http://www.democraticunderground.com/10021032402That was my first reaction to reading this...then my next thought was how do you explain to someone like this how wrong they are.... how do you fight this....I am A CPA going for a PhD in Accounting candidate with a Masters in Accounting and Economics i have taught accounting for years been a CFO for numerous public companies and i would not know where to start....(before you say anything really do not care if you believe me or not and i am not bragging just expressing my thoughts) The reason i told you this background is because one would think i would be able to explain to this person how they are wrong after all i explain basic economics to non financial managers and board members almost every day.
kentuck (62,545 posts)
The way the economy works at its most basic level...Suppose a thousand new people move into a town. These are all potential customers for the businesses that are in this town. But, in order for these new people to buy the products that are made by the businesses in this town, there has to be more production.
Who is responsible for more production so these customers can buy the products that they want to buy? The owners of the business would need to hire more people to make the products for the new customers.
Did you ever hear of inventory. you need to sell off inventory before producing new product. I am not going to produce more goods/ services until my existing inventory is sold off.
Unless one believes that the "small business man" does all of this production by himself, then nothing could be created without the worker. Likewise, the customer is of no use to the local economy if there are no products to buy.
Granted, the "small business man" can hire more people to make more products to sell to the new customers so long as the new customers have the means to purchase the products. Each of these is dependent on the other. The small business owner is dependent on labor to make the product. The laborer is dependent upon the business owner for the job. They are all dependent on the customer buying the product, otherwise, the business fails, the worker loses his job, the customer goes without, and they all suffer. One is not superior to the other, contrary to what we have been led to believe our entire lives.
I love this.. why is it that liberals can never understand that we do not live in a demand only economy. there are countries with demand only economies but by definition they only produce what their people demand. if the demand side does not know about new products how can they demand them. for example the IPAD was not demanded by the public until it was innovated. If people had a choice i would much rather live in a innovation driven economy then a demand side economy.
right now i am just shaking my head wondering why this is so hard for people to understand
If one cannot survive without the other, then neither of them is superior to the other. Historically, the person that "invested" the capital for the business gets the larger cut. However, his capital would be worthless if it was not put to use. Then the question should be, what would be the fair cut for the business man over the worker? If the worker, also the customer, does not make enough to buy the products that are made in his town, then the business goes under and workers are laid off, and everyone loses. That is the challenge of modern capitalism.
Then there is this point the liberals always make.... but they either do not realize or do not want to realize that capital and labor is a supply demand issue. there is a whole lot more supply for labor then their is capital (that ultimately creates demand for labor) just thing about how many people you know work for companies and how many people you know that are willing to start a business. its pretty one sided with the overwhelming majority of people wanting to be workers then business owners
There i tried.........
