Andy
Well-Known Member
- Joined
- Jan 6, 2008
- Messages
- 3,497
Regardless of the amount of foreign investments in the prc, they shall ALWAYS be under the state's regulative powers. The only promise they are giving is that they will not nationalize these outright.
I was going to respond to everything else that you said, when I realized, nothing of what you said disproved or even disputed my point. Regulation and Capitalism are not mutually exclusive. Further, Foreign investments has no ground in this discussion at all. Whether is a business is invested in by a foreign corp, or is home grown, the reason either would do so, is to profit by providing a product... also known as Capitalism.
Read the article I posted. Zhang Yue, is a 38 year old CEO of a completely private corporation "Broad Air Conditioning". He is building products, and selling them for more than Cost of Material + Cost of Labor + Machine Upkeep and Desperation which = Profit. This is Capitalism. He is not doing it for some irrelevant speech, or some government mandate, or some other non-sense... he's doing it because he's a capitalist, capitalizing on making a product. Moving on....
Cost of raw materials + cost of machine depreciation + wages = cost of finished product = cost of investment + profit
From the equation above, where do you suppose profit comes from, hmmm?
Certainly not from raw materials.
Certainly not from machines.
It could only come from human labor. But you have already paid for human labor through wages, haven't you? Unless...the wages are not commensurate to the amount of work done, no?
Unpaid labor -- the secret of capitalist production.
A: I think I understand this theory. Problem is, I fail to see where it makes a point. Further, it seems to validates my point. This very system is what is happening in China. There are private sector businesses in China, that are not under the control of the government, that buy material, pay for labor, and sell those products for more than it costs them to produce, also known as capitalizing. Hence my whole point which is that China has a capitalist economy.
Further, as stated by my references, the socialist government controlled businesses are failing... validating my point that socialism always fails.
B: I'm a bit disturbed you find this theory to be valid as you seem intelligent. This theory fails on so many levels, it's completely unsupportable.
1: This theory claims all profit is merely labor that is unpaid. Ok, I'm the rich guy. I have a product I develop. I design it, blue print it, make a factory to build it. I hire a bunch of people to work the factory to make it. At the end of the year, I spend all my unspent gross income, on labor. Zero profit. Ok... I just spent an entire year and all my money, to gain zero. Next year I'll do the same, and end up with zero. Next ten years... zero. Wait... why do this? If I'm not going to profit from it, why do it? So I close the plant down, lay everyone off, take my money to move to a small island to spend the rest of my years drinking wine on the beach. Under this theory, there would be no jobs anywhere.
Example: GM / Ford. The labor unions make the cost of labor prohibitive to making a profit on smaller cars. Result? Aveo is built in South Korea. As I said before, and it bares repeating... people do not do things unless there is a profit to doing so. If you try and undo that, you end up without a job and complaining about companies move out of the country and complaining about imported products from China.
2: This theory assumes the value of labor is determined by the value of the product. So I own a small bakery. I need someone to run the register while I'm not there. I hire on a little girl in high school to just ring up customer, and otherwise do absolutely nothing all day. I figure that my profit margin is roughly $20 per hour the store is open, averaged throughout the day. Does that mean I should pay a high school girl $20 an hour to sit on her butt and watch TV? Of course not. (Real life example, I know the girl and the shop)
3: In any equation, a quick way to test validity is to reverse it and see if it holds true. GM is in dire straights. They have negative profit. Does this mean all GM employees are over paid and should earn minimum wage? Non-sense.
4: This equation assumes that each element in the equation is static. But this is not so. Value is not static. Value is subjective. For example, I could make a really annoying noise maker, that at random times, plays really horrible old folk country music at 4000 dB. I could make the case out of nickel and carbon fiber, hand build the circuit board with ultra caps and lithium-ion batteries. The cost of material plus labor could hit $100 a unit. Would anyone pay that much for it? Of course not.
Another example is collector items. Baseball cards my father collected, were purchased at $0.25 for a pack. Now some of those cards are worth $5,000 or more. A complete collection is worth $30,000 dollars. Does that mean someone at the card factory was under paid by $30,000 in the mid-50s?
How about a car on the lot at a dealership. If you paint a new car puke greenish yellow, what happens to the value of that car? It drops... but how, the labor + materials + machine depreciation is the same!
How about two workers at GM that both install bumpers. One for a Caddy Fleetwood, and one for a Chevy Caprice... which is the same car... one has a chevy emblem, one has a caddy emblem, both spray painted plastic. But one goes for $20K one for $35K... So which worker is over paid, and which is underpaid? Answer? Neither. They both are paid the same for doing the exact same job. The value of the product is subjective.
In fact, even the value of money itself isn't static. Otherwise there would be no inflation. Or exchange rate changes. Euro to Dollar values would always remain the same.