Is Capitalism destined to fail?

[Mr.Zambezi]

As any historian will admit, people were forcibly driven into capitalism

I have this vision of armed posses of federal Marshals, walking in a line across the country side, leading the farmers at gunpoint to a factory.

People chose capitalism. There was no single Mind, or single group that engineered and created it. Unless you include the Illuminati

[Dumbguy]

If you wait long enough, everything fails

*Originally posted by Alessan *
**Unless you want to state thet mankind is inherently tribal - a valid argument - then we can’t really look at capitalism as a system. It’s more of a default. **

If that’s so, then what was mankind doing for all those centuries before capitalism? We were developing toward our default state? Exchanging goods for symbolic value markers (money) is a system. It’s a convenient one, and it benefits enough people (or the right people) that it’s become pretty popular. But it won’t last forever.

[QuickSilver]

*Originally posted by Mr.Zambezi *
I have this vision of armed posses of federal Marshals, walking in a line across the country side, leading the farmers at gunpoint to a factory.

But I have at least one historical example where this exact thing was true in Russia immediately following the revolution.

People who owned land (small and large pieces) had their land confiscated by the communist party and the people summarily forced to leave or simply relocated to the cities to work in factories. In turn, young eager communist party members, people with absolutely no agricultural experience what-so-ever, attempted to nationalize agricultural production.

And before this draws more fire from oldscratch, perhaps he can enlighten me at what point (in his humble opinion) the Marxist ideals of the Russian revolution turned into totalitarianism. Surely it was not in 1917.

[Smartass]

Anyways; my pro-capitalism fervor is not based in the belief that capitalism is an absolutely perfect system. Were I to believe that, I’d go join the Libertarians.

I feel so used. I don’t think capitalism is perfect, and I’m a libertarian.

As it turns out, I do think market solutions are better than government-imposed ones. If someone comes up with a plan that works better than markets, you can bet that I’ll be one of those libertarians jumping ranks.

-VM

[oldscratch]

First, for John. True, it is somewhat pointless to criticize without offering an alternative. However, this isn’t so much a criticism of capitalism, as a dispute about the facts regarding it as a system. As soon as we can settle that, we can argue about whether the replacement is better or worse. And thanks for your support. And the fact that you are convinced that communism won’t work based on your anyalsis that it isn’t plausible or possible is miles ahead of most criticsims of it.

oldscratch, kissing ass with the best of them.

*Originally posted by Sam Stone *
**
Here’s a thought experiment for you: Does a big hole have value? If I spent a year’s labour (and I’m paid $50,000)digging a big hole, is that hole worth $50,000?

Now, how about if we pay someone else $50,000 to fill in the hole. Now there is no hole at all, but we’ve spent $100,000. So where did all that value go?

**

My GOD you are right. How in the hell did we go 150 years without thinking of the unsolvable conundrum of the hole. Sam Stone, you have singlehandedly brought down the whole dirty mess known as the labor theory of value.

ahem…

from Engels

It is simply wrong to say that the dimensions in which anyone invests his energies in anything (to keep to the bombastic style) is the immediate determining cause of value and of the magnitude of value. In the first place, it depends on what thing the energy is put into, and secondly, how the energy is put into it. If someone makes a thing which has no use-value for other people, his whole energy does not produce an atom of value; and if he is stiff-necked enough to produce by hand an object which a machine produces twenty times cheaper, nineteen-twentieths of the energy he put into it produces neither value in general nor any particular magnitude of value…

**
Once you throw out the notion that labor=value, the rest of Marx’s flimsy construct collapses at all.

**

How true. If you misrepresent your opponents argument and construct straw men, they can very easily be knocked down. Again from Engels “Labour is the measure of all values, but labour itself has no value.” and from Ricardo “The value of a commodity … depends on the quantity of labour which is necessary for its production, and not on the greater or lesser compensation which is paid for that labour.”

**
What is value? Value is contained in a product that improves someone’s life in some way.

**

Wrong. Value is contained in an object that has some use. There are many objects that do not improve lives, yet they have a use. Those objects have value.

