to not understand capitalism

[IceBeing]

Some people work hard (say 60 hours a week all year) and get paid about £20000 a year...and some people work hard and get paid 10 or even 100 times as much a year.

How can 60 hours a week of work from 1 person be worth 100 times as much as 60 hours a week of work from another person?

"What if there are people who want to manage companies and would be good at and wouldn't require 7 digit salaries to do the job?"

DH (headhunter) had a good laugh at this

Of course, you think this is plausible because there are so many street vendors who just like selling and don't care how much they sell their merchandise for, builders who just like to build and don't care if you pay them much below the going rate, etc. Yes, of course, there must be CEOs who just want to manage companies and wouldn't mind doing it for the salary of a nurse. Or not.

kim - Start your own thread if you want to talk about something totally different.

What better way?

How would you propose to alter the way that UK's financial institutions currently work, in practice, to improve the system?

I'm all ears.

The issue I have with CEO salaries is the extent to which these have increase far beyond workers salaries. For example, this link www.theglobalist.com/just-facts-ceos-rest-us/ describes CEO salaries in the USA as increased from 84 x the average worker salary in their company in 1980 to 354 x the average worker salary now. How can that be right? I get fed up of people saying that these highly paid people create the wealth - workers do too and should have a better share of the wealth that is being created. Also, as others on this thread have said, too many bosses running companies are doing their best to minimise tax rather than pay their contribution. Hence you get the likes of the owner of Top Shop who gives that company to his Monaco based wife to avoid UK tax.

kim Has it been good for all Americans?

Well, I can't speak for all Americans, but as one who has done well, and whose family has managed to do well, then yes, I can tell you that the majority of people I know in the States would sing the praises of capitalism till they were blue in the face.

1) it doesn't matter now because property became a lot more expensive during the period when interest only mortgages were given.theyve gone but the inflated house prices remain- easy lending to lock more people into the debt trap- usury based economic system.

If this is a problem for you rent. however, for whatever reason, if you want to buy a house and you don't have the money up front you will have to borrow it. It is unlikely that somebody will lend you enough money to buy a house without charging you interest unless they are your parents.

2) If the profit for the bank was on the house itself, not the money lent, then it wouldn't matter whether someone paid it after five years or 25 years. In fact, you'd be happy if someone borrowed money off of you and paid it off quicker than they had said they could. You get the money back quicker and get to use it for something else. And they've saved you from your money losing value to inflation.

Unless the house lost value. Banks provide loans because people want to buy houses. They also invest in property, but they might not want to invest in the property you want to buy. Also, assuming that the house has risen in value, how are the bank going to realise this gain if the house belongs to you and you are living in it?

3) but why should there be any prohibitiveness at all in making overpayments .... If the system of profit wasn't based on usury that is.

When you take out any fixed rate agreement you do so to avoid the risk. In return it is normal for the person bearing the risk to commit you to stick with your agreement for a set amount of time. If you could just opt out they would't offer you the deal.

if there wasn't this sense of fatalism that debt is inevitable and also a value system based on not having worth unless you have material possessions. (That we start kids on with 'Santa only brings presents for good children dear!') then more people would reflect on if there is another way for the system to be.

Or they could just read the small print before entering into an agreement.

davidjrmum That's not the CEO that is doing the tax avoidance. It's more likely the CFO, who is doing it because of pressure from the shareholders to maximise profit. And they're doing it because, while it's perhaps not morally right, it is legal. That's not the CEO or the CFO's fault, it's the government that you should be blaming.

Jesus kim, there's an ugly side of everything, stop being so idealistic. Nothing will ever be perfect.

But, in capitalism, the good outweighs the bad.

reg you are wrong about the majority of americans doing well by capitalism...you may be right about them 'thinking' it is great...

What's wrong with being idealistic?

Erm... it's not realistic? It's great to stare out a window and wish for world peace, but unless you have some fantastic suggestion on how to each such equality and harmony for mankind that you've been holding back on for some reason (waiting for the highest bidder perhaps?), it isn't going to happen.

Also, this thread isn't about how to right the wrongs of the entire world. It's about capitalism, and if it is or isn't good for society. If you think it isn't, that's your prerogative, but please back it up with something more than wishful thinking.

They also seem happier.

Appearances can be deceiving.

Please re-read Ice. I never said the majority of Americans have done well out of it. I said that I have, and that my family did, and that most people I know, wealthy or not, would still say that capitalism is a good thing, because it's not about what family you are or aren't born into. It's about making your own luck.

All your graph illustrates is that Americans are skewed in their perception of reality. That's not a shock to anyone.

ahh this is what I was looking for....

the majority of americans earn less than a third of what they think a fair distribution of wealth would give someone in their precentile.

Does communism do a better job than capitalism? You still get the problem of the people at the top allocating an unfair amount of resources to themselves.

I do think CEO's have skills that other people don't have, but I don't think they are all necessarily gifted at knowing how much money they should be taking from their employers in terms of their own salary and rewards.

If you think of this in terms of business owners and start ups rather than CEO's, it would be ridiculous to take money out of your company on the basis that somebody down the road is taking the same amount out of their company.

However, seeing a problem (i.e. There is a natural human tendency shared by CEOs to say 3 for me, 1 for you) is not the same as being able to find a solution to the problem of finding somebody to run a large multinational company. The UK has limited control of the global economy.