Does capitalism really suck?

[yella_dawg]

I'm a mathematician so I sometimes look at things a little strangely. From my point of view capitalism suffers from a scaling problem. Its complexity grows at a much faster rate than the system itself. At some point, complexity overwhelms the system. Beyond a simple medieval social structure, capitalism mutates into something like a cancer that devours everything and everybody. Empire simply sends capitalism to devour those "other people". Usually described as helping in some way. Like "bringing democracy". New Deal type regulation provides acceptable stability at a higher level of complexity. Of course, this only provides an environment where the complexity grows to an even more volatile level, until the control mechanism is overwhelmed. The result of this is what we now see as the ultimate expression of the "military-industrial complex".


Capitalism is sorta like nuclear power. Efficient and powerful, but it's going to get you one day. It's inevitable. Except that complexity in a nuclear plant is finite. The complexity of human culture may not be.


Communism is pretty much a different take on the same system. A mirror image, you might say. Suffers from exactly the same problems, though for somewhat different reasons. Basically, Communism (like capitalism) is plagued by complexity issues because it deals with a complex problem: economic function in a complex culture. Two ends of the same dirty stick.


The solution is highly localized, distributed management of resources. Specifically, a system where centralization and conglomeration are immediately detrimental. Not because of law and regulation - we now see where that gets us. The detrimental effect of complexity must be built into the system. A self-correcting village economy. Oh yeah. We gotta get rid of the idea of wealth. That injects a competitive urge that, again - we see around us today - that rewards psychopathic behavior and turns our society into a cut-throat game of Monopoly. Winner take all, including, it seems, our very lives.


I don't know that such a system can be imagined in a form that makes sense. Such decentralization would completely up-end the cellphone / reality TV lifestyle we enjoy. Of course, that's in its death throes as I write.


I have no idea what the solution is, but I do know that refurbished capitalism, through some kind of regulatory hocus-pocus, isn't it.

[OHdem10]

1. This is how I resolved it in my own mind. Capitalism is a competitive

system, therefore there are winners and losers.
Left to its own devices, the more advantaged the player
the better his chances of being a winner.

While Capitalism is not pretty, it seems to have
worked best and withstood the test of time.

Thus, how do you make it work in a democracy.
Capitalism must be regulated and the rules must
be fair.

Unregulated capitalism will lead to loss of middle
class and loss of Democracy. Unregulated Capitalism
permits the Haves to continuously gain more and more
ground (money, income, whatever) and causes the
Have Less and Have nots, to lose ground. Eventually
end up resembling a Third World Country.

Capitalism is and economic system that can be used for
good or ill.

[Oregone]

5. "Capitalism must be regulated"

The problem is that capitalism disproportionally distributes wealth created in production to the owners, not the laborers. As time becomes arbitrarily close to infinity, the investor class's wealth will do the same, giving them the ability to lobby or simply purchase the government, and destroy all semblance of regulation. Capitalism, down to its very core, has systematic weaknesses by emphasizing capital over labor. These weaknesses simply cannot be mitigated through the magical concept of regulations, being that they enable the very destruction of regulations.

[DonCoquixote]

16. OK, answer this

How do you prevent communism from going down the same route? With communism, you have a central group that distributes whatever wealth is created, and does so based on whatever it's agenda is. Granted, at the beginning things may seem nice, but sooner or later, one group (like the soviet "nomenklatura" sons of party elites) starts defining the terms to suit their purposes.

Me personally, I think the Europeans have it best, where they set clear rules, but allow merchants to exist and ply their trades. If any group, ANY, does not have a check and balance, they ruin the best of systems, simply by being human.

[Oregone]

19. Well, what a wonderful debate tactic

When staring directly at capitalism's Great Structural Flaw, you respond by throwing out a distracting, tangential question about a system Im not even advocating. Despite what my answer is on communism, capitalism still has serious issues, and it is the topic at hand.

[Statistical]

why does there need to be a difference between labor & capital.

Say you work for Ford. If you put 20% of your paycheck into Ford stock you are both labor and capital.

Now I wouldn't recommend buying stock in your own company (for obvious reasons just look to GM employees) however if you bought ownership in any companies (or even better diversified portfolio of companies) the same dynamic occurs.

The reality is one must live on less than their means. If you make $35K live like you make $30K and pocket $5K. Easier said than done but it CAN be done. I started saving/investing 10% when I made $18K a year. The $2,000 bucks I saved didn't materially help my net worth in the long run but the acceptance on living with less than my full income.

The difference between capital & labor only applies if labor intends to live solely on the fruits of their labor alone forever. While one can do that one isn't required to do that.

[BurtWorm]

49. Not everyone can or will do that, though everyone will want to feel secure

The great flaw with capitalism is that it doesn't address this essential need of all people to feel secure, to have enough and not need what is necessary. Meanwhile capitalism works to create needs that are not necessary.

And underneath this practical flaw is capitalism's great moral flaw: it requires a legal system (i.e., government) to legitimize and enforce the legitimacy of its basic element, private property, and then insists that that is government's only role.

So while you may be right that anyone is free to accumulate capital, your point resigns responsibility for these major flaws and leaves it in the hands of the owners of capital, who really are the enemy of working people.

[Statistical]

50. "owners of capital, who really are the enemy of working people. "

Once again this artificial separation between capital and labor.

If labor realizes that the return on capital is higher than the labor wouldn't it simply make sense to be part of the capital structure.
Also given many people in the "labor" pool receive pensions or have 401K they are part of the capital structure also.

