Sam Stone raises some correct and valuable points. I’ve always been opposed to, and dismayed by, subsidies for ethanol. (I think that was touted less to mitigate climate change and more to reduce dependence on foreign petroleum.)
But the big message that these points give us is that capitalism needs fetters. In completely unfettered laissez-faire capitalism the rich are free to buy anything including legislators. We prohibit our children from buying methamphetamine. We should prohibit our corporations from buying Congressmen and regulators. Having no regulations is not an option. “Deregulation” is a synonym for allowing corporations to rid themselves of regulations that help the public, while keeping regulations that help their businesses unfairly. Liberals need to be pounded on the head and made to understand that many regulations are stupid. But conservatives need to be whacked on the skull and made to understand that “deregulation” is often just a way to increase the monopoly powers of kleptocrats.
The illegality of selling old children’s books (signed into law by Bush-43 with strong bipartisan support) is an issue I’d not heard of. The original failure to exclude books may have been an oversight, but why wasn’t it corrected? Obama signed a law to exempt motorcycles, but I guess the books are still banned. Is this really at the behest of Amazon? IIUC the CPSC has the authority to exclude items from the ban without Congress; why haven’t they done so? (For that matter, why did Obama appoint right-winger Ann Marie Buerkle to the CPSC? – I’ll guess there’s a law or tradition about partisan balance.)
Capitalism is failing at bringing personal fulfillment to a large number of people. It is failing to provide spiritual guidance. It was never intended to do such things. It was a system that limited disputes by providing for the adequate recognition of property rights. We saw that it did that. We saw that it provided for cooperation and coordination on a worldwide scale without a guy with a bullhorn when the mode throughout history had been local conflict. We were unimpressed.
It is failing to quell the envy of directionless young people and regretful old people. In fact, capitalism stokes envy in unfulfilled and unhappy individuals because they see the returns that an entrepreneur who satisfies consumer desires brings in.
It is failing to force people into making “correct” decisions in their lives. If a guy would rather watch Maury all afternoon, smoke a blunt and put in a couple hours at 7-11, this is a market failure. Not a beautiful display of modern productivity. In more capitalist societies, individuals can sustain themselves with little physical or mental exertion. In the past, people broke their backs all day just to whither away at the age of 40.
Regarding our “market failure” spotters, they are our modern clergy. Sanctimoniously passing judgement on the voluntary choices of millions. They fail to understand what real-deal economics teaches us. Value is subjective. When our Maury watcher can’t identify high-paying opportunities because he isn’t in the old-boys network, this is not a failure of the market. It is individual choice. Perhaps he doesn’t share your value scale. They will prattle on with their sermons. They will identify their best demagogues. They will build coalitions of semi-engaged. They will sacrifice the entrepreneur, the benefactor of mankind.
I think we’d get majority support, in a poll, that “Capitalism is the best economic system but needs to be augmented by government regulation and a social safety net.” IIRC, right-wing economists Friedman and Hayek both supported some safety net.
In a follow-up question, “Do you prefer good, smart, fair regulations or is it better to have regulations that are bad, stupid and/or corrupt” I’ll bet the vote would be even more lop-sided.
Amidst this concatenation of bizarre sentences, there is one which takes a view on human economic history, so let me ask again: Which textbooks, if any, have you read to inform your views on history? I ask because your views seem consistently different from anything I’ve ever read.
Capitalism isn’t just an economic system; it’s a political system.
As an economic system, the brilliance of capitalism is that it enables individual freedom and creativity to generate products and services that the rest of us want, need, or “need”, and it allows people to be rewarded for their inventions and labor. When all people in a society have this freedom, we collectively benefit from the collective brainpower and labor of everyone, which as far as I can tell has been proven again and again to be the best way to generate wealth.
The political problem is that wealth can become concentrated and wealth can be used as leverage (power) to control the flow of resources throughout an economy. Over time, wealth can become concentrated to the point where the power it gives to those who control it can create a form of oppression, which is why wealth, once created, must be manually redistributed. Government isn’t suited to create wealth, which is why centralized or nationalized economies tend to fail. But government is needed to, and best suited for dealing with the political problems that capitalism creates and redistributing resources so that they are more equitable.
No, it isn’t. Capitalism is only an economic system. No idea where you got the idea it’s a political system, but that’s simply wrong. Capitalism works with many political systems, such as democracy or even socialism, but it’s not a political system itself.
Or, to put this another way, can you give me an example of a capitalistic political system as you mean the term? What examples of real world or even fictional world capitalist political systems are you thinking of?
It doesn’t matter at all if it’s a fair regulation that leaves everyone on a level playing field. There is no difference between our current situation where unobtanium doesn’t exist and the situation where the government has banned it’s use. Blindly flailing at regulations as an economic problem is nonsense.
Yes, those things are terrible regulations, and put into place by industry, for industry, specifically to contaminate the capitalist system for the purpose of guaranteeing profits for a few.
Tell that to China, which still has an essentially socialist/communist political system, and has bolted on some aspects of capitalism. Sure capitalism can work with socialism or even communism, as long as those systems are actual hybrids. Socialism isn’t only no private property, though that’s certainly one of it’s tenets…but there are ways to get around that and still have capitalism.
