The finger and the moon
Quando il dito indica la Luna, lo sciocco guarda il dito...

Ethics and capitalism
There is an interesting discussion started three months ago, between BrianneBrucker and myself, on her blog.
That discussion started from a post which theme was "Commercializing War", but it evolved in several directions, and in particular, about economy, which touched my interest..
Brianne allowed me to extract only the parts about that subject (if anybody is interested, the entire discussion is here and here).
Please note that both, Brianne and I, consider ethic peace and equality among human beings. The subject in discussion is only which are the ways to obtain those goals.

Brianne (8/2/2006):
We have known for a long time that war is profitable.  It has been commercialized, probably since its conception, and mercenaries have existed in some form or another for probably just as long.  My question is why arent we spending more time and energy making peace profitable.  It can be, you know.  Maybe not for a single indivudual but as a species peace is much more profitable than war.  And that is where the discord comes in.

Dario (8/3/2006):
I don't think that in general peace is more "profitable" than war, if with that word you mean the raise of economy. Global economy is in my opinion based on injustice and inequality. The production of cheap Fiat cars is necessary for the employees that work in Fiat company, as much as the production of Ferrari cars is for who works in Ferrari company. But, while i can afford a Fiat, i will never be able to afford a Ferrari. But i know somebody that can afford it. So, if those rich people didn't exist, Ferrari's employees would be fired.
Our economical system is based on unequalities, and bringing my example to the extreme, the war in Iraq is useful to the welfare of our society.
Resources, wealth are not infinite, so, if we want an equal and just world (as i wish it was), there should be less unequalities. But, being the system based on it, we have first to change its rules.
In few words, if we re-distribute wealth, freedom and justice among all the human beings, we have to accept to loose some wealth ourselves. Are we ready for it? Are we ready to allow that the new generation will be more poor than the old ones in order to have a better world? Mmmmh...

Brianne (8/3/2006):
When I say I think peace is more profitable than war I say that for two main reasons:

1.) In war we use a lot of natural resources and a lot of things are destroyed, factories are destroyed, farmland is destroyed, people are killed.  Without war we would have a lot more food to go around and a lot more oil if we would stop blowing up oil refineries and using oil in tanks and such.

2.) People get laid off because of war too, as I said factories are destroyed and people are hurt, the economy of the countries at war is unstable in my view.  War is very profitable but only for the countries on the margins. For example, since we are selling intelligence and things to Iraqis we are profiting, but Iraq and the rest of the world is not (as demonstrated by the skyrocketing cost of oil).

In your analogies with the cars I would say that neither is working if there is no factory.  Also, those people could be put to work in many other facets (farming for example) if the city is not destroyed by war.

I agree with you that some things are finite.  Oil for example certainly is.  But the only thing that is finite in the list you gave above of wealth, freedom and justice, is the small part of wealth we know as material wealth.  I dont consider freedom and justice finite... do you?  What I mean by that is I dont think anyone loses freedom or justice if everyone has it.  And wealth is such a big word, but since I know you mean monetary wealth lets talk about that...  In my life I have learned that wealth begets wealth.  I truly believe that.  So I wonder there was a redistribution of the wealth what would happen.  Surely if farmers got a decent rate for the food they produce there would be more food, because they could afford to mechanize, making everything more efficient.  This efficiency would then snowball and create more wealth because they would soon be making a profit.  Do you see what Im saying?  If people in africa were to get their share of the wealth they may be stronger, physically and emotionally and be able to take care of thier basic needs so they can concentrate on industrialization and peace.  There will never be peace until everyone's basic needs are met.  Certainly some individuals will have less money for awhile (as I said money begets money, so I dont think they will give up much for a long period of time) but over the long run, globally, I truly believe we will start seeing higher gnp's around the globe, better trading and overall more peace.  I would disagree with you anyway and say that capitalism is about supply and demand which is always in balance.

Dario (8/7/2006):
Capitalistic society is based on the fact that a company that can sell a product better than a competitor wins the game, which means that it can have a bigger and bigger share of the marked while the competitor will loose. This means that the country where that winning company is located will contribute to make that country more rich, while the looser competitor's country will be more poor.
Which means, at the end, that the "winner" country's citizens will be, on average, more rich than the "looser" country ones. And i stop with that "average citizen", because then a lot of discussion can be done about the fact that within the country the distribution of wealth among the citizen can be very uneven.

Keeping the example of the war in Iraq, there is no doubt that it is "profitable" (="give more wealth") to the American average citizen. The mechanism is the following:

There's not enough oil in the world to allow all the emergent economical powers (China and India) to have the same wealth of the actual economical leaders (America and Europe). If any "average Chinese" and andy "average Indian" would have the possibility to use the same amount of oil that the "average American" and the "average European" can use, the resources of oil will disappear in few years (i read somewhere that 2017 is gonna be the date when the oil would finish).
Being that oil is the main source of energy that allow the expansion of economy, the problem is really serious, and the control of the distribution of this remaining oil is crucial for the developement of the economical assets of the near future.

Let's take, as example, a company like "CocaCola". Coke is sold allover the world, including poor countries and "threatening" competitors like China.
If a chinese buys a can of coke, he will give money to the Cocacola company, so, that company will be able to re-invest those money, enlarging the production, and allowing more people to work for that company.
In the capitalistic system, people that work in a company are given a share of wealth that is bigger than the much they produce working, and that extra amount is given by the money that the chinese that bought the can gave to the Cocacola company. It must be like that because the Cocacola employee has to consume as much Cocacola that allows the company to sell the whole amount that it produces.
In few words the extra wealth of American citizens (that work in American companies, including Cocacola) is given by the money that American companies are having selling their products to other countries.
But where are those citizen taking money to pay all of those "can of coke"? They belong to poor countries, so that, on average, they don't have a lot of money to give. That's why the public debt of poor countries continue to enlarge.
This makes the poor countries economically dependant by the rich ones.
But Cocacola and the other powerful companies can play this game only using energy resources, like oil.
Let's suppose there is a chinese company (that we can call ChinaCola), competitor to CocaCola.
If ChinaCola could have, at the same price, the same amount of resources that CocaCola has, ChinaCola would be a threat to CocaCola. Eventually ChinaCola will win the game and CocaCola will loose its market. A lot of chinese employees will be hired by ChinaCola and a lot of American citizens will be fired by CocaCola. At McDonalds they will sell ChinaCola, and the amercan citizens that will go to McD will implicitly give money to China. The public debt of China towards America will decrease, and eventually America will have public debts towards China. China will be a superpower and America will be a poor country.

This will be terrible for American citizens, isn't it? But it will be a good thing for chinese ones!!!
So, America should protect this privilege it has towards China.
How can America do this?
Putting obstacles on the path of economic growth of China.
ChinaCola cannot grow if it doesn't have access to oil, or if its access is more expensive than CocaCola (ChinaCola can win the game only if its product is cheaper than CocaCola).

That's actually the reason because it's profitable for American companies to control the distribution of oil. And, by the way, it is also the reason because it is profitable also for American citizens. Because, at the end, what is profitable for American companies is profitable for American economy, and what's profitable for American economy is profitable for American citizens.