This idea of BLACK & WHITE labor vs. capital hasn't existed for well over a hundred year. If someone is only marginally included in the capital structure it is simply a choice.

As long as you are well informed about the outcomes of those choices; if you make a choice and the choice is non-optimal then what is the problem.?

By the constant posting of "capital" is evil, and capital exploits labor I would say "labor" is most certainly informed of the benefits of capital ownership. However for the vast majority of Americans we simply choose to buy stuff we neither really need nor want.

I would rather not force participation in capital structures but maybe that is what you are saying. Should the government force companies to provide say 10% of compensation in the form of capital ownership?

Lastly I would indicate that capital ownership isn't the whole answer. As you indicated some people will either not be able to participate or won't participate. That is why a very comprehensive social safety system supporting by progressive taxation is essential. There should also be acceptance that the "minimum wage" must be a living wage. Otherwise society is accepting that many people will live below living wage standard. Minimum wage should be increased and then indexed to a living wage standard (based on cost of goods and services).

If we look at capitalistic countries like Finland or Sweden we can see this system already in place. Strong support for labor & collective bargaining, a living wage acceptance, strong social safety net, and govt services provided by progressive taxation.

[BurtWorm]

53. Capital needs labor. It needs the division. It needs the disparity. It creates the disparity.

It needs government to enforce the disparity to as great a degree as the society will tolerate. This country tolerates it much more than Europe does. It makes it bearable by propagating the line you're taking, that everyone is potentially a capitalist if they want to be one. This may be true to a very small degree, but it can't be true entirely.

This idea of BLACK & WHITE labor vs. capital hasn't existed for well over a hundred year. If someone is only marginally included in the capital structure it is simply a choice.

The reason the capitalist structure has been opened to labor is that capital has successfully shifted the burden for their workers' welfare from themselves to their workers. They've successfully convinced government that they're only responsible for their workers while they're their workers. The gains the labor movement made in the twentieth century have slowly but steadily been eroded.


The Soviet Union collapsed, but that doesn't make Marx's analysis any less valid.

Just to be clear, I'm not advocating anything but an honest look at what capitalism is and what it requires.

[Statistical]

54. " honest look at what capitalism is and what it requires"

That is the point it doesn't require that.

There are many highly profitable companies in Finland for example yet they enjoy a high standard of living and high level of economic security. There are many extremely rich people in Finland yet they have accepted that being insanely wealthy results in high levels of taxation.

That progressive taxation base provides for the economic and financial security of all the citizens. That social safety net is financed directly by capitalism. There is no indication that Finland would be more prosperous under a communist state. It is entirely likely it would be less competitive and thus have less capital to invest in its social safety net results in less security for its citizens.

In the US we have simply chosen to not exploit the massive amount of prosperity capitalism brings. We don't have progressive taxation, we don't have appropriate taxes on capital, and we don't have strong regulations. In essence all of the benefits flow to the few rather than a cut going to the many.

[BurtWorm]

57. I said they require as much disparity as a society will tolerate.

But they still require disparity. The system doesn't work unless people need to work. We're very well conditioned to think needing to work for other people's profits is normal and necessary. The Finns and other Scandinavians are so much more aware of the absurdity of that requirement of capitalism that they mitigate it with their highly progressive tax rates. We, on the other hand, are very well conditioned to think working for other people's profits is a public good. It isn't inherently, you know.

[Statistical]

59. I agree (to an extent) that is why unlimied capitalism can't work.

However some people have a desire to save for the future (give up wants today in order to fulfill potential wants in the future).

For example I could go on a cruise with my wife this year. However the money from that cruise compounded over 30 years will be enough to finance a dozen cruises in my retirement. To me the "future cruise" is worth more than the cruise today. Obviously I am taking some risk. It is possible I never live long enough to go on the future cruise, my wife might get sick of putting things off to the future and leave, cruising might get much more expensive, etc.

However those are risks I am willing to accept.

Likewise say I save 10% of my paycheck every year for 20 years. At 8% compounded, 4% wage growth, and 3% inflation. After 20 years I will have saved/invested enough to generate an annual income of roughly 40% of my labor income. I could choose to take a paycut and not work anymore, I could work less, or I could continue to work and grow that wealth further.

I do agree however when wealth distribution gets so disproportionate is creates an imbalance in the system.

I would argue (and I know I am a minority here) that the problem isn't capitalism it is the compounding effect of three decades without progressive taxation. This is also a major reason why we must have an estate tax. There is a limit to how much wealth I can accrue in a lifetime both via labor and via capital. However if wealth can pass from one generation to another infinitely in 30-40 generations one can see that wealth distribution will get much worse (today will look like the "good ole days"). so a very steep and progressive estate tax is essential.

We, on the other hand, are very well conditioned to think working for other people's profits is a public good. It isn't inherently, you know.

Of course it isn't. I doubt many people really think that way. Say I gave every citizen $50,000 a year free money. How many do you think would still work for "the public good"? Not many. People work because it is essential to maintain an acceptable standard of living.

I doubt we will ever see eye to eye but I enjoyed the debate. You have reaffirmed by belief in the absolute NEED for highly progressive taxation. This provides me with some interesting arguments for my less progressive friends.

[BurtWorm]

60. You're sort of acknowledging that the problem is capitalism

but you can't bring yourself to say it for some reason. Capitalism needs to be on a leash, otherwise a lot of innocent people can get maimed by it.

