Is there a downward spiral to unregulated capitalism, if so has it been consistently proven

[Wesley_Clark]

This is probably economics and marxism 101 (neither of which I really have any background in), but I’ve tried reading Marx and lost interest when they would get to social engineering. It seemed so against human nature that I didn’t know if I could take his other ideas seriously. Plus we have had 150+ years of economic research since Marx, so I’m assuming whatever ideas he had have been refined by now.

So economic marxism seems to be a failure. Democratic socialism can work, but economic marxism has been tried and abandoned pretty much everywhere they have tried it from what I can tell.

But on the subject of marxism, is there a certain pattern that out of control capitalists go through, and a likely set of responses to it?

For example, in an ideal world from the capitalists perspective, the capitalist would have a monopoly on goods/services, the public would be forced to buy the products at inflated prices, competition would be non-existent and likely banned by law and the capitalists would control all the levers of power (government, military, police, media, church, judiciary, etc) while squashing or co-opting the opposition (grassroots, leftist churches, etc). They could charge what they want, face no competition forcing them to increase quality/drop prices, force people to buy their products, and if the public got upset either use the media and church to get them to support the agenda of the capitalist, or use the police and military to terrorize them.

Eventually the misery would be so great the public would demand change. In an authoritarian dictatorship, this would probably come in the form of an armed rebellion like was seen in latin america 50+ years ago. In a democracy (like many nations in latin america in the last 10 years) this would come in the form of electoral politics pushing government policy to the left.

Does democracy lessen the intensity of the pushback against unregulated capitalism or what is seen as unfair capitalism? If people in places like Argentina, Brazil, Venezuela, Nicaragua, etc didn’t have those institutions would they just engage in a military coup and demand an even more leftist government? Or is that question kind of moot since in Nicaragua and Venezuela the people who tried to (and sometimes succeeded) in coups were elected presidents down the road?

[Voyager]

You seem to be assuming that capitalists would form a cabal and cooperate. True capitalists would stab each other in the back the first chance they get if an advantage would come from it.
I think the real problem would be the short term maximization of profits, storing of money, and then harm to society when the excessive risk taken causes an explosion.
A capitalist may not want his company to go under, but walking away with $500 million eases the pain substantially.
Regulations are kind of like speed limits. If somehow we can guarantee that the speeder only kills himself, I say do away with them. But the speeder takes passengers and outsiders with him, so regulations are required.

[XT]

But on the subject of marxism, is there a certain pattern that out of control capitalists go through, and a likely set of responses to it?

Marx made a set of predictions about Capitalism. AFAIK, none of his predictions about where Capitalism was headed have proved accurate. I could be wrong (and there could be No True Scotsmen), so I’d say test it like any scientific theory and see how his predictions coincide with reality.

Off the top of my head and roughly speaking, Marx predicted a zero sum game, where the number of capitalists would drop as bigger capitalist fish ate littler fish, and wealth became concentrated in fewer and fewer hands until we would have a Highlander situation where there can be only one. Looking at the number of wealthy capitalist types world wide, I’d venture to say there are orders of magnitude more capitalists (and, ironically, more capital as well) today than in Marx day. Maybe several orders of magnitude more.

From my somewhat shaky memory I seem to recall Marx also predicted that the revolution would start in the US or another heavily industrialized and Capitalist nation.

Again, from memory, he predicted that once the revolution happened, eventually there would be no need for government. The workers and people, firmly in control of the means of production, would not need government.

He made a lot of predictions of course…these are just the ones I remember (or perhaps misremember, if I’m attributing to him something predicted or asserted by other notables in the Communist pantheon). Perhaps others will come up with some he was right about…or, more likely, ones that their world leads them to BELIEVE he was right about.

For example, in an ideal world from the capitalists perspective, the capitalist would have a monopoly on goods/services, the public would be forced to buy the products at inflated prices, competition would be non-existent and likely banned by law and the capitalists would control all the levers of power (government, military, police, media, church, judiciary, etc) while squashing or co-opting the opposition (grassroots, leftist churches, etc). They could charge what they want, face no competition forcing them to increase quality/drop prices, force people to buy their products, and if the public got upset either use the media and church to get them to support the agenda of the capitalist, or use the police and military to terrorize them.

This isn’t Capitalism. More like the fantasy of some subset of rich people or the fevered dreams of fretting left wingers. I mean, in an ideal (fantasy) world, the reality would be me as God King with scantily clad love muffins feeding me peeled grapes and prancing about while fanning me with palm fronds.

