The Bigger The Government, The Lower The Growth

[vt]

[Southernguy]

Re: The Bigger The Government, The Lower The Growth

I don't see China first (or second) world economy in the graph. Do you?

[dcarrigg]

Re: The Bigger The Government, The Lower The Growth

That's easy propaganda to spout when you're cherry picking countries and neglecting to mention the 800lb gorilla in the room (China). Also, I'd note, as I have before, that Singapore's functionally a one-party dictatorship of the Lee family. Sure, taxes on rich people are low. But unless you consider jail time and caning for chewing gum, $70,000 mandatory permits to own a car, and life sentences for smoking a joint "small government," it's a bit of a misnomer.

Let's see what all the countries together say. In the interest of intellectual honesty and not wanting to blow a lot of time, I'll just take the wiki lists from last year for % GDP growth and gov spending as % of GDP. Let's do it for 174 countries instead of cherry picking.



There's a shape there. But it's not as dramatic as the cherry picked shape. How about R^2? Drops from 63% to 18%. Look:



And just in case you wanted a quick look at who the outliers were, here's a scatter plot with labels (but with 174 data points, it's real messy in the middle).



So maybe there's a weak negative correlation between government expenditures and GDP there. β = - 0.13. Maybe it's just an artifact of 2013. I'd guess that on years where equity markets are generally up, you find a negative correlation here, and on years where it's down, you find a positive correlation, with a statistically insignificant correlation over the long term. But I don't have time to do out all the math right now.

I just want to point out that this took me all of 30 minutes from beginning to post. And most of that was just deleting rows for islands that were on one list but not the other so the country rows matched in Excel.

Why would BCA Research not be able to do something of similar quality and honesty in even less time? Maybe because the parties out on St. Catherine's are much better than in my stoic little New England town?

[vt]

Re: The Bigger The Government, The Lower The Growth

World Bank report shows big government reduces economic growth:

http://www.thenewamerican.com/econom...conomic-growth

Some more academic studies:

http://journalistsresource.org/wp-co...and-Growth.pdf

Cato's conservative view:

http://www.cato.org/publications/com...mum-government

[dcarrigg]

Re: The Bigger The Government, The Lower The Growth

My little diddy there did find that there's a small negative correlation between GDP growth and gov spending per GDP. Like I said, hard to say why or if it's always. Keynsian economic ministers might react to slow growth by juicing gov spending, in which case it's the chicken, not the egg. But regardless, the little graphs I did potentially supported your big gov reduces growth thing, just it found the relationship and the effect is far weaker than the graph you posted that cherry picked countries.

World Bank report shows big government reduces economic growth:

http://www.thenewamerican.com/econom...conomic-growth

You have to read the actual World Bank report. Here's a relevant excerpt:

Second, is big government a drag on growth in Europe? A qualified yes. Over
the last 15 years, higher initial government size has led to slower economic
growth. In Europe, a 10 percentage point increase in initial government
size leads to a reduction in annual growth by 0.6–0.9 percentage points.
Government reduces growth, particularly when it exceeds 40 percent of GDP.
Perhaps because governments are smaller outside Europe, there is no evidence
that government size generally harms growth in the global sample. In Europe,
social transfers tend to reduce growth, and public investments to increase it.
Large government revenues tend to reduce growth, but the evidence is less
compelling than for public expenditures—perhaps because Western Europe’s
tax system is often more growth-friendly than the systems of the four AngloSaxon
countries. Europe combines a high tax burden and labor taxes with low
corporate tax rates and a greater reliance on indirect taxes.

Maybe it really isn't size that matters so much as what you do with it!

Some more academic studies:

http://journalistsresource.org/wp-co...and-Growth.pdf

Here's the conclusion of that article:

We have shown that most recent studies published in scientific journals tend to find a negative
relationship between total government size and economic growth in rich countries. This stands in stark
contrast to scholars such as Lindert (2004) and Madrick (2009), who have argued in book length
treatments that there is no tradeoff between economic growth and government size. Studies that
disaggregate taxes and expenditure typically seem to find that if the policy objective is economic
growth there are two consequences: First, that direct taxes on income are worse than indirect taxes,
and second, that social transfers are worse than public expenditure on investment including human
capital, which, if anything, increases growth.