[Statistical]

63. I don't think the problem is so much capitalism as wealth concentration.

It just happens to be that capitalism is a very effective method for creating wealth but it also is an effective method for concentrating wealth. One outcome is desirable the other is not. Wealth concentration by any other means would be equally bad. There was definitely unequal wealth distribution long before capitalism.

"Capitalism needs to be on a leash, otherwise a lot of innocent people can get maimed by it. "
So do a lot of things for example. Indiscriminate use of fire without any rules, regulations, safeguards, or consequences would be disastrous for the human race. I wouldn't say fire is the "problem" rather it is a danger which needs to be controlled.

[The2ndWheel]

7. When humans accept the rules and regulations of the planet

Then we can talk about business accepting the rules and regulations of the government.

[yella_dawg]

9. Sorry, I can't accept that.

I'm talking about the fundamental nature of the beast. The fact that capitalism is a mechanism for managing resources for a complex system is an inherent problem. Capitalism eats regulations for breakfast. Regulation controls. The problem is the underlying complexity of the system. Regulation simply treats symptoms while the underlying causes create greater problems.



"Capitalism is and economic system that can be used for good or ill."


Roosevelt reined in capitalism with the most powerful regulation ever placed on business seventy-odd years ago. Capitalism broke those bonds thirty years ago. Now capitalism threatens not just society, but the Earth itself. What kind of binding, long term regulation do you suggest??

[Skink]

2. The world has always lived on a system of bartering.

I will give you this rock if you give me those feathers etc.

[Oregone]

4. What does that have to do with capitalism specifically?

[DonCoquixote]

40. Because even barter

is a form of capitalism, perhaps even a purer form of capitalism then the present day, it that if I trade you apples for corn, you can determine that so many apples is worth so much corn, whereas the true value of any currency has been compromised since the gold standard went south.

[Oregone]

3. Yes. It sucks. Put a fork in it already

[Xolodno]

6. Regulated Capitalism.....

....works fine. So long as the regulations are kept up to current economic changes. An economy is by no means static...so why should be the rules to regulate it. Sure there are winners and losers, but, only for those who decide to take that chance.

However, unregulated capitalism brings in a two class society and an endless cycle of boom and bust. Its almost crosses the line into anarchy.

Sadly, when the Soviet Union collapsed, too many took this as proof positive that we should embrace unrestricted capitalism as communism has failed. Yes it did, but communism is not socialism...two different systems albeit with similarities...but even socialism has similarities with capitalism. Problem with both communism and unrestricted capitalism is this....they both sound great on paper...in application they fail, spectacularly.

[Oregone]

8. Cocoon Capitalism

Thats before beautiful butterfly capitalism hatches and shits over everyone.

Im mystified why people think its the silver bullet, being that it cannot last for any substantial amount of time

And still, even with wonderful paper, fairy, cocoon capitalism, workers benefit disproportionally through the process of production (IOW, they are exploited to benefit the owners of capital)

[MrMickeysMom]

11. Agreed... unfettered, unregulated.. it's gone amuck

People really were more consumed by Clinton's sex life than the fact the Glass Steagle was removed and regulation over the banking industry has resulted in Global Financial Terrorism.

We the People, along with our legislators (who themselves are unregulated) are spinning our middle class and therefore Republic into oblivion, which we were warned about by the founding fathers (take note of that, fucking tea-baggers).

[yella_dawg]

12. Does it??

How, exactly, did we end up where we are today then? In the seventies, we had tough, and tightening, regulation on business. Thirty years later, Business ruled the Earth. Not a comforting track record for regulation. Looks to me like it's a losing battle to bind the beast faster than it chews away the ropes.

[Oregone]

17. This is the fundamental problem with the system that you are hitting on

And once you see it, you can never really look at capitalism the same again.

If you put all the moral and economic debate aside for a moment, it all pales in comparison to this problem. Simply put: a system that enables a small class to become egregiously wealthy can never contain the power of those wealthy people for any substantial lengths of time.

When you see both lives and the environment being destroyed, I'm not sure how people can opt to put a happy face on capitalism and try it yet again, expecting different results.

[KansDem]

10. If you have pizzas, running shoes, perfume, or CDs and want to sell them...

...then capitalism works.

However, capitalism does not work for energy, education, defense, the environment, and health care. These are national security issues and should be left to government.

Leaving national security issues in private hands will result in...well, among other things, bogus wars and the Gulf disaster...

[Oregone]

13. But is it necessary for those items?

Why could a business entirely owned by workers not create running shoes, perfume, or CDs, and sell them for-profit?

Why must uninvolved shareholders take all profits and workers be exploited in order for a marketplace to thrive? And the bubbling level of thriving...is it, over a long period of time, really healthy? Capitalism creates a bipolar economy, and we will never know if the highs really merit the lows for the people. In any case, those that capitalism aims to reward the most--the owners of capital--seem to benefit despite the specific business cycle

[dionysus]

18. what is your solution? not all companies are publicly traded. even a worker owned business

is participating in "capitalism".

[Oregone]

25. Not really

"even a worker owned business is participating in "capitalism"."

One distinct attribute of capitalism is the separation of labor and capital, which often results in capital being emphasized and rewarded disproportionally from wealth created in production. In an employee-owned business, capital & labor are merged, and the workers have a direct right to receive the fruits of their labor (being shareholders, they receive all profits instead of uninvolved shareholders who receive infinite ROI to reward "risk"). In a way, it can be thought of as "common ownership".

In the context of keeping the economy churning, this would be part of my "solution". Though it would greatly slow down artificial growth & risky speculation, it would still eventually lead to a raped earth because this model of organizing human activity still requires perpetual growth (it would just be a fair bit friendlier and perhaps slower descent into hell, with the elimination of worker exploitation).

