Is capitalism failing?

[Dangerosa]

@asahi

Capitalism isn’t just an economic system; it’s a political system.

I think this is one of the great errors we’ve let people make - we positioned - way back in the cold war - Democracy (a political system) against Communism (an economic one). - and it started before then. That comparison of apples to oranges and confusion between politics and economics has caused us to paint socialist policies as “undemocratic” and “un American” (and they probably are un American as our Founding Fathers were a bunch of capitalist frat boys out for themselves - but we can grow up as a nation - in that sense being unAmerican is good - just like being unAmerican enough not to accept compromises on slavery).

Of course politics and economics intersect, but since the majority of people really don’t understand the concepts, history, impact and consequences of that intersection, we are better off trying to seperate the two.

[Quartz]

@Fool

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.

I’ve just discovered this article. There’s far to much to even selectively quote but it’s summed up in this graphic.

What you see is the result of capitalism.

[Dangerosa]

@Quartz

I’ve just discovered this article. There’s far to much to even selectively quote but it’s summed up in this graphic.

What you see is the result of capitalism.

Is that in the article? Because a lot of those results come with socialism - things like socialized medicine, socialised education, social safety nets.

[XT]

@Dangerosa

Is that in the article? Because a lot of those results come with socialism - things like socialized medicine, socialised education, social safety nets.

I guess I’ll continue the hijack. The thing is, you are again moving between political and economic systems. A lot of those things come from (some) Socialist POLITICAL systems and policies that use a Capitalist economic framework to, you know, pay for all that stuff. I glanced at the chart Quartz linked too, and my off the cuff impression there is that most of that is actually due to China and, to a lesser degree, India (the African continent too). They all have different political systems, obviously, but most of them have a Capitalist economy…well, ok, no, they don’t, but they have a mixed hybrid economy with many Capitalist features bolted on.

[Quartz]

@Dangerosa

Is that in the article? Because a lot of those results come with socialism - things like socialized medicine, socialised education, social safety nets.

It’s capitalism that pays for it all.

[Fiveyearlurker]

@Quartz

It’s capitalism that pays for it all.

I have no idea why we have to fall into this either/or category of either capitalism or socialism. We can take the best of both and scuttle the excesses of either.

[asahi]

@XT

I guess I’ll continue the hijack. The thing is, you are again moving between political and economic systems. A lot of those things come from (some) Socialist POLITICAL systems and policies that use a Capitalist economic framework to, you know, pay for all that stuff.

I thought that “socialism” originated as a set of economic ideas and principles, no? Regardless, I would concur that, like capitalism, this economic framework can also be described as a dual economic and political system – we’ll probably never agree on the precise definitions of each, but I don’t think it’s really important.

At the center of the debate over whether to favor capitalism versus socialism, there exists a central question of ownership. Should something be produced and owned collectively and “publicly,” or is it better to leave it production and its fruits in the hands of private owners, be they individuals or groups of individuals?

@XT

I glanced at the chart Quartz linked too, and my off the cuff impression there is that most of that is actually due to China and, to a lesser degree, India (the African continent too). They all have different political systems, obviously, but most of them have a Capitalist economy…well, ok, no, they don’t, but they have a mixed hybrid economy with many Capitalist features bolted on.

I can’t think of a modern nation-state economy that isn’t at least partially mixed. But using China as an example, while they’ve abandoned state-owned production in a lot of cases, even where there are examples of market forces at play, the government for overtly political reasons can intervene at any time. If some billionaire is making too much noise about the naked corruption of the CCP, that guy doesn’t stay in public view for very long - at least not without hopping on a midnight flight out of the country and getting political asylum first.

[asahi]

@Dangerosa

I think this is one of the great errors we’ve let people make - we positioned - way back in the cold war - Democracy (a political system) against Communism (an economic one). - and it started before then. That comparison of apples to oranges and confusion between politics and economics has caused us to paint socialist policies as “undemocratic” and “un American” (and they probably are un American as our Founding Fathers were a bunch of capitalist frat boys out for themselves - but we can grow up as a nation - in that sense being unAmerican is good - just like being unAmerican enough not to accept compromises on slavery).