Hence, our results do not imply that government must shrink for growth to increase. There is potential
for increasing growth by restructuring taxes and expenditure so that the negative effects on growth for
a given government size are minimized. Furthermore, countries tend to cluster to institutions that go
well together. As stressed by many observers (e.g. Freeman 1995), the Swedish welfare state can be
seen as an economic model defined by a unique mix of institutions. The specific mix of institutions
and the emergent idiosyncratic interactions among them are key determinants of economic
performance.


Both the Scandinavian and the Anglo-Saxon welfare states seem able to deliver high growth rates for
very different levels of government size. This does not mean low-tax countries can increase taxes
without expecting negative effects on growth, nor that the various mechanisms by which high taxes
distort the economy do not apply in Scandinavia. A more incisive interpretation is that there is
something omitted from the analysis that explains how Scandinavian countries combine high taxes and
high economic growth. We have suggested two such explanations—compensation using growth
friendly policies and benefits from high historical trust (lack of apprehension) levels—but these at best
remain only speculative, with ambiguous policy implications. Even if the debate regarding the
existence of a correlation between growth and aggregate government size in rich countries now seems
more or less settled, the research on policy change, institutions and growth is progressing rapidly.

That study didn't say quite what you think it did. Again, it's the motion in the ocean.

Cato's conservative view:

http://www.cato.org/publications/com...mum-government

Cato's not conservative. It's right-libertarian. I make the distinction for 3 reasons.

Firstly, because I have more respect for Conservative economists than the neo-Austrian libertarians at Cato. Praxeology's bunk pseudo-science.

Secondly I make it because Charles Koch Institute (renamed Cato in 1976) always comes back around to the predetermined conclusion that the optimum level of government is banararchy.

Thirdly, I make it because the guy who wrote that article for Cato is from the Cayman Islands and wears an eyepatch. He's clearly a pirate.

[Ghent12]

Re: The Bigger The Government, The Lower The Growth

That study didn't say quite what you think it did. Again, it's the motion in the ocean.

Not quite sure why a study is even needed to come to a conclusion that should be obvious. What matters is where the wealth comes from and where it goes, at least when measuring only growth. However, what would be less obvious is the general tendency of a government to set economic growth as a political priority. A government has only political priorities, after all.

I would challenge you to "run the numbers" on the multiple years you speak of and to see if equity markets play the role you suspect they do. I suspect that the correlation between smaller government and higher growth is real, especially when weighted for important considerations, as I suspect that people place a much greater priority on their own economic wellbeing than their governments tend to do. The incentive for governments to enable and build wealth are just not very strong--in a democracy the squeaky wheels and the elites get the grease, and in a more autocratic society the squeaky wheels are disappeared while the elites get the grease. None of those situations imply growth.

[dcarrigg]

Re: The Bigger The Government, The Lower The Growth

Not quite sure why a study is even needed to come to a conclusion that should be obvious. What matters is where the wealth comes from and where it goes, at least when measuring only growth. However, what would be less obvious is the general tendency of a government to set economic growth as a political priority. A government has only political priorities, after all.

I would challenge you to "run the numbers" on the multiple years you speak of and to see if equity markets play the role you suspect they do. I suspect that the correlation between smaller government and higher growth is real, especially when weighted for important considerations, as I suspect that people place a much greater priority on their own economic wellbeing than their governments tend to do. The incentive for governments to enable and build wealth are just not very strong--in a democracy the squeaky wheels and the elites get the grease, and in a more autocratic society the squeaky wheels are disappeared while the elites get the grease. None of those situations imply growth.

I agree with you that people place a much greater priority on their own economic wellbeing than their government tends to.

I just think "people" have less control over markets today than they do over government.

That's the real difference between us in a nutshell.

You think markets are free and fair. I'm pretty sure they're rigged and financialized.

The incentives for the rich (who control markets and set prices and wages and decide when to offshore) to let a middle class build wealth are not very strong.

