True Nature of Capitalism unbeknown by people

[Dragon]

People in America do not see the true nature of capitalism and protest because they believe it to be something else entirely. It is a system where the weak fail and the strong flourish. Now this sounds like survival of the fittest which it is but there is a key difference. The weak can become the strong. If they work and actually want to improve their economic situation it can be done. People living in poverty can advance to middle class and the exceptional can even rise to upper class. Now what these protestors are protesting is that there is no economic equality which they are right in that sense. Though they are wrong in another, they don't deserve it. This is a country where you can accomplish almost anything if you are willing. Sometimes you may fail but if there is a will there is a way. Now some of these protestors are calling for socialism which actually kills the upper class and makes everything the same resulting in a weakened economic state. If they desire this they should move to China or North Korea and you can see the true nature of socialism and the wonders of capitalism. Now capitalism isn't perfect, nothing is, it I however the best we have. If you can think of something better please tell me and until someone does then capitalism shall be the best.

Three responses:

1) An economy that consigns the great majority of the people to poverty is not a success.

2) It should not only be possible, but relatively EASY -- easy enough that the majority of the people can do it -- to rise into the middle class. That requires sacrificing the ability of the richest people to become super-rich. It's a worthy sacrifice.

3) You ask what is better than laissez-faire or "pure" capitalism? That's easy: a mixed economy, social democracy, the "managed market," "Eurosocialism," or the economic regimen of the U.S. postwar decades. It's already been tried and shown greatly superior to either laissez-faire capitalism or bureaucratic socialism.

 

[Wiseacre]

People in America do not see the true nature of capitalism and protest because they believe it to be something else entirely. It is a system where the weak fail and the strong flourish. Now this sounds like survival of the fittest which it is but there is a key difference. The weak can become the strong. If they work and actually want to improve their economic situation it can be done. People living in poverty can advance to middle class and the exceptional can even rise to upper class. Now what these protestors are protesting is that there is no economic equality which they are right in that sense. Though they are wrong in another, they don't deserve it. This is a country where you can accomplish almost anything if you are willing. Sometimes you may fail but if there is a will there is a way. Now some of these protestors are calling for socialism which actually kills the upper class and makes everything the same resulting in a weakened economic state. If they desire this they should move to China or North Korea and you can see the true nature of socialism and the wonders of capitalism. Now capitalism isn't perfect, nothing is, it I however the best we have. If you can think of something better please tell me and until someone does then capitalism shall be the best.

Three responses:

1) An economy that consigns the great majority of the people to poverty is not a success.


Am I to assume you believe the great majority of Americans are consigned to poverty? If so, I think you are greatly mistaken, or else your definition of poverty is out of whack.


2) It should not only be possible, but relatively EASY -- easy enough that the majority of the people can do it -- to rise into the middle class. That requires sacrificing the ability of the richest people to become super-rich. It's a worthy sacrifice.


It should be possible and it is, to raise into the middle class. Don't know why you think it should be easy though. And this notion that you can't have any super rich people is nonsense.


3) You ask what is better than laissez-faire or "pure" capitalism? That's easy: a mixed economy, social democracy, the "managed market," "Eurosocialism," or the economic regimen of the U.S. postwar decades. It's already been tried and shown greatly superior to either laissez-faire capitalism or bureaucratic socialism.

Maybe you noticed most eurosocialist countries are going bankrupt? Some faster than others, but isn't there some question of whether the failures of capitalism are due to mismanagement by gov't rather than the economic system?

 

[Dragon]

Am I to assume you believe the great majority of Americans are consigned to poverty? If so, I think you are greatly mistaken, or else your definition of poverty is out of whack.

Let's just say we're moving that direction. The middle class is much smaller and weaker than it was when I was a boy. The OP's ideal would move us that direction faster.

It should be possible and it is, to raise into the middle class.

Agreed; even now the probability of success remains greater than zero.

Don't know why you think it should be easy though.

Because I understand the consequences, both economic and political, of setting the bar too high. The easier it is, the more people will succeed. The harder it is, the fewer people will succeed. The implicit social contract between the rich and the rest of us is this: We agree to let some people live in luxury, in return for most of us living comfortably in a middle-class lifestyle. If it is no longer possible for most of us to do that, then the contract is broken and the consequences will be dire.

And this notion that you can't have any super rich people is nonsense.

It's not nonsense, but maybe I need to connect the dots. It's simple math, really. I can express it algebraically.

1) A middle-class lifestyle requires an income of M.

2) When the richest 1% of the people take X% of the income, the other 99% have 100-X% of the income left to divide up among them; call this amount Q. The higher X becomes, the lower the income Q of everyone else.

3) The lower Q becomes, the more difficult it is for any individual to achieve an income of M.

It follows, then, that allowing or encouraging X to become higher and higher, we are making it more and more difficult for people to enter the middle class. Maximum income for the rich, and maximum ability of people to enter the middle class, are conflicting goals; we cannot achieve both. We must choose between these two goals.

Maybe you noticed most eurosocialist countries are going bankrupt?

No, and this is a myth, not a fact. Eurosocialist countries (in which category include such non-European countries as Canada, Japan, and Australia) remain among the world's richest countries. They are by no means going broke.