Why Capitalism is Doomed

[boedicca]

Spread the Wealth...I knew that's where you'd end up.

 

[CrusaderFrank]

The Communist in Vietnam realize that Progressive, collectivist economics is an Epic Fail and have embraced Free Markets and Free Enterprise and are now prosperous and happy

 

[Dragon]

Here's a little story about that: You're Wrong.

That's a "little story" only in the sense of being a "lie," as you are pretending you know what you're taking about when you obviously don't.

I'll be happy to respond when you present something that looks like it has any thought behind it. Until then, go away and let the grownups play.

 

[boedicca]

Just compare North Korea to South Korea for a stark lesson in control vs. liberty.

 

[boedicca]

Here's a little story about that: You're Wrong.

That's a "little story" only in the sense of being a "lie," as you are pretending you know what you're taking about when you obviously don't.

I'll be happy to respond when you present something that looks like it has any thought behind it. Until then, go away and let the grownups play.

No.

 

[Dragon]

Just compare North Korea to South Korea for a stark lesson in control vs. liberty.

False dilemma - Wikipedia, the free encyclopedia

Better yet, compare either one to Germany.

 

[Dragon]

Here's a little story about that: You're Wrong.

That's a "little story" only in the sense of being a "lie," as you are pretending you know what you're taking about when you obviously don't.

I'll be happy to respond when you present something that looks like it has any thought behind it. Until then, go away and let the grownups play.

No.

Very well. On ignore you go. Problem solved.

 

[boedicca]

w00t!

 

[dblack]

You are defining capitalism in terms of "free trade," when that is only a part of the set of defining characteristics. I don't think we should eliminate that. What we are going to HAVE to eliminate, though, is dependence on wages paid for work as it has been and is now, to distribute the wealth our economy produces.

Unless we DO distribute that wealth effectively and broadly, the economy will break down for lack of consumer demand, and also it will lose the popular support that it depends on to be allowed to exist. If we have high and intractable unemployment, then wages paid for work CAN'T do the job of distributing wealth. Which means that something else will have to.

I don't have a final answer to what that should be, admittedly.

I guess I'm left wondering how "free" trade is that doesn't allow people to decide for themselves how they trade their goods and services with others, or that dictates how wealth is distributed via a coercive authority. In other words, what if people want the security of a regular wage as their means of payment? And what is it you mean when you say 'we distribute the wealth'? My understanding of a free market is that no authority decides how wealth is distributed, but rather, it is a aggregate of individual value judgements and decisions.

 

[Dragon]

I guess I'm left wondering how "free" trade is that doesn't allow people to decide for themselves how they trade their goods and services with others, or that dictates how wealth is distributed via a coercive authority.

You're jumping to conclusions about the hows. Wealth was quite widely distributed in the 1960s. While there were policies that shaped how this happened, to say that it was dictated by a coercive authority is a severe overstatement. Nor would we necessarily have to have that happen now, or in the near future.

Nevertheless, it's pointless to stick our heads in the sand. If wealth becomes too unequally distributed, and especially if most people see no way to better their circumstances, we will have a revolution. You've studied history enough to know that. If we can't get back to full employment, then there is no way that wages paid for work can rise enough to prevent that, even if we go back to full support for labor unions and a labor-friendly government.

 

[dblack]

I guess I'm left wondering how "free" trade is that doesn't allow people to decide for themselves how they trade their goods and services with others, or that dictates how wealth is distributed via a coercive authority.

You're jumping to conclusions about the hows. Wealth was quite widely distributed in the 1960s. While there were policies that shaped how this happened, to say that it was dictated by a coercive authority is a severe overstatement. Nor would we necessarily have to have that happen now, or in the near future.

I can't say I've studied the situation re: the sixties in any depth, but all government "policies" are coercive - it's the nature of the beast.

Nevertheless, it's pointless to stick our heads in the sand. If wealth becomes too unequally distributed, and especially if most people see no way to better their circumstances, we will have a revolution. You've studied history enough to know that. If we can't get back to full employment, then there is no way that wages paid for work can rise enough to prevent that, even if we go back to full support for labor unions and a labor-friendly government.

I don't necessarily agree with this assumption, but if it is your conviction that government must act to redistributed wealth let's at least be honest - that's not 'free trade'. Free trade is about people distributing their wealth as they see fit.

 

[Dragon]

I can't say I've studied the situation re: the sixties in any depth, but all government "policies" are coercive - it's the nature of the beast.

You're not an anarchist, though, so you do favor some coercive policies.

What happened in the 1960s was a combination of highly graduated taxes that discouraged massive accumulation of private fortunes and quick-payoff investments, with strong enforcement of the right to form unions. That's as far as government policy is concerned; just as important IMO is that it was before the computer revolution. In order to produce goods and services, labor was required, and those policies helped make sure that labor got a good share of the wealth produced.

I don't believe the same policies would work today, because they are dependent on a demand for full employment, which we no longer have.

