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In terms of production, capitalism is the most successful economic system in history. And capitalism has many other successes:
1) Most successful at creating income inequality, which destroys even the concept of democracy.
An interesting take on history. I suppose it would depend on the measurement. Slavery meant one didn't own themselves. Seems inequal. Serfdom meant you owned yourself but were tied to some land and owed free labor with Monarchs, vassals.....but then a new class. The merchant class. Mercantilist tendancies still kept growth slow as it was essentially a new class of royalty...albeit unpromised...and to stay there, one did need to produce something of value to someone. That mercantalism is frozen in time when a country moves to communism, or one must constantly reinvent themselves in a move to free market. As it goes international suddenly there's these weird byproducts like not having the industrialized world wanting to war with itself all the time to ruin by royals.
Really, inequality seems to continue to be in that as people become free, some use that freedom to pursue getting rich. Some are content to not be whipped by some overseer born into a position of power or appointed by a crony to have dominion over people.
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Originally Posted by townshend
2) most successful at putting profit over people
Again this is simply not true. The free market works both ways. Unlike serfs of old that worked for free, or communists that worked for currency that didn't buy anything (that some call different than free) participants in a free market system can get a different job. It's hard, but unlike in other systems, you have a choice.
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Originally Posted by townshend
3) most successful at contributing to global warming and destroying the ocean and land masses of planet earth
Actually China is by and large the largest polluter. It is the free market system that's working to monetize pollution and force it into the pricing of products. Who handled their nuclear crisis better....Japan or the Soviet Union. The problem is simply that non-capitalist countries will allow people to do anything in their country. If everyone else is using cheap materials with no punitive actions....what else is someone to do? When people are free, the freedom allows people to provide their most valuable task. That makes people more valuable. When people are valuable, then the damage of the environment those people live in needs to cost more.
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Originally Posted by townshend
4) most successful at exploiting both the natural resources and labor resources around the world, leading to environmental degradation (e.g., Texaco's pollution of Ecuadoran rain forest -- just google it to see the mess) and the impoverishment of workers (e.g., sweat shops, low wages, long hours, lack of safety standards in factories, etc.)
The original sweatshops were in the Netherlands. Giant looms made people more productive than individual producers. They needed more wool, and began importing it from England, which largely started some of the first rural Eventually, people in England realized they to could run looms too, while the peasants got some money of their own in the wool trade. All of which opened up some new opportunities in the new world with the cotton trade. Of course, the ugliness of slavery followed, but eventually a growing free and prosperous population reached tipping point and decided that wasn't a good thing. More machinery developed....including the cotton gin...which made slavery unprofitable anyway. Again cotton to textiles to fabrics to NYC continued, but a little place called Hong Kong started taking off....and more and more places spread like India, Vietnam and Bangledesh...
As each market develops, they have money to pay for the producers that come after. What took a hundred years for the Netherlands in a tiny country has lifted 8000 year old China in a fraction of the time.
Free markets and capitalism....providing better lives whereever it goes. Every system has winners and losers of course. Some may find it more comfortable to universally complain against a king or leading party, but I like the option of being able to do something about my lot in life.
Capitalism is an ideology of capital –- the most important thing is the concentration of capital and to seek and maximize profit, and that comes at any cost to people and to the environment so to me capitalism is irredeemable.” - Rep. Alexandria Ocasio-Cortez (D-N.Y.)
Not sure what her idealized economy would be, but I doubt it could ever exist outside of a textbook given her other naive statements. I am not aware of a system that doesn't use natural resources and ignoring the 100s of millions in just China that have escaped poverty thanks to economic liberalization is incredibly narrow-minded. I do not need to justify to her why I might train for a better job for more money or put my money to use so I can have a retirement nest egg. Bernie was somewhat understandable but this is just going off the deep end into the abyss.
AOC is mind-numbingly stupid. I'm not saying that Capitalism doesn't need some regulation -- it does. But what she wants to do will ruin the country.
Capitalism is an ideology of capital –- the most important thing is the concentration of capital and to seek and maximize profit, and that comes at any cost to people and to the environment so to me capitalism is irredeemable.” - Rep. Alexandria Ocasio-Cortez (D-N.Y.)
Not sure what her idealized economy would be, but I doubt it could ever exist outside of a textbook given her other naive statements. I am not aware of a system that doesn't use natural resources and ignoring the 100s of millions in just China that have escaped poverty thanks to economic liberalization is incredibly narrow-minded. I do not need to justify to her why I might train for a better job for more money or put my money to use so I can have a retirement nest egg. Bernie was somewhat understandable but this is just going off the deep end into the abyss.
I don't understand the hold this nitwit has on the public imagination.
It's amazing how she doesn't understand that seeking to maximize profit is what results in the most efficient use of Capital, so that none is needlessly wasted.