**
How do we determine that value? Why, we determine it by offering the product on the market and letting people bid for it. If they are rational, they will pay what it is worth, overall.

**

Nothing has value unless labor was put into it. If I find a rock on the ground it has no value. As soon as it becomes hard to find that rock, when I must expend labor looking for it (i.e. Gold) it has value. When that rock has a use to someone else, and labor must be expended to get it to them (i.e. Gravel) it has value. The ammount of labor put in, determines the relative value. A board that I cut will not have as much value as a chair I fashion from the board. Why? Because more labor went into the production of the chair. Labor creates value! With no labor, the wealth of the world would not exist.

Fuck. I have to run. I’m going to post this, and then a follow up to the rest of your comments.

[John_Corrado]

I swear I’m not trying to turn this into a “What is Libertarianism?” thread.

*Originally posted by Smartass *

Anyways; my pro-capitalism fervor is not based in the belief that capitalism is an absolutely perfect system. Were I to believe that, I’d go join the Libertarians.

I feel so used. I don’t think capitalism is perfect, and I’m a libertarian.

As it turns out, I do think market solutions are better than government-imposed ones. If someone comes up with a plan that works better than markets, you can bet that I’ll be one of those libertarians jumping ranks.

smartass- I tend to agree with the market solutions vs. government imposed ones, however, I do feel that there are excesses of the market which need to be curbed by the government. Libertarianism, as I’ve seen it posited, does not seem to believe such; or, at the very least, believes that peaceful, honest people who make up the Libertarian country will take it upon themselves to fairly curb such excesses through their spontaneous good will and nature. I consider that too utopian of a viewpoint, which is why I’m a Republican instead of a Libertarian (and my feelings regarding market vs. government solutions is partially why I’m a Republican rather than a Democrat).

[dal_timgar]

Karl Marx died in 1883. in 1886 the supreme court decided in a case between santa clara county and a railroad, that a corporation was a PERSON. the gasoline engine and electric power distribution were technologies introduced after Marx. corporations and technology changed the system. continuing to call it capitalism and using that paradigm is absurd. if noone owns as much as 1% of a corporation, where is the capitalist?

planned obsolescence was introduced after WWI. societies inibality to adjust to the fantastic increase in productivity caused by the new technology helped create the crash and depression. WWII forced FDR to do what Keynes had been suggesting and ended the depression. without the japanese and germans blowing stuff up how do we keep the depression from coming back. PLANNED OBSOLESCENCE on a massive scale. that is what we have now. CAVEATE EMPTOR CONSUMER. do you know enough about technology to figure out if the stuff is junk?

                                              Dal Timgar

[sailor]

When people start discussing Marx in a serious tone, I always have this picture of intellectuals discussing the true meaning of his words as written originally in German and discussing all possible meanings. Just like people discuss the Bible and how much it has lost in the translations.

Personally I have so little interest in both Marx and the bible! They have both been proven to be wrong time and again and I cannot see why anybody would give them any authority. Take them for what they are: fiction.

[jumblemind]

This is either a naïve or rhetorical question, but if capitalism is based on the notion of infinite wealth, and the world is zero-sum in nature, doesn’t this mean the world cannot support capitalism indefinitely? If this is true and history is true, then we will necessarily shift to another system at a certain point.

Now my real question: Would there be a way to predict that point? Either chronologically or theoretically as it relates to the ebb and flow of the capitalist model?

[John_Corrado]

oldscratch said:

First, for John. True, it is somewhat pointless to criticize without offering an alternative. However, this isn’t so much a criticism of capitalism, as a dispute about the facts regarding it as a system. As soon as we can settle that, we can argue about whether the replacement is better or worse.

Okay, I’ll accept that.

In fact, let me help you with it.

Flaws in capitalism:

• Public costs are not paid. That is, there are costs to society for industry that the industry itself does not pay. Under absolute, unfettered capitalism, an industry which pollutes does not have to pay the cost for removing that pollution; this cost is rather passed on to the citizens which suffer from the pollution regardless of whether they actually purchase goods from the industry.
• Capitalism reverts to monopolism. In an absolute, unfettered capitalist society, companies compete with each other for markets. However, when a company- through innovation, development, etc.- manages to greatly outperform its rivals in that market, it can absorb and/or destroy its competition. Once that monopoly is in power, the efficiencies of the capitalist system are removed.