I don't necessarily agree with this assumption, but if it is your conviction that government must act to redistributed wealth let's at least be honest - that's not 'free trade'. Free trade is about people distributing their wealth as they see fit.

I wasn't saying that free trade would suffice to distribute wealth, only that we wouldn't need to eliminate it.

 

[dblack]

I can't say I've studied the situation re: the sixties in any depth, but all government "policies" are coercive - it's the nature of the beast.

You're not an anarchist, though, so you do favor some coercive policies.

Ultimately, I am - but that's a whole 'nother talk. In the meantime....

I wasn't saying that free trade would suffice to distribute wealth, only that we wouldn't need to eliminate it.

which circles back around to my question: what kind of 'free trade' is it that redistributes wealth and tells people that they can't work for wages if they want to?

I suppose you're just saying that some freedom is tolerable, but certainly nothing like laissez faire. As I think you know, I believe the power to manipulate the economy (the power to dictate how we earn a living) should be off limits to government in exactly the same way we now limit the state's power to dictate our spiritual beliefs - and for the same reasons.

 

[Widdekind]

Entrepreneurism only works to the general advantage to the extent that the motives of entrepreneurs and of the people generally are compatible. Where they are not compatible, indeed hostile, as in this case, entrepreneurism is a curse, not a blessing.

"entrepreneurism" = innovation of new & novel enterprises, e.g. "hiring vast pools of unemployed Labor for new & novel undertakings"

you have described "exploitation", but dubbed it "entrepreneurism"

"exploitation" intentionally dis-employs potential Labor
"entrepreneurism" intentionally employs Labor

you have called a thing ("white") its opposite ("black")

Actually, capitalism would survive all of those six changes just fine. The only thing that would doom capitalism, aside from something that would doom civilization itself, is if the people stop supporting it. That will happen if the people are convinced that it will never bring back widespread prosperity.

Say's Law observes that people produce products, as an expression, of their Demand, for other people's products, i.e. "they see a suit in store, and work extra hard to make enough money to buy it".

Ipso facto, lack of "prosperity", i.e. "low Demand", expresses wide-spread reluctance to produce, i.e. "Sloth", i.e. "everybody Just wants Welfare, nobody wants to work, nobody works, nobody has money, nobody buys what nobody makes".

Say's Law dis-proves your assertions; if Americans really wanted to earn more, then they would work harder and make more; instead, American "Zombie Malaise" reflects "Slothful Welfare mentality":

if you extend the social safety net to a majority of people, capitalism takes a big hit from lack of participation. It'd be banana republic time, with little or no expansion or innovation or entrepeneurship.

less and less labor is required to produce wealth. The labor of many people becomes superfluous and unnecessary. Not only does that result in high and intractable unemployment, but it also puts downward pressure on wages for such jobs as remain.

increasing economic efficiency has ceaselessly dis-employed Labor, from existing production, for thousands of years. E.g. the Sumerians pioneered machine automation, 6000 years ago, with their invention, of "Labor-saving" seed-plows; and "(human-)Labor saving" animal-drawn plows.

meanwhile, entrepreneurism has ceaselessly re-employed Labor, into new & novel productions.

you describe "entrepreneurial spirit-less" economic activity; then forecast failure for such "static" economies; but Capitalism is dynamic, "animated" by "entrepreneurial spirit"

w/o such "spirit", Capitalism per se is "already dead"

 

[Wiseacre]

OK, let me know when you think of what that might be. Cuz frankly I can't think of any possible economic model that improves on the basic idea of free trade: a transaction conducted between 2 parties that is freely entered into. I also cannot imagine any other system whereby you can innovate new technologies without losing jobs. So, you therefore have to create jobs somewhere else, what can possibly be a better way to do that than capitalism?

You're not happy with what's we've got, and that's fine, you have a lot of company. But while we wait for somebody to develop a better alternative, I suggest we improve the present system and it's governance. If there's one thing I'm certain of, it's that we can do a lot better at promoting competition and reducing fraud and unfair business practices.

You are defining capitalism in terms of "free trade," when that is only a part of the set of defining characteristics. I don't think we should eliminate that. What we are going to HAVE to eliminate, though, is dependence on wages paid for work as it has been and is now, to distribute the wealth our economy produces.

Unless we DO distribute that wealth effectively and broadly, the economy will break down for lack of consumer demand, and also it will lose the popular support that it depends on to be allowed to exist. If we have high and intractable unemployment, then wages paid for work CAN'T do the job of distributing wealth. Which means that something else will have to.

I don't have a final answer to what that should be, admittedly.

You seem to be suggesting that wages should be based on some other factor(s) than market forces, perhaps need. Quite obviously that ain't capitalism in any form, seems socialistic to me. Do you believe those mixed systems you referred to are paying employees a higher wage than necessary? Can't imagine how overpaying workers would result in higher employment, or make up for the loss of jobs from advances in technology.