Eventually the misery would be so great the public would demand change. In an authoritarian dictatorship, this would probably come in the form of an armed rebellion like was seen in latin america 50+ years ago. In a democracy (like many nations in latin america in the last 10 years) this would come in the form of electoral politics pushing government policy to the left.

Ok. Let’s test this hypothesis. How many functional Capitalist governments have thus far gone through this? None that I can think of. Governments going through this sort of thing are generally unstable dictatorships, not functional Capitalist systems. Or, ironically, ex-Communist hell holes.

Does democracy lessen the intensity of the pushback against unregulated capitalism or what is seen as unfair capitalism? If people in places like Argentina, Brazil, Venezuela, Nicaragua, etc didn’t have those institutions would they just engage in a military coup and demand an even more leftist government? Or is that question kind of moot since in Nicaragua and Venezuela the people who tried to (and sometimes succeeded) in coups were elected presidents down the road?

I’m sure democracy helps, though China isn’t a democracy or anything resembling a democracy (save at perhaps the lowest level), yet Capitalism has brought great wealth to the country, and ironically kept the ‘Communist’ party in power…though it’s only kept in power as long as it can continue to keep the economy ever expansionist, so it’s just a matter of time before it’s tossed out.

[Trinopus]

@Voyager

You seem to be assuming that capitalists would form a cabal and cooperate. True capitalists would stab each other in the back the first chance they get if an advantage would come from it. . . .

True…but that can lead to a monopoly the bloody way: the monopolist is the last guy standing. When one guy gets deep enough pockets, he can undercut the next bigger guy’s prices – or threaten his suppliers – or threaten his workers – and wipe the guy off the map.

(By threaten, I don’t mean, “I’ll break your legs,” but, “You won’t be able to get a job in this town.”)

[Der_Trihs]

@Voyager

You seem to be assuming that capitalists would form a cabal and cooperate. True capitalists would stab each other in the back the first chance they get if an advantage would come from it.

Not really. In reality the “elite” throughout history have always been very class conscious and generally willing to cooperate with each other if it serves their collective interests, especially whenever a threat from the lower classes arises. Although the result isn’t a “cabal”, but an “old boy’s network”. In America that translates to people who come from the same social class, the same gated communities, going to the same schools and getting the same high-level jobs working for each other; a nearly closed caste by now.

[Mosier]

XT, wealth absolutely is being concentrated over time. The more unregulated the market, the more disparity there is between rich people and everyone else. Just look around you.

[Wesley_Clark]

@XT

This isn’t Capitalism. More like the fantasy of some subset of rich people or the fevered dreams of fretting left wingers. I mean, in an ideal (fantasy) world, the reality would be me as God King with scantily clad love muffins feeding me peeled grapes and prancing about while fanning me with palm fronds.

Ok. Let’s test this hypothesis. How many functional Capitalist governments have thus far gone through this? None that I can think of. Governments going through this sort of thing are generally unstable dictatorships, not functional Capitalist systems. Or, ironically, ex-Communist hell holes.

From the perspective of a capitalist, that should be the goal. Why would someone prefer competition when they can have a monopoly? Regulatory capture is a great thing from the POV of a capitalist. Mandatory purchasing of products is a great thing. These things all increase profit both by driving up the profitability of goods/services sold while increasing the market for them. Isn’t that the eventual goal of capitalists? Do you think if AT&T could somehow get the government to mandate that people buy internet/phone service from them at an inflated rate they wouldn’t and would instead say ‘no we’d rather compete in a free market to win a smaller sector of the market for a lower profit per unit sold’. It makes no sense. So in that regards it seems that capitalism has an urge to lead to plutocracy via capture of the public sector, eventually leading to its reregulation either by armed rebellion or democratic change.

My point with resistance is my impression in poor autocracies people are left with no choice but radical resistance. In developed democracies people can vote in left wing parties. It is like a release valve for frustration about economic changes.

The wealth growth in China is being spread among almost everyone. Rural workers and the poor are benefitting. In places like Cuba under Batista that wasn’t the case.

[XT]

@Mosier

XT, wealth absolutely is being concentrated over time. The more unregulated the market, the more disparity there is between rich people and everyone else. Just look around you.

Cite? If you are correct then there should be fewer and fewer rich people with more and more concentrated wealth today than in Marx time. Should be very easy for you to prove if that’s the case.

Of course, it’s horseshit, since there are millions of rich people today, and even the poor in Europe or the US are orders of magnitude better off than the poor of Marx day. I don’t know what you see when you look around, but what I see is an incredibly rich society where even the poor have more wealth than they did even when I was a (extremely poor) kid.

