Is capitalism really for the better?

Great Debates
1

I have been thinking very pessimistic thoughts lately, but one is really bothering me… not unlike a fishbone in my throat.

Most of us have heard of Adam Smiths “Invisible Hand” theory, but is it the best answer to economics?

Certainly it is a very easy, natural and efficient way of manageing economics in a society… but is the greatest good really acheived? Competition implies many attempting to provide the same service or good, and obviously there is a duplication of effort here. We have 4 corporations competing to provide what one could - and in the end at a lower price if they didn’t have to worry about competition - marketing and advertising fee’s being an obvious cost savings, but the scales of economy probably being enough justification.

So the question must be asked - are we working to hard to feed the capitalistic machine? If we had only one organization providing each good or service would we not be able to work less? Maybe we could trade away our 5 working days + 2 day weekends for a 2 working day + 5 day weekends schedule.

We could emphasize more on leisure and family time. We work the hours we do now because everyone else is - we have no choice. As for the question as to how we regulate these industries to provide the most value from the resources they have - that’s another academic question - but in theory there could be other ways to ensure this.

This has all resulted from my thinking that we spend way more time working than we should. Mixing up our priorities so that we spend our best hours slaving for a corporation and kissing ass to a boss who treats us like crap, then come home without any time for our kids and chew out the wife and kids cause we’ve had a bad day at work. Disgustingly backwards.

2

Your problem is that want the results of capitalism, w/o actually having capitalism. In the scenario of only one corporation, who selects that corporation? Who knows, beforehand, which corporation would best “serve” the consumers? No one knows that.

Of course there’s the obvious other issue that, once the corporation has a monopoly, what ensures that the price it sets will not skyrocket? Without competition, there is no way to determine what the value of the product or service is to the comsumers.

You only have to slave for “the man” if you are unwilling to go it alone and run your own comany. It could be GM or it could be a corner 7-11 store. It could be your own interior design company or your own software consulting firm.

Some people prefer the safety of a large corporation. Sounds like you’re not one of them. Don’t get locked into the paradigm that working = working for someone else.

3

Yes, it is. Economically speaking it is the best way to go. But you have to actually understand capitalism - it’s not supposed to be the unregulated mess that certain conservatives would have you believe.

In theory, that’s true. In reality it almost never works out that way. More efficient technologies and processes are generally brought to the public because of competition - which has a tendency to lead to lower prices for goods and services.

You could do that now, you just probably wouldn’t have the stuff you want. If you had one organization providing each good or service, the chances of improvements would be almost nil. Mostly because it would be run by a bureaucracy. Can you imagine the red tape that would be necessary to improve on a design? If you feel comfortable with the inferior goods and crappy service that may very well come out of this system, good for you. Just don’t expect me to buy into it.

Call me when “in theory” becomes “in reality.” And you absolutely have the choice to work shorter hours. Just don’t expect to get paid nearly as much. It’s a trade off. If you don’t feel that the money you bring in is worth the time away from your family, then quit.

What a load of horse hockey. My parents both slaved for the corporation (well, my dad did anyway - my mom was a teacher) and he had plenty of time for me. He just didn’t waste it watching TV and neglecting me. He took me out to the desert for rock climbing, to baseball games, out for catch, was always involved in my Little League team as either a coach or an assistant coach. Came to every one of my youth sports games. He was always there to help with homework if I needed it.

Anyway, I realize that there are a ton of people whose parents needed to work long hours just to make ends meet, or whose parents just worked long hours because that’s what they did. But you don’t necessarily have to give up time with the kids and family just because you work.

4

I never understood that line. If it’s not true in reality, it’s not true “in theory”. If I tried to develop a theory that objects fall upwards on earth, would you say “In theory, it’s true but not in reality”? No. You’d say “The theory is incorrect”.

I’m sure you don’t mean it, but you lend credibility to socialism by saying “In theory, it’s true”.

