To avoid a massive hijack in this thread, I’ve decided to open this up for debate here.
I see that some people think that capitalism is the greatest scourge in the history of mankind. These same people make the assumption that any “ideal” world will naturally evolve to a point where capitalism is replaced by “something else.” Well, I’d be very interested to know what these individuals think “something else” would be.
What I’d really like, is for the proponents of ending capitalism to first define what they mean when they are talking about capitalism. Due to the way I was seeing the word used in another thread, I believe they have a very different definition of it than I would have, so we need to get the definition worked out before we can talk about anything else.
In addition, for the sake of this thread I will also say up front that I won’t accept any argument which claims Europe isn’t capitalist. I’m going to refrain from offering up my own personal definition of capitalism until a bit later, but I consider it “resolved” that European countries are all capitalist. I do not think that the existence of robust social welfare, or even significant income redistribution equates to post-capitalist societies. I think if you look at the economic drivers of Europe’s economy you will note it is still very much capitalist, from Finland to Spain.
I also do not feel that to begin with the onus should be on me to defend capitalism. Not until its opponents have fleshed out their idealized alternative. The thing is, capitalism has flaws, but it doesn’t claim to never cause results that may be undesirable on an individual or even societal level. The thing is though, it’s the system we’ve had for an extremely long time, so if you really think you have one that works better I think the onus should be on you to lay it all out first, prior to me defending a system which has absolutely worked well enough to give us all the niceties of life for a long time.
Look at society as though it is a large machine. The current engine of that machine is capitalism. You’re an engineer who thinks we should use a different machine. I’m the supervisor of the machine and in charge of its overall operation. You have to convince me not that the engine has problems, but that you can replace it with a suitable alternative. No one in my position would agree to take the engine out until you’ve fully explained to me why your alternate engine is better.
Regulated capitalism. We should use our ability to remove charters from corporations that do not work in the public interest. The idea that maximizing profits is the prime directive is absurd. Every corporation should be judged partly on its impact on the environment and its impact on society.
Greed has resulted in corporations capturing the regulators and inspectors. Both the corporations and regulators should be severely punished for transgressions. The inspectors in the gulf oil well mess were not named and punished. They were bribed out of doing their duties and we all paid for it. Yet we view it as business as usual.
The bankers did huge damage to the world economy. yet they walked away rich and sassy. There should be public trials so people know what happened. They should face the courts. The regulators who nodded at every disastrous financial instrument should also face trials.
Then we might have the proper capitalism.
Unfortunately I am off to bed but could you briefly explain who the all is that enjoys the niceties of life and explain why those that don’t need to be excluded. And maybe you could explain why that is a good result for capitalism.
[ul]
[li]Society collapses, and what replaces capitalism is a more primitive form of economy.[/li]
[li]A “post scarcity” (yes the term is an exaggeration) automated economy, where most reasonable needs and desires are met for the asking. “Tea, Earl Grey!” I strongly expect that such a society would still have a more-or-less capitalist sector (just as ours still has an agricultural sector) to deal with those resources that are still scarce (land being an obvious one). And of course the technology for such things is quite a ways off.[/li]
[li]Due to extreme scarcity of resources society becomes a rigidly regulated and controlled impoverished dystopia, but doesn’t actually collapse.[/li][/ul]
And of course there’s the likelihood it’ll be something no one has thought of yet. Capitalism though doesn’t seem sustainable in the long term; it doesn’t deal well with either real world resource & growth limitations, with responsibility towards the larger society, or with the consequences of the easy copying of information.
I would not be this person. I don’t think humans are destined for anything–good or bad. We could devolve into primitive beasts just as easily as we could evolve into enlightened angels. It’s all in the buttons that get punched.
But I do not think capitalism, in its present form, is sustainable. Ecologically speaking, we cannot continue to consume resources at the rate that we are doing now. Human population growth is not behind this overconsumption. It’s capitalism–the philosophy that more is better, that massive economic growth is a requirement for a healthy society, mass quantities is good, and that you’ve got to have everything you want, right now, with no money down. Oh yeah, here’s a credit card or two to help you out. And if you don’t buy now, you let the terrorists win.
