People seem to refer to capitalism, communism, socialism etc. as if they are alternate strategies for the economies and the social underpinnings that go with that. My thesis is that capitalism is not one alternative of many. It is natural law that combines economic laws (supply and demand, information theory) with those with numerous psychological laws (selfishness for oneself and those that are familiar). These arise when people are deemed more or less equal by law. There are other effective systems but they arise only in groups that have unusual properties. Types of communism can be successful when groups are tiny. Dictatorships can be successful when they unite people that are similar or under extreme, temporary force.
My theory is that any future economy and society that is successful in global terms must have fundamental capitalist underpinnings. Countries can try to minimize the less desirable parts of capitalism by adopting socialist policies but a fundamental shift away from capitalism violates the very laws of nature and therefore can never thrive in a global sense as long as humans are involved. All societies of any size must adopt a capitalism base in order to survive and thrive.
While I generally agree with you, doesn’t this assume that work and labor as we know it will pretty much remain? Assume for a moment that nano-tech (or some other futuristic ‘magic’) becomes a reality. Assume that one can use software to program nano-bots to create anything imaginable out of basically anything (say our present land fill garbage).
Suddenly there is no need what-so-ever for manufacturing of any kind. Further, assume that there are quantum leaps in things like AI, expert systems, etc, so that by and large humans are no longer needed in the loop except at the highest end. Bottom line, think what it would mean if something like +90% of humans no longer had to work…and if every device, vehicle, etc, could be manufactured for basically nothing. What would capitalism mean then?
How can we know anything about the future? 90% of human history was spent as hunter-gatherer tribes. We are just beginning our human adventure and we can more claim to have the keys to the future than a cave man could predict the internet.
Actually, I consider it near-certain; it’s when the various technologies come together that I have no idea about. IMHO your basic point is correct; part of the foundation of an economy is technology, and that changes, constantly.
Also, “the future” is a big place. A thousand years from now, Mars could be terraformed and inhabited by a human variant genetically engineered to be instinctively communal and benevolent. A communal economy might work just fine with such people. I recall someone once saying “Communism is a great idea. With a different species, it might just work.” Lots of systems might work for an artificial species that won’t for us.
The ethical questions involved are thorny at best of course.
You both bring up good points. My only new points are that I am mainly referring to capitalism’s say 20 to 100 years in the future with the focus more on the next few decades. My other point is that capitalism, at least in the U.S. has thrived under a shift out of manufacturing. That underscores my main point. People will not ever just sit around letting robot maids take care of them. There are always other resources to be distributed and some should and will get more than others. Capitalism is natural law and given free people, it is the one that will always prevail. The others are just philosophies that exist only in narrow conditions if at all. It isn’t useful to consider capitalism one idea of many. It IS the fundamentals and others can exist on top of it only if the core is left intact given free people.
Capitalism might well be the only game in town for the future, but it might also make that future rather shorter than it would otherwise be; capitalism is really good at increasing consumption, not very good at conservation; when it’s all consumed, what then?
First, it’s not natural law, but a recent development. Second, it’s hardly pro-freedom or inherently just; capitalism has never had a problem with theft, fraud, slavery or genocide.
Third, it deals well with scarcity, but poorly with abundance. Look at the problem with the illegaly copying of movies/music/programs and so on. In order for the capitalist system to function, we essentially have to cripple our own technology. Eventually, all technology will be much like the internet; all that matters is information, which can be copied limitlessly. How with capitalism deal with that ? Even in the shorter term, the more technology improves, the more production will exceed demand; capitalism can’t deal with that, either.
I am certain capitalism will eventually be replaced by something better, because it is fundamentally inefficient and wasteful, especially with regard to human capital. It’s less inefficient and wasteful than all forms of socialism that have actually been tried, but that’s scant praise.
How eventually? I don’t know. I’m not even sure “replaced” will be the right word. Maybe “supplanted.” If some new form of capitalism evolves which does a better job of making use of human potential (anytime you have adults whose main job is mowing grass or asking “would you like fries with that?” you are wasting human capital, I don’t care what your excuses are) or which minimizes the effects of economic downturns more effectively, it will supplant what we have now, and a damn good thing. I don’t see anything BUT capitalism on the horizon, but I don’t count out the possibility of some new form of economic organization coming along. Even if capitalism remains, it will almost certainly be greatly altered, probably so greatly altered that it might not be recognizable as capitalism.
Well it seems to have done nicely so far. I work in large scale information system and my livelihood depends on nothing but ideas, skills, and bit and bytes. My professional didn’t really exist much 20 years ago. The U.S. is already moving out of a manufacturing based economy and has been for some time. The idea that only physical goods and labor itself having value are the weaknesses of other failed systems. Services and ideas seem to do very well under capitalism. In fact, they seem to do much, much better than any other system just like I said. No system is perfect. All you are looking at is the human based self- organizing system once they are free to pursue what they choose and trade what they are able. The fact that it organizes and adapts itself to changing conditions underscores the fact that it is a fundamental system. It does not rely on constant individual oversight, contstraints, and control that create artificial systems.