Sorry if i simplified a lot, the things are a bit more complex than this, but still the rules are those.

In my opinion there is a moral fact on all of this: the fact that the chinese person that wants to have a level of welfare comparable to the American one, at the end he cannot have it, and there is no real reasons for this. He was just unlucky to be born in China instead of America.
Obviously American citizens (i strongly believe in people... i don't believe in the system), they wouldn't ever accept to fight a war for reasons that are hardly justifiable as moral. That's why they believe this war is to fight terrorism. It's not for that reason, it is to control Oil in order to obstacle the access to resources by Chinese and all the other emergent economies.

You got reason, in wars a lot of natural resources are destroyed. But this does not affect the winners. Do you really feel you are more poor now than before 11/9? Or, better, do you think that if America didn't participate to the war in Iraq/Afghanistan you would have been more rich? I don't think so.
The natural resources destroyed in these wars is the price to pay for America to remain the economical leader of the world.

I would add to this discussion that the capitalistic system does not work in a worldwide view of economy.
The capitalistic system main rule is that the extra wealth produced by the productive process is re-invested in enlarging the production (obviously there must be a diversification of the products and stuff like that, but the main thing is that the amount of all the production is enlarged).
The enlarging of the production is an advantage only if the whole amount of the produced goods are actually sold and consumed. So, enlarging the production means also that the amount of the consumers of that product is enlarged. If we suppose that the population in America is constant, it means that a larger and larger amount of that good is sold out of America, and that actually means that America is getting more and more rich (if you think, on average, the current generation is more rich than our parents' one, which was more rich than their parents' one and so on....).
This general rule has a meaning if we consider one country's economy. But if we consider world's economy, the problem is that there is no way the total of the world's production can be enlarged, because in that case, the excess of production cannot be sold outside the world (who are we selling those goods to? Mars?). So there is no reason for those companies to re-invest their profit, so the total amount of money given to the employees of those companies cannot be larger than the value of the good produced by those employees. So, those employees will be able to buy only the amount of wealth they produce. Which actually means that if we re-distribute more fairly the wealth in the world, everybody would be more poor. Or, if you want, that the total amount of wealth is finite.

About freedom and justice, i don't consider them finite. But also i think that in our society we are accustomed to consider those things strictly related with wealth.
Are you free to buy a chicken to feed your children? Yes, because in the store there is enough chickens for everybody. There are entire nations in Africa where the main task of people is to walk barefoot for miles and miles to get some water to drink. What kind of life is that? Where is freedom and justice for those people?
They could have freedom and justice as we consider those things, only if they were a more rich. But that means that we should be more poor.

Brianne (8/7/2006):
As far as profitable goes I agree that a distinction should be made.  When I spoke of profit in the last weblog I was speaking of economic profit, not the more classical moral profit.  I really dont want to think about what this war is costing us morally because I think it is costing us our soul as a nation.  I agree the war is profitable for America right now.  We are selling arms and intelligence to probably both sides.  The war would be much less profitable for America if it were on American soil, in fact, if the whole war were here, and not just 9/11 I think the conflict would have been solved by now.  Moreover, I really do think that if we had not gone to war America and the rest of the world would be richer.  We are literally spend what, billions, trillions on this war a year, not to mention all the other non-monetary resources we have put into it.  Think about it in educational terms... how much more money could we put into our schools if we werent spending in on arms.  How many good teachers have we lost because they were in the Army reserves?  And you can do that with any piece of our country's infrastructure, those are just the most apparent to me.

As far as capitalism, as I have said, I was a language major, not economics, so I am ready to learn, but....

In thinking about it I have to say that I am not convinced that capitalism is the most effective, efficient, or peaceful for of economy available.  I do however, think it most suits humanity at this point in our existance/evolution.  Humanity is naturally greedy and selfish, this can be used for good and for bad.  Take it as you will.  These characteristics are highly compatible with capitalism.  I believe that as we evolve we will naturally change our economics to one that is more peaceful.

Dario (8/8/2006):
I think that you cannot make a real comparison on amount of money we could have to spend for our services if those money were not destroyed on the war.
2,000 US dollars is a pretty big amount of money because the value of that amount is enough to buy something (a teacher's month salary, for example(?)). But if the value of an American dollar was less, that amount wouldn't be enough for the teacher. The power of USdollar is proportional to the power of American economy. And, in my opinion, it's exactly to protect the power of American economy that this war is fought. I mean.....
One can think that if America saves 2,000 dollars from the expenses for war, America could pay a teacher for one month... But that, only with the economical status quo. If economy looses power, those saved 2,000 dollars would have less value. A teacher's salary would be much bigger than that, so... if you save 2,000 dollars not fighting the war, those saved money wouldn't be enough to be used in other goods with equivalent value. Better than nothing? Well, better than nothing now, i can pay... let's say... half a month of the teacher's salary. But what about in half a month? In half a month the value of 2,000 dollars would be even less, because economy is keeping loosing power, and those money i will make won't be enough to pay the other half of the teacher's monthly salary. And so on.... I don't know if i gave the idea.
I make a stupid example. If i have only a little amount of gas in my car, not enough to make 100 miles i have to do to go someplace, and if there is a gas station at only one mile in the opposite direction, what i would do is to go to the opposite direction to make more gas, so that i can go to my destination, driving for 102 miles in total. You could tell me something like "hey, but you are wasting 2 miles of gas departing in an opposit direction... Why don't you use that gas going towards your final destination?" Same thing with war. We are fighting in Iraq, so that the power of our economy will be enough to live our rich life for another century. Never mind if we are wasting money fighting this war.

What kind of dumb example did i make?!?

I think that capitalism is the worst economic system one can think of, because it lives on unequalities.
But i also think that it is the most powerful system, as far as i know. Socialism would be more human, more "equal"... being the concept of it something like "we produce wealth and we share in equal part among everybody". The problem is that, since socialism is not powerful as capitalism is, it can survive only if it is protected by the state. And the only way to protect it is to limitate the individual freedom of the citizens. Obviously i consider this last a negative thing, which makes me think that the best is in the middle. Politics should, in my opinion, limitate the growth of capitalism, controling some crucial services to the citizens. In few words, limitating the "freedom" to grow their wealth (and their power to control the global economy and politics) to rich people. That's actually the system we have (had?!?) in Italy (and they better developed it in some northen European nations). I know that the context is very different so a comparison between the two system is a little more complex (in Italy the economy is driven by tons of little companies, and not by few big ones, as it happens in America).

But anyway i agree with you... if we stop fighting wars trying to protect our capitalistic system, the only way the world can evolve is to change the rules of capitalism. But first we must agree in stopping fighting each other. That's the difficult step.

