# On the Need for Laissez-Faire Capitalist Reforms **URL:** \ **Category:** Great Debates\ **Created:** [May 9, 2007, 4:06am UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356 "2007-05-09T04:06:35Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [May 14, 2007, 8:02pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/41 "2007-05-14T20:02:12Z")
[QUOTE=severus] I don’t know. I’m of the opinion that a market economy, without intervention, is unstable. It doesn’t work as the theory would have it. I get this impression from seeing the fact that monopolies seem to develop naturally and need outside intervention to break them. [/quote] How do you get that impression since there is nothing in history to support it? The only monopolies that have ever needed breaking up were due to government giving these monopolies power they would never get on their own. > [@](#): > > So, instead of remaining fluid, I believe that unsufficiently regulated economies will eventually go a fixed state with a number of “haves” and “have-nots”, and minimal opportunity for moving from a class to the other. A kind of neo-feudal state, say. In the minimally regulated economy that the U.S. had (and still has, to a certain extent), the type of stratification you envision simply does not happen. There is a lot more movement among the economic classes than you may think. > [@](#): > > So yes, of course it’s always desirable to have more jobs. But if you can hire people as little more than serfs, and people will take it, why would you do anything else? And it’s not through servitude that they’ll improve their case. Again, this is not how the world works. The vast majority of workers make salaries above the minimum wage. If your view of the world was correct, companies would only pay the absolute minimum allowed by the government. But they do not. Why? Because it is in their interests to pay their workers a good salary. The more a worker can bring to a company, the better the salary. > [@](#): > > But why, especially since you just said that the service offered by Medicaid isn’t something you’d choose if you were paying? I’ll agree that _some percentage_ of people will agree to remain in poverty if they can survive through governmental aid, but I think this percentage is quite small, and I find it somewhat arrogant to believe otherwise. And yet you see that happening to a certain extent in the U.S. (where government aid is less generous) and to a larger extent in Europe. > [@](#): > > It’s kind of like saying, “of course _I_ want to do things I’m proud of and contribute to the world, but _those people_? They’re lazy parasites who have no pride, and of course the only way to make them work is to force them.” And, yet, that statement applies to some people. > [@](#): > > I know I wouldn’t want to live on social assistance for a long time; if I ever get there (right now I don’t expect it to happen, but we never know, which is why I want the option to remain there), it will be for a short time to get back on my feet. I’m proud enough that I want to have a positive impact on society, and I believe most people are like that too. Sure, most people probably are. But not all. And, if you are able to work, then why should I (and the rest of the taxpayers) support you? And if you make bad choices and continue to make bad choices that screw up your life, why should I (and the rest of the taxpayers) continue to subsidize your bad choices? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [May 14, 2007, 9:33pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/42 "2007-05-14T21:33:57Z")
[QUOTE=msmith537] Doesn’t sound laissez-faire. In fact, sounds like the complete opposite. Once again, people are making up definitions for words that have a negative connotation. Laissez-faire by definition means no government intervention. What you describe in Iraq is LOTS of intervention. [/quote] Yes, intervention by the Coalition governments; but, in economic terms, only for the purpose of dismantling the economic regulations, and privatizing (most) state-owned industries, of the previous regime; resulting in a society closer to the neocons’ economic-libertarian ideal than any before, and with disastrous results (results that **would** be disastrous even if the Iraqis did not have to try to run their economy with shattered infrastructure amidst a raging civil war). ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [May 14, 2007, 9:37pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/43 "2007-05-14T21:37:40Z")
[QUOTE=Renob] The only monopolies that have ever needed breaking up were due to government giving these monopolies power they would never get on their own. [/QUOTE] Eh? That might apply to Ma Bell, but what about Standard Oil, U.S. Steel, International Harvester, Microsoft? ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [May 14, 2007, 9:55pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/44 "2007-05-14T21:55:00Z")
[QUOTE=Renob] Sure, most people probably are. But not all. And, if you are able to work, then why should I (and the rest of the taxpayers) support you? And if you make bad choices and continue to make bad choices that screw up your life, why should I (and the rest of the taxpayers) continue to subsidize your bad choices? [/QUOTE] Of course, the offspring of the wealthy can work, but generally do not. I am sure you are outraged at subsidizing their sloth as well. ---
