Defining freedom seems to be the issue. To me, it seems reasonable that freedom cannot be simply the absense of chains. There are many ways to menace someones freedom.
There is always the choice between death and freedom - so to say that choosing the lesser of those two evils is freedom is incorrect - it’s logic. If you decide not to starve to death you could say you are free - but are you really when you know death is the result of that decision?
By no means does a capitalist economic structure ensure freedom. Freedom is a completely different issue.
Well, the context from the OP has to do with freedom of economic interactions. Freedom can mean many things that do are not limited by economic activity.
So in some sense, yes, even slaves have a measure of freedom. I’m not sure that has anything to do with the OP however.
If I am not mistaken, you were trying to examine why capitalism and freedom are interlinked? As I understand it, capitalism is the economic system defined by the free exchange of goods. So, maybe I can speak to your initial hypothetical. It seems that the primary choice to become a slave or not is a free choice. It doesn’t matter that the choice is not pleasant. It also does not matter that either result it the same as the other (though, I might contend that starvation and death are not the same as slavery).
Of course once B is a slave, you can’t claim that the interactions are free or capitalistic any more. So, I guess in that sense, your model does demonstrate the link between capitalism and freedom.
Of course you have to bear in mind that I don’t agree with your model as representitive of any useful economic system. I am just trying to explore some of its implications in a very limited way.
Bryan and sailor appear to maintain that within laissez faire capitalism, everyone is free, not only in the economic sense.
This has to do with the OP to the extent that we discuss the ethics of socialism.
You are mistaken. Either that, or you forgot a “not”.
So, B is free as far as freedom to die is concerned. Is that how you define freedom? Where, then, are people not free, in this sense?
What link? B signs a contract that he will obey A’s orders. It’s a perfectly good agreement as far as capitalism is concerned. Capitalism is maintained, freedom is not.
You mean, you don’t think capitalism is a good system?
I don’t think anyone disagrees that monopolies sometimes deliver services at reasonable prices. And that private corporations sometimes do not. Having said that, though, it must also be said that the reverse is true. The quesion in the OP has to do with wether or not there are any intrinsic qualities of either system which will make shortages more or less likely.
I would argue that competitive markets do in fact have a magical fortune ball. It has to do with the idea that many eyes will make any problem seem shallow, and is inextricably tied to competition and freedom. What I am saying, is that if everyone is free to enter the marketplace, then everyone becomes a part of the economies “demand detector”. Anyone who detects some small demand ( or a large one if he is lucky) that is not being met is free to try and fill it.
But I have been saying that that is what demand is from the begining. What I have been trying to get you to see, is that competition for resources has an effect on this demand. the more plentiful a resource, the more likely someone is to see a new use for it. The more rare a resource, the more likely people are to find alternatives to it. The “consumer want of a product/service” (its demand) if you will in inextricably linked to the good’s supply; which is inextricably linked to its demand; which is inextricably linked to its supply… It is a never ending cycle of insestuously connected variables. The complexity is stagering.
The gravity anlogy was meant to demonstrate the universal and inescapable nature of the law of supply and demand. While the rain reference was meant to show the variablity of a products demand. The point being that demand is not simply demand. You cannot say that the demand for widgets is 2000 a year and leave it at that. Its like saying that rain falls at 2 inches a year. The statements are meaningless at best and totally misleading at worst.
Both analogies together were meant to demonstrate the sillyness of trying to control economies. If I said I wanted to make all of our lives better by regulating the gravitational force we experience people would laugh at me. Same if I said that I would like to pass laws regulating the weather. But let me say that I would like to circumvent the law of supply and demand and the most common reaction is “hmm that might be interesting”.
I can’t speak for sailor, of course, but you’ve certainly got me wrong. Though it may seem confusing, I’m not claiming everyone under capitalism is free. I will claim that people under repressive regimes (where capitalism is absent or under such rigid control that it may as well not exist) are definitely not free and that it is foolish to claim that repressive regimes offer as much freedom as laissez-faire capitalist systems. Given the choice, I’d rather be a poor person under capitalism then a stooge under full-blown socialism, because the former system needs freedom to operate while the latter system can take it or leave it.