In a modern "post-industrial" capital-controlled society the elites always get the grease by definition and the squeaky wheel gets deep-sixed.

The market elites are not interested in growth. Only in establishing monopoly. Only taking power from government and giving it to themselves and their children. They'll tell you that themselves if you just stop to listen.

[vt]

Re: The Bigger The Government, The Lower The Growth

Therein lies the dilemma.

Big isn't necessarily always bad, but bureaucracy is.

The problem is that big organizations foster over regulation, less creativity, and other poor habits. In government organizations where firing is difficult the inmates sometimes wind up running the organization.

Similar problems occur in large private companies, except firing is easier.

My new independent party concept will change all this by getting rid of the FIREgarchs and Plotiticians (yes plot not poly)

[Ghent12]

Re: The Bigger The Government, The Lower The Growth

I agree with you that people place a much greater priority on their own economic wellbeing than their government tends to.

I just think "people" have less control over markets today than they do over government.

That's the real difference between us in a nutshell.

You think markets are free and fair. I'm pretty sure they're rigged and financialized.

Whoa now, don't put words in my mouth. I did not say markets are free or fair. They should be free--that would be fair, I'll say that. Obviously they are manipulated to work to the benefit of some, but that is true of everything humans create, with no exceptions.

The incentives for the rich (who control markets and set prices and wages and decide when to offshore) to let a middle class build wealth are not very strong.

In a modern "post-industrial" capital-controlled society the elites always get the grease by definition and the squeaky wheel gets deep-sixed.

The market elites are not interested in growth. Only in establishing monopoly. Only taking power from government and giving it to themselves and their children. They'll tell you that themselves if you just stop to listen.

I'm going to say it--this is nonsense. All of it is conspiratorial "eat the rich" nonsense that defies reality both empirically and deduced.

The "rich" do not get to veto the "middle class" from building wealth. In practice, the "middle class" is its own worst enemy at building real wealth via lifestyle choices such as maintaining debt and living beyond their means.

The "rich" do not control markets. They strongly influence markets, but so do all people who play any role whatsoever in that market, to include consumers.

The "rich" do not set prices. Sellers set prices, but buyers must agree to them. Sometimes the government gets involved and sets caps or floors. This is how money works.

The "rich" do not set wages. A wage is a price. See above.

What "modern 'post-industrial' capital-controlled society" are you speaking of where the squeaky wheels get deep-sixed? In America, the "squeaky wheels" get almost a median-wage-level income through pure welfare (i.e. the poor), and special protection in the marketplace (i.e. any industry with subsidies, including licenses), and numerous other forms of "grease," loosely defined. The only "squeaky wheels" getting deep-sixed seem to be those who complain of too high of a tax burden.

I do not think I've seen a more flawed article from the Wall Street Journal ever. Perhaps you care to explain the following from the article?

Before that, IBM's IBM -0.64% hardware monopoly of the 1960s and '70s was overtaken by Microsoft's software monopoly. AT&TT -0.48% had a monopoly on telephone service for most of the 20th century, but now anyone can get a cheap cellphone plan from any number of providers. If the tendency of monopoly businesses was to hold back progress, they would be dangerous, and we'd be right to oppose them. But the history of progress is a history of better monopoly businesses replacing incumbents. Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of.

Regardless, you seem to not understand what a monopoly is. "Only taking power from government and giving it to themselves and their children," is the phrase that betrays your lack of knowledge on this subject. You are in esteemed company, however, as WSJ seems to share that same ignorance to a degree.

The opposite of what you said is true. The "market elites" seem to favor granting the government more powers which are then used to the benefit of said "elites" in a rather overt manner.

For the record, monopolies are not inherently bad, and those that seek to establish them do not have inherently bad motives either.

[dcarrigg]

Re: The Bigger The Government, The Lower The Growth

Whoa now, don't put words in my mouth. I did not say markets are free or fair. They should be free--that would be fair, I'll say that. Obviously they are manipulated to work to the benefit of some, but that is true of everything humans create, with no exceptions.
I'm going to say it--this is nonsense. All of it is conspiratorial "eat the rich" nonsense that defies reality both empirically and deduced.