**Author:** ![Hypnagogic\_Jerk](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hypnagogic_jerk/32/4252_2.png) [@Hypnagogic\_Jerk](https://boards.straightdope.com/u/Hypnagogic_Jerk)\ **Post date:** [May 14, 2007, 9:55pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/45 "2007-05-14T21:55:34Z")
[QUOTE=Martin Hyde] I do think eventually if the U.S. is going to continue the system we have to move away from pay-as-you go. Workers today don’t have a genuine trust in the system, many people genuinely expect the system will simply be unable to disburse their money by the time they retire. [/QUOTE] I believe Canadians think the same. [QUOTE=Sage Rat] As societies approach full socialism they **don’t** continue to work on new methods of reducing disease and such. If you ever go to a communist nation, you’ll find them to be falling apart and dirty, with technology that is stuck decades behind. [/quote] Well, there aren’t that many communist countries remaining. I know that most communist countries that have existed until now had to make “social parasitism” a crime, so it does lean some believability to the idea that people will stop trying to improve the world in the absence of any pressure of any kind. But what happens under communism doesn’t tell us much about what happens under hybrid systems with elements of market capitalism and elements of socialism. And I know that I said earlier that I might want to live in a “perfect” society even if it didn’t have any of our modern comforts, but on the other hand, **msmith537** is probably right that a “perfect” society is undefinable. There probably are some things I would trade our modern comforts for, but unless we find an objectively correct definition of “perfect society”, I won’t try to use this term. > [@](#): > > So personally, minus any greater information than we have at this date, I have to believe that innovation and socialism are inversely linked. The more social welfare there is, the less advancement of all technologies there will be in a nation, including medical. I’m not convinced. I agree with you that a society with an overbearing level of governmental intervention (as in communist countries) stifles innovation. But this doesn’t mean that the correlation remains the same across the scale. It’s possible that a certain level of social welfare _encourages_ people to innovate, given that potential failure doesn’t mean the end of the world for them. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 14, 2007, 10:03pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/46 "2007-05-14T22:03:10Z")
[QUOTE=BrainGlutton] Eh? That might apply to Ma Bell, but what about Standard Oil, U.S. Steel, International Harvester, Microsoft? [/QUOTE] Well, Microsoft was definitely not a monopoly, and defintely didn’t need to be broken up (nor was it)…but certainly US Steel and Standard Oil (while not real monopolies in the strict sense…or really in any sense at all, as IIRC they only controlled like 60% of the market) were classic examples of what Renob is talking about wrt the GOVERNMENT basically making them what they were. I have to admit, I don’t know about IH myself…first time I’ve ever heard them used in this kind of discussion and I don’t know that much about their history. -XT ---
**Author:** ![Hypnagogic\_Jerk](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hypnagogic_jerk/32/4252_2.png) [@Hypnagogic\_Jerk](https://boards.straightdope.com/u/Hypnagogic_Jerk)\ **Post date:** [May 14, 2007, 10:03pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/47 "2007-05-14T22:03:35Z")
[QUOTE=msmith537] I don’t think anyone would advocate the police or Federal highways be subject to free market forces. [/QUOTE] Well, highways are a natural monopoly. You can’t really have two competing highways going from a place to another, that’d be a terrible waste of resources. But you’ll certainly find people advocating the privatisation of highways. That is, to a point, subjecting them to market forces. (For the most part I would disagree with this suggestion.) As for the police, I think it’s clear that _no extremist_ would advocate leaving it entirely to the market. But you’d find people suggesting even that. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [May 14, 2007, 10:07pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/48 "2007-05-14T22:07:18Z")
[QUOTE=Evil Captor] Of course, the offspring of the wealthy can work, but generally do not. [/quote] Actually, I think they generally do. It’s a cultural thing. ---
**Author:** ![Hypnagogic\_Jerk](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hypnagogic_jerk/32/4252_2.png) [@Hypnagogic\_Jerk](https://boards.straightdope.com/u/Hypnagogic_Jerk)\ **Post date:** [May 14, 2007, 10:09pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/49 "2007-05-14T22:09:07Z")
[QUOTE=Agnostic Pagan] And I’ve never understood the propensity for American conservatives who espouse the values of work, responsibility and productivity to favor the rentier class over the labor class. [/quote] I want to point this out, because it’s also something I wonder, especially when it comes to things like inheritance taxes. This is _precisely_ the kind of tax that I can’t find any meritocratic incentive to lower or eliminate. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 14, 2007, 10:24pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/50 "2007-05-14T22:24:58Z")
