Catholic FAQ


Latest Threads
newest posts



Go Back   Catholic Answers Forums > Forums > Apologetics > Social Justice
 

Welcome to Catholic Answers Forums, the largest Catholic Community on the Web.

Here you can join over 400,000 members from around the world discussing all things Catholic. Membership is open to all, Catholic and non-Catholic alike, who seek the Truth with Charity.

To gain full access, you must register for a FREE account. Registered members are able to:
  • Submit questions about the faith to experts from Catholic Answers
  • Participate in all forum discussions
  • Communicate privately with Catholics from around the world
  • Plus join a prayer group, read with the Book Club, and much more.
Registration is fast, simple and absolutely free. So join our community today!

Have a question about registration or your account log-in? Just contact our Support Hotline.

Reply
 
Thread Tools Search Thread Display
  #16  
Old Jun 3, '12, 3:27 am
ACCT ACCT is offline
Junior Member
 
Join Date: February 24, 2012
Posts: 541
Religion: Catholic
Default Re: Forum: How Markets Crowd Out Morals

Quote:
Originally Posted by TheTrueCentrist View Post
Might we not say that in a market, money is power? Therefore, markets are an equitable system unless money is granted excessively to particular individuals. However, in capitalism, the goal is always to maximize profits. Therefore, we could say that capitalism defines people who get excessive amounts of money as winners.

I think that you are confusing market capitalism with socialism. In pure competition excessive profits creates ruinous competition. Competition drives down prices until $1 is excessive profit. Therefore, in market capitalism (pure competition) buyers are the winners! Socialism, such as we have in the United States, creates monopolies with excessive profits and a decline in service.

In a market economy, the forces of supply and demand rule. Price is the mechanism that regulates resource allocation. Prices are a signal, which directs the behavior of suppliers (sellers) and demanders (buyers).

In market capitalism, most of society's resources are privately owned, and the owners of these resources can use them as they please within legal limits. Incentive is the key difference between capitalism (private ownership of resources) and socialism (state ownership of resources). Private ownership boosts incentive, while public ownership retards it.

All of us are affected by economic conditions and can benefit from a better understanding of local, national, and global economic forces. For example, 500 workers at a paper mill in Northern New York lost their jobs because they didn't understand the economic forces affecting their industry. These workers decided to go on strike for higher wages. In response, the company replaced them. This was possible because the paper industry in Northern New York, as well as in New York State and the U.S. has suffered large layoffs, and consequently, there are plenty of unemployed paper mill workers looking for work. The strikers were never rehired, even though their union accepted cuts in pay and benefits amounting to about $10,000 per year per employee. This was devastating to the strikers because, given their skills, most have little hope of finding jobs with comparable pay and benefits. In addition, the small town of Glens Falls has been damaged economically and divided socially. If the union leaders had been more aware of the high level of both foreign and domestic competition (and taken a college economics class) this fiasco might have been avoided!

Last edited by ACCT; Jun 3, '12 at 3:39 am.
Reply With Quote
  #17  
Old Jun 3, '12, 9:14 am
SCRAM SCRAM is offline
Trial Membership
 
Join Date: June 2, 2012
Posts: 4
Religion: Catholic
Default Re: Forum: How Markets Crowd Out Morals

"The Church and the Market: A Catholic Defense of the Free Economy" by Thomas Woods is a good defense of free markets from a Catholic point of view.
Reply With Quote
  #18  
Old Jun 4, '12, 2:13 pm
TheTrueCentrist TheTrueCentrist is offline
Banned
 
Join Date: August 13, 2010
Posts: 2,561
Religion: Yours
Default Re: Forum: How Markets Crowd Out Morals

Quote:
Originally Posted by ACCT View Post
I think that you are confusing market capitalism with socialism. In pure competition excessive profits creates ruinous competition. Competition drives down prices until $1 is excessive profit. Therefore, in market capitalism (pure competition) buyers are the winners! Socialism, such as we have in the United States, creates monopolies with excessive profits and a decline in service.
Certainly there do exist government-granted monopolies. However to say that market capitalism is immune to them is willfully ignorant of historical examples.

I would ask this "What makes a company successful in a market capitalism?" The answer is large profits. How can a company guarantee large profits? By gaining a monopoly. Essentially, a monopoly is the unspoken goal of any company in a free market. Moreover, in a sufficiently free market, political power is a commodity like any other.

Quote:
Originally Posted by ACCT View Post
In market capitalism, most of society's resources are privately owned, and the owners of these resources can use them as they please within legal limits. Incentive is the key difference between capitalism (private ownership of resources) and socialism (state ownership of resources). Private ownership boosts incentive, while public ownership retards it.
And in a perfect world, things would work perfectly. However, the market system all but designed to create people with greater buying power than others, and as you so strongly emphasized: "the greatest threat to human freedom is the concentration of power."
Reply With Quote
  #19  
Old Jun 4, '12, 4:23 pm
Ridgerunner Ridgerunner is online now
Forum Elder
 
Join Date: September 10, 2006
Posts: 22,187
Religion: Catholic
Default Re: Forum: How Markets Crowd Out Morals

Quote:
Originally Posted by TheTrueCentrist View Post
Certainly there do exist government-granted monopolies. However to say that market capitalism is immune to them is willfully ignorant of historical examples.