Of course politics and economics intersect, but since the majority of people really don’t understand the concepts, history, impact and consequences of that intersection, we are better off trying to seperate the two.

I think the problem is that Western, and particularly American, propaganda framed economics and politics as some sort of binary choice. What we ought to be doing instead of choosing one very broad system OR the other is to be more interested in identifying the advantages and disadvantages of each. We ought to be answering questions such as “How much socialism is too much?” and “How much capitalism is too much?”

What does capitalism do well? What does it do better than socialism? I tend to think of it as the oldest form of crowdsourcing. Rather than herding individuals into groups of people confining them to think according to a general paradigm, it takes advantage of our collective brainpower by allowing millions and millions of individuals to innovate. That’s the beauty of capitalism.

What does it not do so well? Its excesses allow capitalism’s ‘winners’ to abuse the rest of us. In excess, it creates its own form of oppression. Monopolies can prevent the very crowdsourcing and innovation described above because it’s not necessarily in the interests of those with power to have potential competitors innovate with potentially better ideas.

Beyond that, these same forces that prevent innovation also prevent wealth redistribution, potentially violating our collective sense of what is ‘just’.

[D_Anconia]

@Fiveyearlurker

Mitt Romney’s parents, apparently.

Not the government/taxpayers, though.

[KidCharlemagne]

@asahi

I think the problem is that Western, and particularly American, propaganda framed economics and politics as some sort of binary choice. What we ought to be doing instead of choosing one very broad system OR the other is to be more interested in identifying the advantages and disadvantages of each. We ought to be answering questions such as “How much socialism is too much?” and “How much capitalism is too much?”

What does capitalism do well? What does it do better than socialism? I tend to think of it as the oldest form of crowdsourcing. Rather than herding individuals into groups of people confining them to think according to a general paradigm, it takes advantage of our collective brainpower by allowing millions and millions of individuals to innovate. That’s the beauty of capitalism.

What does it not do so well? Its excesses allow capitalism’s ‘winners’ to abuse the rest of us. In excess, it creates its own form of oppression. Monopolies can prevent the very crowdsourcing and innovation described above because it’s not necessarily in the interests of those with power to have potential competitors innovate with potentially better ideas.

Beyond that, these same forces that prevent innovation also prevent wealth redistribution, potentially violating our collective sense of what is ‘just’.

Capitalism does everything better except distribute resources equally. Obviously that’s a big but. But the right way to approach is to start with capitalism and then decide as a people what we believe should be provided for everyone, regardless of wealth. I think for starts, if people can’t fend for themselves then they should at least not starve, not freeze to death, and not suffer from curable disease or injury.

[mazinger_z]

There’s a lot of good responses to this thread, but sadly, there is a lot of noise and just outright misconceptions. Not to pick on asahi. but this is the most convenient point to clarify the discussion:

@asahi

My statements about capitalism don’t apply exclusively to capitalism; they apply to all ‘economic systems’. In my view, what we refer to as economic systems aren’t purely economic systems; they’re also political systems - at least partly. In order to have an economy, you need policies first, rules that everyone agrees to play by and rules that are, on paper, enforced equally and consistently.

Many people who think along these lines are conflating power with money. True, they often go hand-in-hand, but at the end of the day, the government by fiat of whatever political system it operates truly holds the power. At best, money is a check against that power. For a short argument, look at the rule of kings and emperors from the ancient times to the monarchies of today. It’s not money that keeps everyone in check and order in the streets. Like the banking system and floating exchange rates, it’s the belief in the system itself (along with the delegation of power).

@asahi

If a government says we’re going to nationalize our petroleum resources, our water resources, our power companies, they’re not simply saying that the general public and public institutions shall retain control of these resources; they’re also saying that one individual or groups of individuals cannot profit from these resources to inflate their own wealth. Moreover, depending on what’s written into the laws of a specific government, they may be giving those who administer these resources power. Those who hire and fire these ministers have power.