By the way, if A says “work for me eght hours a day and I’ll give you food”, is B still a slave? If so, I’d like to know how you define the term “slavery”, and please refrain from pretentious quoting in the process.
Yes freedom and capitalism are linked. Capitalist systems will tend to provide more freedom than other economic systems.
I did not forget a not. I was rephrasing the OP. I did not mean to imply that it assumed a link. Although there is one. Perhaps UI should have said “if” instead of “why”.
Most people are free in this sense. Almost anyone is free to die now or later. I suppose the only ones not free in this sense might be coma patients who cannot pull their own plugs.
Come now. Once B is a slave no one will recognize the system as capitalistic. If you only mean that B has agreed to work for A, then slave is the wrong word.
No, I mean, that as you said when you proposed the model, it is not representive of normal interactions.
True, but it’s a very very strong indicator. Where capitalism exists, freedom is very likely to exist also. Where capitalism doesn’t exist, freedom isn’t likely to exist, either. Because freedom and capitalism work very well together, it’s hard to picture a sustainable society that has one but not the other, unless you make up whacky hypotheticals like two people named “A” and “B” on an island somewhere.
Instead of ripping the example consider the point, it’s valid. First lets find the corners of this square…
Freedom (from dictionary.com):
Synonyms: freedom, liberty, license
These nouns refer to the power to act, speak, or think without externally imposed restraints.
Surely this is available outside a capitalist structure?
Remove from your mind our society as an example of capitalism - it happens to be a capitalist society that is free imho. But we are rich (Canada & US) relative to the rest of the world.
In a third world country, a sweatshop is an example where the supply of labour is so excessive that the wages are minimal and in order to get enough money to eat and afford your house you need to 16 hours a day 7 days a week. Can you claim you are free? From the definition above I don’t see this as being free.
Suppose it’s true(I see Vriggs’s trying to contradict that, and I just don’t know enough). Still, correlation doesn’t imply causation, and I think you’re trying to imply it.
Of course you can. How does hard work change a person’s freedom? I’ve worked that hard in the past. Was I less free then? You aren’t arguing that only the indepenantly wealthy are truly free are you?
OK, I think I understand what you are saying a little better. You’re right of course, correlation does not prove causation.
However, the relationship between freedom of action and capitalism is not merely concidental either. Capitalism requires a free market. That is transaction based on an exchange of values where both parties are free to enter the transaction or not. Wether this means that one causes the other is difficult to say.
But the last point I was trying to make was that the new system is not capitalism. Since B can no longer enter into free transactions, they cannot be said to have a free market.
A lot of us would define “freedom” to include the freedom to work where we choose, and to freely spend the money earned by our labours, as well as invest that money into new companies or start our own businesses. Is that available outside of a capitalist structure?
Sorry, I don’t like to remove things from my mind. I keep forgetting where I put them.
Of course they have a free market, it’s just that since there are only two commodities(food, B’s freedom), and they’ve already been exchanged, the market is temporarily empty. But it exists. Should C arrive, she could buy B from A on that same free market.
Possibly, or there might be other ways to change the model to make it a free market again. However, the point being that once the freedom is lost, then so is the free market and therefore the capitalist moniker.
Thus we again encounter the fact that freedom and capitalism are inextricably linked.
Your theory is flawed. A competitive market - one that allows free entry and exit and consists of similar products, encourages competetition by its very nature. If a company can introduce a product that is somehow superior to it’s generic competition, it will achieve greater success. It is that competition that drives companies to seek to improve the way they do business. You are correct about monopolies. It is the ultimate desire of any company to seek monopoly. This is also a good thing since it tends to drive companies towards economies of scale. In reality, monopolies are difficult if not impossible to achieve unless one company has a particular technical or geographical advantage, and that never lasts long.