That’s the kind of capitalism I’m talking about. The unbridled one that we’re still living under.
Can you concede that these places are not as capitalistic as the US, though? It’s hard to draw similarities between a system like France, where it used to be against the law for an employer to require a 40-hour workday, where the government requires companies to give their employees generous paid holiday leave, where health services are free and plenty, with the United States’ economic and societal model. I mean, if we proposed these measures for Americans, you know good and well the Right would have a field day drawing up OBAMUNIST posters. We’d run out of magic markers! I’m curious why you think western Europe is more capitalistic than socialistic. You can say they lean more towards one than the other, but to lump them in completely with one system is to grossily oversimplify economics and twist the argument into a simple “capitalism versus communism” one. Which has been done to death already.
Um, can I ask why? Is it because you can only come up with defensive statements (like “cheap meat is good”), but not good stand-alone arguments? Doesn’t that seem kind of weak?
First off, “it” does not have a voice. It has proponents and practioners, but capitalism does not have a PR firm. So it cannot claim to be one thing or another. It just is.
Secondly, just because it’s the system we’ve had for an extremely long time does not make it grand. I mentioned what three hundred years of capitalism did to this country. It made it a wonderful place to live…unless you were a black person or a recent immigrant during the Industrial Revolution. It still is a wonderful system…unless you’re a coal miner with Black Lung disease, or a cashier at Walmart who has to go on Medicare and foodstamps, or you’ve just been laid off because the multi-national conglomerate that you work for has decided to ship your division oversees, where the labor is cheaper, the labor laws more lax. Or you don’t live behind a landfill, toxic dump, or make your living fishing or crabbing. It’s also great unless you live in a country with natural resources and a corrupt, inept government…where corporations can steal the land you’ve lived on forever, even if that land was your only means for survival.
The reason why it has lasted so long is that the main people who benefit from it are always the ones with the power to keep it around. The people who get shit on by the system have no such power, so no one cares about their opinion on the subject.
Fair enough. Let’s start with baby steps.
We need to disconnect private economic interests from the government. No more Big Pharma, Big Ag, Big Oil, Big Auto, Big Wall Street. There’s too much backscratching, and Dems do it just as much as Repubs. How do we do this? Well, I admit I don’t know. I’m not for pubic campaign financing, but I don’t want the wealthy guys with their own money to always beat out the little guy with no money. I’m almost wish we could require congress people to wear the logos of their corporate sponsors at all times, just so we can see who’s in their pocket. But that’s not going to happen. I just know the root of the evil of capitalism is the unlevel playing court that it creates in our political system. It’s hard to fix a broken machine if management has a vested interest in keeping it that way.
Let’s regulate these guys up the wazoo. Not just Wall Street, but everyone. And make them pay for their “oopsies”. Let’s create some enforcement jobs by making sure corporations and everyone else are following the law and not spoiling the air and water. Let’s do away with the mentality that care for the environment and care for the economy are mutually exclusive.
We should have a means of production that is separate from profit-generation for the individual. In many states, municipalities control utilities like power and gas, rather than corporations. What’s the difference, you say? Well, corporations are beholden to their stakeholders moreso than their consumers in a situation like this, because they know they have the consumers by their short hairs. So if they raise rates, they know someone will pay–because people aren’t wont to move just because of sewage hikes (just like they’ll pay an extra twenty-cents per gallon at the pump at the pump, but scream bloody murder if their property taxes are increased one nickle). Municipalities, however, have a vested interest in keeping things functioning because the people running municipalities can lose their jobs if they have enough unhappy customers. And if the municipality gets a bad reputation, businesses and residents will eventually move away, which means less tax dollars flowing in. Also, it is much easier to call out a corrupt, inept government than it is to do so with a corporation. All the latter has to do is do some creative furniture rearranging and it looks like they’ve done something. Government doesn’t work that way.