[Statistical]

46. Simple solution be a shareholder.

Devote 10% of your income to becoming an owning interest.
Most people will say they can't afford 10% but anyone middle class CAN afford it.

If you make $30K a year, there is someone living just fine on $27K a year. If you lived his/her lifestyle and the end of the year you would have $3000 in capital. Capital you could use to invest. If you make $80K a year there is someone who lives just fine on $72K a year.

It doesn't have to be your company specifically but any company or even better hundreds of companies. The idea that labor & capital are two distinct groups that never intermix is silly. The only time labor exists solely as labor is if that element spends 100% of their income forever and never investing anything back into asset ownership.

Sadly we are a country addicted to debt and "stuff". People say they absolutely HAVE to get an iphone. They can't live without it. Nobody says I absolutely HAVE to cut my expenses by $400 a year in order to HAVE AN OWNERSHIP STAKE in economic prosperity.

[AnArmyVeteran]

14. Complexities are created to side step regulations

Look at Wall Street. They concocted schemes and scams no one could even understand. They did it intentionally and because of their scams they almost destroyed our economy. If simplicity is genius, then unregulated capitalism is complete madness. Complex systems like designed on Wall Street are not only unnecessary, they should be made illegal. Buying and selling is not rocket science. And our markets shouldn't be either. They only reason politicians are allowing them to remain complex is because of the complete corruption of our system. Unfortunately, most of our elected officials are nothing more than prostitutes to their wealthy pimps.

The problems with regulation are that penalties for violations of the rules are so minimal that people willfully break them knowing their massive gains will surely dwarf any token fines or penalties they have to experience. We need to make penalties tougher and based on the amount of money involved. If someone concocts a scheme to pilfer off a million they should get automatic 20 year sentences. If someone steals a billion they get life. That's not complex.

Corporations consider violating the law and token fines as just a part of doing business. But if the laws were changed to read if they broke the same law three times the CEO goes to prison you would then see accountability. But unfortunately, corporations and their lobbyists and their prostitutes politicians write laws that specifically allow them to break laws with virtually zero punishment.

We the people aren't able to afford to pay off politicians to write laws just for us. So if we even steal a candy bar we could end up in jail. In one California case a man was given life for stealing a candy bar under the three strikes and you're out law. WHY aren't there similar laws for the wealthy and corporations? Well, I already answered that because they write their own laws.

The only way to make capitalism work is to inject heavy doses of responsibility and accountability into the system where punishments are severe and swift. It wouldn't take long to have a just and fair system if CEOs or Wall Street executives were regularly rounded up and given life sentences, just like that poor man who stole a candy bar.

Tough penalties are only for the poor and middle class. You'll never see 'three strikes and you're out' laws for the wealthy or corporations.

It's not complicated.

[Starry Messenger]

15. Yes, it sucks.

I think we get bogged down on this conversation when people think that anti-capitalism means we have to have "communism" in its place. It would be more productive (and fun!) to think of all the things we could do with all the money if it wasn't in the hands of so very few. Getting rid of capitalism first is a good start to a plan.

[Yavin4]

20. All Organizational Structures Created by Humans Inevitably Lead To Corruption and Benefits A Few

Whether it's economic system, a political system, a religious order, the local lodge down the street, whatever organization that humans create inevitably they become corrupt and service only those at the top or the very few.


A capitalist economic system eventually will only benefit the few with the most capital to the detriment of everyone else.

A communist system eventually will only benefit the few with the most connections in government to the detriment of everyone else.

Concentration of benefits of the organization to the top of the organization to the detriment of everyone else in the organization is the prime motivation for war.

Leaders at the top use warfare to deflect attention and hostility away from them to others. Those engaged in warfare don't notice that they're really fighting to preserve wealth at the top.

[The2ndWheel]

22. But who's going to trade all that for

loose bands of hunter/gatherers?

[damntexdem]

23. Well, I guess that settles it: no use trying to improve anything.

We are inevitably doomed, so we shouldn't even try -- not!

[Yavin4]

30. We're Only Doomed If We Do Not Create Checks on Corruption

It's just that we have to create checks on institutional corruption beyond simple regulations.

Constitutional democracies were a check on the concentration of power into the hands of a few, but today, we're seeing that becoming more corrupt so we will have to create an entirely new system of government once again.

[Oregone]

31. Which really doesn't seem possible in Capitalism

[Statistical]

47. Seems just fine in progressive countries like say Finland or Sweden.

Large social safety net, high support for labor, strong minimum wage (living wage) standards. Access to all of necessities for life including education and healthcare.

Still the economies are driven by capitalism.

[yella_dawg]

44. Not necessarily.

There is clearly evidence that organizational structures created by western civilizations lead to corruption and so forth, but native North American cultures reached fairly high levels of development, apparently with little of the trouble you mentioned. There are other historical examples. There is always the risk of romanticizing the "Ancients", but the history, though sparse, is there.

There is precedence, just not much of it.

[damntexdem]

21. Yes, but only if it can make a profit from sucking.

However, it has found that that is the ONLY way it can make a profit. ;-)

[proteus_lives]

24. "We gotta get rid of the idea of wealth."

Good luck with that. :eyes:

That's something that exists no matter what system you're in and has existed since one hunter/gather had an extra spear-head.

[SB37]

32. Yeah - I was kind of mystified by that one as well.... n/t

[yella_dawg]

42. I'm not even sure what "eliminating wealth" even means.

I do know that a system that rewards sociopathic behavior is a disaster waiting to happen. (Actually happening, really.)

