On the Many Failings of Capitalism

Great Debates
321

On most political issues, I am an extreme moderate, a radical middle-of-the-roader. I’m moderate because I understand the strengths AND weaknesses of both Marxism and unfettered capitalism. But I’m radical anyway – despite my moderate stances, I’m happy to rant and rave like an extremist. :stuck_out_tongue:

When I saw the title of this thread, I was interested. Capitalism does have many failings, which are ignored by the libertarians at SDMB. But, after a quick post or two I lost interest in this thread. Truth comes from moderation: watching extremists go at each other with hammers and tongs holds no interest or value.

One concrete piece of advice. If your argument depends on some difference between synonyms, count me out. That’s just word-play, not economics.

My answers: (1) Correct; that’s life. The handsome confident guys get the girls.
(2) :confused: Capitalism has reduced poverty. Henry Ford, capitalist, is famous for enriching his employees so they could buy cars! Do you object to “the sale of goods and services for more money than went into their production”? Should painters sell their paintings for cost of paints and just a living wage? :confused:
(3) Yes, the “market” is very imperfect and it’s annoying that the hyper-libertarians can’t figure that out. But without “markets” we’d still be living in the Stone Age.

As I said, I’ve not followed this thread. But Hellestal has seemed very patient.

I wonder, Enterprise; Have your views changed at all from this thread? If so, I’d suggest you acknowledge that and move the debate forward. If not, maybe it is time to bring the thread to a close.

322

Near the beginning of Critique of the Gotha Program, Marx denies that labor is the source of all value. Nature, according to Marx, was also a source of value.

Ok, but then Marx is susceptible to the “Who cares?” critique. In the 1860s or heck during his lifetime Marx could answer that question easily, to wit: “Look around you, capitalist bonehead”. But consider the American workingman even c. 1905 and such a response starts to lose traction.

Look. Marxism is a paradigm, a way of thinking about the world. You can’t disprove it. What you can say though is that the model isn’t especially useful; eg, it doesn’t produce decent predictions or it’s detached from most people’s natural or even reflective sense of justice. A good way to understand paradigms is to think about pre-Copernican astronomy, with the sun rotating around the earth. Hey, don’t knock it: there was a lot of solid navigation and calendar making that was produced by the model. The model worked. It’s just that there was a better one. (This is an analogy only: since Marx was putting forth descriptions about social relations, the same sort of crisp falsification can’t be done. Or rather, -er- well some parts of the social sciences produce falsifiable hypotheses which is actually to their credit.)

It would be possible to comb through Kapital to find inaccuracies. But that misses the point: it’s the framework that’s insufficient. See above.

I think there’s a logical fallacy there: you are deriving an is from an ought. I think it’s called argument from consequences: see page 10. (BTW: pointing this out doesn’t end the discussion: it does, however, suggest that the speaker needs to recast his position at the very least.)

Once we got off the first or second page, I went off on a tangent. My take is this: Marxism suffered intellectual and political collapse during the 1990s. What I’m doing now is a post mortum. Resurrecting Marxism today would require some pretty extraordinary claims. Enterprise has a rather hard case to make, in light of the unfortunate events of the 20th century. There was a time when Marxists could dismiss bourgeois economics and even Darwinism. But today it’s sort of like relying on Mill’s Elements of Political Economy (1821, 1844). A great book in its time, it’s rather dated now.

323

No, no, no: he could be using technical terms. Technical terms -making necessary distinctions- can clarify. (They can also obscure.) Economists for example have different definitions of investment and capital than businessmen do. It depends upon the context of the discussion.

Enterprise though is working off of a now-obscure intellectual framework with its own set of definitions. Difficult to present properly, at least without contrasting with modern usage.

324

There is not an insult in that post.

I have not insulted you in this thread.

Attacks on your arguments are not the same as attacks on you personally.