The social welfare of our system needs beefing up. Right now, the cracks that you can fall in are the size of Grand Canyons. We need to caulk those babies up so that we can all have the basics. Food, housing, health care, pension. We do not have these things guaranteed to us right now. Social Security, under the Bush Administration, was just a hair away from being wiped out through privatization. That shouldn’t have even been on the table. There’s no good reason why people should debate getting tested for treatable diseases, but in our society, knowing the “truth” will make it harder for you to get treated and cured. We need universal health care right now. That would make us more in line with those so-called “capitalist” countries of Europe. We would have a healthier, less anxious populace, with lowered infant mortality rates, and a more productive workforce. And we might actually be more consumptive too. For instance, I have to spend $2K to get a certain diagnostic test. I have to save up for it, so that means that’s $2K that isn’t going to the local economy, or towards a downpayment on a house. And heaven forbid, if I get a positive result on that test! Lord, I don’t even want to think about what will happen to me. And I’m a lucky person. I have insurance!
Those are my “baby” steps. Right now, each one has been labled as “socialistic!!!” by the American right. I’m curious, Martin. Do you agree with this position?
Sorry to snip your long post and focus on this, but I think it’s important (as the OP asked) for us to define what we think capitalism is before we talk about what replaces it. What you have described is not capitalism. It might be called consumerism, but capitalism is simply free people trading goods and services freely. It can exist in the context of shrinking resources or populations as well as increasing resources or populations. Private ownership of the means of production, whatever the scope of those “means” are.
Now, you can regulate capitalism (as you suggest) and it doesn’t necessarily morph into some other economic system. I would question whether you can “regulate these guys up the wazoo” and not turn into something else, but we’d need to get our hands on what “up the wazoo” actually means before deciding that.
Myself, I’ve never understood how one could have a real, liberal democracy without a free market. All the other systems you can think of can exist, voluntarily, in a free market, but a free market can’t exist where private ownership of the means of production is not allowed. And the more something is regulated, the less you “own” that thing. At some point, the scales tip, and the society is no longer free. People will vote for freedom when they don’t have it, and the only way to keep them from doing so is to take away that vote. That applies to the realm of ideas and to the realm of economic activity.
Completely unchecked capitalism results in feudalism, though. Unchecked capitalism inexorably moves wealth from the bottom to the top and concentrates it in few and fewer hands. We see that in the US right now.
I agree with what you’re implying. Der Trihs mentioned a “more primitive form of economy” but I can’t imagine anything more primitive than a capitalist economy. Except for economies which aren’t really economies at all- but even if it’s just a barter economy that’s still capitalism.
Corporate feudalism.
Feudalism is when the vast majority of capital and resources are concentrated in the hands of a small, oligarchic overclass while the vast majority does the actual labor and production without reaping the wealth. It’s an exploitive system.
We have it in the US along with “company store” credit and loan scams which keep the exploited working class perpetually in debt to a bloated, parasitic overclass which does not contribute to the society as a whole but only takes.
They also control the media and brainwash people into thinking that hhe democratic political system which the people control and participate in is “evil,” and that they should be abjectly grateful and servile to ecomomic rapists who exploit their labor, poison their children, murder the earth and stifle competition. It’s funny how the economic elite and their apologists always talk about their interest in protecting “small business,” when the biggest enemy of small business, by far, is big business.
Capitalism needs to be tightly controlled by the public. It needs rules. The average CEO used to make about 20 times more than the lowest paid employee. Now it’s some like 2000 times more. That’s the kind of exploitation of labor and transferrence of wealth from the bottom to the top I’m talking about. The primary engine of capitalism is human greed. Any economic or political system based on greed is not going to be equitable or sustainable.
For the sake of argument, I will accept your definition, although I will note that I don’t believe that is a common definition of what “feudalism” is. Let’s just call it “DtC’s definition of feudalism” and move on.