I guess it's all a big conspiracy. All the numbers are wrong. We're doing great everybody! Nothing to see here...

The "rich" do not get to veto the "middle class" from building wealth.

I guess the middle class must have been sipping brandy in Davos when they decided to sign a bunch of free trade deals behind closed doors, shutter all the factories, and move them to China.

In practice, the "middle class" is its own worst enemy at building real wealth via lifestyle choices such as maintaining debt and living beyond their means.

Many do. Many of us here don't. But you're looking at the question backwards. Who's selling the debt? Cui bono? Welcome to financialization.

The "rich" do not control markets. They strongly influence markets, but so do all people who play any role whatsoever in that market, to include consumers. The "rich" do not set prices. Sellers set prices, but buyers must agree to them. Sometimes the government gets involved and sets caps or floors. This is how money works.

How many banking scandals and price manipulation schemes do we have to post here before you change your mind on this one?

The "rich" do not set wages. A wage is a price. See above.

Come now. Have you ever applied for a job? How many people march into an interview and dictate their wage? I thought you said sellers set prices? But have you ever heard of that happening in labor markets? Why do job ads come with attached salary ranges? Looks like sellers of everything except labor set prices then...

What "modern 'post-industrial' capital-controlled society" are you speaking of where the squeaky wheels get deep-sixed? In America, the "squeaky wheels" get almost a median-wage-level income through pure welfare (i.e. the poor), and special protection in the marketplace (i.e. any industry with subsidies, including licenses), and numerous other forms of "grease," loosely defined. The only "squeaky wheels" getting deep-sixed seem to be those who complain of too high of a tax burden.

Nope. Nothing to see here either.

Regardless, you seem to not understand what a monopoly is. "Only taking power from government and giving it to themselves and their children," is the phrase that betrays your lack of knowledge on this subject. You are in esteemed company, however, as WSJ seems to share that same ignorance to a degree.

You're right. I'm too stupid to figure out what a monopoly is. Must be my negligible Irish ancestry keeping my IQ down again. Could you please educate me, oh wise one?

PS - That was Peter Thiel - famed libertarian billionaire PayPal dude - that wrote into the WSJ, not their editorial board. The dude's on your side.

The opposite of what you said is true. The "market elites" seem to favor granting the government more powers which are then used to the benefit of said "elites" in a rather overt manner.

It's always the government's fault in your eyes. It can never be both the fault of governments and the inherent structure of markets. It's like you don't believe in market failure, externalities, or monopoly at all.

For the record, monopolies are not inherently bad, and those that seek to establish them do not have inherently bad motives either.

Tell me more about how monopolies are good for me, and how their owners have my best interests at heart. I'm waiting with bated breath.

[gwynedd1]

Re: The Bigger The Government, The Lower The Growth

In addition to the flaws already discussed , growth like this is measured by the increase in financial assets, not necessarily a real economy , and I would say that credit bubbles tend be more common when the profits are in private hands.

[Milton Kuo]

Re: The Bigger The Government, The Lower The Growth

How many banking scandals and price manipulation schemes do we have to post here before you change your mind on this one?

I was thinking this exact thing. If the rich truly did not possess undue control or influence in the markets, the shares of Citigroup, Bank of America, etc. would have all gone to zero as they deserved to. Investors in those criminal organizations, who are overwhelmingly the wealthy, could have had their stakes wiped out without any additional harm done to the banking system. Likewise, the wealthy money managers who allocated assets in the equities of those frauds would have been exposed for the incompetents they are and perhaps may have never been able to find work managing money again.

[vt]

Re: The Bigger The Government, The Lower The Growth

Fine. Go the the White House and to the leaders of BOTH political parties and tell them they have to return all contributions from FIRE, and start criminal prosecution of the culprits.

Oh wait, the President and leading politicians of both parties Are culprits!

[Ghent12]

Re: The Bigger The Government, The Lower The Growth

I guess it's all a big conspiracy. All the numbers are wrong. We're doing great everybody! Nothing to see here...