5

These problem with these counter arguements are that they are reality-based to theoretical-based question. I propose this is the hang-up that has made capitalism so easy to say ‘yes’ to.

From an implementation standpoint, yes the IH theory is strong. But is it necessarily a fact that if only one corporation is there to provide a good or service, they cannot do it in an optimal way? If we want to argue that competition reduces prices in the long run we must do it on the argument that it forces best practices and the maximal use of minimal resources - but nothing in theory that prevents a single organization that is properly motivated to do the same.

In fact, only at the highest level of management does it really make a difference, since the operational staff are likely not motivated by external competition factors. So if high level management of enterprises were properly motivated to run the business as efficiently and resourcefully as their capitalistic counterparts there should be no difference.

John Mace mentioned who picks the corporation - it doesn’t matter. You can even assume it is a crown corporation.

Neurotik I think your issues are at the implementation level. Also re: working hours - I meant working less days for the same pay.

6

There was no better “proper motivator” than Stalin. If he couldn’t do it, no one can. But I’m open to your ideas.

7

Walks right into what I was saying… there is a difference between the two. What is theoretically possible is a worthwhile discussion. Many times something that is not possible because of real world constraints is very possible in theory.

In your example what if the object was a helium balloon. Or a piece of wood under water. Depending on the constraints your statement would be correct or incorrect.

8

No. My point is theat Neurotic was talking about something that had been proven by reality to be incorrect. That would be the same as if I had explicitly said “steel cannonballs” instead of “objects” in my original statement.

But I’d like to hear what Neurotic has to say about the “true in theory” saying.

9

One advantage of capitalism is an active chain of accountability. The lack of it was a huge part in the downfall of Communism. Weaken the chain, and one gets Enrons and Arthur Andersons and Worldcoms all over the place.

10

Bad example. Stalin did wonders for the Soviet economy and industry. Moved it forward at least a century from the serf-driven mess it was in before. It was just the actual human beings that didn’t make out so well.

A managed economy is perfectly workable. It can even be succesful. But it will always be managed to the benefit of the managers, and everyone else makes out how they see fit. Great if they’re beneficent paragons, but try finding a roomful of those. And even worse, try finding a roomful of them among the types that are actively striving to be in charge.

That’s one of the problems with not having vigorously enforced anti-trust laws, you wind up with a managed economy, just not a government managed one. There is no difference between Bill Gates and Mao, except that Bill Gates has more insidious means at his disposal - lawyers.

11

What motivation would they have? Humans are imperfect, often greedy creatures–that’s the fact underlying the truism “power corrupts”.

I work in an industry (commodity housewares) that’s terribly competitive, and we experience every day capitalist pressure to reduce our prices and improve efficiency. How would you provide that constant pressure without capitalism?

Well, that’s kind of the problem right there: with a monopoly, there’s no motivation to run the company efficiently or in the best interests of the consumer, while there’s tremendous motivation to gouge the customer and rape and pillage the environment for the enrichment of the few at the top. You can posit benevolent dictators, but I don’t think we’ve ever actually seen one that remained so, have we?

What good is a theory that bears no relation to reality, and can’t possibly be implemented? As John Mace pointed out (and ignoring the snotty “aid and comfort to socialists” aside), when a theory fails to correspond to reality, we say that the theory is wrong.

12

Well, I mean it in that for a certain theory, you can set certain theoretical parameters for which that theory would be true in the real world, but things start to break down when introduced into reality.

For example, basic capitalism is predicated on access to markets, informed consumers, blah, blah, blah. And the whole process works in theory. But, in reality, you can’t apply that basicness to the real world because you don’t always have easy access to markets and whatnot. That’s what I mean. And it’s a perfectly acceptable and logical line.

So, to break down what I was saying. If you had a giant national monopoly with no competition, it would indeed save money in advertising and the economies of scale would also save money. I assume we are not arguing there.