The vast majority means >> 50%. Is it your claim that something like 75% of the people in the US “does the actual labor and production without reaping the wealth”?
Ah, the nefarious “they”… And you know very well that there is no such thing as brainwashing. At any rate, is it your contention that something like 75% of the people fall in that category? If not, then what percent do and where do you get your statistics from?
I don’t know that the ratio of CEO pay to the lowest worker’s pay is any significant measure of anything. People usually talk about the ratio of CEO pay to the pay of the average worker. That ratio was about 40 in 1980 and peaked at 525 in 2000 and has been steadily declining since that, reaching 263 in 2009. Humans are greedy (as well as charitable). Any system designed to eliminate greed is doomed to failure. You might as well try to eliminate sex.
But this is not a transfer of wealth since that wealth never belonged to the “bottom” in the first place. At least not in a capitalist system. And the fact that CEO pay has been on the decline for at least a decade tells me that the market is capable of regulating itself.
Yes it did belong to them. They produced it. You can use that same rationalization to say that the serfs working on the medieval feudal farms of the past were not really being exploited because their lords owned the farms. That entire way of thinking is sick and diseased, and it’s what we have going on in the US.
Okay, I’ll bite. Capitalism is not based on just private ownership, but indirect ownership of the means of production - which is land, labor and capital, both physical and financial. Indirect meaning most owners don’t actually use those means of production, but just take the profit generated by them. It also means direct financing through the use of stocks and bonds, which soon becomes indirect as well as soon as they are sold on the secondary market.
Both indirect ownership and financing are the roots of the evils behind modern capitalism. It divorces accountability of the financiers from how they generate their financial flows. It is also overly concerned with only those financial flows, and not with the real flow of goods, and if those goods are actually beneficial, only if their interest payments or dividend checks are coming.
How to address those issues?
Socialism 3.0 - The cooperative commonwealth.
1)Banking is through member-owned institutions based on Islamic principles, i.e no interest, no traditional loans. Most assets purchased through a joint-venture with the bank who is then bought out by the debtor/co-owner. Bonds may be issued on a preferred stock basis - no voting rights and first claim to net profits. Payable only if profits exist. Non-callable. Make financing either partners or subservient to the groups they work with, not the dominant party.
2)Most firms are cooperatives or social enterprises, i.e. non-profits. Indirect ownership is illegal. Financing mostly through bank joint-ventures or bonds. Strict debt to equity of no more than 10 to 1 allowed.
3)Social accounting is required for all firms greater than 10 employees. No more than 50 employees or must convert to a cooperative. No more than 500 employees total per firm, but any firm may join consortia with others. Accountability means recognizing that all costs must be accounted for, especially environmental and social, not just the financial costs, and clear ownership must be present to hold them accountable for their actions.
4)All non-residential land is owned by ‘trusts’ which lease land for non-residential purposes. Revenues are divided between the ‘trust’ and the resident members of the trust region. Leases can only be revoked by court order, but the lessee may cancel with proper notice. Land cannot be ‘owned’, it is only held in stewardship for a bit, and the only steward that can be halfway trusted is the entire public itself. (Any vacant properties after five years have to be ‘leased’ at auction to the highest bidder, or sold if residential.)
5)Social government. Majority of government functions except for the bare essentials are transferred to government-chartered but independent trusts which receive an initial endowment to manage their operations. Membership in the trusts is open, but voluntary. Don’t like libraries, don’t use them. Need to go to the ER - head to the non-profit hospital that covers care through its investments, not its patient fees.
The transition will take place over the 20 - 50 years. Stage one is creating the alternative banking institutions and scaling up those institutions and establishing them on a global level; stage two is buying out capitalist firms and converting them to cooperatives; stage three is buying out the non-residential land and converting them to the trusts. The final stage will be the restructuring of governments and the creation of the social trusts.
There’s capitalism, and then there’s predatory capitalism. Which needs to be discouraged via regulations and fines. Moderated markets, so the playing field remains level, etc.