# Can "capitalism" really work any more? **URL:** \ **Category:** Great Debates\ **Created:** [May 12, 2013, 3:55am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125 "2013-05-12T03:55:49Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [May 15, 2013, 10:21pm UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/61 "2013-05-15T22:21:58Z")
double post ---
**Author:** ![sisu](https://avatars.discourse-cdn.com/v4/letter/s/df705f/32.png) [@sisu](https://boards.straightdope.com/u/sisu)\ **Post date:** [May 15, 2013, 11:55pm UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/62 "2013-05-15T23:55:49Z")
> [@Measure\_for\_Measure](#): > > Sure, if you’re operating at the same level of generality as the OP. But drill down an inch and you will see that there are pretty significant differences between crony capitalism as practice by Suharto in Indonesia, the Japanese post-Zaibatsu system where large producers of final products lend funds to smaller suppliers (IIRC), the German bank-dominated system, the US equity-dominated system of 1945-1980 which had skeptical financial regulators and the US equity dominated system of 2005, where banks were trusted not to make decisions resulting in their insolvency in the absence of federal bailout. > > Big differences. > > Go an inch deeper and distinguish between problems of aggregate demand stabilization and simply designing a financial system that is less prone to panics. Very different problems. Then dig another foot and we can discuss policy. Great post, unfettered capitalism will lead to monopolies etc,when there is sensible government intervention we do see capitalism work well. In the above examples they made very specific strategy decisions based on what was best for their countries int he short and long term based on current environments. If they don’t change as the world changes then we could see what has happened in Japan happen in Germany. In Australia we saw during the 1980’s our left government (Labor) introduce things like a floating dollar, sold off state enterprises, freed up labour laws etc. These were incentives for capital to come to Australia and has lead us to great outcomes over the last 30 years. So simply put, unfettered capitalism sucks. ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [May 16, 2013, 12:58am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/63 "2013-05-16T00:58:08Z")
> [@Mijin](#): > > If you’re implying capitalism won’t still exist, I don’t see it. Capitalism doesn’t require everyone to want or need to trade, as long as some proportion do, it exists. The only way I can see humans ceasing to trade is if we have all our needs met, which in turn I can only see happening in a virtual environment. And even then, I don’t think every human would be willing to live in a VR. People can still trade in a system unlike the current model. Why does trading require exponential GDP growth? Under the existing model, if “the economy” is even a fraction of a percent smaller this year than it was last year (that is, still larger than pretty much every year in the history of the Earth) then we are “in recession” and it’s a disaster. Why? Constant GDP growth of a modest 3% implies that the economy has to double in size four times each century, for ever. Given how much of the Earth’s resources we are using up right now just to keep the status quo, we’d better hope that solar system exploration comes sooner rather than later. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 16, 2013, 1:26am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/64 "2013-05-16T01:26:09Z")
Unfettered capitalism doesn’t exist. Of course there are different ways that it works depending on the country, but no matter what, we’re going to have capitalism unless we figure out an entirely new model that no one knows about yet. We don’t have unfettered personal liberty in any country either, but as long as we don’t live in the dark ages, Western governments will start from the assumption that the people should be free. The same will go for economics. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [May 16, 2013, 4:32am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/65 "2013-05-16T04:32:59Z")
> [@Colophon](#): > > Under the existing model, if “the economy” is even a fraction of a percent smaller this year than it was last year (that is, still larger than pretty much every year in the history of the Earth) then we are “in recession” and it’s a disaster. Why? Well, if the economy grows at the rate of population, that’s a slump, not a recession. > [@](#): > > Constant GDP growth of a modest 3% implies that the economy has to double in size four times each century, for ever. Given how much of the Earth’s resources we are using up right now just to keep the status quo, we’d better hope that solar system exploration comes sooner rather than later. That’s a common misconception. Economic growth can take the form of better cars and faster computers, not necessarily bigger cars and computers. Now I agree that we have a pretty serious problem with global warming. But remember, in the US CO2 and methane emissions are _wholly unregulated_ by the federal government. You can emit them for free. So it shouldn’t come as a shock that people emit too much of them. ## There are free market solutions: put a price on C02 emissions, otherwise known as a fee or a tax. Or require permitting. We could have started doing this 20 years ago, but conservatives blocked such efforts. I see that **adaher** conflates economic and civil freedom. I find it strange that modern conservatives consider both free speech and, say, ownership of power plants to be human rights issues. It suggests that they value one too little while exhibiting sheer paranoia about the other. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 16, 2013, 4:39am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/66 "2013-05-16T04:39:15Z")