[QUOTE=Evil Captor] Of course, things are frar less than peacy keen in the US. Right now there are 45 million Americans without health insurance. Many of them employed (such as myself) by employers who don’t offer health insurance and don’t pay enough to make it possible to buy it. There are also employed Americans who can’t even afford a place to live. (I am fortunate enough not to be in that category at present, but things can always change.) [/quote] Employer-provided health insurance is a peculiarly American invention-- an absurd holdover from WWII when salaries were frozen and employers offered benefits to attract workers. It’s a stupid system. We don’t expect employers to provide food to their employees. > [@](#): > > Don’t let the American conservatives fool you. They are social Darwinists all. Not worth more than a :rolleyes: . > [@serverus](#): > > I want to point this out, because it’s also something I wonder, especially when it comes to things like inheritance taxes. This is precisely the kind of tax that I can’t find any meritocratic incentive to lower or eliminate. Depends on the tax rate. If it’s too high, people will just find ways to shelter their assets. Why is that? Most Americans think they should be able to pass their wealth on to their heirs. It’s not so much a meritocracy issue as a private property issue. Personally, I think all income should be taxed at exactly the same rate (with the assumption that a capital asset that is sold has its basis indexed for inflation). ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [May 14, 2007, 10:36pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/51 "2007-05-14T22:36:04Z")
[QUOTE=BrainGlutton] Eh? That might apply to Ma Bell, but what about Standard Oil, U.S. Steel, International Harvester, Microsoft? [/QUOTE] I don’t think any of those things were monopolies. In fact, if you look at the facts in the Standard Oil and Microsoft cases (the ones I’m most familiar with), it seems to me that these were politically motivated prosecutions done to curry favor with the companies that were unable to compete on a level playing field with the so-called “monopolies.” > [@Evil Captor](#): > > Of course, the offspring of the wealthy can work, but generally do not. I am sure you are outraged at subsidizing their sloth as well. I wasn’t aware that the offspring of the wealthy were being subsidized by taxpayers. As long as they are not forcing me to give them money, then I am not all that outraged by their sloth. ---
**Author:** ![Hypnagogic\_Jerk](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hypnagogic_jerk/32/4252_2.png) [@Hypnagogic\_Jerk](https://boards.straightdope.com/u/Hypnagogic_Jerk)\ **Post date:** [May 14, 2007, 10:48pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/52 "2007-05-14T22:48:43Z")
[QUOTE=ForumBot] In practice, however, it has been observed that, on the whole, the poor do benefit from the overall wealth creation of a free market, despite the lack of a governmental guaranteed of this. [/quote] I recognize that the creation of wealth is a good thing, and it’s likely that, in our hybrid economies, it will make its way to all social classes. But would that be true in an economy ruled entirely by the free market? I doubt it. > [@](#): > > In a truly free market, a monopoly can arise out of two conditions: > > 1. It provides a service so high in quality that no competition can beat it > 2. Control of a limited natural resource. > > Wal_mart is an example of the first. Many people may hate Wal_Mart, but they deliver goods and services at low price, and their success over other, less efficient businesses through voluntary exchange is proof that they provide an unparalleled service for the market they operate in. I still think it’s not a positive thing when the competition rarefies. Obviously the reason why Wal-Mart have been able to gain a quasi-monopolistic status in many regions is because their sheer size allows them to offer unbeatable prices. But this has happened at the cost of diversity in the market (retail market and job market). You’ll probably respond that if people agreed with me, it would be very easy for new commerces to appear and thrive, since people would go there instead of Wal-Mart (or in addition to Wal-Mart), even if it might cost more, because they value diversity in the market. But I’m not convinced. On the other hand, if what people really want in their region is a Wal-Mart monopoly, it would be arrogant of me to try to prevent it. But it isn’t what people want here, so it isn’t what should happen here. 