Consider that prior to the rise of European empires, most human cultures were hospitality-based, in that the purpose of achieving wealth was to distribute it. Basically, "coming into money" means it's party time. Consider some of the rather advanced native cultures in North America prior to the European invasion. Indeed, a couple still exist and are even regaining strength. Those cultures simply didn't (don't) recognize wealth in the same way as modern Western cultures do.


Roll your eyes `till they hurt. I never claimed to have answers. Just pointing out the underlying problem.

[harun]

26. End usary, everyone give 2.5% of their wealth to charity each year, done.

[Oregone]

29. If people's wealth naturally degrades, it creates an incentive to grow that wealth

How much more perpetual growth can this globe really take at this point?

[harun]

36. You want people to have wealth so they can purchase provision for themselves.

Peoples wealth degrades much more under the current system than it would under a no-usury, charity system, it would also eliminate poverty.

(I didn't think up this system BTW, just advocating it)

[MyNameGoesHere]

27. I been thinking about this very much

I have looked at some other economic theories and I am intrigued by Participatory Economics (parecon) with Participatory Politics (parpolity) If capitalism really worked why is it so marred with failure? I know one thing it is not a economic model that helps the people. That is unless you're the 1% that has the wealth.

[jody]

28. "scaling problem" occurs with all organizations. Start-ups typically are headed by individuals with

experience in the actual production of goods and services for the new venture and an instinctive awareness of customer primary expectations -- quality, cost, timely delivery.

When an organization grows that person(s) floats to the top and her/his contact with actual operations becomes clouded by staff and particularly the accounting and finance function.

Eventually a size is reached where production & operations that made the business possible is replaced with accounting & finance as the actual power behind the CEO and decisions are made in expectation of how they will affect the price of stock.

Lost in the evolution of scaling from start-up to full fledged corporation with cancerous bureaucracy dominating is the customer who still demands goods and service that meet the three criteria -- product quality, product cost, timely delivery.

IMO that also describes the growth in government from a few liberal individuals loaning an elected group authority to manage group activities, but stressing liberal goals of maximum individual freedom and limited government to morph into a corporate state.

Of course I could be wrong! :shrug:

[yella_dawg]

45. That's the problem exactly.

The answer is aggressive decentralization. It's a matter of complexity.

[unblock]

33. what we have isn't capitalism because there's not nearly enough competition.

putting the government regulation issue aside, it ain't capitalism if there's not meaningful competition. if one company or a small number of companies working with remarkably similar strategies and pricing can effectively dictate the terms of the market (or in any event, more precisely, exercise "pricing power") then it's not proper capitalism.

and of course that sucks and is going to lead to serious problems.

either competition has to step in quickly to prevent serious economic dislocations, or the government has to step in and do something about it. so we're back to regulation after all.

call it semantics, but my key point is that competition is an intrinsic part of capitalism. without it, it's not capitalism. it's laissez-faire economics, robber baron run amok, whatever. it's not capitalism.

[Oregone]

34. Its called Real-World Capitalism (tm)

The means of production are still privately owned, with shareholder receiving infinite ROI on wealth their grandfather's originally invested into plantations and sweat shops. Yes, it is most definitely capitalism.

[unblock]

37. it's starting to look more like modern-day feudalism to me.

[Hydra]

35. Capitalism does suck by nature

You suggest it's an eating machine as it gets bigger. That is incorrect- the nature of the beast is the same micro or macro. It eats. It gobbles everything up.

Ignore the complexity- when someone says "it's complex," it's usually very simple. They're trying to figure out the best way to lie to you.

Simplicity- we all have basic needs. How do we address that?

[TreasonousBastard]

38. It's not capitalism that's complex, it's the underlying economic...

situation that's complex.

Capitalism is merely the one system we tend to evolve to in order to sort out wants and resources.

The primary argument against capitalism is that resources ten to filter upwards, and those on the lower rungs are left behind. Well, surprise, surprise, that happens in every system so far devised. Communism, socialism, feudalism... where's the good one? Marx thought that capitalism had to build industry before communism could take over and make things fair. What happened was that Russian peasants didn't notice the difference in misery between working for the Tsar or Lenin. Western workers were not all that well off at the time, but were usually smart enough not to fall for communism.

Capitalism is the one system that does not have to be forced on the population, but every system that has been tried has had a group of elites arise taking what they want, often enough by brute force.

Classical liberalism was the mix of public and private resources-- each one had its own benefits and they worked together. The British Empire was the ultimate end of such policies, as was the industrial revolution, Enlightenment thought, the invention of the stock market, and Dickens complaining about it all because the underclasses were no better off than under the old systems.

Modern mixed economies, with elements of capitalism and socialism are the evolution of that form of liberalism, although it's still a messy business. Europe is getting swamped with the costs, the US never did fully appreciate how well it can work, and Asia is anybody's guess.

[bigmonkey]

39. You have to keep weeding.

Use a gardening metaphor, not a mathematical or scientific one. I'm always surprised that there's an expectation that the rapaciousness of capitalism can be "solved". We have to readjust the human response every time it gets out of balance, and the readjustment will be different each time. We can't give up, or that's the end of "the garden".

Even if the entire system is changed in some way, say by the introduction of capital that depreciates instead of accruing interest, we will eventually have some other problems to constantly redress.

[branders seine]

41. capitalism sucks far beyond our ability to even estimate its suckitude.

it is the death of our species.