I guess the middle class must have been sipping brandy in Davos when they decided to sign a bunch of free trade deals behind closed doors, shutter all the factories, and move them to China.

Do you even know or care who comprise those "percentile" of incomes? Does your apparently liberal but unnamed source for that chart of graphs know that they cannot be taken seriously because they are trying to compare things that cannot be directly compared to draw meaningful conclusions? Actually, step back a minute. What are they actually comparing? Household income or personal income? They did not even label it. If it's household income, then you should laugh at this and any other attempt to compare household income over time (and if you do not know why, I will explain). If it is individual income, there are still some significant problems with making this type of analysis. Ignoring unemployment considerations (which is a HUGE mistake when analyzing policy, but gives the benefit of the doubt to the chart of graphs author), does this chart account for or make any note of workforce size? Does it account for demographic changes in each of the income "percentiles" (i.e. is any mention made as to whether the bottom 5th and 10th "percentiles" are increasingly or decreasingly populated by high school dropouts or by 4-year degree holders, or is the average age or demographic circumstance of each percentile analyzed at all?) or is it simply aggregated data with no factors considered outside of inflation-adjusted income over time? Finally, it is clear that the source makes no consideration for labor force mobility, so it is an effectively meaningless chart of graphs in terms of drawing any conclusions.

Many do. Many of us here don't. But you're looking at the question backwards. Who's selling the debt? Cui bono? Welcome to financialization.

Yeah, I hate it when people sell me something and I buy it. It is totally their fault. Cui bono is fine and all that for determining who has motive for an action, but in market transactions the best advice is caveat emptor. How about you take personal responsibility for your actions, and encourage others to do the same?

How many banking scandals and price manipulation schemes do we have to post here before you change your mind on this one?

See my reply to Milton Kuo below. We are clearly having two different conversations. You want to "eat the rich" who you see exclusively as bankers and Wall Street types. Almost everyone else thinks that other metrics are better, whether it be income "percentiles" or professions or so forth. The "rich" do not cause large scale banking fraud, bankers do. Maybe all bankers are rich, but not all rich are bankers. Use the language properly if you want a meaningful discussion. Your forays into metaphor are disastrous.

Come now. Have you ever applied for a job? How many people march into an interview and dictate their wage? I thought you said sellers set prices? But have you ever heard of that happening in labor markets? Why do job ads come with attached salary ranges? Looks like sellers of everything except labor set prices then...

I have applied for a job or two, and I have turned down employment opportunities when the price offered to me was too low. Yes, sellers of labor do dictate prices quite a lot, often though not exclusively through labor unions. Some people in what they consider a "good job" seek out a better offer from their firm's competitor, then use that as leverage to increase their wage. The point is that both buyer and seller must agree to the price, and both have the right of refusal to a price asked by the other.

Nope. Nothing to see here either.

A fairly meaningless chart, especially since the "highest" and "lowest" income earners are not defined and changed drastically over time. The spark for the American Revolution happened when the King lowered the tax rate. These are just things to consider, if you wish to apply critical thinking to the subject of tax rates.

You're right. I'm too stupid to figure out what a monopoly is. Must be my negligible Irish ancestry keeping my IQ down again. Could you please educate me, oh wise one?

PS - That was Peter Thiel - famed libertarian billionaire PayPal dude - that wrote into the WSJ, not their editorial board. The dude's on your side.

It's always the government's fault in your eyes. It can never be both the fault of governments and the inherent structure of markets. It's like you don't believe in market failure, externalities, or monopoly at all.

You clearly aren't stupid, but I will say your knowledge of monopolies is quite lacking. A monopoly is a business firm which has an overwhelming market share and in practice almost always relies on a government keeping competition away from their market, either through patents or through exclusive access rights or other means. A theoretical example of a monopoly which would require no government assistance to keep competition away (aside from protection against theft) would be if a private firm owned the entire Grand Canyon and charged admission for people to explore it, since there is only one Grand Canyon to explore. Virtually every example of a real monopoly or near-monopoly requires some crucial government assistance to keep competition away.