If people can’t make a living freely, then how can any reasonable person be considered free? The alternative to economic freedom has always been that you work where you are assigned to work. I don’t care if you have the right to urinate on public officials as a form of protest, if you work where they tell you to work, you aren’t free. This similarly goes for ownership. If all property belongs to the public, then you also are not free. ---
**Author:** ![bldysabba](https://avatars.discourse-cdn.com/v4/letter/b/ecccb3/32.png) [@bldysabba](https://boards.straightdope.com/u/bldysabba)\ **Post date:** [May 16, 2013, 5:06am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/67 "2013-05-16T05:06:05Z")
> [@Measure\_for\_Measure](#): > > I see that **adaher** conflates economic and civil freedom. I find it strange that modern conservatives consider both free speech and, say, ownership of power plants to be human rights issues. It suggests that they value one too little while exhibiting sheer paranoia about the other. It’s not just adaher. The first influential equation of market economics and civil freedom was made by Hayek in the Road to serfdom, and it was a pretty substantial contribution, acknowledged by people as far away from Hayek in the economics spectrum as Amartya Sen. Market economies do promote inherent freedoms(although Sen isn’t entirely convinced that they do this to perfection, which is a qualification an academic, especially one on his side of the spectrum, will make). Read more [here](https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CC0QFjAA&url=http%3A%2F%2Faubreyherbert.blogspot.it%2F2004%2F10%2Famartya-sen-on-hayeks-road-to-serfdom.html&ei=0WeUUayCBs3OrQeXi4CwBQ&usg=AFQjCNHOABmFlR2h584HFmhAwbEYJXXfrg&bvm=bv.46471029,d.bmk) if you’re interested. If you’re not, here are some quotes > [@](#): > > Consider Hayek’s insistence that any institution, including the market, be judged by the extent to which it promotes human liberty and freedom. This is different from the more common praise of the market as a promoter of economic prosperity. A huge part of economic theory is concerned with the prosperity argument, going back to Adam Smith and David Ricardo. That connection is indeed important, and it is not surprising that so much attention has been devoted to seeing the market mechanism from this perspective - defending its achievements as well as disputing particular claims and proposing qualified endorsements. Yet Hayek was surely right to insist on clarity regarding the purpose of seeking prosperity. > > … > > A third contribution of Hayek is of particular interest to those on the left of the political spectrum. Hayek’s critique of state planning is mainly based on a subtle psychological argument. He was particularly concerned with the way centralised state planning and the huge asymmetry of power that tends to accompany it may generate a psychology of indifference to individual liberty. As Hayek put it: “I have never accused the socialist parties of deliberately aiming at a totalitarian regime or even suspected that the leaders of the old socialist movements might ever show such inclination.” One of Hayek’s central points was that “socialism can be put into practice only by methods of which most socialists disapprove”. > > We can hardly ignore the massive accumulation of evidence - before and after publication of The Road to Serfdom - of tyrannical use of bureaucratic power and privilege, and the political and economic corruption that tends to go with it. Hayek’s central point here was to note that even though socialism has a strongly ethical quality, that is not in itself adequate to guarantee that the results of trying to implement it will be in line with its ethics, rather than being deflected and debased by the psychology of power and the influence of administrative arbitrariness. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 16, 2013, 5:28am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/68 "2013-05-16T05:28:50Z")
> [@sisu](#): > > Great post, unfettered capitalism will lead to monopolies… Can you cite when this has every happened? Actually, it’s highly fettered capitalism that leads to monopolies, as they are extremely difficult to establish, much less maintain, without government backing. Hint: Standard Oil was never a monopoly, and by the time it was broken up, its command of the market was well below where it was at the peak of its reach. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 16, 2013, 5:42am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/69 "2013-05-16T05:42:44Z")
Yep. The only monopolies in the US are government sanctioned monopolies. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [May 16, 2013, 8:51am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/70 "2013-05-16T08:51:56Z")