Brianne (8/8/2006):
The thing Im not sure I agree with you on is your example about the teacher.  You see, we arent talking about 2000 dollars, we are talking about trillions.  And the lives of the men and women in the service that value much more than that.  I understand your statement that if we lose our spot on top of the economic food chain as it were, the resulting loss in worth of the dollar.  But as you stated we have more nukes than we could ever possibly use, there would be a nuclear winter and everybody would die before we could use them all. Besides, all you really need is one.  We could scale back there and noone would notice.  Also, with a little more foresight and planning this war could have cost millions a year instead of trillions a year and we would still be on top of the economic food chain.  War in general is wasteful and this war in specific is ghastly so because it wasnt planned.  And it still isnt going to give us the right to distribute the oil, so what is the point.  I still dont buy that that is the reason we are there.

I agree, I think we will take on a more socialistic economic structure as we evolve.  I wonder if it will take on a form of communism.  Maybe Marx was just ahead of his time.  Please dont misunderstand, communism isnt perfect either, but I think the biggest of its imperfections was that it came too soon.   We shall see.  Im not sure the problem is that socialism is not powerful.. I think socialism is very powerful, it just is completely suited to the strengths and limitations of the human psyche at this point in our evolution you know what I mean?

Personally I would love to see a government that provides an infrastructure of communication between its citizens, provides for basic healthcare/welfare for the needy, education, and.... well, thats about it.  This means that the goverment uses my taxes for roads, telephones, foreign trade, etc.  It provides basic healthcare, like medicaid, medicare and social security disability, but for everyone and it pays for schools.  Not much else.  It would adopt a foreign trade policy based on the inherent worth and dignity of human beings so it wouldnt need a big defense system or immigration or homeland security, or anything like that.  But that continues to be my utopia.

Dario (8/10/2006):
About my example with the 2000 dollars and the teacher salary, i was just trying to simplify.
It's clear that this war was very wasteful of money, and i think that anyway, who agrees with this war and who doesn't, since those are American people's money, don't want any waste at all.
But i think the problem is another. A war is usually very expensive anyway. So, even if all the money were used without any waste to support the war, one can think (as you and me) that the war shouldn't be fought anyway, to save also those money.
Then there is also, as you say, that the cost of war in human lives, in destroyed goods/buildings/structures, and, last but not least, in American image in the world.
But anyway i see that Americans (and i include also Europeans and Westernians in general) are happy to live their rich lives. They are happy to have their huge refrigerators full of all the kind of precious food. They want to be able to jump on a plane and go to holiday in the tropical islands (and i include myself in this last category!). In general, they want to live in the wealth. Moreover they want their children to be able to live atleast in the same wealth.
They still don't know, but this mean that they want to keep the economical supremacy of their countries on the world.
Unfortunately China is a threat of this status of economy. We (America and Europe) have to win the economical war to China, otherwise our economy will begin to loose its supremacy, and our huge fridge will be, day by day more and more empty. And at the end we won't even be able to have enough electricity for our fridges.
This is what this war is fought for.

Yes, without this war we could save trillions, but we would have lost the economic war with China, and we would have had our fridges empty for our children. With this war we waste trillions, but, frankly, did you noticed that your fridge is no more as full as before? I didn't.
Yes, anytime i put gas on my car i complain. But still i can put gas in my car. That, thanks to the fact that the cost of life is not really changed so much, if compared to my salary. Gas is more expensive but in general economy is doing good. I didn't hear about an Italian that was fired from his job for guilt of this war. Or that his salary was decreased for it. What does it mean? That Italian economy is pretty much doing as it was doing before the beginning of this war (that is not really true... it is doing worse, but you'll see that in few years we will still be the economic leaders of the world - i include Italy and Europe in American economy because they go side by side)

Finally about socialism.
Try to imagin a society in which everybody worked the much he was supposed to, and all the wealth produced with work would have been shared among all the citizens.
That would be a dream, but that also would mean that if i work more than what i am supposed to, i don't get more money, so i am not pushed to do more than my share. And, globally, the economy does not grow.
If outside this utopia there is another State with capitalistic organization, this State's economy will win.
That's why, in my opinion, socialistic societies are looser. Because if my utopistic state need to import some good, the price of that good would be too much to afford.
But in my opinion it's wrong also to say that the capitalistic model as it is now can work forever in the world, because, without tricks as wars are, that protect our supremacy, the global wealth cannot increase.

Brianne (8/10/2006):
Can I ask you a question?  Why is everyone so afraid that there isnt enough?  You say that someday there wont be any food to put in the freezer (because China will have it all) but I just dont believe that.  I think that there will always be enough.  I believe in the abundance of life, while I do understand your argument, I just cant believe it.  The problem has never been scarcity.  It has been greed.

Yeah, I understand the downfalls of socialism, especially while capitalism exists.... Human beings definitely need incentive to do right.  Please dont misunderstand, I dont think human beings are naturally evil.  I think they are naturally amoral.  That being said they have to be taught right from wrong and they have to have an incentive to do anything (right or wrong).  If a person didnt have the incentive of hunger we probably wouldnt even eat.  So until the incentives for peace outweigh the incentive for war we make war (and the capitalist system is upheld).  As I have said before, I think we should be spending money on educating people on the profitability of peace.  The way we can do that here in America is by rewarding political candidates who advocate for peaceful negotiation by voting for them.  But those are few people.  It needs to be a grassroots education from the ghettos up.  Thankfully, I feel that as we evolve, we are finding those incentives for peace more appetizing and they are overpowering our greed.

Dario (8/11/2006):
Actually i said that there won't be food enough to fill our fridges. But that was only an image. What i think is that if Chinese economy surpasses American one we will be in troubles for any kind of monetary wealth. I don't grow chickens, if i want to eat chicken i have to buy it at the store. I have no problem to buy it because i have money enough. I have money enough because i have a good job. I have a good job because the company i work for is doing good. Since that company produces dies to build bodies of cars, it is doing good because the companies (mostly european) that produce those cars are doing good. And they are doing good because there is a lot of people (mostly europeans) that buy those cars. And they can buy those cars because they, theirselves, have good jobs... and so on... If Chinese automotive and other companies surpass European/American ones, at the end of the chain i will loose my job, or atleast the value of my salary will be lower. So that if i want to eat chickens i will have to grow them, because i won't have money enough to go to buy at the stores. That's actually what is now happening in Africa. Do you think in the world there is not enough food to feed Africans? There is, but anyway they are suffering starvation. And i am not speaking only on food. They don't have cars, they don't have toys for the children, they don't have decent buildings... Do you think that in Africa there is no water? There is, but anyway a lot of Africans spend a big part of their lives to go to take water for themselves and their family. Because they don't have a water supply network that bring water to where they live. And why? Because their economy looses the competition with ours.

About socialism.
Yes, i think that you got reason, even if i don't share that attitude. Humans need incentives to do right (or better, as you say, to do anything). And that's one reason i don't like extreme socialism. I would probably do my best even if i didn't have incentive to have more money, if that's what you mean, but i wouldn't feel good if, by law, i didn't have the opportunity to own more money... that's a kind of strange answer, isn't it?
I want to say that, for example in my job, i do my best because i like to do the best i can and have the best results, never mind if they don't give me any raise. But if they don't give me any raise in few weeks (i am waiting for it!!!) i would really be upset, because i like to raise the level of my (and my wife's) life. I'd like to be more "free" to be able not to save any single penny for our holidays or for any other thing we like, i'd like to be able to pay off the entire amount of the loan for our house...
Said that i still don't agree that there is no limit to those monetary incentive. I don't agree with the fact that there are people so rich that they can buy the power to drive the world politics as it happens now. And i don't agree with the fact that there is people so rich that they won't be able to spend their money in their entire life while there is so many people that are so poor that they don't have any money enough to live their lives. But it is like that. And that is given for the extreme application of capitalistic rules.
That's actually why i think that a mixed system is the one that can be applied to make the things a little better.