[XT]

[QUOTE=Wesley Clark]
The wealth growth in China is being spread among almost everyone. Rural workers and the poor are benefitting. In places like Cuba under Batista that wasn’t the case.
[/QUOTE]

No, it’s not being spread among everyone. But, the key fact is that China HAS more wealth now than at any time in it’s long history. And they have it because they have allowed at least little Capitalism into their system. Places like Cuba under Batista…or under Castro…haven’t really. Which is why they are poor.

My point with resistance is my impression in poor autocracies people are left with no choice but radical resistance. In developed democracies people can vote in left wing parties. It is like a release valve for frustration about economic changes.

So, the reason why Americans aren’t revolting in the streets is because they can vote in left wing parties to relieve the pressure? :dubious: I don’t think so. The real reason is that the vast majority of Americans are unimaginably wealthy by historical standards. The poorest American has access to wealth that even the middle class of earlier ages…hell, even the wealthy classes…could only dream of. Same goes for Europe. People don’t revolt when most of their basic needs are taken care of. They might bitch and complain…and no one bitches and complains like Americans, especially middle class Americans…but they aren’t going to revolt.

The kind of frustration you are talking about comes from REAL hardship and repression. Years, generations of it. You want to see that go to the Middle East today, or some of the 3rd world hell holes in Africa or Latin America.

From the perspective of a capitalist, that should be the goal.

Only from cartoon Capitalists letting their fantasies have free reign. That was the point of my counter analogy…EVERYONE wants some sort of fantasy. But then we all have to live in the real world, which isn’t nearly as much fun.

Why would someone prefer competition when they can have a monopoly?

Because the reality is that having and maintaining an actual, real world monopoly isn’t nearly as easy or effortless as folks make it out to be. And competition is often good for a company…a lot of companies WANT competition, and all of then need it. Capitalists aren’t all stupid, and even if they were they are realistic enough to know that unless you have government support creating a monopoly in the real world is nearly impossible.

Isn’t that the eventual goal of capitalists?

The goal of capitalists is to make money.

Do you think if AT&T could somehow get the government to mandate that people buy internet/phone service from them at an inflated rate they wouldn’t and would instead say ‘no we’d rather compete in a free market to win a smaller sector of the market for a lower profit per unit sold’

The reason why AT&T DID have a monopoly on phone service was because of the government. Certainly if someone wanted to put them back in that position they would jump at the chance. I’d jump at the chance to be God King of the world with those SCLM’s serving my every whim, too. Again, you are talking about fantasy, not reality. We all have fantasies. Capitalists do as well, since they are only human beings.

So in that regards it seems that capitalism has an urge to lead to plutocracy via capture of the public sector, eventually leading to its reregulation either by armed rebellion or democratic change.

In the same way that leftists dream of complete wealth redistribution and command economies and lining up all of the rich Capitalists and shooting them or sending them off to re-education camps I suppose, though honestly as with the leftists it would only be the fervent fringe who would think such drastic things would be a good idea. Most ‘Capitalists’ are just people who want to make money and enjoy the fruits of their labors. They don’t WANT armed rebellion or the destruction of democracy any more than most leftists are crazy wannabe hard line Socialist/Communists who want the absolute destruction of democracy and the introduction of their own ideas of what’s good for the people.

[Voyager]

@Der_Trihs

Not really. In reality the “elite” throughout history have always been very class conscious and generally willing to cooperate with each other if it serves their collective interests, especially whenever a threat from the lower classes arises. Although the result isn’t a “cabal”, but an “old boy’s network”. In America that translates to people who come from the same social class, the same gated communities, going to the same schools and getting the same high-level jobs working for each other; a nearly closed caste by now.

Oh, good neighbors like the Borgias?
While we don’t have the upward mobility we once had and should have, it is not totally from those on top keeping people out - I live in Silicon Valley, and there tons of people on the top here whose parents weren’t anywhere close to it.

I think the Mafia (back when it was competent) is actually a great example of unregulated capitalism at work.

[jsutter]

@Der_Trihs

Not really. In reality the “elite” throughout history have always been very class conscious and generally willing to cooperate with each other if it serves their collective interests, especially whenever a threat from the lower classes arises. Although the result isn’t a “cabal”, but an “old boy’s network”. In America that translates to people who come from the same social class, the same gated communities, going to the same schools and getting the same high-level jobs working for each other; a nearly closed caste by now.

As Paul Simon put it, “a loose affiliation of millionaires and billionaires”.

Aloha