I would ask this "What makes a company successful in a market capitalism?" The answer is large profits. How can a company guarantee large profits? By gaining a monopoly. Essentially, a monopoly is the unspoken goal of any company in a free market. Moreover, in a sufficiently free market, political power is a commodity like any other.


And in a perfect world, things would work perfectly. However, the market system all but designed to create people with greater buying power than others, and as you so strongly emphasized: "the greatest threat to human freedom is the concentration of power."
I would not agree that "a monopoly is the unspoken goal of any company in a free market..." Monopolies are difficult to establish in a truly free market, and usually require some kind of government intervention to allow them to become monopolies or oligopolies.

What the "free market" really is, is a system by which "A" gives some resource to "B" in exchange for what "A" values more than the resource he gives to "B". "B", in turn, does the same with "A". But "A" has to be careful because if he demands too much or if his product isn't very good, "B" might buy from "C".

Now, let's say "A"'s product is cherry ice cream. "A" might perceive that if he corners the market in cherries, he will have a monopoly on cherry ice cream and can demand any price he sets for it. He finds that there are lots of cherries out in the world, but he manages to get most cherry orchards under his contracts. But that causes other people to plant cherry trees so they can sell them to "A"s rival "C" who makes ice cream but can't get enough cherries because "A" has cornered the cherry market, or enough of it to make it impossible for "C" to get enough cherries to compete.

"A" is desperate to preserve his monopoly. Moreover all of the new cherry tree plantings threaten to cause the price of cherries (thus cherry ice cream) to plummet. So "A" goes to the government and, because he has lots of money, persuades the government to issue stringent regulations on cherry growing; in the name of the environment or something. The regulations are so difficult to comply with that nobody can get past them other than a handful of big growers who don't want the competition from startup growers either. Theoretically, "C" can make cherry ice cream, but he can't get cherries. All the little would-be growers can't meet all the regulations the government has imposed. So "A" keeps his monopoly, and the free market is thwarted. "B" continues to buy cherry ice cream from "A", but at a higher price than would otherwise be the case.

That's how monopolies happen.
Reply With Quote
  #20  
Old Jun 4, '12, 6:13 pm
boclucky14 boclucky14 is offline
New Member
 
Join Date: October 11, 2011
Posts: 18
Religion: Catholic
Send a message via MSN to boclucky14
Default Re: Forum: How Markets Crowd Out Morals

Quote:
Originally Posted by TheTrueCentrist View Post
Certainly there do exist government-granted monopolies. However to say that market capitalism is immune to them is willfully ignorant of historical examples.

I would ask this "What makes a company successful in a market capitalism?" The answer is large profits. How can a company guarantee large profits? By gaining a monopoly. Essentially, a monopoly is the unspoken goal of any company in a free market. Moreover, in a sufficiently free market, political power is a commodity like any other.


And in a perfect world, things would work perfectly. However, the market system all but designed to create people with greater buying power than others, and as you so strongly emphasized: "the greatest threat to human freedom is the concentration of power."
Your close to what makes a company successful is large profits, but it's not right. The goal of any firm is to maximize profits, namely for the owner, so that the owner has a no opportunity cost - it's the best way to make money with his own time and money.

Having large profits is not necessary for this to be true. As long as the company is as profitable to the owner as the next best opportunity (this, by theory, could be a the same as compared to, say, the best career he could get), then it's enough for the company to remain in business.

EDIT: Actually, you don't even need that much. You just need for the marginal revenue to cover the variable costs. Otherwise, the business shuts down (at least temporarily).


The reason a monopoly can form boils down to a few assumptions, with the primary being Barriers to Entry/Exit:

1) Government Regulation (Ex. Patents)
2) Economy of Scale (More you make, cheaper it is, but before to long, Diseconomies of Scales, which is the effect of a large overhead, etc. comes into effect, allowing competition to remain more competitive)
3) Indivisibility (I can't think of an honest example)
4) Control of essential input (Ex. De Beers)

Over time, without government regulation, or control of essential input, monopolies will fall to a competitive market.

I'm willing to say the #1 reason for any monopoly, present or past, is because of government regulation.
Reply With Quote
Reply

Go Back   Catholic Answers Forums > Forums > Apologetics > Social Justice

Bookmarks

Thread Tools Search Thread
Search Thread:

Advanced Search
Display

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump



Prayer Intentions

Most Active Groups
8048Meet and talk,talk talk
Last by: georget
4829CAF Prayer Warriors Support Group
Last by: Vim71
4295Devotion to the Sorrowful Mother
Last by: James_OPL
4027OCD/Scrupulosity Group
Last by: fencersmother
3813SOLITUDE
Last by: Prairie Rose
3377Let's empty Purgatory
Last by: RJB
3184Catholic Vegetarians & Vegans
Last by: libralion
3150Poems and Reflections
Last by: PathWalker
2962For seniors and shut- ins
Last by: libralion
2701Petitions Before the Blessed Sacrament
Last by: Amiciel



All times are GMT -7. The time now is 2:21 pm.

Home RSS Feeds - Home - Archive - Top

Copyright © 2004-2013, Catholic Answers.