Brianne (8/16/2006):
About Africa.  I understand and still disagree with you about there not being enough for everyone, you said yourself that there is enough food and water to feed Africa (I would add and the rest of the world, starving population also).  I think that if we invested some money in industrializing Africa it would bring more abundance in the long run and we would all have more, even if they are in competition with us.  I wish I knew an example to explain it to you better.... Ill keep thinking.   Its just that... that is one of the good things about capitalism.. the competition.  Competition makes things less expensive, more effecient, and more effective... That being the case, I think if Africa were industrialized, they would be in competition with us but things wouldnt cost as much either... Hmmm Im going to leave that statement, but Im not sure you're going to understand what I am thinking...

About socialism, I agree with you that a mix of both would be good.  If you could take the incentives and light competition of capitalism and mix it with the spreading of the wealth of socialism I think you might have the perfect economic system (at least for awhile- until things change) I am going to think some about what that might look like, maybe it would be similar today only there would be more of an incentive for people who have a lot of money to give it away.  Or maybe it would be more socialistic... Ill think about that and maybe write a new post.  I do want to say though that money is not the only motivator.  Certainly it is the primary motivator for a lot of people, but not for all of us.  It sounds like you are motivated by a sense of pride in your work.  I am motivated by helping people.  I heartily agree with you that monetary incentive has gotten excessive which is why I think we should focus on making things other than money more motivating.

Hey Dario, what do you think about a global currency?  How about globalization in general, maybe that will be an easier question.

Dario (9/14/2006):
I see that you agree with me that the problem is not actually the lack of food/resources, but the distribution in the world of them. But the solution is not like the one you suggest (=invest to industrialize those poor nations so that they can have more wealth for theirselves). Actually we (rich countries) do not invest in it because if we did, they would develop an economy potentially risky for us, and if they would apply the same logic we are applying now, they will become richer and richer while us poorer and poorer.
In italy (i think also in USA) economist are very worried about the growth of Chinese economy. In the beginning of that growth the labor of Italian companies was beginning to parcial moving to China, since the labor of those employees was much cheeper (the italian low-level employee's salary is about 10 times the chinese omologue). Still that was not a global problem because the Italian companies were still controling the power of the production. Actually it was a problem for italian low-level employees that lost their job, but those economists didn't really care of it?!?...
Now the thing is that China is developing the same technology, so in Italy the goal is to increase more and more our technology to always be one step ahead. And we are also trying to use another side of strength of our production: the Italian style that actually cannot be stolen by any chinese production because it's a fact of culture radicated over here since millennia. Anyway, the thing is that if the high-level labor (like mine... i am a computer guy) would be more competitive in China, not only they will "steal" my job, but they will also be able to start their own business for the production of products competitive to ours. And that is the big problem of those damn economists: the managers will also loose their jobs. Conclusion of that? That Italian economy will loose the game against chinese one.
There is still two chickens every two people, but Chinese will want two chickens each just like now we want two chickens for us. We will be poor and they will be rich.
That's why there is the need to stop the growth of Chinese economy. And the only way is to submit their economy to ours.
Africa is the same. If we submit Africa we will be sure to be able to have our two chickens each.
That's the reason i parcially like Socialist economy. They would share the two chickens giving one to Africa. The problem is that Socialism is looser because, when Africans will develop an industrialization society, if they would be capitalists they will be able to have also this chickens. Capitalism is always winning against socialism. Unless socialism is imposed by a bigger power. And that won't ever happen because the biggest power, nowadays, is USA.
Moreover, industrialization of africa doesn't look to me a good idea. The problem of industrialization in general is that agriculture gets poor. And that gives more wealth but less food. The best way, in my opinion, to help africa, is to make so that agriculture gives more wealth. Some programs had started in Italy (and now are pretty much developed in the whole world, but it's still not sufficient... because they don't have political support), by "commercio EquoSolidale" (i don't know the name in English). They sell products from the third world (Asia, Africa and South America) being careful that people that produced those products are paied "the right amount". I like to go shopping in those shops even if the products are a bit more expensive than the omologues in the ordinary trade, where often low-cost labor is used in a slavery condition.

You say that competition make the things less expensive.
I agree with this. But the problem is not the cost of a product, but its real value. If something is less expensive it doesn't mean that it's more affordable, because its value is still the same.
I make an example.
Suppose you have a product, that producer A sells at 100 dollars. If next to there there is producer B that sells the same kind of product at 90 dollars people go to buy that product from B, so that producer A, to continue its business, must lower its price atleast to 90$, but in order to beat A, he would eventually sell the product for 80$. Company B will do the same... lets suppose that at the end A and B will stop decreasing the price to 50$. What happened? That both company A and B have the half of the income. In an ideal company the income is used to pay the employees that work for that company. Half of the income means half of the salary to the employees (or half of the employees with the same income?!). Incidentally those employees are also consumers. It's true that those consumers have to spend the half to have the same product, but it's also true that they have half of the money available to buy it... unless... unless the decreased income is given by enlarging the market for that product. Which means to invade other countries, with obvious influence on those other countries economies (actually that's the reason for which we, rich countries, are pushing for globalization of trade, which means abolishing protectionism of the states against foreign economies).
By the way i think there is a good thing about competition, which is that if there is a monopoly (especially for necessary goods), who drive the company can sell the price they want, and at the end, if there is not enough control, who makes more money is the rich guys, not the employees.
You are speaking also about competition between an American (or European... same thing) company and an hypotetical African one. Yes, competition would eventually reduce the price of our (and their) products, and that would mean less salary for everybody. Including the rich guys... Isn't this a good reason for them to obstacle the evolution of an African company?
You say there would be more abundance. Actually abundance is not a good words for those economists. The problem is that my work is underpaid for the value of the product i produce, and that is a necessary fact for capitalism, because the extra value i produce is used to re-invest, and that re-investiment is what helps to have more products, more abundance. But those products must be sold (otherwise you have an overproduction crisis), so that, when the market is exhausted, the ones that will loose wealth, are still the employees, that are the consumers. They will have abundance of goods to buy but not enough money to buy them. Or, worst, the company won't be able to re-invest, the company fails and the employees loose their jobs.

So, i agree that capitalism (and competition, which is the main effect) will make people in average more rich, but only if taken as a system able to expand. Unfortunately for economy, while American (=European) economy can expand towards the rest of the world, the world economy cannot expand. That's what i mean when i say that the global wealth cannot increase.