[Boojatta]

43. A TV station makes a centralized broadcast to a mass audience, but...

cell-phone use is an example of decentralized communication.

I don't know that such a system can be imagined in a form that makes sense. Such decentralization would completely up-end the cell-phone / reality TV lifestyle we enjoy.

[yella_dawg]

48. There is a theory out there...

There is a theory out there that basically states that the existence of cell phones requires the cubicle workspace. The only way to manage the necessary technologies is through a stifling, crushing bureaucracy.

What we're really discussing is a total ground-up reorganization of culture that re-prioritizes technology, etc. in light of what we now know the costs to be. Basically, we're gonna have to face the fact that driving an automobile requires the gulf oil spill. Then we have to decide what we're gonna do about it.

[Xenotime]

51. Capitalism is just greed masked as good will

[Statistical]

52. By that logic collective marganing is just greed as good will.

:hi:

[Taverner]

55. Capitalism can last longer with regulation and Keynesianism

If you go balls out, Milton Friedman style, it will last 5, maybe 10 years

[Dogtown]

56. The main problem is inherent to the system.

Regulation will never be allowed, longterm, by those that control the capital. They will use the excess to influence or corrupt the regulators.

Aquisitiveness is a prime motivator of our species. It's in our primate genes. Add to that the primate urge to dominate the group, and the issues become clearer.

There has never been a system of government that did not eventually become corrupt. There never will be.

[leftstreet]

58. If 'acquisitiveness' is our motivator, why aren't we all bank robbers?

Why do 99.9% of us 'play by the rules' of capitalism?

I agree with your statement that the problem is inherent in the system, but it's the capitalism that's corrupt, not the people.

[Dogtown]

61. I must disagree, leftstreet.

99.9% of humanity is *not* "good". The old canard, "Put 3 people in a room..."

If even a simple majority of folks play by the rules, it's mostly fear of reprisal that keeps them "honest", and remember that honesty is a construct. The rules are always made by the Haves to control the HaveNots, and favor accumulation of wealth and power by the wealthy.

Please show me one government/society that has endured for any real length of time that was not corrupt.

[leftstreet]

64. I know you mean well, but that's just way too anti working class for me

Attempting to explain how the Predator Class oppresses the peons by suggesting the peons themselves are just as corrupt...just doesn't work somehow

All over the world today millions and millions and millions of people will tend the sick, direct traffic, teach children the alphabet, cook soup, repair plumbing, sew clothing, engineer bridges, and fill potholes.

If capitalism falls this afternoon, these same people will do these same things tomorrow

[Statistical]

65. Do those people do that because they are "good" or because it is the means to an end?

Say tomorrow the govt announced $50,000 free to every citizen for life with no consequence or cost.

Also all wages would be reduced to $0.00. How many people would go to work? How many people would work a 40 hour week for nothing?

Some would they are called volunteers but very few would.

People work because it is a method to convert labor into the means of survival.
Cash and capitalism are simply middle men in the process. People worked and people were opposed long before capitalism.

[leftstreet]

70. No doubt, the CONDITIONS under which we labor SUCK!

:thumbsup:

Many, many people would likely give up their crap jobs for 50k. And just as many people who'd still likely tend the sick, teach children, fill potholes.....

You're right, people labored long before capitalism

[Dogtown]

67. We'll have to disagree on that point

I understand your class issues and share the same attitudes, but different beliefs. It's a matter of perspective and mine is a bit nihilistic.

"Attempting to explain how the Predator Class oppresses the peons by suggesting the peons themselves are just as corrupt...just doesn't work somehow" I didn't make my point clear. Aggressiveness is the issue. Human speciatic imperatives require that the most aggressive and ruthless "lead", rather than those most intelligent and compassionate. Perhaps there is an undiscovered system that will redress those issues, but damned if I'm clever enough to picture it.

In the short term, I agree completely that capitalism is a flawed system that needs a massive overhaul. Our leaders are all "merchants" and think in terms of profit rather than human condition.

The "trickle-down" philosophy is just a shuck, they have no intention of sharing.

[leftstreet]

69. Let's try this

I know people often detest this comparison, but let's try it anyway...

You said...Human speciatic imperatives require that the most aggressive and ruthless "lead", rather than those most intelligent and compassionate.

This coming weekend, all over the world millions of working class people might likely engage in 'potluck' dinners - family, neighbors, coworkers, whatever. In how many instances will you find that one or two attendees took all the food and sold it for a profit in a neighboring town?

'Aggressiveness,' 'leadership'....these are terms inherent in capitalism, not in people

:shrug:

[Dogtown]

78. Your example breaks down

if extended beyond the "clan" level. When relative strangers interact, the picture isn't so rosy.

Not that they're aren't problems within your dynamic. Most families/neighbor groups have a definite hierarchy. Sometimes a serene and pleasantly appearing social function on closer inspection is rife with authoritarianism and bullying that enforce the outward serenity. This certainly can exist when "co-workers" includes any management personnel, as well as within the family enclave.

A specific example: my SO is a mid-level marketing executive. The CEO has begun mandating social activities under the aegis of "team building". Responsibility for planning has been given to the "Fun Committee", traditional planners of the company Christmas party.

The trouble lies in this: the Fun Committee is all old guard employees. My wife was hired because of her skills as a "fireman", the Marketing Division was in a shambles. "Old Guards" seldom appreciate newcomers equipped with an ax. Debora, a 54 YO with psoriatic arthritis and a hip replacement, has been expected to go white-water rafting and bowling.