Pretty much everyone accepts gravitation. To reject Newton (or Einstein) would be similarly “preposterous”. But every once in a while, we get a question about firing rockets into the sun, for example to dispose of toxic waste. As it happens, the sun is the hardest place in the solar system to reach. To a naive intuition, it doesn’t seem that way, because gravity. The sun is the most massive object and with gravity it exerts a great force on all the objects around it. “How hard could it be to reach the sun from where we are now? We just have to fall toward it!” That’s what they think. It’s natural. It’s hard to consider how fast we’re actually moving because we don’t feel it directly. These people are not consciously rejecting the notion of “gravitation” – just as you are not consciously rejecting evolution – but their misunderstanding is severe enough that they reject the clear implications of the science. It is not their intent to stand against science. Once the idea is explained, they can pick it up. (Or they can play Kerbal Space Program.)

But you, in contrast, are trying to have it both ways. You want to both accept gravity and also believe it’s easy to rocket into the sun.

“Evolution” is not just a warm fuzzy word we can associate ourselves with in order to feel socially superior to the silly creationists. The word has an actual meaning. The science of biology has strong logical implications. When confronted with one of the most obvious of those implications, you express no belief in those implications. “I found this an interesting read, but I have nothing to say to it. It again reduces mankind to biological imperatives. It’s a view to take, I’m sure. I’m less sure why one would want to take that view.” You can’t have it both ways. If you reject as preposterous the stance that “evolution doesn’t apply to humans” then you must start applying evolutionary theory to humans. Formally, that would mean learning some game theory. Informally, it means listening to other people who already know some game theory, just as the sun-rocket people listen to the physicists. But you don’t want to do this. When faced with underlying biological imperatives – and we’re talking the most basic imperative of all, which is reproduction – you immediately back away from the idea in a fit of discomfort.

Whether or not you’d like to admit it, this means you are backing away from evolution.

You might accept the word stripped of meaning, but that’s not the same thing as accepting the science. You possess some vague notion of evolution that somehow, inexplicably, doesn’t necessarily have to relate to human behavior. You consider it preposterous to deny evolutionary effects on humanity, while you simultaneously wish to deny evolutionary influence on human nature because it “reduces” mankind in some way. You give no reason for this beyond your personal discomfort with the notion. You don’t “want to to take that view”.

Obviously, your personal discomfort is not enough. Evolution and its implications are correct regardless of your acceptance of those implications.

I did make my case. You ignored it.

If you had questions about evolutionary theory, you could have asked them. If you had objections, you could have made them. If you were uncertain about the logic, you could have pointed it out. If you had come to a different conclusion, you could have offered your conclusion. You did nothing of the sort.

“I found this an interesting read, but I have nothing to say to it. It again reduces mankind to biological imperatives. It’s a view to take, I’m sure. I’m less sure why one would want to take that view.”

That was all you had to say to engage my point.

Here is your next sentence.

I did, in fact, answer that question. The whole point of that entire section was to answer that very question. I gave the answer in italics to give special emphasis to it and you still missed it.

The whole point of that section was to finally separate underlying human imperatives from any particular economic system. As I said before, you wag your finger at human behavior and then complain about capitalism. Your criticisms of capitalism are vacuous for many reasons, but not least of which because you have been continually unable to separate normal human behavior from behavior within capitalist systems. I wanted to engage that difference directly. But all I get in response is resistance to the implications of evolution – which is no better than denying evolution outright – and more complaints about insults that I never made.

So, how far down this rabbit hole am I supposed to go?

Am I supposed to teach you some game theory in order to “make my case”? What if you reject that, too? We already know you’re comfortable with dismissing mainstream economics without any deep knowledge of it, so why wouldn’t you be equally comfortable summarily rejecting evolutionary biology in the same casual way? Anyone who happily rejects a simple fact will have no compunctions about rejecting a complex fact.

There is a limit to my patience.

As long as you’re on record being ambivalent about the implications of very simple ideas, then there’s no point to this. It’s good and proper that you have explicitly accepted that evolution affects human beings. That’s a start, and it’s worth acknowledging because it’s something you hadn’t done before. But it’s also not enough. If you accept the fact that evolution can still affect human beings, then you also need to accept the implications of that fact. This is quite possibly the most direct implication of all: animals that breed voluntarily will (eventually) breed to the limit of their resources. We can continue a discussion if we’re on the same page with basic facts like that. Otherwise not.