A mix of capitalism and socialism, to me, doesn't solve the problem, because in that utopia there will still disparities between people. But atleast that can avoid poor people to be so poor that die for hunger. It doesn't create new global wealth, but it distribute it more evenly (not perfectly evenly, but atleast a little better).
Still the problem is that this mix is still less powerful than pure capitalism. If we have the world splitted in 100 nations that agree in the mix system the things can work, but if only one doesn't, its economy would grow crushing the other 99.
Unfortunately i am not that clever to find out a third economical system that can win to Capitalism. Maybe it doesn't exist anything like that.

Last, but not least: Globalization.
I think that under particular conditions globalization can be good, because depending on the economical system it would still have big, medium or low disparities between people. But atleast those disparities are not geographically distributed. Now, if i am lucky to be born in Italy, i can live pretty good, while if i get birth... lets say... in Burundi, i will probably die for hunger, thirst or machete before i reach my adult age.
The problem of globalization of economy is that if you cancel the self-protectionism of economy of some nations, you have also to reduce the self protectionism towards immigration for rich countries.
For example... Northen Italy, for a lot of reasons, is more industrialized and more rich than south. That's a good thing for south itself since people from south italy can freely move to north, help producing wealth and sharing that wealth with us (i am from north). But if we split Italy in two so that the north still have the right to trade the way it wants to south, while southern people are not allow to migrate to north, it's obvious that southern italy would get poorer and poorer.
Obviously this migration of southern people to north is not good for north, because northen towns are growing too much (loosing that bucholic taste and specification of culture they had in the past), while southern people must leave their lands, their culture, their families... The best thing is to grow southern economy. But in long-term that would be solved because eventually southern people would invest in the south made more rich by emigrants.
In few words i think that if we split Italy the way i told you, only rich north will get some advantages.
Globalization as suggested is exactly like that. I think Americans (and Europeans) agree with globalization but they wouldn't like the mass immigration from poor countries.

Brianne (9/18/2006):
I dont know, It seems like a contradiction to talk about human rights, but at the same time you dont want them to have the same opportunities as us because you are afraid of the competition.  I do agree that America should not export democracy but I think competition is healthy and necessary.  I also think that we have a responsibility to the world to do our best to help countries who need it.  I understand your concerns and your examples, but I disagree with them.

Economics is not my forte, I have a lot to learn, so I cant offer you counter-examples of what I think will happen if Africa is given a chance to industrialize.  I only truly believe that it will be a benefit to the world.  I believe the new outlets that would be created, the new companies and opportunities for growth and commerce will expand capitalism in ways we cannot imagine.  That is why I guess I disagree with your fundamental assertion that the world has finite wealth.  Our concept of what wealth is might have to change, but from the depths of my soul I truly believe in the law of abundance, and that wealth creates wealth.

As far as globalization goes, I am really interested in its effects, but I think that once the world is truly globalized (if that is even a word!!) and I do believe globalization is inevitable that people wouldnt want to immigrate to other countries.  I think that if things were more equal there would be no reason to.

Dario (9/19/2006):
You say: "I dont know, It seems like a contradiction to talk about human rights, but at the same time you dont want them to have the same opportunities as us because you are afraid of the competition."...
Wait a minute, stop stop stop... i didn't say anything like that.... mmmmh.... or better, forgive me if i said something like that, if i did is for my limited knowledge of English language.
I said that for our competitive capitalist economic system it is not useful to give opportunities to other less powerful economies to raise, because they will limitate our economy, its power to grow, and the power to grow is the necessary pre-condition of a capitalist society. So, i think the fork we have to choose is this:
1) we continue with our capitalist society, but in that case the only way for our economy to survive is to continue to limitate other cultures' freedom to grow.
2) we change our system to a socialist or atleast a less strong capitalism where we ensure the poor countries to survive.
It's obvious that my choice is for the second option, even though it's difficult to obtain because, as i said, a capitalist society always win against a more moral system. So there must be an authority that is recognized by everybody in the world, to impose everybody the more moral system and not to allow strong capitalism. Can it be the UNO? I don't know.
Anyway, option #2 also means that we begin to share our wealth with the poor countries. That our children will be poorer than us. We have to forget our privileges, in order to give some wealth to that part of the world. Nevertheless i still prefer option #2, because #1 is immoral. Unfortunately i am not the one that decides. Everybody can decide in our "democratic" nation, if everybody knows the truth. I am kind of pessimist because choosing option #2 is against the interest of the big companies, which control the political power.
I am not gonna tell you again the reason since i believe that, although competition is healty for us and for our economy, it strongly limitates the evolution of the global economy. You say you disagree with this point, so what's your opinion? Frankly i think that what i told you is true, because it's not my invention.
You agree that capitalism is based on expansion of the market? If yes, you would say that a capitalist economy of a state is based on exporting the good produced in the country. Ok? So, if we change in that statement the word "state" with the word "world" and the word "country" the word "Earth" ("a capitalist economy of the world is based on exporting the good produced on the Earth"), it makes no sense because to export you need some "outside", no? how in the heaven would you expand the market? Towards the other planets of the Solar System? Stop expanding means stop producing new wealth, and that means that wealth is limited to the point where capitalism cannot expand. I work in a company in the field of automotive: it's not enough to produce a wonderful car to increase the wealth of people. You also have to find somebody that buys that car. In a closed system the value of a produced good (the wonderful car) is bigger than the value that one in the closed system can afford, otherwise it means that there is no more money to re-invest by the producer of the car (and that is a need for capitalism). So, or you have a wonderful car which you don't know what to do with it, or you open the society to export it outside, invading foreign market. Suppose that you, for some reasons, cannot invade foreign countries. It's the collapse of the production of that wonderful car, isn't it? Ok, that's my statement: you cannot invade any foreign countries in a global market, because there is no countries at all outside the world.
But you disagree. So, what's your opinion about this problem?

Economics is not my forte either, so, all the wonderful discussion about Africa is just a very small simplification, to me. But the problem is that a rising economy is a menace for our economy, and the big companies will do everything to contrast that rising economy. And the wealth of our companies is actually our wealth, simply because those companies are situated in the countries where we are living.
I cannot imagin a world with africa rising its economy, frankly. But that's exactly what it is happening for China, if you know the problem.
My company is suffering for this problem, infact some labor strength is moving to east-europe and China. So, some of my colleagues are being fired. That doesn't affect my salary, for now, but don't you think, if all the Italian companies do like that, that italy will become a more poor country, while east europe and China more rich? And when their economy will grow to be comparable to our economy, don't you think that it will be a menace for our two chickens?