Tough old trooper, she endured the rafting. She has elected to work the reception desk during tomorrows bowling excursion, primarily because she objects to drinking on the job and the "FC" have authorized a bar tab.

Coercion, degradation, punishment: this is "team building"? Yet all will laugh tomorrow and the atmosphere will appear quite convivial.

Anecdotal evidence, I know.

Still, the example does indicate that appearances are often deceptive.

We seem to have wandered away from the original thread and I don't want to jack the OP. I've enjoyed our civil discussion and will close by repeating that we seem to agree that capitalism is a broken toy. I invite your rebuttal, but probably won't reply out of respect for the OP.

:hi:

[MellowDem]

62. Regulation is the answer.

Just look at Europe. A mixed system of socialism and capitalism works best. Like you said, you have no other idea or solution, and neither does anyone else.

[blindpig]

68. Oh, you mean like Greece, Portugal, Ireland..........

The 'mixed systems' of Europe are going belly up and capitalists are ascendant even in the Scandinavian countries. Put quite simply, the capitalists are taking back all the concessions that they've made over the last 60 years. They do it because they need to balance the contradictions of capitalism on the backs of the masses and because they have the power to.

There is no coexistence with capitalism.

[Statistical]

73. You are aware that scandinavian countries are in economic expansion and have low unemployment right.

There is no contraction that needs to be balanced on the backs of the masses.

[blindpig]

75. They are also reducing social expenditure.

Capitalists like having it both ways.

[Statistical]

76. Not true again. Spending increased 8% overall and higher for social services.

http://www.stat.fi/tup/suoluk/suoluk_valtiontalous_en.html

Some select Ministries
Ministry of Social Affairs and Health: +19%
Ministry of Employment and the Economy: +57%
Ministry of Defence: -7%

Any other fallacies you need corrected?

They actually cut taxes, increasing borrowing, and increased spending. That is exactly what one to stimulate the economy.

Of course they can do that because they didn't borrow decade after decade without balancing the budget racking up trillions in debt even through the best years.

Durring their last economic boom (roughly late 90s till 2007) they had a balanced budget with surplus and slowly paid down the debt.

Crazy concept I know: increase spending when times are bad, pay it back when times are good. 40 years ago the US followed the same sane economic policies.

[blindpig]

81. Denmark , Sweden...

http://www.europeaninstitute.org/June-2010/eu-austerity-a-country-by-country-table.html

Denmark: In seeking €3.2 billion in budget “consolidation,” the government proposes to cut unemployment benefits back to two years (from four); the public sector will lose 20,000 jobs; child benefits are to be reduced by five percent and ministerial salaries cut by five per cent.

Sweden began backtracking in the 90's:

http://www.socwork.net/2005/1/articles/473/Gould2005.pdf

Bottom line is that Capital cannot be coexisted with, it will always seek to profit and the public sector is un-gathered fields to them. Thus we see them nailing down health as a for profit enterprise, seeking high cotton in education and the big prize, privatizing Social Security.

[MellowDem]

82. And whose fault was that?

Capitalism's or the countries that spent deep into debt? If capitalists are trying to push back regulations, the answer is for the people to push back and the government to have the power to push back. Even then, with a country that has a good, strong regulatory system, that doesn't mean a country's economic system won't fail if other things go wrong. Like a government that spends beyond its means for votes.

The mixed systems of Europe aren't going anywhere.

The problem according to you, and many others on here really, though you don't readily see it, is democracy. The reason that capitalists have been able to infiltrate our government and have such power are failings of our democracy to keep such things from happening. Authoritative nations like China don't have those sorts of issues. They can do what they feel is best for their country, period. Not so in democracies, at least not easily, especially the US version of democracy.

[Rex]

66. Only if used wrong and it has an inherent flaw - monopolies.

The end goal for a competitor in capitalism is to own their field or product, which stifles creativity and innovation. Microsoft is a good example of why capitalism can suck.

[Greyhound]

80. The flaw is fundamental to the system itself. It can't be 'fixed', only endlessly patched with the

inevitable results that go along with that. A better patch, regulation in this case, can make it functional for a time, but in the end the flaw will overcome any patch.

[GSLevel9]

71. well... the alternative is a full pound of medium rare FAIL-burger. nt

[yella_dawg]

83. Wow!

What insight. What wisdom!

[fishbulb703]

72. I agree. The ideal is distributed, localized economies with information sharing via internet.

Of course that will never happen.

[LanternWaste]

74. I imagine that like any economic system...

I imagine that like any economic system (and even political system) there are people who can be considered "winners" and people who can be considered "losers" within the parameters of any of the human constructs.

Hence, I imagine the "winners" would consider the political/economic religion they adhere to as "doesn't suck" while the losers" would place their political/economic religion in the "it does suck" category"

As to whether it is the prophet of its own doom or not, I can't say... I've allowed myself to get somewhat cynical when it comes to secular doomsday/post-apocolyptic scenarios.

[Initech]

77. When soulless business people like Meg Whitman and Carly Fiorina can buy public offices it does.

[Greyhound]

79. Ponder this, if you will.

If you understand how money is created extrapolate the inevitable consequences of interest, a constant withdrawal of a percentage of every new dollar created.

Here's my question; If we were to replace the proportional drain of interest with a straight fee, and rebind currency to a universal constant value, would that system be sustainable?

I've been trying to think of the fatal flaw of this kind of system for years, but I'm not a mathematician.