Don’t go into business management. You are paying 5 employees to do the job of 1. A much better plan is to lay off the bottom 3/5 of your work force and free up the labor and capital for other things.
You can’t make a baby in one month by getting nine women pregnant.
Nice straw argument. Where does A get his food from? The food fairy. A more realistic argument would be A ownes a farm but he can’t farm it without help. B has nothing to do and needs food. Of B agrees to tend his fields, A will give him some food. The alternative is that both A and B starve. That is capitalism.
There was no USSR until 1922. Doesn’t matter anyway. A typical example of communist central planning would be the Moscow subway stations. Architectually very extravagent. Too bad Stalin bankrupted most of the country to build them. Would you rather have food or a chandelier in your subway station?
How about ‘thinking outside of the box’ of hackneyed business cliches.
Partially true. Even a monopoly must strive to reduce it’s marginal costs. It too is bound by the laws of economics - the higher the price the less people will want or be able to purchase it, even if you are the only game in town.
The fact is that most industries tend towords monopoly or oligarchy. Economies of scale and the desire to choose alternatives usually results in several big distinct players (Coke, Pepsi), and a lot of small specialized niche players (Snapple, DR Pepper). This is for the best. In a capitalist system like ours, you are free to create a new softdrink if you like. If it is essentually another Coke, well, you probably wont stay in business. You can make a good living if you do create something new though.
I think I should point out that CAPITALISM does not mean LAISSEZ FAIRE CAPITALISM. Coruption, fraud, market manipulation, agency issues, inequality of the distribution of wealth and other factors all make the market less “free”. The role of government in a free market economy is to make sure that the market stays free:
-Providing a safety net so people can transition to other jobs or careers
-Enforce standards of quality
-Prevent predatory business practices and coruption
-Maintain a level playing field
Problem is that once you get the government involved, people expect them to help with EVERYTHING. They should protect my job. They should prevent foreign competition, they should provide free healthcare, they should protect the small inefficient businesses from the big bad conglomerates.
It isn’t my theory, and it sure isn’t flawed. I do not think I am making myself particularly clear.
A competitive market stifles innovation.
Innovation does not come without cost. Take, for example, an innovation that lowers the marginal cost of an intermediate good. The costs of this innovation include the resources spent on research and development and the cost of acquiring new capital stock to replace obsolete capital stock. Though the marginal cost of producing the intermediate good may go down in an absolute sense due to the innovation, the costs of innovation must be passed down. When the costs of innovation are divided by a given time scale and added to the daily/weekly/yearly/whatever marginal costs, the innovator does not reap the fruits of his innovation. In other words, he is not being paid his marginal product.
Furthermore, consider the non-innovator. If he suspects that someone else is going to innovate, he has no incentive whatsoever to do so, since he can simply imitate the innovation and not have to bear any of its costs. There is simply no incentive whatsoever for him to spend resources acquiring more skills and spending time innovating.
In a market such that everyone expects everyone else to innovate, progress grinds to a complete halt.
It is only in a market characterized not by free competition but by monopolistic competition where innovation is rewarded. An innovator can expect to maintain exclusive rights over his innovation for years to come, and as such, can profit from it mightily. The protection of such rights is a distortion of the competitive market, though a distortion that most people find valuable. I would argue that there is nothing intrinsically “capitalistic” about it.
It is not the market’s “freedom” but its constraints that promote innovation. The Soviet economy, though hardly free and competitive, yielded spectacular innovation. And yes, it ended up in the dustbin of history, just like countless other American companies that made poor financial decisions and ran out of money.
I’m not even sure where to start. Perhaps a question first.
If it is not your theory, can you give its name? do you have a cite?
Why is it necessary that the costs of the inovation cannot be returned? I understand why you want an example where they are not. I realize that sometimes investments do not pay off. But you seem to be saying that investments in inovation NEVER pay off. Are you actually suggesting this? NEVER?
But if I have a hard time warping my mind around that idea…
I am absolutely flabergasted by this one. Can you give me 3 examples? Not counting the secret police, gulags or progroms?