Which she understands. But part of maximizing profits for someone is employing the fewest workers possible, paying the lowest wages possible, buying the cheapest resources possible, having the fewest competitors possible, and selling dearest.
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Those "antagonisms" as you erroneously refer to them are why the system works so efficiently.
I agree, when they can be resolved.
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They aren't "antagonisms" rather they're healthy competition and negotiation.
So at first antagonisms are great, but don't really exist? Competition is antagonism itself, a negotiation outcome is its solution.
No they didn't, the homeowner wanted $225,000 the potential buyer wanted $215,000. This is just an example of an antagonism, the buyer-seller. In most cases, potential buyers wish to buy cheapest, potential sellers sell dearest. The negotiation outcome is its resolution. But the antagonism did exist.
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the homeowner still profited,
How do you know? What if he bought that property a couple of years ago for $500,000 and the market tanked in the meantime and he thought of $225,000 for an asking price to recoup some losses? The negotiation resulted in him taking a steeper loss. Or vice versa: the market tanks in a few years and the prior buyer now has to sell for $100,000; he just took a loss and the previous seller forced him to buy dearer than he wanted to, taking a larger loss.
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and it is advantageous to both, because they both walk away winners.
Not necessarily, and in this case, there was still the antagonism between buyer-seller, which resolved for what they both thought was acceptable at that time.
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That's totally untrue.
You never had a Free Market.
I.e. "free-market capitalism" is a utopia which can never exist.
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Capitalism can never fail, but people can.
Oh good lord, if our economy collapses its because we committed too many sins and didn't keep capitalism pure enough, right? Capitalism has not always existed, and all that is born dies.
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All systems require some State action.
Did hunter-gatherers have a state? How could there be state action then?
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Land was held in tenancy with no right of survivorship.
My point was that that in feudalism, land, implements etc. Was mostly held privately, yet feudalism is not capitalistic. Typically a peasant owns the household implements and rents land, he produces most things necessary for his survival and gives some amount of his produce as rent to a landlord. It was chiefly a private household economy, so capitalism can not be boiled down to simply private property.
That there's deep polarization on socioeconomic outlook as well as ideology, here?
Close.
Occasional-Cortex is practicing tribal economics where she wishes ill and seeks to cause harm to non-members of her tribe solely because they are not members of her tribe.
AOC is mind-numbingly stupid. I'm not saying that Capitalism doesn't need some regulation -- it does. But what she wants to do will ruin the country.
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Originally Posted by MinivanDriver
I don't understand the hold this nitwit has on the public imagination.
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Originally Posted by RationalExpectations
Occasional-Cortex is practicing tribal economics where she wishes ill and seeks to cause harm to non-members of her tribe solely because they are not members of her tribe.
None of you, along with the other hundred million riled up by Fox News, seem to understand that AOC, along with Bernie and probably Pete as well, are politically irrelevant.
But go ahead, squawk and rage and bang your beer on the bar top. It's almost as amusing as the juvenile form of progressivism you're so exercised about.
You do realize that cartels and monopolies form by themselves all the time even in a true free market. Especially in a true unregulated free market. Heck, Warren Buffett made his billions by betting on monopolies.
A natural monopoly forms when there are long-run decreasing average costs per unit of production. That doesn't describe many businesses. Most monopolies form when they are granted a charter or franchise by the government - that is, our government creates a monopoly where none existed prior to awarding the franchise.
Regarding your observation about Warren Buffett, you're mistaken. First, Buffett does not place bets. He owns companies and invests. There is a big difference. Second, Buffett started by purchasing pinball machines and places them in local storefront businesses, not through monopolies. Later in life, through several investing partnerships, he acquired a windmill manufacturer, a bottling company, a textile company, American Express, and of course nowadays he credits insurance companies he owns for giving him a leg up. He does own some government-created monopolies that are public utilities, but monopolies are not how he made his fortune.
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Originally Posted by asliarun
There is this persistent notion that the magic of unregulated free market will "cure all"
No, there isn't.
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Originally Posted by asliarun
and will act as a self-balancing system.
Economists have studied General Equilibrium Theory since the late 1800s, but you might not be familiar with it as it is rarely taught at the undergraduate level. The math is a bit hairy for typical undergraduates, and the economic concepts are complex. Much of modern General Equilibrium Theory was developed by Kenneth Arrow (1972 Nobel Prize in Economics) and Gérard Debreu (1983 Nobel Prize in Economics). These two men published the seminal academic paper "Existence of an Equilibrium for a Competitive Economy" (their definitive mathematical proof of the existence of a general equilibrium used Topological Math rather than any Calculus-based methods). Debreu went on to publish the classic "Theory of Value: An Axiomatic Analysis of Economic Equilibrium," a tour-de-force of mathematical economics.
My point is any detailed discussion of general equilibrium is over the heads of most people on this forum, so let's not get into it.