> [@John\_Mace](#): > > Hint: Standard Oil was never a monopoly, and by the time it was broken up, its command of the market was well below where it was at the peak of its reach. In another thread you posted a (probably incorrect) factoid about Standard Oil’s market share. Ever find a cite? … And, BTW, the fact that the government’s case against Microsoft was dropped when GWB took office does not prove Microsoft was not exercising monopoly powers adverse to the consumer. ---
**Author:** ![bldysabba](https://avatars.discourse-cdn.com/v4/letter/b/ecccb3/32.png) [@bldysabba](https://boards.straightdope.com/u/bldysabba)\ **Post date:** [May 16, 2013, 9:51am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/71 "2013-05-16T09:51:20Z")
> [@septimus](#): > > …Microsoft was not exercising monopoly powers adverse to the consumer. That’s nowhere near enough to justify government intervention though. For that, you’d also have to show that Microsoft could continue exercising those powers in a way that was adverse to the consumer and not make itself vulnerable to competition through doing so. I don’t think you could do that. ---
**Author:** ![sisu](https://avatars.discourse-cdn.com/v4/letter/s/df705f/32.png) [@sisu](https://boards.straightdope.com/u/sisu)\ **Post date:** [May 17, 2013, 12:49am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/72 "2013-05-17T00:49:24Z")
> [@John\_Mace](#): > > Can you cite when this has every happened? > > Actually, it’s highly fettered capitalism that leads to monopolies, as they are extremely difficult to establish, much less maintain, without government backing. > > Hint: Standard Oil was never a monopoly, and by the time it was broken up, its command of the market was well below where it was at the peak of its reach. No I can’t as it really hasn’t existed in modern time. That was my point if we remove all rules then it is just as bad as having too many rules. ---
**Author:** ![eschereal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eschereal/32/18939_2.png) [@eschereal](https://boards.straightdope.com/u/eschereal)\ **Post date:** [May 17, 2013, 4:06am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/73 "2013-05-17T04:06:08Z")
> [@Mijin](#): > > Firstly, there is no reason why, in principle, to grow an economy requires using more stuff. In the case of human activity to date, it sometimes does, and sometimes does not. Sometimes we just make better or more efficient use of something. I kind of see what you are saying, but not everything can increase in intrinsic value. Many of the staples of the economy – the things we need to survive in reasonable comfort – retain a constant relative value. Trade encompasses these things, I would venture they frame the economic baseline. So, fundamentally, we do need to use more stuff. > [@Mijin](#): > > For the star trek scenario, I’m not sure what you’re getting at. It’s doubtful we’ll be trading latinum with other species that are human caricatures. > But if you’re implying our growth is not sustainable, I’m afraid the universe can support our exponential growth for billions of years. Heck, the solar system alone could handle all our needs for _millions_ of years, such is the degree to which we have not scratched the surface. At present, obtaining resources off-planet is not very realistic. Even with a significant increase in exploration for exploitation, the cost is prohibitive, at least with respect to profitability. Technology is likely to change, but the net energy costs are not likely to change enough to make it worthwhile. I cannot see a way to expand beyond the earth’s capacity without at least first stabilizing the Terran economy far more than it is. And that is not for lack of imagination, I enjoy my speculative fiction, but after the last page, it is still fiction. > [@Mijin](#): > > If you’re implying capitalism won’t still exist, I don’t see it. Capitalism doesn’t require everyone to want or need to trade, as long as some proportion do, it exists. Trade is not the sole province of capitalism. Any sort of economic system will involve trade. > [@adaher](#): > > If people can’t make a living freely, then how can any reasonable person be considered free? The alternative to economic freedom has always been that you work where you are assigned to work. I don’t care if you have the right to urinate on public officials as a form of protest, if you work where they tell you to work, you aren’t free. > > This similarly goes for ownership. If all property belongs to the public, then you also are not free. Freedom is subjective. Those things that enhance your liberty may well be the things that detract from mine. Freedom itself is not a satisfactory argument in favor of capitalism. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 17, 2013, 4:18am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/74 "2013-05-17T04:18:39Z")
That’s a good point, but I don’t see how it applies to economic freedom. My freedom to work where I want or own what I want doesn’t imperil your freedom in any way. And we have anti-trust laws to prevent anyone from gaining the commanding heights of our economy, plus a Constitution that prevents the government from doing the same. ---