And regardless of whether or not you start to accept the implications of evolution – rather than the just the fact of evolution – I don’t intend to respond for another week. I’ve already sunk more time into this post than I had any intention of doing. The need for precision in writing these posts is draining. I can write again after a week if there’s something worth talking about. An acknowledgement of reality would be nice. Otherwise, I will leave it here with you.

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Almost any question is amenable to the “who cares?” critique, such as it is–and I’m certainly not saying that you must, personally, care. You needn’t, it’s fully up to you. I’m merely saying that to point at anyone’s particular working conditions to say, well, you may be right, but I’m still feeling pretty good about myself, is not a useful step towards proving the wrongness of Marxist theory–in fact, in such a case, you might even readily concede that you’re alienated (thus “proving” Marx correct), and simply say that you don’t care (the impersonal you, in this case).

I fully agree that Marxism is “merely” an economic paradigm, with a specific set of axioms, deriving from a particular methodological tool-kit. I disagree that it has an insufficient framework; I’m probably being a bit dense here, but I assume you mean such Hegelian influences as Marx had? There’s considerable debate about their extent, of course, and I’m personally not well-versed enough in Hegel to do them justice.

I’m also not quite sure what you would like me to see or concede here, or debate, in particular: “it doesn’t produce decent predictions or it’s detached from most people’s natural or even reflective sense of justice” might be said about most any form of neoclassical economic theory as well, especially on the macroeconomic level, but I’m reasonably sure you didn’t mean that? I’m certainly not disputing that many of Marx’s own predictions were badly off the mark. But that doesn’t invalidate the economic analysis, in particular not as it has been developed since Marx’s time.

Yes, one can read it like that–sorry. I hadn’t meant we “should” take this view in the sense of following a personal desire to do thing one or other; I merely meant to say that while hellestal’s remarkable extrapolation into the far future is a possible way of seeing things, it’s hardly the most likely, the most natural, or, forbid, the only way of seeing things. Assertion does not make opinion fact.

This is a quite common way of looking at things, of course, much as it is wrong. We need, as I keep pointing out, to keep Marxist economic theory (i.e., the critique of political economy and the analysis of the workings of capitalism) separate from the political expression of the socialist ideas which a) predated Marx and b) only imperfectly followed Marxist economic theory in the first place. I agree that this must seem an arbitrary and self-serving division, given that Marx was the author of both *Capital *and the Communist Manifesto; but it really doesn’t help us understand either side of Marx’s arguments or the trajectory of Marxist theory and thought since to conflate the two necessarily. There is no necessary logical connection between the failure of the Soviet Union and the possible lack of validity of Marxist economic theory–if for no other reason than that *Capital *is an analysis of the capitalism, not of communism. You can think either is doomed to failure, or none is; but it’s inadequate to say that the collapse of the Soviet Union doomed Marxism as an analysis–any more than the Great Depression doomed neoclassical economics (even though lots of people thought it did, from Keynes forward).

Measure for Measure, I appreciate your openness here, and I’d like to be more helpful–I’m clearly missing something I could be doing to saying to make this debate more useful. Just let me know if there’s anything in particular that would help.

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It’s certainly regrettable that you think this way, but at least it explains the rest of your post.

hellestal, I appreciate your knowledge of neoclassical economics, and would not dream of claiming I know that better than you. But I’ll not just accept you as the arbiter of what evolution is. Here is the actual meaning of the word. You keep using it–I do not think it means what you think it means. For a final time, of course it applies to humans. Does it *necessitate *your extrapolation into the future? I don’t think so. Would anybody with any inkling of the difficulties of evolutionary predictions dare to do what you postulate as necessary gospel truth? I don’t know–we could ask a biologist. I have my doubts.

Now, as for the more basic question of what we should do from here on out. It seems to me you’re trying to move the scope of this debate from economics to biology because you don’t have a reasonable argument to make that does not boil down to what you think human nature irredeemably is, what you think it will inevitably lead to, and you make this point without giving a single thought to the possibility that you might be wrong–or at least without publically entertaining this notion. I envy you your strong sense of personal and intellectual rectitude.