And thanks for your support. And the fact that you are convinced that communism won’t work based on your anyalsis that it isn’t plausible or possible is miles ahead of most criticsims of it.

Aw, geez, I’m blushing here. No, really. Thanks.

[oldscratch]

*Originally posted by Sam Stone *
**
How do capitalists add value? By coming up with good ideas, innovations, and by building an infrastructure which magnifies the labour potential of people.

**

Since capitalists do not add labor, they do not add value. A table coming from a corporation owned by capitalists has no more value than one I create myself. What do capitalists do? They take surplus value and invest it. Whence comes surplus value?

To Engels once more

It cannot come either from the buyer buying the commodities under their value, or from the seller selling them above their value. For in both cases the gains and the losses of each individual cancel each other, as each individual is in turn buyer and seller. Nor can it come from cheating, for though cheating can enrich one person at the expense of another, it cannot increase the total sum possessed by both, and therefore cannot augment the sum of the values in circulation. “The capitalist class, as a whole, in any country, cannot over-reach themselves.”…the problem being: how is it possible constantly to sell dearer than one has bought, even on the hypothesis that equal values are always exchanged for equal values?..

This solution is as follows: The increase in the value of money that is to be converted into capital cannot take place in the money itself, nor can it originate in the purchase, as here this money does no more than realise the price of the commodity, and this price, inasmuch as we took as our premise an exchange of equivalents, is not different from its value. For the same reason, the increase in value cannot originate in the sale of the commodity. The change must, therefore, take place in the commodity bought; not however in its value, as it is bought and sold at its value, but in its use-value as such, that is, the change of value must originate in the consumption of the commodity. “In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find … in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power.” Though, as we saw, labour as such can have no value, this is by no means the case with labour-power. This acquires a value from the moment that it becomes a commodity, as it is in fact at the present time, and this value is determined, “as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article”; that is to say, by the labour-time necessary for the production of the means of subsistence which the labourer requires for his maintenance in a fit state to work and for the perpetuation of his race. Let us assume that these means of subsistence represent six hours of labour-time daily. Our incipient capitalist, who buys labour-power for carrying on his business, i.e., hires a labourer, consequently pays this labourer the full value of his day’s labour-power if he pays him a sum of money which also represents six hours of labour. And as soon as the labourer has worked six hours in the employment of the incipient capitalist, he has fully reimbursed the latter for his outlay, for the value of the day’s labour-power which he had paid. But so far the money would not have been converted into capital, it would not have produced any surplus-value. And for this reason the buyer of labour-power has quite a different notion of the nature of the transaction he has carried out. The fact that only six hours’ labour is necessary to keep the labourer alive for twenty-four hours, does not in any way prevent him from working twelve hours out of the twenty-four. The value of the labour-power, and the value which that labour-power creates in the labour-process, are two different magnitudes. The owner of the money has paid the value of a day’s labour-power; his, therefore, is the use of it for a day – a whole day’s labour. The circumstance that the value which the use of it during one day creates is double its own value for a day is a piece of especially good luck for the buyer, but according to the laws of exchange of commodities by no means an injustice to the seller. On our assumption, therefore, the labourer each day costs the owner of money the value of the product of six hours’ labour, but he hands over to him each day the value of the product of twelve hours’ labour. The difference in favour of the owner of the money is six hours of unpaid surplus-labour, a surplus-product for which he does not pay and in which six hours’ labour is embodied. The trick has been performed. Surplus-value has been produced; money has been converted into capital.

**
Why do you think auto workers earn a good salary? Because of the union? Nope. The union may get them a few extra points here and there, but mainly auto workers are paid well because the auto company they work for has invested heavily in an infrastructure that allows the workers to be much more productive.

**

omigod. This, like, totally made me laugh. Do you know much about the history of the union movement? Do you know how much workers were paid before they unionized? Do you have any idea whatsover what working conditions were like before unions? Obviously not, or else you wouldn’t say something so ignorant.