Tell me more about how monopolies are good for me, and how their owners have my best interests at heart. I'm waiting with bated breath.

It appears you are receiving excellent tutelage from Strawsman in the art of making strawman arguments. I will say it again and give you a second attempt to respond: monopolies are not inherently bad, and those who seek to establish a monopoly do not necessarily have bad motivations.

I was thinking this exact thing. If the rich truly did not possess undue control or influence in the markets, the shares of Citigroup, Bank of America, etc. would have all gone to zero as they deserved to. Investors in those criminal organizations, who are overwhelmingly the wealthy, could have had their stakes wiped out without any additional harm done to the banking system. Likewise, the wealthy money managers who allocated assets in the equities of those frauds would have been exposed for the incompetents they are and perhaps may have never been able to find work managing money again.

How do you define "the rich?" If you limit it to just bankers and money managers, then you should brush up on your language skills. The term "rich" is a label with a broad range of meanings most typically associated with a high income, and the term should always include people like doctors, highly skilled technical professionals, some small business owners, some authors, some actors, and so forth. Do doctors and highly skilled technical professionals and some small business owners and some authors and some actors control the markets? No? Then the "rich" do not control markets. While some of the "rich" do exert influence on the markets, that does not imply that the "rich" control or have undue influence over the markets.

You and dcarrigg are having a difficult time with blanket generalizations. Saying that the "rich" do this or that is inaccurate and frankly unfair. I will post a rhetorically and structurally identical sentence to what you posted and change only some words for words of an identical type (i.e. nouns to describe demographic circumstance for nouns to describe demographic circumstance), and see if you can identify the problems with them which are glaring:

If the rich truly did not possess undue control or influence in the markets, the shares of Citigroup, Bank of America, etc. would have all gone to zero as they deserved to. Investors in those criminal organizations, who are overwhelmingly the wealthy, could have had their stakes wiped out without any additional harm done to the banking system.

If the blacks truly did not murder or assault in Chicago, the property values of Englewood and the rest of Chicago's south side would have all recovered as they deserved to. Investors in those properties, who are overwhelmingly black, could have had their assets increase in value without any additional changes done to Chicago neighborhoods.

Demographically speaking, most violent crimes in Chicago are committed by blacks. Does that mean that blacks are the violent criminals?

Again, bankers control large financial systems and are rich, but the rich are not necessarily bankers who control large financial systems.

If English is a second language then I apologize for the confusion my concise wording may have caused, but please be more careful while reading and typing. Dehumanize people at your own risk.

[dcarrigg]

Re: The Bigger The Government, The Lower The Growth

Do you even know or care who comprise those "percentile" of incomes? Does your apparently liberal but unnamed source for that chart of graphs know that they cannot be taken seriously because they are trying to compare things that cannot be directly compared to draw meaningful conclusions? Actually, step back a minute. What are they actually comparing? Household income or personal income? They did not even label it. If it's household income, then you should laugh at this and any other attempt to compare household income over time (and if you do not know why, I will explain). If it is individual income, there are still some significant problems with making this type of analysis. Ignoring unemployment considerations (which is a HUGE mistake when analyzing policy, but gives the benefit of the doubt to the chart of graphs author), does this chart account for or make any note of workforce size? Does it account for demographic changes in each of the income "percentiles" (i.e. is any mention made as to whether the bottom 5th and 10th "percentiles" are increasingly or decreasingly populated by high school dropouts or by 4-year degree holders, or is the average age or demographic circumstance of each percentile analyzed at all?) or is it simply aggregated data with no factors considered outside of inflation-adjusted income over time? Finally, it is clear that the source makes no consideration for labor force mobility, so it is an effectively meaningless chart of graphs in terms of drawing any conclusions.

It's because it's a snapshot from the NYT. It was individuals, not households. The point is simple and obvious - people at the top are getting very wealthy very fast particularly in the US when compared with everybody else.

Yeah, I hate it when people sell me something and I buy it. It is totally their fault. Cui bono is fine and all that for determining who has motive for an action, but in market transactions the best advice is caveat emptor. How about you take personal responsibility for your actions, and encourage others to do the same?