The point, however, is that capitalism isn’t a political system…it works with and in other political systems. It’s purely economic.
Capitalism works up until the point where too much wealth has been accumulated in the hands of too few. I believe in income inequality; some people work harder, take more risks and have great ideas and those people should be rewarded with increased wealth. I believe that one of the perks of that wealth is the ability to pass some of it on to your children to make their path a bit easier, and allow them to be more successful. I believe this version of capitalism works, up to a point.
The problem lies when so much wealth has been accumulated that the wealth passed down within a family becomes so vast that generations of people do not even have the possibility to fail. When Donald Trump was a millionaire on his eighth birthday he was guaranteed success through no effort of his own. He wasn’t rewarded for hard work or taking risks. He was rewarded for being born. And this is the inevitable outcome of capitalism when we have a system where wealth can be accumulated and passed down, and that amount of passed down wealth is the single greatest predictor of how successful the next generation is. And it appears that the beneficiaries of this wealth, are under the impression that their success is truly their own.
I want to leave some money for my kids, but I’ll be damned if I’m going to leave them so much that they can just sit on it. And writ large, society is better off with something approaching a meritocracy where some wealth can be passed down to the next generation (as an incentive to the current generation of working folks), but not so much that the success of the next generation is set in stone on the day they are born.
I don’t pretend to know where that line is, but we are way, way over it right now.
Ok I consider socialism to be the collective “ownership” of the means of production. This is what it has meant for a long time and we have terms like social democracy that describe hybrids. China is basically a mercantilist nation with large state-owned corporations and a small amount of trade on a capitalist level.
Capitalism tells us who owns property. There is definitely a political aspect to that.
What happens to the children of a handful of super-wealthy people seems more like a mildly-interesting footnote rather than the yardstick by which we should be measuring the success or failure of capitalism.
Capitalism works optimally when:
[ul]
[li]Consumers and producers make rational decisions, can think critically, and can adequately gauge long term benefits over short term gains. [/li][li]Consumers have perfect information on the product, and are capable of evaluating all the information (i.e, how much benzene in my corn flakes is too much benzene?)[/li][li]All negative externalities/long term risk are appropriately baked into the price.[/li][/ul]
However:
[ul]
[li]humans in general tend to prioritize short-term gratification & profit over long term well being, and often have sup-par critical thinking abilities. [/li][li]Its in a producer’s best interest to withhold as much negative information on the product as possible from the consumer, and have entire departments (marketing & advertising) focused purely on spinning any positive information in the most effective way possible. [/li][li]Most consumers should not have to require a chemistry, biology, medical, and engineering degree in order to properly evaluate long-term risk information from using a product, assuming it is provided in full. [/li][li]Negative externalities (long term effects of CO2 into the air during manufacturing, sewage into the river, or a retention pond leaking after 30 years) does not get reflected in the price to the consumer, and there is little incentive to either properly assess this long-term risk or provide this information.[/li][/ul]
Government’s role should be to shore up all the weaknesses above that allows for competition while still providing for minimum standards in product disclosure, safety, long term risk, accountability for externalities, and ensuring a properly educated populace that can think critically.
Government can prioritize long term well-being? No. They have no interest in the long term health of the country. At least individuals can choose to have an interest or not have an interest. Capitalism allows for both.
Government could simply provide enough resources for courts to handle disputes between consumer and producer. They can’t manage this foundational responsibility. State courts are bogged down and unable to adequately address disputes in a timely, inexpensive manner. Perhaps once they have demonstrated an ability to fulfill this important role, we can grant them more responsibiltiies over product safety, etc, but that may not even be necessary.
I think this is mostly a question of definitions. Try to explicitly define “capitalism” and “working”. I think you’ll find if you do, that those who agree with the OP that capitalism is failing will have similar definitions to him. Those who disagree will find their definitions of those terms differ more greatly from the OP’s.
Just for example, we’ve seen people define capitalism as a political system in this thread. “Rule by capitalists”, I suppose. Whereas others take a more neutral “free market economy” definition. Likewise, “working” means “improves quality of life for the poorest among us” to someone like the OP, while it means something like “allows the average person the freedom to choose a life that makes them happy” to others.
To some, the freedom to make decisions which can ruin your life is a laudable goal for a society which respects and dignifies the individuals who live in it. To others, it’s a sign of a rotten system that prioritizes greed over security.
[li]humans in general tend to prioritize short-term gratification & profit over long term well being, and often have sup-par critical thinking abilities.[/li][/QUOTE]
What do you think the government is made of, besides human beings?
We tend to believe that capitalism is strictly an economic system, but it’s inherently an extension of any political system where it exists. The question of who owns property and what kind, who can create wealth and how much of it they can possess – those are naturally political questions.
Referring to the example of North Korea, for instance. Some have proposed the idea that North Korea could perhaps one day make the transition to more of a market-based economy, like China and other Asian countries. But North Korea creating a market economy creates the potential for private wealth - a source of power that is potentially independent of the state. That is a political bridge that must be crossed, not a simple economic policy decision.