**Author:** ![sisu](https://avatars.discourse-cdn.com/v4/letter/s/df705f/32.png) [@sisu](https://boards.straightdope.com/u/sisu)\ **Post date:** [May 17, 2013, 5:30am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/75 "2013-05-17T05:30:07Z")
> [@adaher](#): > > That’s a good point, but I don’t see how it applies to economic freedom. My freedom to work where I want or own what I want doesn’t imperil your freedom in any way. And we have anti-trust laws to prevent anyone from gaining the commanding heights of our economy, plus a Constitution that prevents the government from doing the same. But alas you don’t have the “right or freedom” to work where you want or even own what you want. There are very good reasons for limiting freedoms as they may impinge on the greater societies freedoms… ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 17, 2013, 5:40am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/76 "2013-05-17T05:40:35Z")
That’s the problem, there’s no greater society freedom. Freedom only has meaning for the individual. We can talk about balancing societal WELFARE and freedom, but there is no freedom for society. ---
**Author:** ![eschereal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eschereal/32/18939_2.png) [@eschereal](https://boards.straightdope.com/u/eschereal)\ **Post date:** [May 17, 2013, 5:48am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/77 "2013-05-17T05:48:06Z")
> [@sisu](#): > > But alas you don’t have the “right or freedom” to work where you want or even own what you want. There are very good reasons for limiting freedoms as they may impinge on the greater societies freedoms… I think **adaher** ’s premise is that, theoretically, he has a natural right to engage in profitable enterprise of his choosing and that doing so would not compromise my liberty in a significant way. Which is a slightly myopic way of looking at it: you may or may not have the natural right to practice your electric bass at full volume whenever you feel like it, but exercising that right with impunity may well help you discover whether it really is a recognized freedom. On the other hand, a lot of these contentious issues could be mitigated with dialog: if you consult with your neighbors over your bass practice, you might have better luck retaining your right to practice loudly. More disturbing, though, is **adaher** ’s apparent perception that the system is successfully protecting society from plutocracy and government overreach. From what I can tell, this has not been the case for many decades. ---
**Author:** ![sisu](https://avatars.discourse-cdn.com/v4/letter/s/df705f/32.png) [@sisu](https://boards.straightdope.com/u/sisu)\ **Post date:** [May 17, 2013, 5:55am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/78 "2013-05-17T05:55:53Z")
> [@adaher](#): > > That’s the problem, there’s no greater society freedom. Freedom only has meaning for the individual. We can talk about balancing societal WELFARE and freedom, but there is no freedom for society. Yep wrong turn of phrase from me, societal welfare sounds a bit lefty though 😉 ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 17, 2013, 5:59am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/79 "2013-05-17T05:59:12Z")
In order to restrict my liberty, my actions have to have a direct negative effect on you. Basic liberties cannot be restricted for the sake of something so nebulous as society. To use your example of the bass, if I’m playing it too loud so that you can’t sleep or generally disturbs your right to peace and quiet, I’m definitely directly harming you. However, if you’re one of those types who thinks my bass playing is harmful to society somehow because maybe I record dirty lyrics or encourage kids to worship the devil, then you’re in the wrong. Which I’m sure we both agree on in that example, since it affects a civil right(freedom of expression) rather than economic rights. ---
**Author:** ![eschereal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eschereal/32/18939_2.png) [@eschereal](https://boards.straightdope.com/u/eschereal)\ **Post date:** [May 18, 2013, 4:14am UTC](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125/80 "2013-05-18T04:14:45Z")
> [@adaher](#): > > In order to restrict my liberty, my actions have to have a direct negative effect on you. Humans are pretty crafty animals, some of us can think three or four moves ahead and effect results indirectly. If you are granted liberty on the basis of direct harm, then you have _carte blanche_ to cause indirect harm, because you can claim that you were not proximate. The troubling aspect to this is that it is usually not possible to determine whether the indirect harm was incidental or deliberate, so we build a complex base of legal code to avoid having the issues develop in the first place. Now, I for one am not in favor of complex legal code based on the fact that I have seen it abused in some pretty unforgivable ways. On the other hand, I do favor prophylaxis, because fixing broken shit is a lot more work and expense than making sure it does not get broken in the first place. In the end, it is a difficult issue that I am not smart enough to resolve. Yet, you are willing to just throw up your hands and pick the easy answer, apparently because it sounds good to you, so I would venture that you are no more qualified than I am. I even doubt that there is any one person who is (or was) smart enough, but I do believe that a bunch of us could probably figure something out together. Or we could just keep treating it like some kind of game, where “my guys” “win” some of the time and “your guys” sometimes “win” but most of us end up losing. [Previous page](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125.md?page=3) [Next page](https://boards.straightdope.com/t/can-capitalism-really-work-any-more/658125.md?page=5)