Yeah. Why would anyone ever have a moral issue with loan sharking?

See my reply to Milton Kuo below. We are clearly having two different conversations. You want to "eat the rich" who you see exclusively as bankers and Wall Street types. Almost everyone else thinks that other metrics are better, whether it be income "percentiles" or professions or so forth. The "rich" do not cause large scale banking fraud, bankers do. Maybe all bankers are rich, but not all rich are bankers. Use the language properly if you want a meaningful discussion. Your forays into metaphor are disastrous.

All of the very wealthy use finanzialized markets to maintain and enhance their position.

I have applied for a job or two, and I have turned down employment opportunities when the price offered to me was too low. Yes, sellers of labor do dictate prices quite a lot, often though not exclusively through labor unions. Some people in what they consider a "good job" seek out a better offer from their firm's competitor, then use that as leverage to increase their wage. The point is that both buyer and seller must agree to the price, and both have the right of refusal to a price asked by the other.

But just like the kid with a lemonade stand sets the initial price for a cup, the employer sets the initial price for the employee. This is real world 101. The markets don't have to be anywhere near equilibrium. Nobody has to buy, nobody has to take the job. The privilege of setting the initial price for goods and services goes to the owner of capital. The privilege for setting the initial price for labor goes to the owner of capital. It's just the way the world works.

You clearly aren't stupid, but I will say your knowledge of monopolies is quite lacking. A monopoly is a business firm which has an overwhelming market share and in practice almost always relies on a government keeping competition away from their market, either through patents or through exclusive access rights or other means. A theoretical example of a monopoly which would require no government assistance to keep competition away (aside from protection against theft) would be if a private firm owned the entire Grand Canyon and charged admission for people to explore it, since there is only one Grand Canyon to explore. Virtually every example of a real monopoly or near-monopoly requires some crucial government assistance to keep competition away.

This is libertarian propaganda hogwash. Micro econ 101 will teach you about natural monopolies. They're not all the fault of government. That's just a lie unsupported by facts.

It appears you are receiving excellent tutelage from Strawsman in the art of making strawman arguments. I will say it again and give you a second attempt to respond: monopolies are not inherently bad, and those who seek to establish a monopoly do not necessarily have bad motivations.

It's a bird! It's a plane! No! It's fallacy man!

In all seriousness, I use flowery language sometimes probably because I think it makes things more fun, but maybe just as likely for the same reason I have such a low IQ. My people have a propensity for it.

First I can't understand what a monopoly is even though I've played the game since I was a kid. Now I'm making strawmen cause I like to have a little fun and not treat every conversation like a formal meet of a high school debate club. So it goes.

How do you define "the rich?" If you limit it to just bankers and money managers, then you should brush up on your language skills. The term "rich" is a label with a broad range of meanings most typically associated with a high income, and the term should always include people like doctors, highly skilled technical professionals, some small business owners, some authors, some actors, and so forth. Do doctors and highly skilled technical professionals and some small business owners and some authors and some actors control the markets? No? Then the "rich" do not control markets. While some of the "rich" do exert influence on the markets, that does not imply that the "rich" control or have undue influence over the markets.

We're defining the rich differently. I don't mean a doctor. I don't mean a small business owner. I mean the Forbes 500 list and their ilk. The real players and power brokers.

You and dcarrigg are having a difficult time with blanket generalizations. Saying that the "rich" do this or that is inaccurate and frankly unfair. I will post a rhetorically and structurally identical sentence to what you posted and change only some words for words of an identical type (i.e. nouns to describe demographic circumstance for nouns to describe demographic circumstance), and see if you can identify the problems with them which are glaring:

Demographically speaking, most violent crimes in Chicago are committed by blacks. Does that mean that blacks are the violent criminals?

Again, bankers control large financial systems and are rich, but the rich are not necessarily bankers who control large financial systems.

If English is a second language then I apologize for the confusion my concise wording may have caused, but please be more careful while reading and typing. Dehumanize people at your own risk.

I like how you had to bring it down to race. Awesome move! Really classy!