Why Capitalism is Doomed

Discussion in 'Economy' started by Dragon, Feb 29, 2012.

  1. Dragon
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    Dragon Senior Member

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    This is for discussion of something I wrote for my blog recently. You can find it here: The Dragon Talking: Why Capitalism is Doomed

    The basic reasoning goes like this. Economic systems, like governments, exist on popular sufferance -- by the consent of the governed, to use Jefferson's phrase. Each can be described, therefore, in terms of a social compact: the people allow the system to go on, in return for promised gains.

    With capitalism, the unwritten agreement was that the people would allow an economic system in which a few privileged and powerful individuals controlled most of the wealth, in return for their managing it so as to create rising standards of living for most people. But in order for that to work, there has to be a high demand for labor, which can be leveraged by one of several means into high wages.

    Today, we are increasingly in a situation where labor is not needed to produce wealth. That means that even as the economy grows, demand for labor doesn't grow with it, and capitalism can no longer provide rising standards of living for most people. Unemployment is too intractably high, demand for labor too low, and downward pressure on wages accordingly great.

    Since capitalism can't fulfill its side of the tacit bargain, it is losing popular support. When that loss reaches a critical point, the system will be replaced by -- something else. Exactly what else is a good question. But unless high demand for labor can be restored, capitalism is doomed, and I see no way to do that.
     
  2. Si modo
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    Si modo Diamond Member

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    What capitalism are YOU talking about?
     
  3. regent
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    regent Gold Member

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    Since the Constitution, America has probably never been a totally capitalist nation. The problem has been keeping capitalism, capitalism. When Americans became aware of its possible loss they begin to try and strengthen it, even modify it to save it. We had the progressive period when the competition part of capitalism was almost eradicated, and kept it going. FDR kept it alive when it probably was in most danger and since then we have added more socialism to the mix for equality. Another way to look at the need for less labor, is less working hours, we went from a sixty hour work week to a forty maybe it's time to let machines do even more? Think of what America could do if politicians were more interested in the people than campaign coffers filled with corporate money.
     
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  4. Dragon
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    Dragon Senior Member

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    Did you read the linked article?

    "Capitalism is an economic system characterized by private ownership of the means of production and the defining of ownership of goods by who owns the capital that is used to produce the goods."

    Less technically, it's a system in which most people make a living through wages paid for work done on behalf of private for-profit companies.

    I'm not just referring to laissez-faire capitalism or to Reaganomics. The death knell is sounding for New Deal capitalism or social democracy as well, since that, too, is dependent on high demand for labor.
     
  5. TakeAStepBack
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    TakeAStepBack Gold Member

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    You're mistaking capitalism with corporatism.
     
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  6. Dragon
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    Dragon Senior Member

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    Again, please read the linked article. Here's another quote from it:

    Under those conditions, even the most liberal version of capitalism must fail.
     
  7. TakeAStepBack
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    TakeAStepBack Gold Member

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    That wasn't capitalism.
     
  8. Dragon
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    Dragon Senior Member

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    Meh. I'm using a broader definition than you are. By your more restricted definition, capitalism failed a long time ago and has disappeared and will never come back. What I'm saying here is that even liberal capitalism is doomed.
     
  9. Amelia
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    Amelia BANNED

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    Interesting.
     
  10. TakeAStepBack
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    TakeAStepBack Gold Member

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    If you're not going to properly use terminology and just make shit up as you go, the entire point you're trying to make becomes self defeated. Capitalism never failed, it was hijacked by central panners and passed off as capitalism to shield the reality of what was really happening. Which is why I find myself correcting people on a constent basis regarding what is, and what is not in economics.
     
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