There will always be scarcity. If not in products, then in art, real estate, whatever. And our capacity for wanting more knows no bounds. For example, we could work half the hours we currently do, if we were willing to go back to the standard of living of the 1950’s. We choose not to. If we invent matter replicators, then people will want personal starships and their own floating islands. That’s just the way it goes.
150 years ago, 90% of the population was engaged in the production and distribution of food. Now it’s something like 5%. 85% of the people don’t have to work, so long as we go back to that standard of living. We just choose not to.
I don’t expect that will ever change. Oh, we might get to the point where people only work a few hours a week, or where ‘work’ is defined very differently. But so long as people want to trade goods with each other, capitalism will be the most efficient way to do it.
On the contrary, Capitalism is extremely efficient. And it’s becoming more so by the day, as new mechanisms for pricing goods and connecting producers and consumers together eliminate market failures and inefficiencies.
For example, consider the wastefulness of attics full of stuff that has value to someone, but not to the person who owns it. But it’s not valuable enough for the person to spend money to advertise for buyers in traditional ways. Enter eBay. Billions of dollars of otherwise unsalable goods now change hands, moving from low-value uses to high-value.
Or consider internet review sites and price checking sites. These have had the effect of removing the inefficency of information hiding. The more that is known about the true value of a product, the more efficiently it can be priced and sold.
This process is continuing. Capitalism, because it is nothing more than the end result of free people exercisign their own choices, evolves in the direction of more efficiency. Top-down economies like Socialism and Communism do the opposite - over time they become less efficient as they become sclerotic, the bureaucracy grows and calcifies, and the people more cynical and less likely to cooperate.
What are we taling about when we say “Capitalism”? Freedom and right-thinking American goodness? Untrammelled market economy? Well-trammelled market economy? Laws creating limited liability corporations? Joint stock corporations? Robust civil liberties? Robust market institutions?
I think that “capitalism” in its current incarnation has several problems - it deals poorly with common goods and it has trouble anticipating. That does not mean it is not generally superior to any command or planned economy.
However, I think it is premature to discuss the end of history.
It only means that you should view capitalism as the necessary, fundamental, underpinnings of any country that wished to succeed in the global economy. It isn’t one of several ideas that a country can choose from as equally valid alternatives. It just is because it is based on economic and psychological laws rather than artificial constraints. In other words, it wasn’t invented, it was only exposed as technology and information grew. Countries can shunt capitalism to varying degrees if they choose with such ideas as socialism but those are layers piled on top of the actual engine itself and should always be regarded as such. There are other systems such as dictatorships and small-scale communism that work under other conditions but they aren’t well suited modern nations.
If a free market deems that the most someone will be payed for is to ask “would you like fries with that?” then that human capital is being maximally exploited. Almost by definition. In what way is it ‘wasteful’ for a person to be producing as much as they can? If we assume that a person will be payed according to the value of what they produce, and that a person will work for the maximum pay then every person is producing as much as possible.
I assume that your thinking here is that a person as an individual could be better utilised appreciating fine art or doing complex mathematics. The trouble is that such is a personal, subjective decision on your part. If the person were objectively better utilised in that manner then they would be payed more and thus work at that task.
You can’t say that capitalism is wasteful of human reosurces simply because humans don’t always do high level, cerebral jobs. Humans are still the best machines we have for many menial tasks as well, from driving taxis to serving fries. And as such they are best utilised by doing those tasks whatever your subjective opinion on the matter is.
Does it? I thought that capitalism was very good at anticipating, that’s why futures tarding works so well. Individual capitlaists of course are only human, and they have a less than perfect record of predicting, but what makes you belive that capitalism as a system has any trouble anticipating and responding to future conditions?
Okay, I’m no economist, nor necessarily coherent all the time. Still, if I might explore an idea…
Capitalism works pretty well. It provides motivation for each of us to trade the goods and services we have for those others have and the invisible hand of self interest somehow works to bring us all the goods and services we really want.
Anyhow. it’s always seemed that a well-run cooperative should be able to do just as well. In such an organization, the profits get delivered back to the members of the cooperative. Sure, cooperatives have problems; for one thing, it’s managers may miss out on the big picture of what its members really want, and may miss out on how to best set prices for individual products and services.
I don’t know quite how to express this, nor how to encourage it, but it has seemed to me that the best system might be some kind of hybrid, where capitalism and cooperatives are always in competition with each other. We’ve now got both credit unions and regular banks - I think that’s a good idea.
Is there any better way to combine the advantages of both capitalist ventures and cooperatives?
You can’t assume that all people will work in their best field and be paid appropriately. Women still make less than men on average, and I can’t say that I’ve noticed any difference in performance among women I’ve worked with.