If on the other hand, we have a more capitalistic system, then that power doesn’t disappear; it simply falls into the hands of private individuals who makes these decisions. Again, policies come into play. Economic activity typically involves regulation, which is again political. Even in ‘free’ markets, most countries don’t let power companies run however they please for the simple reason that economic consequences also entail political consequences. But let’s suppose that you have privatization of those resources mentioned in the paragraph above, well now you have private individuals with wealth. And private individuals with wealth can become their own political class, in the same way that political administration can become its own political class.

However, the key distinction missed here is in the capitalist system, the ownership of production does not remain solely at the whim of the private owner. There is a market and there is competition, both fiercely grasping at the reins of ownership. If the private owner fails to provide its good and services to its market, then that private owner will fail. What’s left of his firm will be absorbed into other owner or repurposed for other markets. Ownership via government mandate will continue as long as the political will/government system is in place. The natural order of the market is far, far more expedient on average than the movement of government.

[mazinger_z]

To answer the OP, no, capitalism is not failing. Without more context, failure can truly only mean existence as a system. Capitalism, at its root, is simply the free transactions of people of their goods and services by a common currency (as opposed to simple barter; because capitalism requires price theory which is not possible without common currency).

There should be a sticky on this board so we can all have common definitions and some rigor to our arguments. Yes, there are regional differences in application, but these discussions often grind down into political goring which does not help the discussion and at worse just reinforces bubbles of thought and cognitive dissonance. That being said, as someone who studied these subjects, let’s use the following key definitions:

Capitalism: an economic system of generally (and preferably) free markets transacted via currency, minimum government intervention, private ownership of the means of production.

Socialism: an economic and social system by where the state owns the means of production and has regular/periodic intervention into the market; decision-making for the populace as well as its industries are largely made through a type of leadership or council and such decisions are made through politicking/arguing as opposed to a completion of a sale for a good or service.

Social Democracy: a political system by which its citizenry vote in some fashion to provide a varying scale of social safety net type rights to its citizens, with a free market capitalist economy. The rights are paid for through less progressive, flatter taxes, across the entire populace. The most lauded examples of social democracies at work are closer to ideally free markets and the rights of the citizenry do not interfere with that.

Yes, there is some overlap, but these definitions should be used through a lens of reasonableness. For instance, an economy can be capitalist, but still have socialistic aspects, e.g. social security. A social democracy can have, and largely does have, a free market economy. A social democracy can have its industries self-regulated by a workers and owners council, where the difference lies in the degree of freedom and control. An economy where the means of productions and markets can be co-opted by government fiat is nothing but socialist at the end of the day.

[XT]

@mazinger_z

To answer the OP, no, capitalism is not failing. Without more context, failure can truly only mean existence as a system. Capitalism, at its root, is simply the free transactions of people of their goods and services by a common currency (as opposed to simple barter; because capitalism requires price theory which is not possible without common currency).

There should be a sticky on this board so we can all have common definitions and some rigor to our arguments. Yes, there are regional differences in application, but these discussions often grind down into political goring which does not help the discussion and at worse just reinforces bubbles of thought and cognitive dissonance. That being said, as someone who studied these subjects, let’s use the following key definitions:

Capitalism: an economic system of generally (and preferably) free markets transacted via currency, minimum government intervention, private ownership of the means of production.

Socialism: an economic and social system by where the state owns the means of production and has regular/periodic intervention into the market; decision-making for the populace as well as its industries are largely made through a type of leadership or council and such decisions are made through politicking/arguing as opposed to a completion of a sale for a good or service.

Social Democracy: a political system by which its citizenry vote in some fashion to provide a varying scale of social safety net type rights to its citizens, with a free market capitalist economy. The rights are paid for through less progressive, flatter taxes, across the entire populace. The most lauded examples of social democracies at work are closer to ideally free markets and the rights of the citizenry do not interfere with that.

