davywavy | If this is Communism, where do I sign?

I've been debating over on

raggedhalo's journal (again) about politics and economic theory. No surprises there; when one of the basic contentions being made is that the public sector is wildly corrupt and inefficient but it is better to raise taxes to cover the ensuing shortfall than to deal with the corruption and inefficiency you can expect my blood pressure to go up dramatically.
During the course of the debating, the old Communist Manifesto line about "From each according to his abilities, to each according to his needs" was trotted out as 'basic social contract'. On the face of it, the statement seems quite unexceptionable - but when you try and pin it down, it becomes quite a slippy concept indeed. You see the question I ask is: whose definition of the word 'need' are we going to accept? Certainly nobody I asked in the debate who supported the idea that we have a moral requirement to support the needs of others was prepared to define 'need' in absolute terms, instead prevaricating furiously whenever I really asked the question.
So I set out to look elsewhere for definitions of human needs. What are human needs, and who defines them?

The United Nations defines poverty thus: They state that any person lacking any two of the following list is, according to the UN, living in poverty: Access to adequate food, access to potable water, access to shelter, access to healthcare and access to education. I think there's a basic definition of 'need' there which we can all get behind, although a definition of what level of education (am I in poverty if I can't get to postgraduate education?) counts is still needed.
Looking closer to home, I checked out Oxfam and the Government's Social Exclusion unit.
Oxfam make a big deal about how 1 person in 4 in the UK lives in Poverty. This is a staggering number - more than 15 million people. The front page of their website makes quite a to-do about eradicating poverty. But what is "poverty" in those terms? Digging through their website, we find that Oxfam defines poverty as: "Poverty is measured here as below 60 per cent of contemporary median net disposable income in 2000/01."

Go back and read that again, and think about what it means.
It means that, according to Oxfam, who are leading a poverty eradication campaign, poverty itself can never be eradicated. Simple maths tells us that a proportion of the population will always live under a set point of the median income, because that's what the median means. In other words, if you're working for Oxfam in poverty reduction, then you've got a job for life. I'm sure it's only the cynic in me that suggests this thought might have crossed the mind of whoever set this somewhat arbitary standard of 'poverty'.

But what of the Social Exclusion unit? They too are trying to end poverty - but finding how they define 'poverty' is bloody hard. Anyone would think they didn't want you to know. Eventually, I tracked down some studies (carried out by the Joseph Rowntree foundation) they were basing their statistics of poverty on, and found some of their definitions. They, like the UN, set a list of criteria of what poverty 'is'. However, their criteria differ quite markedly from the UN; their list includes things like 'Not owning or having access to a car' and 'not owning your own home'.

What is most striking about both the Oxfam and SEU definitions of poverty (and thus 'need') is that I, personally, meet their criteria for poverty. When Oxfam or government statistics are trotted out to tell you how many people live in poverty in this country, their criteria are so broad that they catch me in there.
So, the next time an Oxfam worker collars you in the street and demands you set up a standing order to help them eradicate poverty in the UK because (adopts meaningful and portentious tone of voice) "One person in four lives in poverty", just remember what the true face of poverty in the UK looks like. It looks like mine, and I'm stuffing a jammy Wagon Wheel into it whilst I'm typing this.
As I'm in poverty, can I have a handout now, please?

These catch-all, broad definitions of 'need' and 'poverty' only serve to undermine the genuine problems of a very small proportion of the population and instead all they tell me is that when people say 'from each according to his needs', those 'needs' are a very moveable concept indeed, and the definitions given seem more designed to keep the people doing the defining in comfy jobs than to actually solve any genuine problems.
What strikes me even more is that the definitions are being defined completely arbitarily; I can make up any definition to 'need' and 'poverty' and then tell you that I want to do something about them - and most people, because they never consider the assumtions being made and the definitions being used, will go along quite happily, unaware that they're being bilked.
So; if socialists can make up their own definitions of 'need', then two can play at that game:
it strikes me that what most people need is a firm kick up the arse and, thanks to my kickboxing, I have the ability to give it to them. From each according to his abilities, to each according to his needs indeed.

So if you'd all line up and bend over, I've got some percussive rectal encouragement to get on with.
Why did nobody ever tell me before that Communism could be this much fun?

Flat | Top-Level Comments Only

A company (let's call it "Exploitation Inc") identifies a dereliect old building on a contaminated site, which could with a bit of work be reclaimed, cleaned up & turned into flats. This work will cost £20m. Exploitation issue 20m shares, at £1 each, which are bought by gullible investors, obviously, as they are just paying £1 for a little piece of paper! I mean, how much does a sheet of paper cost? A ha'penny, right? Anyhow these people are clearly being kidded by Exploitation into handing over £20m of the money pool from the poor to the rich.

Anyhow. Exploitation refurbish the site and sell the ensuing luxury flats for a total of £50m. This means that the owners of the £1 shares are now being offered £2.50 per share.

Given a constant amount of money in this closed system, identify who has robbed from who?

a) Exploitation have robbed from the shareholders by selling them worthless paper

b) The shareholders are robbing from the people wanting to buy their shares

c) the buyers of the flats are being robbed because we were informed that the site is derelict and hence worthless

d) the building contractors were robbed because the extra £30m added to the site value must have come from somewhere and they were the workers, so it must have been them

e) some other form of robbery took place (explain)

and for a bonus point

f) explain how the £20m originally belonging to the shareholders is now distributed in the closed system, given that there has obviously been no change in overall wealth.

H

1. Who determines it costs £20 million? Surely that depends on the tender?
2. Has £30 million in value actually been added to the property? How is that defined?

In this instance, money is exchanged for the sake of someone else doing the work. Assuming that the £20 million represents an amount of actual work and investment that the customer is happy with, then there is no disproportionate element. The people who bought the flats COULD have bought the area and done them up themselves, but because they invest their time, effort and resources elsewhere, chose not to - or didn't see the opportunity. Those people, let's say, own a car dealership. The same shareholders might then go and spend their newfound wealth on a car. Thus the cycle is, if not complete, then veering that way. However, if the £20 million reflected some stud walls, a lick of paint and a trip to Ikea, and the product that the buyers gained was not that which they had expected, but merely appeared so, then they are the ones being exploited.

The shareholders risked their money - earned through the provision of goods and services - to people who could make it happen. As an incentive and reward, their contribution is reflected in the projected profit. I'd assume, though, that Exploitation was going to hold some of the shares itself, as otherwise it wouldn't make any profit itself as a result of the venture.

To me, the phrase "the cycle is, if not complete, then veering that way," implies that once the cycle is complete, we'll be back where we started - derelict site, £20m back in the hands of the shareholders. That's what I understand by a cycle, something that returns to its starting point. Is this what you mean?

H

Well, I was referring to the exchange of money rather than the development. A bicycle wheel rotates 360 degrees, but the bike still moves.

Er, so which is the model for the £20m? the wheel or the bike? where does the £30m come in - the panniers? You've lost me here.

H

The shareholders give investment to the company
The company builds a product
The company sells a product for investment+profit to salesman
The company gives investment+profit to shareholders
The shareholders get investment+profit
The shareholders spend investment+profit on salesman

Assuming that the profit margins are equivalent:
salesman gets profit+investment.

H'mm, seems like you've introduced this "profit" thing into the equation, which sounds suspiciously like venture capitalism to me.

H

If this is Communism, where do I sign?

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