I know what you think of. You think that ok, those employees of my company are fired, they can start a new business their own and hire other people. But it doesn't work like that, simply because you cannot create wealth, wealth is limited. If the products on the market of one country are available for all the people in that country, people cannot do more money producing other products.
I try to explain better.
Suppose that you have a very simplified economy: you have only one type of product, and suppose that that product is consumed by an average human one piece a day. Suppose that there is actually available one product a day for each person, but only a half of those people can afford to buy it, because the other half is unemployed. Suppose than, that one unemployed guy succeeded in starting a business for producing the same product, hiring all the other unemployed people of that society. The problem is that there will be available the double of those products, but people will still consume one piece a day. So, in order to save that closed economy you have to limitate the production to the half. Which means to fire half of the employees, got it? But if you fire half of the employees, you will still have the right amount of those products: one for each person, but you still have half of the population unemployed that cannot afford to buy those product. How do you solve that problem?
I see only two ways to solve the problem:
1) invading some other country with the market of those products, so the production will increase and all the people of the society have money to buy atleast one piece a day. That makes those people more rich, because they can buy the product.
2) redistributing the wealth of those product, so that everybody can afford to buy that product a day. But that means that the money made selling those products is enough only to pay the employees' salary, so it won't be enough to re-invest and grow the economy.
solution #1 is limitating other economies
solution #2 will kill competition and capitalism.
I hope i explained now a little better my idea.

I know, i know, i simplified a lot, because there is not only one product in our market, and people are not employed only by companies that produce that product, but if you complicate a big lot the stupid example i made, you will see that, in a closed economy, the things still work like that, because we can pay only for how big our salary is, and our salary value is smaller than the value of the products we produce, and that is the easiest and most necessary rule for capitalism.

I parcially agree that wealth produce wealth. If i am good in producing... i don't know... i am a farmer and i produce apples. I produce 2 apples a day, but i need only one because we all know that one apple a day keeps the doctor away. So i have created wealth, because with the energy i used eating one apple i could keep the doctor away in order to produce the second apple, enough for somebody else. So, i can give my apple to somebody else. But our economy is based on the fact that if i sell that apple, i want that apple to be paied for atleast the value of that apple. That's good because i also like peaches, and the farmer next to me sells peaches.
Suppose than that i produce not 2 apples, but i produce 1000 apples a day. I will still eat one apple a day for my goal to keep the doctor away, so that i have to sell 999 apples. Other 999 farmers will give me one fruit they produce, so that i will have to eat 1000 fruits a day, otherwise it will be a ruin for the whole economy, don't you agree? If i need only 10 fruits a day for my consuming, i will produce only 10 apples, selling 9 of them to buy other 9 fruit from other 9 farmers. And what about the other 990 farmers? They won't be able to buy my apple, don't you think? That's good only for the doctor!

Immigration is a direct consequence of globalization. There will always be some areas that are more rich than others. If you open the borders and let everybody move and to find a job outside the countries, in long long times the wealth will be evenly geographically distributed in the world, so immigration won't be necessary at all. But till when it will happen, if you don't allow free immigration the rich countries will always be more rich and the poor more poor. Because actually people cannot move money how they want in the world, so they cannot start business where they need more wealth.
Since there are already disparities among the countries, globalization of market but no globalization of labor will be good only for rich countries.

Brianne (9/26/2006):
Let me see if I can think of an example as to why I dont think our children will be poorer if we share our wealth with poorer countries.  I think the best way to do this is to ask questions... What would happen if I chose to fund an upcoming business in Africa, lets say it is a pharmaceutical company that is studying the AIDS virus.  Lets say I gave them a loan to be paid back with 10% interest in 10 yrs.  How is my company less wealthy?  We make a lot more money with the interest than we give out.  Or lets say we draw up a contract that says we give them money to start and they give us 10% of their earnings.  Then lets say the find a cure for AIDS.  They market it and make billions... My company gets millions... how is my company less wealthy.  Or since you may say "yeah, right, and what is the chance of them finding a cure for AIDS.."  Well maybe they dont, but maybe they develop a better drug that combats it more effectively... surely they could accomplish that.. and if it were to be done anywhere it would be Africa, right, I mean, isnt that where AIDS started.  Then not only does my company make out monetarily, the world gets a cure (or a better drug) for AIDS.  I guess what I am saying is that there is always something to be developed and invented, that is why I dont see that sharing wealth will limit the evolution of economy... I hope this explains my position better..

I think one of the problems in our discussion is that we are simplifying it too much.  The fact is that there is not only one product being produced and that people demand more of one product that another.  Think about music.  First it was on E-track... then everyone who was working in 8tracks got fired and stated working on tapes, then they got fired and started working on CD's, now they are working on Mp3 diskettes... do you see what I mean... or should I try to explain it better.

Dario (9/28/2006):
Thanks for the example, because it makes even more clear your point. And also it allows me to use it as a starting point for my following explaination.

Uhm.... So, you are founding a pharmaceutical company in Africa that studies AIDS. I wish you the best luck, so, suppose that within few years your company finds the perfect medicine for AIDS, which, given to a sick people, he will be safe and sound and healty after few days.
I guess you are starting that business in Africa in order to let Africans to work for that company, if not in the research part (i don't think they have enough technological knowledge to do it, yet), atleast for the production of the drug.
Even if you are the best honest person, giving sick people (or their healthy national programs) conditions to pay that drug cheap and with loans enough good for them, you will have back an extra wealth, isn't it? That's why you rightly say that since the business is doing good your children will not be poorer than the previous generation (you).
That's about what you said, isn't it? And i agree with it. That needs you being very rich, but, as an example, i buy it.
Unfortunately you didn't mention the children of those people that are now working for already started pharmaceutical companies in America that are studying for AIDS remedies.
Your company will be the ruin of those companies, don't you think? Some of those people will be fired, or have to be reconverted to other jobs, while, obviously, your company, doing better and better, thanks to the extra money you make, will be able to hire more and more people in Africa.
So, those African children will be richer than their parents (and that is good, since some of them - or their national healty program, still paid by them - have to pay back the loan for buying those drugs).
So, what is the result? That your company is making so that America shares wealth with Africans. Which means that Americans are poorer (infact some employees of those American pharmaceutical companies are being fired, or atleast they have to accept worse conditions being reconverted), and African are richer (infact you are hiring some employees).
So, if we take your children, they will be richer than you. Luky! But if we take the average child of the average American, he will be in average poorer, thanks to the fact that the average child of the average African will be in average richer.
And that is actually the reason since if you will start a business you will probably start it in America and not in Africa, because American economy will make you better conditions in order to push you to start it over there, but that's another subject.
That is actually what is happening now: They didnt' find a perfect medicine for AIDS, but they found out some good remedies. Look to the statistics, the rate of death of AIDS people in America and in Africa. Why is there such a difference? Because Africans cannot afford those medicines. And that, because businesses are in America and not in Africa.

Or, maybe i understood wrongly your idea: you want to start that business in Africa, hiring only American people. That does not make sense, because then, those Africans that need the medicine, have to pay for them (with the most honest condition you can imagine) to an American company, although it is situated in Africa, so Americans are going to be richer and Africans poorer.

And there comes your other example... the evolution of music storage: there was 8tracks then tapes, then CD's and now MP3's.
Apart from the fact that the evolution of this technology didn't make more jobs, but just converted old jobs to new ones (i mean, i am not so informed about it, but i think that Mr. Sulu, employee of Sony Music, that was working in the 60 for producing 8tracks, in the 70 he was not fired, but reconverted to produce tapes, in the 80s to CDs and now to MP3 minidisks).
Note that, while i am not old enough for 8tracks, i do own a vinyl album of Pink Floyd The Wall, and i also have a tape of it, a CD, and i will probably soon have also a MP3 minidisk. So, to pay that Mr. Sulu of Sony Music i payed 3 times the price of the music, and i will pay for it a fourth one soon. Which i think is kind of dumb, but that's another subject, again (you know, my music taste sometimes is a little fossile).

