argument, that gov't will crowd out private business. As I have said before, government is capable of working with private business. My opponent claims that his is still negative because someone else will have the pay the price. As I have said before, the important thing regarding money isn't just where it is, but also what it's doing. The money derived from taxes may very well be coming out of a savings account where it was doing nothing. Additionally, business's crowd each other out as well. When one business creates wealth, it usually does so at the expense of another business. This is also "crowding out".

Even when banks aren't insured, they will make plenty of risky decisions. There were several instances of risky bank failure prior to the federal insuring of banks, such as the panic of 1907 and the great depression. Government insurance has saved the U.S. much pain and suffering in today's recession.

In conclusion, we cannot trust the free market to help itself. There are many fundamental flaw that the free market cannot solve by itself, and it is the duty of government to fix these flaws.

I thank my opponent for a good debate.

For all the above reasons, vote PRO, and please refrain from vote-bombing, (especially if your name is mongoose, mongeese, whatever)

Thank you
Debate Round No. 3
19 comments have been posted on this debate. Showing 1 through 10 records.
Posted by wjmelements 5 years ago
wjmelements
The Great Depression was a monetary phenomenon.
Posted by Ragnar_Rahl 5 years ago
Ragnar_Rahl
Recession is not merely a natural part of a business cycle. Perhaps naturally there is something similar, but not on the scale of modern recessions, for which government fueled credit expansion is largely responsible.
Posted by Mr_smith 5 years ago
Mr_smith
srry if I offended, but I did feel the need to do some calling out.

But seriously.....
Posted by mongoose 5 years ago
mongoose
Guess who got the conduct point?
Posted by wjmelements 5 years ago
wjmelements
You kind of got called out.
Posted by mongeese 5 years ago
mongeese
"For all the above reasons, vote PRO, and please refrain from vote-bombing, (especially if your name is mongoose, mongeese, whatever)"

I feel somewhat offended by that statement...
Posted by Leftymorgan 5 years ago
Leftymorgan
Governments job is not to get involved in the running of a business or company (GM). They are to make laws and regulations and ensure they are followed. If a company is facing bankruptcy then it needs to happen. They didn't bail me out 10 years ago when I made an unwise business purchase. Free market needs to remain a free market or we are headed towards socialism.
Posted by wjmelements 5 years ago
wjmelements
The economics of government intervention would be neo-keynesian. Look it up.
Posted by toy5auce 5 years ago
toy5auce
mr. smith,
i am interested to hear your real perspective on today's issues to expound even further:

1. What do I think about the direction that we are heading to defeat the recession?
2. Has capitalism set up for this recession?
3. How should the government intervene in this recession?
4. What are your thoughts about how intervention will work in the short run and long run?

thank you!
and great arguments by the way.
Posted by mongoose 5 years ago
mongoose
Hey, I actually read the thing before voting.
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