Capitalist Exploitation or Interest? | The Libertarian Institute \ stacker news ~econ

pull down to refresh

Capitalist Exploitation or Interest? | The Libertarian Institute libertarianinstitute.org/articles/tgif-exploitation-or-interest/?mc_cid=9b69742912

345 sats \ 2 comments \ @Undisciplined 7 Jan econ

Sheldon Richman discusses libertarianism and capitalism.

"What looks to the unschooled like exploitation, is not exploitation at all. The workers and landowner must have found the exchange worthwhile or they would not have agreed to it. If the capitalist’s vision of the future is wrong and consumers don’t like the final product or the asking price, the capitalist is out of luck. He suffers losses. He can’t get a refund from the workers and landowners."

Eugen Bohm-Bawerk:

The completely just proposition that the worker is to receive the entire value of his product can be reasonably interpreted to mean either that he is to receive the full present value of his product now or that he is to get the entire future value in the future. But … the socialists interpret it to mean that the worker is to receive the entire future value of his product now.

view all related items

38 sats \ 1 reply \ @SimpleStacker 7 Jan

Rothbard:

An individual or a group of individuals acting jointly can…, at present, offer to pay money to the owners of land and labor, thus buying the services of their factors. The factors then work and produce the product, which, under the terms of their agreement, belongs to the new class of product-owners. These product-owners have purchased the services of the land and labor factors as the latter have been contributing to production; they [product-owners] then sell the final product to the consumers.

What has been the contribution of these product-owners, or “capitalists,” to the production process? It is this: the saving and restriction of consumption, instead of being done by the owners of land and labor, has been done by the capitalists. The capitalists originally saved, say, 95 ounces of gold which they could have then spent on consumers’ goods. They refrained from doing so, however, and, instead, advanced the money to the original owners of the factors. They paid the latter for their services while they were working, thus advancing them money before the product was actually produced and sold to the consumers.

Very good.

Another aspect of this that I didn't see mentioned is the work of identifying the opportunity. The worker may be the one making the product, but the worker may not even have known there was a demand for said product, or who the buyers are. Finding that stuff out takes time too.

30 sats \ 0 replies \ @Undisciplined OP 7 Jan

Yes. Discovery of profit opportunities is something Israel Kirzner focused on. I haven't read as much of his work, but what I have read is interesting.