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Originally Posted by asliarun
Take Google and Facebook and ebay and Uber/Lyft and Microsoft for example. None of these monopolies have enjoyed any kind of government support to establish their monopolies. However, all of them rapidly went on to become very very firm monopolies all on their own. To the extent that most startup companies and even wealthy companies don't even try to compete with them anymore.
If you had written your post a few decades ago, you would have said the same thing about Yahoo, MySpace, AOL, Atari, Napster, DEC, EToys, WebVan, Excite, AtHome, Lucent, Western Electric, Pets.com or any of dozens of other once high flying companies that had commanding presences -- until they didn't.
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Originally Posted by asliarun
Or take Western Europe for example. They too have a very healthy capitalistic society, regardless of how Americans paint them out to be socialistic borderline communist kind of economies. They have true capitalistic societies where companies perform and grow and compete just like American companies and startups do.
But they also have sensible regulations and laws and oversight from legal agencies that prevent them from abusing monopoly status or customer privacy etc.
The surest sign of an entrenched maturing industry is that it calls for "sensible regulation." In its early days, Facebook decried regulation; now that it is a mature company, Facebook is calling for "sensible regulation" -- which regulation will be designed to make it harder for a hypothetical future competitor to dethrone Facebook.
The ineluctable fact is most regulation serves the regulated rather than protects the public at large.
George Stigler won the Nobel Prize in Economics in 1982 for his pioneering work showing that for the most part, regulation exists at the behest of companies so they can protect themselves from future competition. Now called The Economic Theory of Regulation, Stigler showed Governmental Regulation is an "Economic Good" just like guns and butter in that it responds to the laws of Supply and Demand. Interest groups and other political participants use the regulatory and coercive powers of government to shape laws and regulations in a way that is beneficial to them.
Take for example the case of Big Tobacco.
The advertising of cigarettes on broadcast TV and Radio was legal until January 2, 1971. The popular press credits a long fight by public health organizations against tobacco products, vigorously defended by Big Tobacco, culminating in the Public Health Cigarette Smoking Act of 1970.
Except that isn't what actually happened.
What actually happened was that Big Tobacco long knew TV advertising was somewhat effective at getting smokers to switch brands, but was ineffective at getting non-smokers to start smoking. It was game-theoretic: Brand A had to advertise on TV merely because Brand B was advertising on TV, and Brand B had to advertise on TV merely because Brand A was advertising on TV.
The end result: the size of the smoking public pie stayed the same, and the slice of the pie that each of Brands A & B stayed the same, and the collective marketing costs of Big Tobacco were higher and their profits were lower.
So, Big Tobacco lobbied the Federal Government to ban TV advertising -- and the big TV networks (CBS, NBC, ABC and local affiliates) lobbied the Federal Government to keep TV advertising legal.
When you then look at the profitability of Big Tobacco over time, there indeed was a one-time discontinuity upward in corporate profits for 1971 because of banning TV advertising.
I'm not arguing against regulation -- just the opposite. Most everyone believes in reasonable regulation and the benefits it affords us all -- clean air, a safe food supply, a safe & effective pharmaceuticals & medical devices industry, safe & efficient automobiles and transportation networks, etc. etc. etc.
I'm pointing out we must realize not all regulation serves the public good. Much of it serves business owners.
The ineluctable fact is most regulation serves the regulated rather than protects the public at large.
I sharply disagree, and while I note your comment about not being anti-regulation, I think that far more regulations protect "the public" - be it one worker or the whole country - that exist in some CYA, speed-trap-revenue sense. If any body of regulations "serve business owners," it's probably because it keeps the playing field level and promotes healthy competition instead of gladatorial combat leading to monopolies.
The notion that major systems run best with no regulation is the self-serving, Randian HS that got us to this grossly unstable economic point.
Well, if we continue on the path we're on, in which we consider it our divine right to burn as much fossil fuel as possible, the Earth's climate will clap us back into the pre-industrial days. Then we'll be sorry. Lucky for us typing on here, we won't have to deal with the consequences. But let's assume we muddle along on this Earth & manage to avoid those worst case scenarios....
I think within the next 200 years there will be some kind of global post-industrial, quasi-capitalist economy that most of us would not comprehend. If we went back 200 years, the economy would not make sense to us and we would have trouble navigating it. So it's very likely the future will not make sense to us.
It will be very different, especially considering that the U.S. and the Western European world are not likely to be the dominant powers of the future. Assuming China and India do not pollute themselves to oblivion, Asia is the future, and the economy & values they have are not like ours.
Just look at what the U.S. spends all its money on. A bunch of aircraft carriers like it's WWII or the Cold War, but Russia screws us worse than they ever did during the Cold War with a few hackers they probably paid a few thousand bucks to. We are so stupid.
Last edited by redguard57; 05-24-2019 at 11:09 AM..
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