[Smartass]

Why, Oldscratch, I think you may be on the verge of an epiphany here.

Obviously, labor spent digging a hole and then filling it back up is of little value (not many millionaire gravediggers, I reckon). Two places where you need to concentrate your efforts:

1. Most will concede that labor can contribute to value. That doesn’t lead to equality. Value is a result of labor plus other things.

2. Quantity of labor is not the sole measure of the value it contributes. You must consider quality of labor. Let’s say that you are a master carpenter. I am as close as you are likely to come to the opposite of that. Let’s say we both build a chair, taking the same amount of time and contributing the same amount of labor. Will they be equal in value? I submit that they will not. Yours will be much more valuable than mine. Should not you be paid more for yours, since you created more value?

The capitalists contribute both capital and labor to the production of the product. The workers contribute labor. Why is it that the worker should get an “equal exchange” (whatever that might be), but the capitalist should not?

If I am running the business, paying the salaries, orgainizing the distribution, etc., am I not entitled to my “profit” as recompense for the value that I am adding? Is the value that the workers are adding equal in quality to the value that I am adding?

-VM

[jmullaney]

*Originally posted by dal_timgar *
if noone owns as much as 1% of a corporation, where is the capitalist?

Um, if 90 guys each own one percent each of every corporation, you have found them.

That is an exagerration because I hate math, but you get the idea.

planned obsolescence was introduced after WWI.

Isn’t it insane? All that wasted effort just to prop up the system.

And really, sailor, you don’t need Marx to show capitalism goes through cycles of creation and destruction. The Great Depression proved him right in a lot of ways though.

The real danger is deflation. Any thoughts on that oldscratch?

[sailor]

dal_timgar, man, you are a one trick pony. You get your “planned obsolescence” pitch into every thread. You sound like a fanatic who has discovered a new concept that explains the entire world and has to preach it to everyone.

[oldscratch]

To quick silver. Please stop coming in with points and attacks that are completely off topic. If you can explain to me what the degeneration of the russian revolution has to do with if or if not capitalism has faults I’ll answer your question. Of course you are also ignoring the fact that I have answered it at least once before, and provided links to the answers.

For sailor and others. true, Marx is dead, true he wrote 150 years ago. However, copernicus wrote far before that, it doesn’t make his views any less valid. Adam Smith wrote long before Marx, and yet those who denigrate Amrx turn faithfully to Mr. Smith.

To jumblemind. I’m going to address your point in more detail later. The basic answer is we can predict that crashes will come, however capitalism is generally able to pull itself out, and it is very hard to predict exactly when they might happen. Go back and read about the destruction of rescources, that enables capitalism to rebuild afresh.

[Smartass]

John Corrado:

Libertarianism, as I’ve seen it posited, does not seem to believe such; or, at the very least, believes that peaceful, honest people who make up the Libertarian country will take it upon themselves to fairly curb such excesses through their spontaneous good will and nature.

Without meaning to hijack this any more than necessary, I’ll just say it would be fairer to posit it this way:

Libertarianism…observes that people (whether or not they are peaceful and honest)…will take it upon themselves to curb such excesses through their tendency to watch out for their own best interests. The government’s job is to enfore the peacful and honest part.

-VM

[oldscratch]

Thank you Smartass. I was wondering when someone would bring up the quality of labor, or as Marx called it, compound labor.

*Originally posted by Smartass *
**

1. Most will concede that labor can contribute to value. That doesn’t lead to equality. Value is a result of labor plus other things.

**

I’m interested in what other things you are talking about.

**
2) Quantity of labor is not the sole measure of the value it contributes. You must consider quality of labor.

**

Absolutely. First I’d like to recomend everyone read Anti-Duhring. Most of your objections so far (and probably some future ones) are handily addressed in it.
You can find it here. http://csf.colorado.edu/psn/marx/Archive/1877-AD/

From Marx

“[the value of commodities]…is the expenditure of simple labour-power which, on an average, apart from any special development, exists in the organism of every ordinary individual… Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom”…The reader must note that we are not speaking here of the wages or value that the labourer gets for a given labour-time, but of the value of the commodity in which that labour-time is materialised.