Anyway, i got your idea. If i invent a new product that didn't exist before, my company will make good business because that product will invade a virgin market with no competitors, just because that product is new. And, after a while, some newly born competitors will make even better business.
That's what happened (atleast in Italy) with cellphones, for example.
10 years ago cellphones were kind of unknown, and everybody could live well without them. Somebody invented the product and now everybody (atleast in Italy) have one. That was very clever. They invented the product and then they convinced us that we really needed it, so we had to buy it.
So, what you are saying is (correct me if i am wrong) that in a case like this some wealth was created.
I firmly oppose to that opinion.
How many cellphones have been built in the world? I don't know the number, but i would say that the total amount of cellphones ever built in the world is exactly the same amount of cellphones that in the world somebody ever bought (if we don't consider those ones stocked in the stores, which, i guess, is a very small number). I hope you would agree with it, uh?
And how much did those people pay in total for buying those cellphones? again, I don't know, but i guess it is the cost of a single cellphone multiplied for the number of cellphones ever bought (i know that cellphones have different prices, so let's take the average cellphone). You would agree with this too. Or not?
But you would correctly say that the companies that produce cellphones created wealth, i imagine. Infact those companies hired people for producing those damn phones.
And how much is the total wealth created by those companies (or, in other words, the total amount of money paid as salaries to the employees of those companies)? I would say that it is LESS than the money payed by all the people that bought those cellphones. You agree with it? Infact, if you take a product, a part of the cost is used to pay the inert matter (plastic, silicium...), a part to pay the machines (dies, CAMs...), a part for the infrastructures and services (the shops that sell cellphones) a part for the salary (including also the salaries of people employed in the infrastructures) and a part for the company to re-invest, so only a part of the cost of the cellphone is used to pay salaries. At the end, only a part of the total amount of money spent in the world for cellphones is used to pay the salaries of the employees used to produce those cellphones.
So, in the world, people that buy cellphones are globally paying a price for those little things that is more than the total wealth created by the companies that produce cellphones. I hope you agree with this, because if you don't, please explain me where is that new wealth you are speaking about: i cannot find it.
Now there is my question: In your opinion, given this stupid example, is the wealth of the average human increased or decreased after the introduction of cellphones? I would say decreased, since they paid, for their cellphones, in average, more than the extra wealth they, in average, obtained by the introduction of that technology...
...or, better, it depends upon what you call "wealth". In some way it is increased because, yes, we paid a lot of money for our cellphones, but now we have the cellphones, which is a good that we didn't have before, so our life style is better, or, in other words, we are more rich.
But that applies only for those people that bought cellphones.
What about the wealth that could be used to buy food for poor people? It decreased, because, since we paid for our cellphones more than the wealth we obtained by the introduction of cellphones in the world, we have less money to share in the market for other goods in other production cycles as food.
You would now say that if i am an African and now i don't have money to buy food i am a stupid to buy a cellphone. I could use the wealth produced by those cellphone companies to buy food instead of cellphones. WRONG! If people buy food instead of cellphones those cellphones wouldn't be sold, so those companies wouldn't pay the salary, so that extra wealth wouldn't be "created".

By the way, pulling over the limit of this example, cellphones are now widely distributed in the rich countries, i think. So, or the companies that produce cellphones stop to produce new wealth, or they will expand their market in the poor countries. A rich guy of the poor country will be able to buy a cellphone produced in Japan (while a poor guy won't). And that means that the rich guy would pay some money that he could use to create a new business in his own country. And so, he couldn't hire other people of that country, giving them the wealth they could use to buy food.
And that's the reason since poor countries are getting poorer while we are getting more rich.

You would say that in my example on cellphones i didn't consider the evolution of the economy, which, by mean of competition, is the one that in your opinion contributes to create new wealth.
But still, if instead of a price to pay for a cellphone i pay less thanks to competition, that means that or the salary of the people employed for that production cycle decreases, or the market expands, because the total amount of money we are giving to those companies is still the number of cellphones multiplied by the price of a cellphone, so, if the price lowers, to maintain the same total wealth (the sum of all the employees' salaries) the number of produced cellphones must increase, which means that more cellphones have to be sold, or, in other words, that the market enlarges.

So, the thing is that i am obviously content if you (or anyone else) find the remedy for AIDS, but not because it makes the world more wealthy as a business.
Ok, it would makes it more healthy, and that means that the world will save a lot of money that now are used for supporting AIDS sick people, not to mention the pain that would be avoided to a lot of people. But that's again another subject. As businesses i don't think that pharmaceutical companies will ever increase the global wealth, as they don't the companies that produce cellphones or any other good.
Still, in few words, in a capitalistic society the total amount of wealth in the world cannot increase.

Brianne (10/2/2006):
Ha ha ha you liked my example on Aids huh?  I know, I know, the cure may be a long way off but it works!  I am beginning to see what you mean that the amount of wealth in the world cannot increase... The increase that seems to be happening is just the economy evolving.  Say that global wealth is static, I think that is ok.  I dont think it needs to grow, but I think it is ever changing... evolving.  I still disagree with you that the next generation will be "poorer" in the material sense than ours.  Because of the evolution, this... regeneration, of wealth, I dont think the amount changes, only in redistributed.  Oh, I guess you meant that our specific next generation in America and Italy will be poorer, because the next generation in places like China will be richer.  If that is what you meant, that may be true.  In all honesty, I guess I dont have a problem with that because I see it as the world coming into balance... Then again I am not my children.

I guess I see a baseline... a level of wealth that I know my children will never go under.  They may or may not be able to drive a Mercedes, or a Ferrari... but they will have the basic needs, and I think that is all anyone should ask for.  I think everyone deserves that, so I am willing to give up some of those privilidges to find that balance, and I will teach my children the same.

Dario (10/27/2006):
I read back my last comment and i have to say that something i told you is not exactly correct (let's still consider my example on cellphones).
I said, infact, that only a part of the cost of the cellphone goes to the pockets of the employees. And that is true. But the wealth produced by cellphones companies shouldn't be counted only on the salary of their employees.
For example i quoted the inert matters. Well... the inert matters themselves do not cost anything at all. The price the companies pay for those inert matters is actually given to the companies that produce the inert matter theirselves. Which pay the salaries of their employees and so on... At the end, of course, all the money that the human beings pay to buy cellphones are going to some other human being. So, if we evaluate the wealth on the monetary trade, no new wealth is produced and no old wealth is destroyed. It's only money that go from somebody to somebody else. In other words it is a redistribution of wealth.
I say that because, actually, reading my example it seems i come to the conclusion that the effects of people's work is to loose wealth: so should it be better not to work?
The mistake, in this discussion, is that the wealth we need is not an amount of money, but an amount of products. The reason i go to work is not that i need money, but that i need the products i can buy with money. An economical system is a way to redistribute always the same money, or, in other words, to decide the way wealth (products) should be shared among people.