This business of wealth redistribution, do you really think you're going to get enough revenue to make a significant difference? Broadly, how much is broadly? They say the Buffett Rule for instance will only net you 4-5 billion a year, that ain't going to help create many jobs. Presumeably you're thinking the gov't will take that money and create more jobs. Good luck with that, their record has not been good at that so far. If you're going to take enough money from the wealthy to make a difference in UE, there's gotta be some pushback, especially in today's world where a rich person can put their money to work in another country.

Redistribution of wealth is not an answer for unemployment IMHO, under any economic model. If you want more jobs you must create a culture that encourages investment and taking a risk to startup new businesses. Raising the tax rate on capital gains is hardly a way to do that. I know libdems do not ascribe to the theory that redistribution of wealth would have a deletorious effect on the economy, I guess the thinking is that the gov't will do a better job of it that the rich guys will. Personally, I think the gov't has a higher priority to get re-elected and spend that extra money towards that end rather than the most effective way to grow the economy and create jobs.

 

[docreflex]

Can the environment an economy coexist in the curren economic model we have?? One slave worker mass produce a thousan dresses in some far off country, rather then one seamstriss making one dress an selling to several customers?? This is the only way I seee more jobs produced.

 

[Widdekind]

every mixed economy that has ever existed has far outperformed every pure capitalist or socialist economy that has ever existed

what economy was "pure capitalist" ?

Can the environment and economy coexist in the current economic model we have??

fishermen enact Government Regulations, protecting "common" fisheries -- an example of successful "eco-nomics", resulting from proper assessment, of Fair-Market-Value (FMV), to environmental resources (cp. Louis & Clark USGS survey, assessing FMV, of Louisiana Purchase, in 1805 AD)

imagine housing & property markets, without up-to-date assessments, of property FMVs -- other than land, housing, fisheries, timberland, metal deposits, oil/NG deposits; humans have yet to survey-and-assess FMV, for earth assets (e.g. marine algae blooms that "scrub the atmosphere", consuming CO2 & generating O2). Under-valuation of (earth-)assets, is a failure of survey-and-assessment; not Capitalism per se

 

[bigrebnc1775]

200+ years of Capitalism and now it's doomed? If Capitalism is doomed so is America since they both go hand in hand.

 

[Dragon]

which circles back around to my question: what kind of 'free trade' is it that redistributes wealth and tells people that they can't work for wages if they want to?

"Free trade" has never sufficed to distribute wealth adequately, but unless you are prepared to say that any regulation on trade makes "free trade" nonexistent that's not really a pertinent point. And if you are, then "free trade" is impossible anyway so there's no reason to worry about it.

I find your second point rather weirdly expressed. Nobody works for inadequate wages because they want to. In all cases, it's because they have to -- because they can't get better and must have something. If I could wave a magic wand and restore demand for full employment, and if thereafter government policies drove wages up so that any job people could find paid a decent wages, those complaining about it would NOT be the working class. So it's kind of absurd to phrase an objection to such policies as defending the rights of job-seekers.

I suppose you're just saying that some freedom is tolerable, but certainly nothing like laissez faire. As I think you know, I believe the power to manipulate the economy (the power to dictate how we earn a living) should be off limits to government in exactly the same way we now limit the state's power to dictate our spiritual beliefs - and for the same reasons.

And I believe that, like anarchy, that's a nice thought in theory but impossible to implement. The government will manipulate the economy, because those whose interests it represents will demand that it do so, and it has the power to do so. You may recall that the government initially began doing so at the behest of the corporate interests, in ways that were far from liberal, and began implementing liberal economic policies only later. "Laissez-faire" in practice was not laissez-faire, it was just a set of government regulations entirely in the favor of capital and not at all in the favor of labor.

To present a political impossibility as an arguendo, suppose that tomorrow Congress were to pass a law abolishing all economic regulations, subsidies, etc. How long do you think that situation would last, in the face of massive lobbying efforts and public outcry? Not very long, I'd say. I would also say that a modern economy CAN'T EXIST without substantial government oversight.

So it's not a question of whether the government regulates the economy -- it will, and that's that -- but only of how it does and on who's behalf.

But that's all by the by with respect to the thread topic. As I said, the old ways that worked when I was a boy will not work anymore, because they depend on full employment, which we no longer have and are (I believe) not going to get back. When I say that capitalism is doomed, I don't mean laissez-faire capitalism (that died decades ago), I mean the entire system of an economy dominated by privately-owned for-profit corporations. Like any economic system or any government, it exists on the sufferance of the people. The people have supported it not for any philosophical principles (about which they care jack-diddly and in most cases know bugger-all anyway), but purely because it delivered: it provided rising standards of living for most people.

If we can produce wealth without labor, or with much less labor, so that full employment becomes a thing of the past, then it can no longer deliver this result, and will lose popular support and vanish. To be replaced by what? That's what I'm thinking about here, and it's a more radical and fundamental question than mere government regulation and tinkering with a capitalist economy.

 

[CrusaderFrank]

Just compare North Korea to South Korea for a stark lesson in control vs. liberty.

False dilemma - Wikipedia, the free encyclopedia

Better yet, compare either one to Germany.

Yes, good analogy!

West Germany made BMW, East Germany made Trabants