Reply #24: It's the default setting for an unplanned economy [View All]

[izquierdista]

When Adam Smith was describing capitalism, he was putting words to the primitive concept of "trade you some of my stuff for some of your stuff". Markets and capitalism pop up anywhere primitive tribes have an imbalance of goods they can correct by swapping stuff. In the highlands of New Guinea, you can swap stone axes for bags woven out of vines, or maybe a pig. It's more primitive when there is no medium of exchange, but just because some fiat currency has high-tech anti-counterfeit features doesn't mean the economic system it keeps running is in any way planned or on a higher level of sophistication.

Capitalism, with its deity The Invisible Hand, is a primitive device. In that way, it is like the wheel, which has come a long way from the Roman chariot wheel to the modern Goodyear steel-belted radial. But it's still a wheel; it can't fly, and it can't hover over the surface of the water. Capitalism has a lot of things it can't do. It can't seem to take care of the poor, sick, and elderly, even though capitalists get to write off charitable deductions. It can't seem to keep from crapping up the environment; that's just a place to externalize costs of your dirty process. People that put their trust in capitalism end up in one of two places: (1) the very greediest end up with enough extra money that they don't need to worry about any material things or (2) the majority who end up looking at an envelope of Zimbabwean dollars or a losing lottery ticket hoping for better luck next time.

In order to take care of all these other things that capitalism can't, there needs to be some control over it (a government) and incentives and disincentives to keep it on track (central planning). Capitalism has been phased out in a lot of places: British hospitals, European railway ticket offices (although the vendors in the station still do a brisk capitalist trade), elementary school classrooms (although in the US, they are trying to make a comeback), most fire departments, and many other enterprises organized for the public good. It will never go away completely, markets are always springing up, like the market in beanie-babies, and whatever new collectible some half-wit offers to a gullible public.