I’ve really put much good faith in this debate, and I’ve refrained from accusing you of “vacuous criticisms,” of “summarily rejecting evolutionary biology,” of a “wish to deny evolutionary influence on human nature,” and so on, and so forth, the various ways you find to insult without needing to admit you insult, and poison the debate.

In summary then, I would probably prefer indeed if you would leave the few of us left here to it, yes, should they still be interested. I’m rather sorry about it, but I’m not patient enough for your particular style of debate.

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I think your problem is that you think economics and biology are somehow separate fields. Economics is the science of human behavior, and human behavior is dictated by biology.

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And I think your problem is that you think economics is the science of human behavior, or indeed if I interpret you less charitably *the *science of human behavior, which is even more wrong. Telling, though.

I also think your problem is that you think human behavior is *dictated *by biology, when there is considerable debate on the matter in much greater nuance than you offer here (well, surprise, eh?), and no concrete proof either way. (And I’m saying this even though I’m actually a materialist, believing that anything we do must ultimately originate in nothing more mysterious than our neuronal activities; but I’d never speculate on what in any individual case influences that plenty-mysterious neuronal activity (which we know can easily be modified in general through education, upbringing, and other purely cultural influences).)

I *also *think that your problem is that you think you should “contribute” to complex debates by two-sentence posts without actual content, but I’m getting used to that.

329

Economics seems to be akin to the study of Brownian Motion, in particular, the reality that each individual vector of action can be deconstructed into component vectors, in much the same way that the path, between two points, of an individual particle in a gas or liquid, can be magnified to reveal multiple intervening points of change, almost ad infinitum. The major difference being that particulate motion is much easier to predict than the vector probabilities of economic actors on divers levels of the economy as a whole. The chaotic and unpredictable nature of economics tends to get obscured by simplistic examples of how individual actors will behave, because those behaviors are only nominally predictable. Hence, to claim a useful understanding of economics is specious at best, because that would imply being able to reasonably chart and track a ridiculously complex vector map.

The question then stands, to what extent should we favor a management of the overall market? Autocratic control has not been shown to work, in large part because the managers have historically had minimal connection the effects they are causing. Yet, we are seeing the results of a more loosely managed market, which is leading toward the same end: consolidation of operations (a lot of M&A) has been reshaping the contingent of significant actors into a core group who are disconnected from the effects of their actions, not terribly different from management by the state.

If a free market is to work, it needs to be more democratic. Property and ownership are critical elements of capitalism, but if they are allowed to converge toward plutocracy, “free market” economics gives way to something that is functionally indistinguishable from autocratic management of the market. Power seems to accrue to a narrowing circle of actors, whether or not that is by design. Howsoever a system is laid out, the end result is the same: this is the most obvious aspect of human behavior that matters, and the historical evidence suggests that it is hardwired into the social behavior patterns of humans.

Can free market capitalism avoid this constriction of power? Possibly, but not without specific rules (limitations on the overall freedoms of the participants). It is in this area that the glibertarians and the communists can find common ground, only separated by the issue of property. If that can be resolved, a sustainable, fair and equitable socio-economic system might be reachable. Because the systems we have seen, so far, are not sustainable, in that they eventually lead to cycles of imbalance, social collapse and a lot of misery and destruction. That strikes me as the end target that we do not want to hit.

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How is this so? Governments does a poor job managing the market because it is insulated from the consequences of its actions–good or bad regulations do not affect government’s wellbeing. However, corporations are directly affected by their actions–good decisions generally lead to good outcomes, and bad decisions generally lead to worse outcomes. Plutocrats have no reason to be inefficient in their actions.

331

This “libertarian” dogma is wrong for several reasons.

(1) Corporate managers are often largely motivated by short-term results. Often their very contracts emphasize short-term profits or stock price growth. If/when calamity falls, the manager who caused the problems is long gone. This can apply to shareholders as well, since much stock investment these days has very high turnover. How does this relationship between corporation managers and their constituents differ from that of government managers and their constituents?

True, some corporate managers will be motivated by their posterity, by their reputation among their grandchildren. Is it your contention that politicians, unlike capitalists, are happy to be despised by their grandchildren?

