*A great many inventions can be attributed to the government sponsored- space race, including velcro and teflon coating.*

Grim, very true Nasa came up with various inventions. Given the
huge amount of funding, one would hope so. After all Thomas
Edison came up with quite a few too and he had no Nasa funds
behind him.

Now take a look at economies where Govts do all the research
and development and what do we have? In the West, most projects
are a combination of Govt basic research and then venture capital
moves in and takes it further. Designing goods by Govt Depts
has really not been a market success, if you check out China,
the USSR, North Korea and other attempts.

At the moment, venture capital in the US is throwing huge amounts
of money at energy solutions. Because so many are trying and risking,
only one of a few needs a breakthrough to get results. Compare
that to a single Govt dept with flawed thinking and you have huge
expenditure with no or little results.

The great thing with private enterprise is that anyone who thinks
that they have aptitude at anything, can have a go. Investors
are around, for those who can make an impression. Do the same
thing at a Govt Dept and no matter how good you are, if the boss
does not like your idea, you are basically stuffed.

Passy, any worker who feels they are being screwed, can start their
own business tomorrow and appeal directly to the consumer, who will
decide how they spend their money. A bucket and a mop is about
all you need to start up "Passy's Cleaning Services" tomorrow,
if you don't want to have a boss. All that changes is that now
the consumer is directly your boss, rather then the bloke at the
company, which you so despise.

Yabby, bro and others

Amy Leather in this week's Socialist Worker in the UK outlines Marx's idea of exploitation. The link is here:

http://www.socialistworker.co.uk/art.php?id=15481

You paint a wonderful picture, Yabby, but sadly it's still just a picture.
In truth, although Capitalism is a system based on competition, Capitalists hate competition, and try to stifle it where ever possible.
Equally Capitalists hate innovation. When you have spent billions tooling up to produce one product, it really hurts to dump it in favour of another.
Competition forces companies to innovate, where genuine competition still exists.
Is anyone here old enough to remember that there is actually more than one petrol company?
Remember Ampol, buy Australian? (The first 'colour' advertisement, on black and white TV).
"Buy BP, with Boron!"
"Amoco, with the final filter, for cleaner fuel!"
Does anyone notice, or care which brand of fuel they buy?
The biggest single expense, the one that drives practically all others, and any pretence of competition has left the building.
I fully agree that Governments do most things badly. My point was always, enlightened legislation can stimulate and even force innovation, where genuine competition is lacking.
We have never needed visionaries in government more than now.
Sadly, this Government, like the last one, has all the colour and vision of your stereotype CPA.

*Capitalists hate competition, and try to stifle it where ever possible.
Equally Capitalists hate innovation. When you have spent billions tooling up to produce one product, it really hurts to dump it in favour of another.
Competition forces companies to innovate, where genuine competition still exists.*

Grim, the way I see it is that capitalism accepts that people
act in their own self interest, wheras socialism seems to believe
that people will act in the interests of the greater community
before their own interests. In reality that is seldom the case.
My understanding of evolutionary psychology ties in with the fact
that self interest dominates.

Passy, I read your article and its a long time out of date and
full of holes and flaws.

If the cost of a commodity was based on the labour involved, how
come can the Saudi's spend 10$ to pump oil worth 145$?

Perhaps Marx thought of these things in terms of pre industrialisation. Today factories full of machines can churn
out goods with little human input. Innovation is the key for
if I can build a machine that turns out goods twice as cheaply
as you can, then I will win. That has little to do with labour
input, everything to do with ideas.

But Marx might turn in his grave, if he knew that today workers
through their super funds, own the majority of the means of
production. Take a look through the share registery of the
top 200 Australian companies. They are nearly all dominated by
super funds, owned by workers. If they go broke, workers are the
big time losers.

Capitalism today is very much about earning a return for providing
capital, by taking a calculated risk. If there is no return its
a bit like not being paid to go to work, you don't do it. If you
don't do it, then there are no jobs.

The ultimate exploiters and deciders are in fact consumers. They
don't buy your goods if they don't feel like it. They only buy
your goods if they think its of value to them.

"Grim, the way I see it is that capitalism accepts that people
act in their own self interest, wheras socialism seems to believe
that people will act in the interests of the greater community
before their own interests. In reality that is seldom the case.
My understanding of evolutionary psychology ties in with the fact
that self interest dominates."
I fully agree. However, you have not addressed my concerns about a lack of real competition in the marketplace, which rather destroys your argument.
Your example of Saudi oil highlights this point. The Saudis -and the rest of the oil producing nations- can sell their oil for 10 times what it costs to produce, because they are not competing with each other.
On the other hand, there is some defense of socialism, in our modern world, largely due to the obscenity of compound interest, and the absurdity of our fractional banking system.
Due to these two devices, real capital (land) has become so expensive that the only way anyone can become a farmer these days, is if one inherits.
We have had hundreds of years to learn that inheritors are rarely the best at their jobs.
From the Crimean War to WW's 1 and 2, we found that Lords and Counts weren't necessarily the best Generals, while humble bakers and tradesmen could be brilliant soldiers.
Inherited wealth is as outmoded a concept as the divine right of kings.

Passy,

I skimmed the article, but saw nothing that answered my question about the price of land.

It is true that the labour theory was proposed by Smith, Riccardo and other classical liberal economists, but once marginal utility theory was discovered in the late nineteenth century, it was abandoned. Even Karl Marx (correct me if I am wrong!) was unable to refute it.

Labour theory was abandoned because marginal utility theory is a much better theory, e.g. it can answer my land question, but labour theory cannot.

The world has moved on, yet not for Marxists and unionists. This is likely because of the implications of marginalism.

Marginal productivity theory shows that wages are not determined by the employer (as labour theory implies) but rather by the marginal revenue product of the worker. In other words, the more productive workers are paid more than less productive workers.

Grim,

The Saudis can sell oil at any price they want, it is their right. In any case, you are appealing to the 'cost of production fallacy', but prices are not determined in this way, they are determined by the laws of supply and demand.

If you are blaming the central banks for inflation, then I agree with you. We should return to the gold standard and sound money.

I disagree with you on the issue of inheritance. In a free society, people are entitled to earn money any way they can, provided they do not violate the freedoms of others. Inheritors of wealth are just as capable of losing money as anyone else. If you carefully study the BRW's Richest 200 each year, you will notice this.