[yella_dawg]

84. Our economic system must continually grow.

The current economic system requires that any entity grow or fail. That works as long as there are no resource shortages, and as long as the population continues to grow. Obviously, we can't continue this strategy any further. We could bind currency to a constant value with a stable population and a sustainable economic model. The problem with binding currency to some defined resource or or whatever is that it limits growth in the economy. Nixon had no choice but eliminate the gold standard. There wasn't enough gold available to allow the economy to grow. With a sustainable model, you could bind the currency, but that requires a stable population. Since basic arithmetic absolutely insists on a stable population, and soon, this shouldn't be a big problem.


On the other hand, bind it to what? The knee-jerk reaction is gold, of course, but in truth, gold is only another arbitrarily valued currency. Gold is pretty, and it's useful in electronics manufacturing, but in truth, steel, titanium, and a lot of other metals are a hell of a lot more valuable in a practical sense. Gold is treasured primarily because it is relatively rare, and because it's a cultural thing. But not because it has real value. It's too soft for making things and too heavy to boot. It's value arises from the fact that we think of it as valuable. Find some genuinely hungry people and offer to swap gold for food. You'll see the true value of gold emerge.

One idea that has been floated is pegging the currency to some "average" hour of labor. A high-school dropout in a manual labor job would earn one "hour" per hour. A geek in some research dungeon might make four "hours" per hour. Or some such system. The idea is to peg currency to the population rather than some natural resource.


As per a straight fee rather than interest, Muslim countries use such a system with good result.


Interestingly, your opening scenario points out a curiosity in our current system. It sounds like you are comparing apples to apples, but consider: Money is created by loaning pretty pieces of paper you print in the back, essentially. (The Fed controls the money supply by loaning money they create.) You repay the loan by creating some kind of economic activity. Employment, business, whatever. The principle basically never existed in the fist place. There are some issues that need to be considered, but basically, principle can be ignored for the moment. The interest, however is something different (so to speak). The interest represents the results of your efforts. It represents intrinsic value of sorts. So the idea that you simply borrow money, then pay it back, is somewhat misleading. The principle is merely an abstraction that lubricates the economy. The interest represents value. I wonder if it wouldn't be better if we found a more efficient lubricant for the economic machinery.

[Greyhound]

85. OK that seems to verify the premise.

Of course this is hypothesis, but I'm a systems guys and so am looking for the most stable and efficient system.

In your reply, you seems to make a couple of assumptions; One, that limiting growth is, of necessity, bad. And two, that basing currency on time must be relative to what one does, not what portion of one's life is spent doing it.

What I'm looking at/for (remember this is theory and so is not constrained by 'the way it is') is a method of economics that serves to facilitate economic activity in an egalitarian society without the inherent loss through what we call the financial industry (non-productive). By binding a currency to absolute time growth is only limited by effort and population and, I think, remains constant.

[yella_dawg]

86. Assumtions

Limiting growth is absolutely necessary. Limiting growth will be enforced (is being enforced) by reality itself. Exponential growth is some really spooky stuff beyond a point (in this case, about 1970). My assumption is that our current economic model is based on sustained growth. That's just economics 101. Not my idea, but insane on its face.

As for wages, I threw that out because I needed an example of alternative currency models. Personally, I'd like to see something along the lines of annual salary based on productivity, with productivity based on real world issues such as community need, unique skills, and so forth. (The goal being long term income stability.) I knew a woman years ago who never worked at any job but a presser in the Hagar slacks factory. Started straight out of high school and retired from the same job. She became so skilled they sent her all over the world to train pressers. Her skills at "unskilled labor" was such that she was paid on par with middle management (sans perks, of course). I'd like to see something along those lines more general in our system. Such skills are valuable, and should be recognized as such.

My brother is a plumber who spends a great deal of time under houses and in other unsavory environments. He's skilled, but the working conditions are more important than the skills in this case. That's really crappy work (pun absolutely intended) and should be compensated. This is another example of imbalance in our current system. Lots of others exist.

I'm not exactly sure what you are getting at, but binding a currency supposedly provides a hard link between the currency and some commodity of defined intrinsic value. Gold has little intrinsic value. Rather, it is a more stable form of currency, in a sense. Binding currency to gold has caused trouble numerous times, for example, there have been times when crop seed has been more valuable than gold. (Not in the sense of tulip bulbs in Europe some centuries ago, but in times of severe crop failure.) You seem to be searching for something more flexible but with real intrinsic value. I don't think such a thing exists. I think we're stuck with currency as an abstraction.

The core problem, currency, actually has two parts. Since we've been raised as capitalists, we feel that some aspects of capitalism are necessary, such as investment capital which enables business creation, expansion, whatever. We also need currency to facilitate daily activities, such as eating. In reality, these are two different things, and one can envision an economy with a dual currency, one for groceries, one for constructing a new hospital, so to speak. Use a "common" currency bound to gold, or crushed limestone, for that matter. Such a currency should be extraordinarily stable since it would not be available to what we now regard as "financial activities". It couldn't be borrowed or lent (commercially). One currency for gas and groceries, another for buying a house. Obviously, there would have to be some ability to translate one to the other, and therein may be the rub. But consider that home loans are a twentieth century phenomenon. It may be that personal credit creates unacceptable instabilities in the system.


Until the last century, people commonly survived, and prospered, with little or no money. Up through the thirties, the annual expenses on our family farm ran around a hundred bucks a year. That was mostly seed and veterinary supplies. The average monthly expenditures ran a few dollars. Now we pay around fifteen minutes of minimum wage labor for a drink of water. Somewhere in that shift lies the problem, I think.