Can we honestly say that capitalism as a system is working? This isn’t a question about the merits or failures of other systems. This is a question about whether capitalism in its current form is sustainable for the prosperity of the world.
Such a broad question… speaking very broadly, there are a lot of people struggling, and I believe the overall economic system could be improved to help the most desperate among us (both in my country and around the world) while not holding back growth and innovation. That would involve a combination of a robust safety net, smart regulations and a laissez-faire approach (as much as practicable) for industries which don’t need as much regulation for safety, environment, and labor concerns.
IMO, the short answer is no and the love of money that capitalism has turned into is actually going to hasten the end of the world.
There isn’t just one form of capitalism currently, so you will need to narrow this down. Capitalism is the private ownership of the means of production. Is that sustainable? Sure - there are drawbacks, but overall, it is sustainable.
Unless we compare it with other systems, the question is going to be that much more difficult to answer.
Regards,
Shodan
“Capitalism” isn’t exactly a system. It can’t fail as a concept; it’s a tool. It’s akin to asking “can construction fail?” Sure, a building can collapse, but as a concept, building things won’t go away.
I would say, speaking as an ardent free market guy, that the excesses of a capitalist economy are in many places being allowed to get out of control. One can hardly blame young people for embracing socialism when they are given so much evidence that their country isn’t really a free market, but is an oligarchy where the rich lives by one set of rules and the poor live by another.
Serious question here…what are your indications that the current system isn’t sustainable for the prosperity of the world? Or that capitalism isn’t working, as a system? We are currently in the greatest age wrt global reductions in poverty our species has ever seen. More people have moved from the lowest tiers of poverty to tiers above those, and more people as a percentage of the population and of course in just raw numbers terms live better lives than ever before. So, to me, this would indicate just the opposite of what you are…well, not sure what you are saying, but would seem to indicate that capitalism is doing a pretty good job, even though it’s not designed to actually move people out of poverty or make their lives better. Is it sustainable? That’s a more interesting question. I guess it depends on your outlook for the future. I don’t really see resource depletion as a major issues, but environmental impact? Yeah, that’s a major issue and one capitalism, per se, isn’t really geared to ‘fix’. So, not sure how sustainable any of this is wrt our environmental impact, and what that will do wrt continuing to bring people out of the lowest ranks of poverty across the globe.
Short answer…no, it’s not failing. As an economic system, it’s succeeding very well. Of course, what you couple to it wrt a political system is going to have an impact, and how much you constrain it (or let it run loose) is also going to have an impact, but overall? It’s the primary economic system for most the world, and basically ever successful country on the planet uses it in one form or another for their economic system. Countries that don’t use it generally are very poor. Countries that use parts of it are a mixed bag.
Yes. Pretty much everything you see around you is the result of capitalism. Is there a better system? Maybe.
It all depends on how you define success. Capitalism tends towards economic efficiency, and if that’s all you’re after then the fact the I can buy whatever I want shipped directly to my door at record low prices right now is an indication that capitalism is working swimmingly.
If you define success differently, say, having a healthy planet or a society with an increasing level of economic mobility, then capitalism isn’t working so well at the moment and I think it’s up to society via government to step in and take some corrective actions. If we’re not doing it, that’s not really capitalism’s fault.
This nation grew under what I call, “Small Business Capitalism”, which I believe is the best economic system in the world. Consider that owners are directly responsible to their clientele who usually know them. If they skimp on quality or overcharge, the loss of business is going to affect them personally. It’s a model that has a natural “quality control” factor built in.
“Corporate Capitalism” is, as far as I’m concerned, a diseased model. It is a model designed to maximize the profits of the super rich investors that own the majority of the shares. It usually follows this route:
- The company is established, starts out successfully, and grows. This gives the investors the kind of profit they want.
- Inevitably, the growth period maxes out, and the company has to figure out other ways to keep their investors happy. Those ways invariably include methods such as reducing quality, raising prices, cutting back on employees, etc.
- If, after all of that, the corporation fails, it simply goes bankrupt with no financial consequences for the rich people who squeezed it dry.
This is not a beneficial model for the consumer. It is a beneficial model for the rich, controlling interests of the corporate entities.
Depends on what you mean by “working”.
If your criterion for a working system is “More people worldwide are leaving grinding, subsistence-level poverty at a faster rate than has ever been achieved before in all of human history”, then the answer to your question is yes. Yes, capitalism is working. Average wages are higher than they’ve ever been before. Inequality is currently decreasing. By such measures, it’s “working”.