The real question is whether these savings would offset the presumed cost of non-competition. Now, it’s entirely possible that you would have an innovative, efficient national monopoly. I say entirely possible in the sense that it would not break any laws of physics. However, it would be extremely unlikely given the experiences that most people have had with government agencies. But, with the right managers and a true national dedication to making it work, there’s no absolute reason why it couldn’t be made to work fairly well. It’s just not likely.

Hence, in theory it could work (as in there’s no definite universal law against it), but in reality, it’s extremely unlikely.

Of course my issues are the implementation level! That’s where all the problems are in your theory. It’s just too hard to implement and sustain.

And why the hell would you get the same pay for less working days? Especially given the ridiculous switch you were making, 5 days to two days working. Sorry, doesn’t work that way.

13

[/quote]
Hansel wrote:
What good is a theory that bears no relation to reality, and can’t possibly be implemented? As John Mace pointed out (and ignoring the snotty “aid and comfort to socialists” aside), when a theory fails to correspond to reality, we say that the theory is wrong.
[/quote]

Did that really come across as snotty? It wasn’t meant to be. I’m not 100% sure that I know what Neurotic’s leaning are, but I’m pretty certain they are not socialist. I wanted to point out that he might have been unwittingly giving a boost to a philosophy with which he disagrees by making that statement.

14

Well, I don’t have any moral objections to socialism or anything. And it would be nice if it could actually be implemented without being a disaster. I just don’t think that’s the case.

15

Well, I thought you had a good point about the uselessness of contradicting reality with “it’s true in theory.” The introduction of socialism into your post appeared to be a hobby-horse being dragged out to be whipped again. If I misinterpretted, as I apparently did, I apologize.

16

Vriggs
But is it necessarily a fact that if only one corporation is there to provide a good or service, they cannot do it in an optimal way?

Actually, it is necessarily a fact. If only 1 corporation is allowed to produce any given good or service, what could possibly compel them to produce it in an “optimal” way? I assume by that you mean with the highest quality at the lowest price.

The problem, of course, is that you have to imagine the situation from the viewpoint of a producer. If you had a supply of widgets that people wanted, and you knew that people were perfectly willing to pay $10 for them, what could compel you to sell them for $5? Even assuming that they only cost you $1, why would you sell them for less than they are worth?

Unless, of course, someone around the block was willing to sell his for $7…

17

I got a glimpse first hand of what the OP proposes in 1979. I was touring east Berlin and came across a line 4 abreast which wrapped around 2 city blocks. I asked what everyone was standing in line for and was told the government store was selling wallpaper that day and that this would be the only day you could buy wallpaper until next month’s delivery.

Thus is illustrated a state managed economy. I think it would be outrageous for us in the west to even consider something like this. How many here would wait in line all day just so you could get your hands on some state issued wall paper? Capitalism keeps competition fresh and prices as low as competively possible. It allows us the luxury of choice which one could not have without capitalism.

Back in 1979 the difference between east and west Berlin was literally night and day. West Berlin “capitalism” was financially and socially active while East Berlin reminded me of a Mauseleum even during the day. No vendors, no choices and the pepsi cola was flat and sucked!

I did have someone offer me $300 US for my blue jeans but later found out it was an East German Police sting trying to net western tourists and gouge them with fines and then ransom them back to their families. Luckily my west german friend warned me of this before I did something that dumb.

18

Well, if it was a state owned monopoly, they could be legally compelled to sell them at cost.

Pretty simple solution, really.

19

The law of supply and demand is just such a universal law against it. The value of a particular good or service cannot be dictated by state fiat, or even social convention. It is based on the sum of the value placed on the good or service by everyone who might buy it.

It helps to think of these values like weather temperatures of pressures rather than physical forces like gravity.

20

It seems simple, but a large number of people who participated in comunist experiments might disagree.

Notice that we have similar laws about selling cocain. And they don’t stop people from selling it or buying it.

To return to the widget example, if you are selling the widgets and I drive a truck up to your factory and ask for a couple thousand, are you really going to turn me away when I offer you $10 each? $100? $1000?