Engels

But not all labour is a mere expenditure of simple human labour-power; very many sorts of labour involve the use of capabilities or knowledge acquired with the expenditure of greater or lesser effort, time and money. Do these kinds of compound labour produce, in the same interval of time, the same commodity values as simple labour, the expenditure of mere simple labour-power? Obviously not. The product of one hour of compound labour is a commodity of a higher value – perhaps double or treble – in comparison with the product of one hour of simple labour. The values of the products of compound labour are expressed by this comparison in definite quantities of simple labour; but this reduction of compound labour is established by a social process which goes on behind the backs of the producers, by a process which at this point, in the development of the theory of value, can only be stated but not as yet explained.

**
If I am running the business, paying the salaries, orgainizing the distribution, etc., am I not entitled to my “profit” as recompense for the value that I am adding?
**

Again. What value are you adding? you haven’t stated anything besides labor that adds value. Please do, and we can go back and argue over whether or not that actually adds value.

[Smartass]

Oldscratch:

Among the opinions I have of you, one is not that you are stupid or untrustworthy. You would make it easier if, instead of the massive quotes, you would summarize the argument and provide a link to the text. I don’t have time for all this reading when the notion being put forward is pretty simple. (I’m not going to say simpleminded. Be nice, Smartass.)

Again. What value are you adding? you haven’t stated anything besides labor that adds value. Please do, and we can go back and argue over whether or not that actually adds value.

Let’s see. You can build, say, one chair a week by hand. With the proper equipment, you can build 100 chairs a week. However, you can’t build chairs while you are buying wood, or delivering chairs to stores, or sweeping up the workplace. So, I buy the building, the equipment, I plan the Supply Chain (which is what I actually do, by the way, but not necessarily for chair-building), I handle the payroll. Let’s face it: I buy the equipment, I bring the organization together, and I supervise the operation. Hell, even if I just subsidize these activities, do you honestly believe I am not adding value? Without me, you’re building one chair a week. With me, the organization is building hundreds of furniture items a week. You don’t think that I am adding value?

-VM

[jumblemind]

oldscratch, I understand and refer to the following:

Marx writes: ´Capitalist production seeks continually to overcome these immanent barriers, but overcome them only by means which again place these barriers in its way and on a more formidable scale.ª (21) In the Manifesto of the communist party, he adds after having defined the employers’ solutions to the crisis:ªThat is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.ª

In my simple reckoning, there are a finite number of diminishing markets, by anyone’s definition. Since we are dealing with finite numbers, I had a wild thought in my head that some doctoral candidate somewhere might be working on a theoretical equation for the capitalist model, like the expansion of the universe. (I’ve been told everything can be explained with math, but that’s another great debate.)

I was wondering if anyone had taken a stab at predicting the shift.

[oldscratch]

Sorry about the long quotes. One of the assertations that people have made is that Marx didn’t think of this or that. I was simply showing, through use of his and engels own quotes, that this issue had already come up 150 years ago. I will summerize more.

And no you are not adding value. The chair is no more valuable now then it was before. The chair has not had an increase in use value.
What you have actually done is decrease the value of the chair. We do not need to expend as much labor to produce it. This is evidenced by the fact that many chairs are cheaper and more disposable now then they were. To keep the same rate of profit, you must start selling more chairs. Of course, there is a finite market for chairs. Eventually, you will produce to many. You will see a further drop in profit. You will have to lay people off. They will no longer afford chairs. You will sell even less chairs. More lay offs. And a decreasing rate of profit.

And for jumblemind, yes many have taken shots at predicting. Most have been wrong. Basicly, what happens is capitalism degenerates into a mess which can no longer support itself. You see mass poverty and frequently fascism. You have people thrown into depression. Out of this can arises capitalism again. The markets are rejuvinated as it were. The destruction of the means of production occurs.

One of the reasons why we had such a long boom after WW2 was because of the Cold War. You had massive rescources basicly being destroyed. Going into an unproductive and unprofitable sector. There was no crisis of overproduction in weapons, and this buoyed the rest of the economy.