This isn’t a reasonable restriction.
Human systems are graded on a curve. We evaluate them not based on their failure to live up to impossible utopian ideals, but how they stack up to other implementable systems.
I think capitalism should be evaluated fairly highly because it has, in general, more merits and fewer failures than other systems. We can discuss the places where it needs patched up. That’s fine. But there’s no real point in praising or blaming any system in isolation. Even the best possible system can be seen as a “failure” if the yardstick it’s being measured with isn’t calibrated properly.
No.
Absolutely not. It’s not sustainable.
This is because no human system is sustainable.
I agree with most of this.
Capitalism, like every available system will fall to corruption.
We can see it around us. We can, and do, call it out. But, just like every system, we are powerless to change it as it’s been hijacked by corruption.
I see capitalism as an economic engine. It’s an engine that runs on greed. As a result it will never lack for fuel, which is its greatest strength.
An engine that runs without direction is dangerous. We have those that argue that all the controls you put on the engine slow it down, and that is true. What is not true is that we can dispense with those controls and trust that the whole system won’t careen off and be a danger to the people it’s supposed to help.
So, to sum up, the system is working, but it may not have enough direction to be optimal.
Capitalism is failing. It always has been failing, and will continue to be failing. It sounds bad until you consider that all the other systems have already failed.
It’s failing slower than any other system that has been tried.
Most new business start ups fail, so they don’t give investors any kind of profit. So no, that doesn’t “usually” follow that route.
In what way is this different from a small business trying to maximize profit? Are you saying a small business would be less likely to do any of these things to gain market share? Do you have a cite to that effect?
No consequences apart from losing their investment, you mean.
The benefit to the consumer is that he or she gets to buy from whoever they like. If they prefer to shop at small businesses, then small businesses gain market share and big corporations lose it. If big corporations get the business because of economies of scale or innovation or whatever, then small businesses go out of business. In either case, the consumer is getting the benefit of buying what they want.
Regards,
Shodan
I guess it depends on how you define ‘working’. If it’s for the rich obtaining more then it appears to be working. For advancement of society as a whole, sort of, though it is unsure if it will continue with the drying up of the middle class.
To me capitalism in a mature market brings everything to either a monopoly where one can set their own price, which also is the rich, or a commodity, where everyone takes the going rate, which becomes the poor. For those economically inclined, the other 2 states of market structures, oligopoly and competitive market, are temporary states of a new market, though can be maintained by things such as innovation (which creates new markets and ends old ones) and government regulation, which interferes with free market forces going to either end.
No it’s not failing. Is it perfect? No.
I’m another vote for “not failing”
According to the Census Bureau, 11.1% of U.S. people were below the poverty line in 1973 (the first year their table shows); it has never been that low since. The rate rose during the 80’s and early 90’s, getting above 15%, fell to 11.3% by 2000, then rose again, exceeding 15% during the financial crisis. It is back to 12.3% in 2017.
The inflation-adjusted median wage for full-time male workers in the U.S. fell almost 6% from 1973 to 2014. Inflation-adjusted GDP per capita rose 99% over the same period! :eek:
Simply put, the share-of-the-pie earned by workers of average skill is falling quite sharply. Instead the pie share is going to highly-skilled workers; owners of land, capital (e.g. robotic equipment), and intellectual property; and various rent collectors. It can be argued that this is the free market in action: human labor makes a smaller contribution to the pie, so “should” get a smaller share of it.
But is this good? Standard dictionaries may define “economics” as " the science that deals with … the material welfare of humankind." Adam Smith defined “economics” as “a branch of the science of a statesman or legislator [with the twofold objective of providing] a plentiful revenue or subsistence for the people … [and] to supply the state or commonwealth with a revenue for the publick services.” Thus, if labor’s share of the pie continues to diminish, one can indeed argue that capitalism, at least as practiced in the U.S.A., is failing its economic purpose.
We’ve become so much a people who can’t see anything other than binary.
Pure capitalism is doomed to fail. Selfish greed, money made by severe exploitation - that is doomed - corruption, revolt. Like pure communism - it isn’t a sustainable system.
Regulated capitalism with socialist aspects (like socialized education, medicine, police forces, roads, libraries, public parks) and regulations (like OSHA, minimum wage laws, consumer protection laws) is probably the strongest economic system in existence.
But capitalism cannot go unchecked. Human nature will corrupt any system that doesn’t have some checks and balances in place.
(Its the combination of capitalism with libertarian philosophy that scares me the most)