😉 [QUOTE=Renob] How do you get that impression since there is nothing in history to support it? The only monopolies that have ever needed breaking up were due to government giving these monopolies power they would never get on their own. [/quote] That would be surprising to me. I’m quite certain that monopolies can arise naturally. I’ll try to find interesting examples, if I have the time. > [@](#): > > In the minimally regulated economy that the U.S. had (and still has, to a certain extent), the type of stratification you envision simply does not happen. There is a lot more movement among the economic classes than you may think. I know Americans like to think that in their system (unlike in Europe, where you are born a servant or a noble and you shall stay that way until you die) people can dramatically improve their lot. It does happen that people improve their situation, I agree. But I don’t think it happens as often as you think. I’d like to see statistics about this actually. And the converse of this would be that people of higher social class who don’t remain dynamic will find their status get lower. Does that happen? > [@](#): > > Again, this is not how the world works. The vast majority of workers make salaries above the minimum wage. If your view of the world was correct, companies would only pay the absolute minimum allowed by the government. Employers will pay their employees the minimum they can pay them to keep them (or at least keep them long enough to get meaningful work done). In some cases this will be higher than the legal minimum wage. But there are situations – if you remove or ignore the legal minimum wage, of course – where an employer might find it economically feasible to pay an employee a salary that is barely enough for this employee to survive. And I’m quite sure that this employee will stay, too, it’s not like they’ll be able to find time to try to get a better deal. > [@](#): > > And, yet, that statement applies to some people. Some, I’m quite certain. There are a lot of different people in the world. But are there a lof of people like this? Are you like this, **Renob**? I don’t think I am (or at least, I hope not). > [@](#): > > And if you make bad choices and continue to make bad choices that screw up your life, why should I (and the rest of the taxpayers) continue to subsidize your bad choices? Because if I’m able to get a break, I’ll invent something that can fit in your hand and that everyone will have a copy of, and in some cases two or three, that’s why! 😃 No, seriously, I think we just approach the world differently. Even though I’m a bright person and I should be able to contribute a great deal to the world, I can’t be sure that I’ll never fail badly, and I’d like to have a cushion if this happens. Also, I think people should be given a certain level of support even if they can’t entirely support themselves for some reason. Yes, I guess I’m a bleeding-heart. 😉 But I live in a democracy, so I’ll try to influence my government to follow my values, and if enough people agree with me, that will be that. In this case, there is nothing that makes your values and opinions, or mine, or anyone else’s, inherently superior. (Yes, some values _are_ superior to others, but it isn’t the case here.) ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 14, 2007, 10:57pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/53 "2007-05-14T22:57:57Z")
[QUOTE=severus] I recognize that the creation of wealth is a good thing, and it’s likely that, in our hybrid economies, it will make its way to all social classes. But would that be true in an economy ruled entirely by the free market? I doubt it. [/quote] A free market is really good at making things less expensive. That’s good for people who don’t have much money. > [@](#): > > Employers will pay their employees the minimum they can pay them to keep them (or at least keep them long enough to get meaningful work done). In some cases this will be higher than the legal minimum wage. You probably didn’t mean it this way (I hope), but when you write “some cases” you make it sound like most people make the MW, when in fact only a small minority of workers in the US make the MW. I just want to make that clear. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [May 14, 2007, 10:59pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/54 "2007-05-14T22:59:21Z")
[QUOTE=Evil Captor] Don’t let the American conservatives fool you. They are social Darwinists all. They’re willing to sacrifice me and my family and many other people’s families on the altar of the free market, even if we are employed. It’ll happen in France, too, if they have their way. [/QUOTE] Not true at all. This is the worst kind of hyperbolic over-generalization. When was the last time an American conservative really said something like that? I’m sure you’ve got _some_ example, but let’s be realistic, every one in America felt our system needed reworked. It was _Bill Clinton_ who reformed the welfare system, for example. Your problems with having a crappy job aren’t the fault of American conservatives. That’s projecting your own problems in an attempt to blame someone else, which is pretty shameful in my opinion. ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [May 14, 2007, 11:15pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/55 "2007-05-14T23:15:34Z")