(2) Government managers are responsible for the public interest. Pollution and social welfare are just two of the most obvious cases where corporate managers will act against the public interest (and even have a “fiduciary duty” to act against the public interest). Hyper-capitalists lose all credibility when they refuse to comprehend even this much.

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A recent article in Atlantic Monthly may help corporate apologists fight their ignorance.

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Why would this be so? Is there any evidence that corporations are actually motivated solely by short term profits, beyond the talking points of left-leaning bloggers? Because for millions of people at thousands of companies to independently reach the same incorrect conclusion would be quite a coincidence indeed. Besides, if long term planning is something that most corporations are foolishly skipping, shouldn’t they have all been outcompeted by now by some company that was aiming for the long run? Why haven’t you started a corporation and crushed all of these foolish executives? The answer, probably, is that corporations are actually striking the right balance between a short and a long term focus.

Nominally, sure, but government doesn’t really have any incentive to plan for the long run either. Individual bureaucrats are granted substantial employment protections that make losing their jobs unlikely, and many of them won’t personally be around to see the results of long-term planning. Meanwhile, the rapid turnover of staff outside the civil service makes long-term planning difficult, arguably even harder than in the private sector. The owner of a family run corporation would have every reason to look at consequences that are decades out, while a politician only cares about the next election cycle. And this short-term focus, combined with political turnover, makes planning harder even for unelected officials who are at no risk of losing their jobs.

Most reasonably well-educated conservatives support Pigovian taxes to compensate for negative externalities and other correction of market failures; I certainly do. But eschereal seemed to be arguing for some sort of redistribution of wealth, which is not at all comparable.

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The central problem of capitalism is that it requires continuous economic growth (involving increasing use of material resources and energy coupled with increasing credit levels) in a biosphere with physical limitations.

335

Cites, please. For both the main part and the parenthetical part.

336

But what is Economic Growth?

Since the Depression we have been brainwashed with Gross National Product and then Gross Domestic Product. But that is the measure of cash flow. Is it the measure of WEALTH? We manufacture stuff to depreciate so we have to work to replace it to create more cash flow.

Before 1900 consumers did not buy many machines, and what they did buy tended to last like sewing machines that could last 100 years.

Consumerism is just the new form of economic power game and the propaganda about Capitalism is merely excuses. There is nothing about Capitalism that precludes making accounting mandatory in our schools. When was the last time you heard an economist advocating the idea?

Corporate Consumerism has been the system since World War I.

http://www.spectacle.org/1199/wargame.html

psik

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[QUOTE=psikeyhackr]
Before 1900 consumers did not buy many machines, and what they did buy tended to last like sewing machines that could last 100 years.
[/QUOTE]

Yeah, right? I mean, back in the day when a new computer came out those things LASTED. Now a days you get a new one every year, and the fucking things just keep getting better, cheaper and faster! The rat bastards! And they tell us that this is progress! Cars! Back in the day you had the choice of black or black, and those things lasted forever. Now the cars get better and better mileage, they release fewer emissions and are safer every year! What the fuck is up with THAT??? We should go back to the good old days when you had a choice of any color as long as it was black and the sewing machines lasted 100 years and you took your life (and limb) into risk every time you used it…and it never got better or more efficient and you needed laborers who would sit at those old fuckers for 12 hours a day (without a break whether they lost a hand or not, by the gods!) in good old sweat shops (because the things were so expensive that only a business or the wealthy could afford one for themselves)! Man, we have been SO tricked into thinking that things are better today around the world, when our sewing machines don’t even last a tenth of 100 years!

Preach it brother!

338

Capitalism

requires continues economic growth because of capital accumulation

which means more material resources and energy needed to back up increasing credit

unless only credit is increased:

http://www.washingtonsblog.com/2012/05/top-derivatives-expert-finally-gives-a-credible-estimate-of-the-size-of-the-global-derivatives-market.html

which eventually leads to financial crashes driven by only a fraction of it:

while masking the threat of a resource crunch (see peak oil and Limits to Growth threads for details).

339

Those consumer goods were not manufactured outside capitalist systems.

340

I think you accidentally left off the rest of the quote. Here, let me help you:

I don’t know where you got the part after that, but I did a search of that cite for “requires continual” and that was the only hit.