Profit within Capitalism is a result of the exploitation of the workers

Profits are not exploitation of workers for three reasons (1) money has time value, (2) increased risk merits increased rewards, (3) and creative genius adds value that should be rewarded. All of Pro's contrary arguments are based upon abstract theory that have no confirmation in real world behavior. 1. Pro implies that paying interest, the explicit time value of money, is a recent social innovation of our society, and hence suspect as a fad of some sort. He says, "looking at what most people do in the current society and claiming a "Law of Nature" is very bad methodology." The book "The History of Interest Rates," http://www.amazon.com... documents the near-universality of the practice: "[The book] places the rates and corresponding credit forms in context by summarizing the political and economic events and financial customs of particular times and places, including: * Ancient Times: Mesopotamia, Greece, and Rome * Medieval Times and Renaissance Europe: Italy, Spain, Germany, France, and more * Modern Europe and North America to 1900: England, France, and other European countries, as well as the United States * Europe and North America since 1900: England, France, Germany, and Italy, as well as Canada and the United States * Other countries and regions in the 1900s: Japan, Russia, China, and Latin America" There are a few cases of societies attempting to deny the time value of money. The Soviets attempted to undertake large projects without counting the cost of capital. The results were economically disastrous, because doing so ignores the fact that if you do one thing with capital, that means you cannot do something else with it. Islam has a religious prohibition against paying interest. Insofar as the prohibition is given lip-service, the prohibition is evaded by various in-kind trades and other schemes. My methodology was not merely to point to nearly-universal behavior, but to explain why it was so it logical terms. Pro offered no explanation beyond it being some unsupported modern creation. Pro points out that if people are forbidden from collecting interest they will save anyway. I rebutted by saying that they will save, but not invest. If interest or profits are unavailable, then the only thing that savers can do is avoid risk. To avoid risk, they won't put money into anything that has no chance of gain, but retains a chance of loss. Losses occur because most ventures, even something as simple as opening a sandwich shop, require start up capital. There is a risk that the capital will be lost. Hence, the only potential for investment is to work essentially alone, where "profit" can be ideologically classified as "labor." Instead of building steel mills, people hoard commodities. Pro argues that a universal observation does not make a theory sound. He cites the theory of gravitation being overthrown by the theory of general relativity. However, general relativity did not overthrow Newtonian gravitational theory in terms of overthrowing all the observations that supported it. Newtonian theory is still taught and used. General relativity showed that in extreme cases that had not previously been observed, classical theory was inadequate. General relativity certain did not demonstrate that something other than gravity was responsible for pulling objects down. Pro needs to establish that the reason that ancient Mesopotamians, and virtually everyone in every culture since, charged interest was something other than the time value of money. I gave numerous examples of the time value of money. People value going to the movies now more than postponing it to retirement. No one gives up their present money without promise of greater return later. Pro will not do it, and he cannot point to any rational person who does. Pro's answer is that people will save anyway. That is inadequate because giving up money now in return for the money back without interest later is a pure form of savings. Pro cannot point to the risk of actually getting the money back, because Pro depends critically on the claim that risk should have no reward. Whatever Pro's theory, it must explain the simple examples I have posed. His theory leaves them as mysteries, while logical application of time value and compensation for risk explains them in readily understandable ways. Pro asserted that people will pay for the security of their savings. I pointed out that this completely contradicts Pro's contention that risk has no associate value. Pro did not reply to this. I challenged Pro to explain why cooperatives, fully enabled by present law, were so unpopular. Pro said that it is because the current system provides a better alternative. Sure, and if there were no alternative to living in caves and gathering roots and berries, we would all do that. The point is that if a person believes that the is no value in anything but labor, he is free to put that into practice and show that he accrues more value than capitalist alternatives. The current system is not stopping him from keeping his undiluted labor-derived wealth. People do not opt for that method of wealth generation. Pro claims, the loaning of capital "does not involve an actual sacrifice on the part of the capitalist ... because the loan is not a deprivation to him; he lends it because he has no use for it himself." The statement assumes that capitalists are redundantly rich, so that they have lots of money beyond current needs. That fits Bill Gates and Warren Buffett, but "Pension funds continue to account for the largest block of institutional investor assets, with $10.4 trillion or 38.3 percent of total 2006 assets under management." http://www.conference-board.org... There are also 401K plan investments, annuities, and investments made by small investors either directly or through mutual funds. Perhaps half of the capital in the markets is from people who could use the money for other things. For most Americans, their major investment is in home ownership. The profits accrued in real estate do not result from labor, but from supply and demand. Presumably, Pro would wipe out all of that profit as well. Rich or poor, disallowing investment income abolishes the reward for risk. Without reward, investors will not loan out money because there is a risk they won't get the money back. The alternative to taking risk without reward is hoarding, most likely commodities. Pro contends that investors, particularly rich successful investors, live without working. This is not true. Successful investing requires an enormous amount of work evaluating risks and their relative rewards. Not only does the investor benefit from the hard work, society benefits by having capital channeled into its best uses. Some people, especially retirees, do not work at investing and accept low returns with low risk. They deserve the income they get because they are placing their capital at risk rather than hoarding it or spending it. Pro says that the potential return on investment from venture investment is virtually unlimited, and says "con has not explain why Capitalist risk deserves such preferential treatment." The historical average return from the stock market is 10.9%. Adjusting for inflation it is 6.9%. http://www.simplestockinvesting.com... The potential returns are irrelevant; it is the actual returns that count. The holder of a winning lottery ticket makes millions of times his investment in the ticket. The potential large return is fully justified by the expected return. 3. Burning DVDs and putting them in envelopes is trivial, so I don't understand Pro's point about it being complex. Pro did not explain while good ideas should be valueless. He should treat my simple example explicitly, because his theory must apply to all cases.