[QUOTE=severus] I still think it’s not a positive thing when the competition rarefies. Obviously the reason why Wal-Mart have been able to gain a quasi-monopolistic status in many regions is because their sheer size allows them to offer unbeatable prices. [/quote] Please post a link to anything that says that Wal-Mart has even a quasi-monopolistic status in many regions. I’ve traveled fairly widely in this country and have yet to see an area where the only store (or even the main store) in any area is a Wal-Mart. > [@](#): > > But this has happened at the cost of diversity in the market (retail market and job market). Again, I don’t think so. Usually where a Wal-Mart moves in it provides much more diversity for retail products and people line up for hours to get a job there. > [@](#): > > You’ll probably respond that if people agreed with me, it would be very easy for new commerces to appear and thrive, since people would go there instead of Wal-Mart (or in addition to Wal-Mart), even if it might cost more, because they value diversity in the market. But I’m not convinced. Why not? Wal-Mart can only stay in business if it serves the needs of its customers. Therefore, if people really agreed with you, no one would shop there. However, you seem to think that where Wal-Marts are built all of a sudden all other businesses shut down. That, too, is a myth. Wal-Mart serves a certain segment of society. Other stores serve other segments. Wal-Mart is merely a part of the large shopping landscape in most American cities or small towns. > [@](#): > > On the other hand, if what people really want in their region is a Wal-Mart monopoly, it would be arrogant of me to try to prevent it. But it isn’t what people want here, so it isn’t what should happen here. 😉 Again, please show me any region with a “Wal-Mart monopoly.” > [@](#): > > I know Americans like to think that in their system (unlike in Europe, where you are born a servant or a noble and you shall stay that way until you die) people can dramatically improve their lot. It does happen that people improve their situation, I agree. But I don’t think it happens as often as you think. I’d like to see statistics about this actually. It actually happens to most people: [http://www.ncpa.org/st/econ\_ladder.pdf](http://www.ncpa.org/st/econ_ladder.pdf) “Only 31 percent of children are in the same income quintile as their parents.” “The percent of workers who remained in the same quintile after one year was 60%. The percent remaining in the same quintile fell to 43% after five years, to 33% after 10 years, and to 29% after 15 years.” “Focusing on individuals initially in the bottom wage quintile, note that the probability of being in a higher quintile is 48% after five years, 60% after 10 years, and 67% after 15 years.” > [@](#): > > And the converse of this would be that people of higher social class who don’t remain dynamic will find their status get lower. Does that happen? Yep. “At the other end of the distribution, 74% of those in the top quintile remain in the top quintile in the second year, 16% move down to the fourth quintile, and the remainder drop two or more quintiles.” > [@](#): > > Employers will pay their employees the minimum they can pay them to keep them (or at least keep them long enough to get meaningful work done). In some cases this will be higher than the legal minimum wage. In almost all cases. Only a very tiny percentage of people make the minimum wage. Most are teenagers. > [@](#): > > But there are situations – if you remove or ignore the legal minimum wage, of course – where an employer might find it economically feasible to pay an employee a salary that is barely enough for this employee to survive. And I’m quite sure that this employee will stay, too, it’s not like they’ll be able to find time to try to get a better deal. Again, this is simply not reality. People change jobs all the time. And as employees acquire skills, they have more bargaining power to demand higher wages. > [@](#): > > Some, I’m quite certain. There are a lot of different people in the world. But are there a lof of people like this? Are you like this, **Renob**? I don’t think I am (or at least, I hope not). Of course not. That’s why I’m not on welfare. > [@](#): > > No, seriously, I think we just approach the world differently. Even though I’m a bright person and I should be able to contribute a great deal to the world, I can’t be sure that I’ll never fail badly, and I’d like to have a cushion if this happens. Certainly. I agree with you. That’s why I have a savings account and insurance. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [May 14, 2007, 11:16pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/56 "2007-05-14T23:16:21Z")
[QUOTE=Agnostic Pagan] When socialism is corrupted into communism with total ownership of production and distribution of its output, then the platform fails. Sweden learned what the balance was and has had a fairly successful economy. Russia and other communist nations did not and did become totalitarian in their attempts to succeed. [/quote] With all due respect, I don’t think you know what the definition of socialism is. Marx viewed socialism as the inevitable result of the collapse of the capitalist system. He viewed socialism, as leading eventually to communism. The Soviet Union ideologically labeled itself communism, but most Soviet political thought recognized that their system was not “true communism” eventually achieving what they viewed as “real” communism was the ultimate goal of the Soviet state–at least publicly. In truth it was ran by a small cabal of powerful men who were mostly interested in keeping control. Europeans misuse the word socialism as much as Americans misuse the word liberal. Socialism isn’t about keeping the free market alive with some regulation (which is the practice in Sweden, and every other purportedly socialist European country.) It’s about replacing the market system _completely_. Marx was a class warrior, he viewed capitalism (the investment