When I worked at McDonald’s, there was a woman who had been a licensed pharmaicst in Mexico. She moved here looking for a better life, but discovered that her license was no good here and she couldn’t afford to go to a US pharmacy school. She became a shift manager at the McDonald’s. Although she seemed to have a somewhat better standard of living here than in Mexico, I believe with a bit of help she could be doing much better.
Civil Guy I fail to see how a co-operative provides any practical incentive to trade goods and services, and history is on my side with this one.
If any one member recieves a greater share of the profits then you don’t have a co-operative as an alternative to capitalism. All you have is capitalist company under another name. A co-operative where goods and services are sold collectively and the profits are divided up according to pre-arranged terms based on input is no different at all to Jim Smith and Nephews, Merchant Venturers. And Jimmy and his boys are archetypal capitalists.
If the co-operative is in any way seperate from capitalism then you have a situation where profits get delivered back approximately equitably to all members. Person A works their ass off, person B slacks off and both recieve the same profits. That is hardly an motivation to trade goods or services.
And historically all co-operatives fall into exactly that problem. They work OK as an initial starting base, when people will work to produce a certain standard of living. But as soon as conditions reach any individual’s minimum (or an individuals expectations) they will cease working, justifiably. That then leaves the industrious working to increase the living standards for those who have no great desire or hope for an increased living standard.
To be efficient long term co-operatives need to have a simple system for expelling those who work least, and a system to ensure that the slackers aren’t able to veto or otherise control that system. That’s hard to do.
Considering credit unions to be examples of non-Capitalist co-operatives is a bit of a stretch. Credit unions are simply very dispersed companies. Everybody is in it to make money and everybody gets a payoff according to their investment. Their is nothing anti-capitalist in the concept of a credit union. The only real distinction between a credit union and a bank is that in principle all credit union members are company members and not simply bank customers.
I’m still not quite sure on what you mean by co-operative. You refer to them as something other than capitalist, yet I get the distinct impression you are referring to building societies and farmer’s co-ops, which are very firmly and indisputably capitalist and have always worked just fine as a mainstay of capitalism.
I’m not saying I have any better ideas, but in a capitalist market framework, what prevents the headlong and ever-accelerating exploitation of a finite resource to it’s eventual destruction; In a scenario where there are other resources anyway (such as, say, ducks and geese), what prevents the self-interest of the hunters from pursuing passenger pigeons to destruction, and to respond to the dwindling remainder by fighting to grab a bigger share of it?
Or should we just shrug and say that if the passenger pigeon had been worth saving, the market would have hit upon a way to do it?
Yeah, I can make that assumption. That’s because an employer will pay someone more if he can make more out of them. If he doens’t do that then the person will be poached by someone who relaises thatthe person is agood investment. Unles we are talking about slavery then we cna;t make any other assumption.
You have made the common mistake of applying an average to individuals. you can’t do that. I will bet that the women you work with don’t get payed any less. AFAIK in all the developed world it is an offense to pay women less if they do the same work.
The reason why women get payed less on average is a debate in its own right and one we have had numeorus time son these boards. I don’t want to re-ignite it here, but suffice it to say that when you factor in education levels, employment history, geographic location, occupation and years spent out of the workforce women can’t be objectively shown to earn less than men.
That is in large part because it’s so damn hard to control for all those factors, but the point is that your premise is even more dubious than the conclusion you are trying to reach.
I am unclear what point you are trying to make with this example.
The issue we are discussing is whether the person is maximally utilised. If the person was able to produce more than she is now why isn’t someone paying her more so that they can make more money themselves? And if she can not produce more then why do you believe she is anything other than maximally utilised?
Or is it that ‘with a bit of help’ means that with enough money and resources invested in this person she could make enough money back to recoup that investment? If this is the case then how do you explain that nobody will invest in her? Why won’t banks lend thes epeople money? For that matter why don’t people like you or I invest our money in such people if we eblieve they are an under utilised resource?
And the answer of course is that we and the banks consider them a bad risk. And that is presumably born out by the statistics or else succesful businesses would be lending to these people. On average the ‘bit of help’ doesn’t produce more resources than it consumed. Which means that on average these people are not under utilised.
Is this individual under-utilsied? We can’t know. If we could know I would personally lend her the money because I would be gauranteed a better return thanif those same resoucres were utilised elsewhere. But on average such investment will yield a negative return. And as such these people are not under utilised. They are a resource that is utilised concommitant with return, exactly like all other resources.
Once again it seems that your view hunges on a subjective judgement that being a pharmacist would be a better utlisation of this person even if it requires an investment of X hundred thousand dollars. But there is no objective way that we can reach that conlcusion.
If (and I hope when) technology advances to the point when property (*ie.[/]i monopolistic use of resources) becomes unnecessary, then behold, the future.