Yes, there is some overlap, but these definitions should be used through a lens of reasonableness. For instance, an economy can be capitalist, but still have socialistic aspects, e.g. social security. A social democracy can have, and largely does have, a free market economy. A social democracy can have its industries self-regulated by a workers and owners council, where the difference lies in the degree of freedom and control. An economy where the means of productions and markets can be co-opted by government fiat is nothing but socialist at the end of the day.

The only part I’d quibble with here is that Socialism is an economic and political system, having aspects of both. Other than that, good post.

[asahi]

@mazinger_z

Many people who think along these lines are conflating power with money. True, they often go hand-in-hand, but at the end of the day, the government by fiat of whatever political system it operates truly holds the power. At best, money is a check against that power. For a short argument, look at the rule of kings and emperors from the ancient times to the monarchies of today. It’s not money that keeps everyone in check and order in the streets. Like the banking system and floating exchange rates, it’s the belief in the system itself (along with the delegation of power).

Private power can be a check on institutional, bureaucratic, or administrative power, but private power can also corrupt a democracy to the point where the interests of the wealthy subordinate the interests of everyone else who lacks that kind of wealth. Over time, this, too, can become a form of oppression. If a West Virginia coal miner is working 14 hour days for a few cents an hour and becomes the equivalent of an indentured servant or modern day serf, that’s not freedom; that’s oppression. There’s no hope for socioeconomic mobility in that situation.

@mazinger_z

However, the key distinction missed here is in the capitalist system, the ownership of production does not remain solely at the whim of the private owner. There is a market and there is competition, both fiercely grasping at the reins of ownership. If the private owner fails to provide its good and services to its market, then that private owner will fail. What’s left of his firm will be absorbed into other owner or repurposed for other markets. Ownership via government mandate will continue as long as the political will/government system is in place. The natural order of the market is far, far more expedient on average than the movement of government.

Maybe, but that’s not what I was talking about. My point is that capitalism isn’t just an economic system; it’s also political, regardless of however one feels about its economic expediency.

[asahi]

@KidCharlemagne

Capitalism does everything better except distribute resources equally. Obviously that’s a big but. But the right way to approach is to start with capitalism and then decide as a people what we believe should be provided for everyone, regardless of wealth. I think for starts, if people can’t fend for themselves then they should at least not starve, not freeze to death, and not suffer from curable disease or injury.

That’s a good start, but it’s not an end. Wealth should be redistributed not simply out of concern for the poor, but also for what happens to free and inclusive political and economic systems when rich people gain too much wealth (and power). In such cases, these systems become less open, less inclusive.

I understand that it’s not in the interest of the shareholder to care about the welfare of a company’s employees - their bottom line is ROI. Nothing wrong with that, in a sense. But employees are also citizens, who have needs and who actually can strengthen capitalism for each other when they’re empowered to take home more of what they produce.

The problem with oligarchy is that oligarchs end up acting against their own interests, believing all along that they’re supporting these said self interests. They’re like parasites who end up killing their hosts.

[asahi]

@mazinger_z

To answer the OP, no, capitalism is not failing. Without more context, failure can truly only mean existence as a system. Capitalism, at its root, is simply the free transactions of people of their goods and services by a common currency (as opposed to simple barter; because capitalism requires price theory which is not possible without common currency).

There should be a sticky on this board so we can all have common definitions and some rigor to our arguments. Yes, there are regional differences in application, but these discussions often grind down into political goring which does not help the discussion and at worse just reinforces bubbles of thought and cognitive dissonance. That being said, as someone who studied these subjects, let’s use the following key definitions:

Capitalism: an economic system of generally (and preferably) free markets transacted via currency, minimum government intervention, private ownership of the means of production.

Socialism: an economic and social system by where the state owns the means of production and has regular/periodic intervention into the market; decision-making for the populace as well as its industries are largely made through a type of leadership or council and such decisions are made through politicking/arguing as opposed to a completion of a sale for a good or service.