of capital in exchange for profit) as innately exploitive and in his ideal, socialist world there would be _no_ capitalism. Trust me, capitalism is alive and well in Sweden. Just because Sweden has a large amount of income redistribution does not undermine that fact. Marx, in a way, respected capitalists. Even _Marx_ viewed capitalists as the most innovative group of people in history. However, he theorized that as the economy progressed, eventually many crises would result in lower and lower profits for the capitalists, which would in turn mean lower wages and living conditions for the proletariat. Eventually, profits would rise again, fall again, and et cetera. It was Marx’s contention that eventually this cycle would be broken by violent revolution of the proletariat (anyone who sells their labor for money, differentiated from capitalists who invest money and buy labor to produce commodities and reap the profits of selling them.) But this _never_ happened. People, all throughout Europe, continue to invest money and reap profits. As long as that happens, you have capitalism. Not socialism. Social welfare was influenced heavily by socialism, but it does not equate to it. Is the U.S. a socialist country because of our Social Security Administration? Of course not. Nor is Sweden. Sweden has a large social welfare net than America does, in fact maybe America needs a larger one. But both countries continue to have _capitalist run economies._ I’ve yet to see any system in which the government does a better job at managing the economy. The reason capitalism works, is _just like Marx said_ the capitalists continually push innovation, because they have a vested interest in innovation. Marx had good reason to view this innovation as creating a great disparity between rich and poor, and eventually a class revolution. What Marx failed to see is, that while the capitalist system _did, and continues_ to create a vast gulf between the “capitalists” and the “proletariat” the enormous amount of technological innovation driven by capitalism has given people extremely high standards of living. If you’re working at a factory today, you might make $50,000-$75,000 a year. You’re not in the same _galaxy_ as Bill Gates or Warren Buffet. They have fluctuations in their net worth on a daily basis greater than the lifetime sum of that factory worker’s salary. But, unlike the factory worker in 1880, the factory worker today lives in a comfortable home, has a car, has electricity, has reasonable access to medical care and et cetera. People certainly get squeezed out by the system. But enough people are kept fed, happy, and well cared for by the capitalist system that the revolution Marx foresaw never came. He never envisioned the massive increase in standard of living. He also probably overlooked the small business owner, the true driver’s of capitalism and focused too much on the factory owners, the business magnates and captains of industry. > [@](#): > > Finally, the more I read up on the [New Institutionalists](http://coase.org/newinstitutionaleconomics.htm), I agree with their stance that institutions - the artificial rules, customs and conventions of society - create and shape the market more than vice versa. The free market does not follow any ‘natural’ laws, and very few economic principles do either. As such it is society that can determine what economic policies they desire, not some ‘invisible hand’. France decided they want to tweak those policies a bit in a different direction, so they elected leaders that will attempt to do so. I do think those leaders are following a soon-to-be outdated methodology though. I think you innately misunderstand economics if you honestly believe over two hundred years of economic thought and the ideas of the world’s brightest economists is wrong. The market system works, period. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [May 14, 2007, 11:20pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/57 "2007-05-14T23:20:16Z")
[QUOTE=ForumBot] The free market does not ensure a fair distribution of wealth. [View this Wiki page](http://en.wikipedia.org/wiki/Pareto_efficiency) for a quick breakdown on the efficiency of a free market and the division of equity in one. In practice, however, it has been observed that, on the whole, the poor do benefit from the overall wealth creation of a free market, despite the lack of a governmental guaranteed of this. [/quote] Yep, and this is what undermined Marx’s predictions. I have a ton of respect for Marx, and this coming from a guy who makes a good deal of money from the capitalist system. He was brilliant. He was, however, limited by perspective. He had no way of seeing what was to come, and to be honest, from his perspective, in his time, I can’t say his predictions were off base. Some of them came close to happening, workers did revolt in some places because they could not take the wretched conditions they lived in. The goal of governments should never be for complete economic equity. Even Marx recognized that it was economic _inequity_ that fuels innovation. Governments should seek to protect the general welfare of its people, not to make everyone equal. > [@](#): > > Wal_mart is an example of the first. Many people may hate Wal_Mart, but they deliver goods and services at low price, and their success over other, less efficient businesses through voluntary exchange is proof that they provide an unparalleled service for the market they operate in. Being a large corporation is not in itself bad. > > The second situation is one in which the government must interfere. Luckily, it is also extremely rare. Public drinking water falls into this category. Despite Wal-Mart’s enormous level of success, the retail market is so huge it isn’t really close to being a monopoly. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [May 14, 2007, 11:21pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/58 "2007-05-14T23:21:56Z")