The problem is, so, to decide which is the best way to distribute this kind of wealth among people.
In our society (atleast in modern westernian world) we are accustomed to consider ethic the rule that links wealth to work. Even if it is not happening like that (i can make several examples of people that work much less than me and can have a better life style), we believe that who is more productive deserves more wealth. Actually it is not depending upon what is the productive cycle he works in. For example it's not said that who works for building cars would have a better car while who works for producing food eats better food. That's why our society invented a shortcut for the exchange of products which is money. If i work for producing cars, they give me money which i can spend to buy whichever product i want. But there is no doubt that the wealth i produce working (which is the extra wealth given not by the money the company makes, but by the fact that the transformed product has more intrinsecal value than before the transformation, thanks to my work), well, that wealth goes only to people that use cars.
The thing that is kind of wrong in all of this is that there are some products that are more necessary than others, while the wealth one can afford is independent from that. So, if i produce cars i can have food, while the wealth of my work is not in any way going to improve the production of food.
Fortunately the production of food needs less labor than what it can feed. I mean, never mind if a part of the population works to produce unnecessary goods, because necessary ones produced by people that work for those production cycles are enough to feed them too.

Apart from the etical point of view, some disparities among people are not obstacles for everybody's survival. If, on a population of 100 people there is only 20 that work for producing food and the others to produce cars, well, everybody can be fed with the food produced by those 20, and if the cars produced by the other 80 people is not enough for all of them, well, there is the disparity: 100 people can afford food, but only a part of them can afford also a car.
In our system (capitalism, consumerism), disparities are necessary. If i work for Ferrari, the fruit of my work can be used only by few rich people, while i can eat food thanks to the salary i get from Ferrari company (and, at the end, form those few rich people). If there was no rich people, there was nobody that could afford a Ferrari, so i couldn't have my salary, so i couldn't buy food. So, even if i am not one of those rich people, i can eat food thanks to the disparities of wealth among people.
But, the problem is still that those disparities are not ethical. I mean, if there was no people that could afford Ferrari, people that produce food would still produce the same amount which enough to feed myself too. I think a more ethical society could be a society where the rich people wouldn't be so rich. In that way Ferrari cars wouldn't even exist, and all the goods with less intrinsecal value would be more affordable by more poor people. Without those unnecessary goods, people would be able to work only for the amount that is necessary for them to buy necessary goods.
I mean, if we suppose that the only necessary good is food, and the work of 20 people is enough for 100 people, well, that means that those 20 people are the only ones that really need to work. Or, better, that they could work much less (20 people working 8 hours produce the same amount of 40 working 4 hours, or 100 working 1.6 hours).
In a perfect society like this people would work much less and everybody would have enough necessary good.
So, at the end, we are working a lot for what? For producing wealth (intrinsecal wealth of products) that can be used only by rich people, increasing the disparities.
The problem of a society where there is no disparities is that people are not incentivated to produce more than what they really need. And so, there is no innovation nor progress in technology. If working 1.6 hours is enough to produce the right amount of food, why should we work more than that to allow few people to produce machinery that allow us to produce the same amount in less than 1.6 hours? Or, even more, why should we improve our technology to produce cellphones that can be used only, atleast for a period, by more rich people, in a society where more rich people don't even exist? In a society like this computers wouldn't ever been invented, and now we wouldn't be here discussing...
That's why, actually, i think that a pure socialist economical system wouldn't work, even not considering the problem of competition with other capitalist societies.

On the other side of the coin, a free-trade capitalistic consumeristic economy works exactly the opposite way. In my example, 20 percent of people produce necessary goods enough for the 100 percent. But, since what 80 percent produce is wealth only for the rich part of population, those 80 percent have a better life style, since obviously production cycles for rich people are better remunerated (industry is more convenient than agriculture). So that those 20 percent of people are kind of pushed to enter those last productive cycles at any condition, and leave their jobs (look for example the countries of third world where children are hired as slaves by big companies like Nike or something. So that, necessary goods won't be enough for the whole population, which means that they are affordable only by rich people them too, and poor people won't even have enough necessary goods for theirselves. In a completely free market, the tendence is the redistribution of wealth so that there would be few very very rich people and tons of poor ones that work for them just for a piece of bread and a glass of fresh water.
Obviously this is not a guilt of rich people theirselves, because it's the system that induce this situation. If a rich guy tries to be more moral and becomes poor, there will be another guy that will take its place, because if it was not like that, the system itself could not work.
To maintain the same average wealth for everybody the system must expand, and when it cannot expand anymore (the globalization), the disparities are going to uncontrollabily grow.

For those reason i prefer a mixed system, where necessary goods are affordable by everybody. This slows down the innovation, but looks to me more even, with respect to a capitalist society. Nevertheless people's ambition to have a better life style (although within acceptable limits) is paid, so that there is no regression.
The only (!) problem for this kind of system (which actually is not my invention: there are a lot of societies that work like that!), is that since the society must provide a minimum wealth for everybody, the cost of production for any product is higher, which means that the goods produced in that country is not competitive with the ones produced in pure capitalist societies. So, in a global market it would be more convenient, for that country, to import products from the capitalist ones instead of producing products theirselves. And that brings to the economical destruction of that country.

So, at the end, i think that a completely free global market would crush the less powerful economical systems in favor of the pure capitalistic ones. That's actually why i don't agree with globalization. Globalization would work only if, before, we establish strict rules that atlast ensure the necessities for everybody.

In my opinion, the real problem is not that the money is not geographically distributed. The real problem is that there is few rich people that can afford everything, when there is a lot of poor people (which, incidentally, live all in the same geographical area) that cannot even afford food and water. If we introduce globalization in a pure capitalist society, poverty will be more evenly distributed allover the world, but the number of poor people won't decrease. Instead, i think it would increase, being that the market won't obviously be able to expand outside that society (the world).

Brianne (10/31/2006):
I thought your last point was very interesting too... that there would be the same amount of people poor, they would just be spread out over the globe instead of concentrated in certain places.  I wonder if that is true... I mean, it very well may be I dont know, but I would hope that not only would the wealth be distributed througout the globe, but throughout the people as well, so not as many people are poor.

I admit though, I am starting to get confused ... I think it is definitely time to open this discussion up to see what other people have to say.

Actually I think I have one more thing to say.  Since capitalism seems to fit the human strengths and weakness more than any other economic system (as evidence by its continued existence and popularity- in that a lot of countries use it) shouldnt we focus more on a system of checks and balances on it, rather than a whole new system.  For example, I think in America we could use our taxes better.  I would like to see us keep our capitalistic structure, since that is what suits us best, but use the wealth it creates more effectively and efficiently.  Socialism simply isnt as conducive to the human state of mind as capitalism is, that is why it isnt used... Capitalism is a good system, it just needs some fine tuning.  I mean, Im not sure Americans right now really know what our taxes go for, I mean, REALLY go toward.  Sure the politicians say they go toward one thing, but do they really?  I think this should be audited.  Frequently.