Social Democracy: a political system by which its citizenry vote in some fashion to provide a varying scale of social safety net type rights to its citizens, with a free market capitalist economy. The rights are paid for through less progressive, flatter taxes, across the entire populace. The most lauded examples of social democracies at work are closer to ideally free markets and the rights of the citizenry do not interfere with that.

Yes, there is some overlap, but these definitions should be used through a lens of reasonableness. For instance, an economy can be capitalist, but still have socialistic aspects, e.g. social security. A social democracy can have, and largely does have, a free market economy. A social democracy can have its industries self-regulated by a workers and owners council, where the difference lies in the degree of freedom and control. An economy where the means of productions and markets can be co-opted by government fiat is nothing but socialist at the end of the day.

There’s no need to define capitalism or socialism; there is a need to define what it means to have a healthy system of political self-governance. There is a need to define what it truly means to be free, and what it truly means to have prosperity, because those are usually what we consider to be the ends; capitalism, socialism, and whatever else are the means.

[Dangerosa]

@Quartz

It’s capitalism that pays for it all.

Not necessarily - Cuba had a pretty socialist economic model - not a lot of capitalism (I believe, but am not certain, that that has changed in the past few years) and had pretty good infrastructure - health care and services - mostly paid for through its socialist/communist economic policies.

[asahi]

@Dangerosa

Not necessarily - Cuba had a pretty socialist economic model - not a lot of capitalism (I believe, but am not certain, that that has changed in the past few years) and had pretty good infrastructure - health care and services - mostly paid for through its socialist/communist economic policies.

The trade off was a lack of freedom, which is why, despite my concerns about capitalism’s inherent limitations, I generally prefer capitalism over state-owned production and property ownership.

[KidCharlemagne]

@asahi

That’s a good start, but it’s not an end. Wealth should be redistributed not simply out of concern for the poor, but also for what happens to free and inclusive political and economic systems when rich people gain too much wealth (and power). In such cases, these systems become less open, less inclusive.

I understand that it’s not in the interest of the shareholder to care about the welfare of a company’s employees - their bottom line is ROI. Nothing wrong with that, in a sense. But employees are also citizens, who have needs and who actually can strengthen capitalism for each other when they’re empowered to take home more of what they produce.

The problem with oligarchy is that oligarchs end up acting against their own interests, believing all along that they’re supporting these said self interests. They’re like parasites who end up killing their hosts.

I actually tried to go back and add a bunch of other issues ripe for government control but was past the 5 minute window. Those things aside, I have no problem with a huge income disparity - it’s an inevitable result of a working capitalistic system because the rich will have the resources to make investments. The only thing I care about is the minimum standard of living provided for our citizens. I’d also like to see that standard rise over time (though empowered labor unions might make that inevitable). But any arguments about how it’s not fair for someone to be so much richer than someone else (not that you’re saying that) really bothers me.

[asahi]

@KidCharlemagne

I actually tried to go back and add a bunch of other issues ripe for government control but was past the 5 minute window. Those things aside, I have no problem with a huge income disparity - it’s an inevitable result of a working capitalistic system because the rich will have the resources to make investments. The only thing I care about is the minimum standard of living provided for our citizens. I’d also like to see that standard rise over time (though empowered labor unions might make that inevitable). But any arguments about how it’s not fair for someone to be so much richer than someone else (not that you’re saying that) really bothers me.

You might not have a problem with it, but history suggests that it’s politically destabilizing. What good is a free market economy if it undermine’s people’s confidence in self-rule?

If you look at when fascism was popular in this country (and worldwide, for that matter), it was during the 1920s and 30s, during a period of great economic disparity and distress. It’s not a coincidence that authoritarianism is making a comeback at a time when income inequality in the industrialized world is as high as it has been in decades. These two variables are related, and politically, that means that maintaining a free society as we know it is unsustainable.