[QUOTE=BrainGlutton] Yes, intervention by the Coalition governments; but, in economic terms, only for the purpose of dismantling the economic regulations, and privatizing (most) state-owned industries, of the previous regime; resulting in a society closer to the neocons’ economic-libertarian ideal than any before, and with disastrous results (results that **would** be disastrous even if the Iraqis did not have to try to run their economy with shattered infrastructure amidst a raging civil war). [/QUOTE] Neo-Cons and libertarians?? They aren’t remotely related. Neo-cons are all about exporting democracy by force. What does that really have in common with classic conservatives (who were traditionally isolationist) and libertarians (who are for extremely limited government, not global government intervention.) ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [May 14, 2007, 11:28pm UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/59 "2007-05-14T23:28:10Z")
Also, in my experience with mom and pop grocers (worked in one in High School) they were more exploitive of their workers than Wal-Mart by far. Some of them would pay employees under the table, below the minimum wage, hire young kids who didn’t know they were entitled to better treatment and et cetera. I don’t know how typical this is, but my niece started working at Wal-Mart when she was in High School and she made $1.00/hr more than minimum wage. That’s atypical for mom and pop grocers. Heck, even most “franchise supermarkets” tend to pay minimum wage or a few dimes an hour over (usually after giving the employees a raise.) ---
**Author:** ![ForumBot](https://avatars.discourse-cdn.com/v4/letter/f/ee59a6/32.png) [@ForumBot](https://boards.straightdope.com/u/ForumBot)\ **Post date:** [May 15, 2007, 12:02am UTC](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356/60 "2007-05-15T00:02:10Z")
[QUOTE=Evil Captor] Don’t let the American conservatives fool you. They are social Darwinists all. They’re willing to sacrifice me and my family and many other people’s families on the altar of the free market, even if we are employed. It’ll happen in France, too, if they have their way. [/quote] Poor widdle martyr going to be cruci-wucified? Is he? Is he? OH YES HE IS! OH YES HE IS! _spitblurbsssssssppppppppbbb_ [QUOTE=Martin Hyde] Despite Wal-Mart’s enormous level of success, the retail market is so huge it isn’t really close to being a monopoly. [/QUOTE] I agree with you, but it’s the example people most often cite as the “soon everything will be a Wal\*Mart!” reason that free markets create monopolies. I should have named something else and explained that better. Also, what undermimed Marx was a fundamental misunderstanding of wealth. To his credit, no one else knew anybetter. If his assumption that wealth were zero-sum were correct, then socialism would be a perfectly good system (economically, but I would object on moral grounds). Wealth can, however, be created, and free markets are demonstrably the most efficient form there is at creating wealth. [QUOTE=Severus] You’ll probably respond that if people agreed with me, it would be very easy for new commerces to appear and thrive, since people would go there instead of Wal-Mart (or in addition to Wal-Mart), even if it might cost more, because they value diversity in the market. But I’m not convinced. [/quote] Why not? That’s apparently the case where you live. [QUOTE=Severus, one sentence later] On the other hand, if what people really want in their region is a Wal-Mart monopoly, it would be arrogant of me to try to prevent it. But it isn’t what people want here, so it isn’t what should happen here. [/quote] [QUOTE=Severus] Also, I think people should be given a certain level of support even if they can’t entirely support themselves for some reason. [/quote] I agree with that. It’s good to have a support cushion, be it friends or family. A governmental one would be good, but the way they get the money, by stealing it from its citizens, is not one I can condone. There are several private charities which serve the function of this safety net–the salvation army is one. Why does it have to be the government providing this net? History has shown that government is traditionally a wasteful, beurocratic game where the goal is to waste as much money as possible. **BrainGlutton:** Standard Oil controlled a majority of a finite resource. US Steel was found to not be a monopoly by the government, I haven’t heard of that trading company you cited, and Microsoft wasn’t a monopoly and didn’t need to be broken up. [Previous page](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356.md?page=2) [Next page](https://boards.straightdope.com/t/on-the-need-for-laissez-faire-capitalist-reforms/403356.md?page=4)