Why Capitalism is Doomed

[hipeter924]

Economists and politicians however are not interested in making everyone rich, instead keeping a small minority rich,

Economists are interested in how the economy works. Politicians are interested, at the end of the day, in retaining their power status. That may involve voting in the interests of a small minority of rich people to obtain funding, whose interests are in keeping said small minority rich.

Capitalism needs to be reformed, so the focus is on eliminating the lower and middle class, and bringing everyone into wealth

And how do you imagine that would happen?

Pseudo-free market economists are interested in filling their own wallets like everyone else, and are just as corruptible as anyone else. Name a single pseudo-free market economist not lobbying congress for the green aka deregulation or lower taxes for their own companies.

Some possible steps to move forward: Stop corporate welfare and subsidies, open the door to trade with all nations, put money into education not war and welfare.

 

[TakeAStepBack]

Capitalism

Definition of CAPITALISM
: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Free Market

: an economic market operating by free competition



In order to have capitalism, there must be a free market. We don't have a free market. The market is controlled by govt. at almost every intersection. Banking, finance, energy, infrastructure, pricing, industry, etc...etc...

What we have is corporatism. Where govt. designates favoritism in industries that build up large monopolies that control their sectors, seek govt. intrusion to set controls they favor to kill off competition.

 

[TakeAStepBack]

Definition of 'Market Economy'
An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning. This is the opposite of a centrally planned economy, in which government decisions drive most aspects of a country's economic activity.



Read more: Market Economy Definition | Investopedia

 

[hipeter924]

Capitalism

Definition of CAPITALISM
: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Free Market

: an economic market operating by free competition



In order to have capitalism, there must be a free market. We don't have a free market. The market is controlled by govt. at almost every intersection. Banking, finance, energy, infrastructure, pricing, industry, etc...etc...

What we have is corporatism. Where govt. designates favoritism in industries that build up large monopolies that control their sectors, seek govt. intrusion to set controls they favor to kill off competition.

Corporatism is fairly interchangeable with State Capitalism.

 

[TakeAStepBack]

Sure, although misleading to the true definition of capitalism. "State capitalism" is just misleading as it indicates capitalism is happen, when it is not.

 

[TakeAStepBack]

Which was my initial point in posting in this thread. Capitalism is not doomed because it isn't even the system we have. At which point people got up in arms claiming I'm splitting hairs and pandering to semantics. But the reality is, the OP is fataly flawed because the write up attempts to push an economic system not in play as doomed.

then there was the flaw in trying to portray technological advancement as spiking the division of labor. Which we see in the real world, as not happening. It only divides it up in new ways, it does not take away leaving some left with no means. If anything, it is the coporatism that is doomed and is causing the disparage in labor as govt. and their revolving door favortism in corp. relations squashes competition and tilts the production, competition and labor through collusion. Like labor unions, large international finance, banking, etc...etc...etc...etc...

 

[dblack]

I'm waiting to read a 'true' definition of capitalism. So far the only statements made assert what we have today is not capitalism. How about defining what is capitalism.

Well, as I know you can use a dictionary or encyclopedia as well as any of the rest of us, I'll assume you're looking for the reasons apologists are saying that what we have today isn't "real" capitalism. I can take as stab at that.

From my perspective, the most important redeeming feature of capitalism is its ability to decentralize power in society. It does this by keeping political power and economic power separate. That's the whole point of 'laissez faire'. That doesn't mean the government has no part to play - they set the basic ground rules and protect property rights - but otherwise they don't get involved in our economic decisions.

It's the fact that modern "capitalist" states have largely failed to honor laissez faire that leads me to say that what we have isn't capitalism. More and more we are merging economic and political power - with the state becoming more and more involved in managing our economic affairs, and corporations becoming more and more involved in politics. I think this is a very dangerous centralization of power.

That's why it's so frustrating to hear pronouncements that 'capitalism' has failed. We've failed to maintain the separation of political and economic power that is required for capitalism to even exist, so it's sort of hard to see how it's failed.

 

[TakeAStepBack]

I posted the definitions for Wry Catcher of the differences and why the Op is fatally flawed in the diagnosis.

 

[Dragon]

Arguments by definition are a way of dodging an issue. Unless the subject is linguistics and nothing else, they are always fallacious. At most, they make the point "you are using the wrong word," which is a nit-pick, not a real criticism.

Look, here is what I'm saying, avoiding the word "capitalism" altogether.

The economic system we have today is dependent on full employment to work. That's what allows wealth to be distributed to the people, and (sometimes with help from things like labor unions and government regulations) creates rising standards of living for most people as productivity improves.

However, advances in automation and information technology are decreasing the need for labor to produce wealth. We are entering an economic situation characterized by persistent and intractable high unemployment. This breaks the implicit social compact. Without full employment, we cannot (under the present economic system) see rising standards of living for most people. Instead, we will see (and are seeing) great riches flowing to a very few, while most people's standards of living decline.

For that reason, the economic system we have now is failing, and will be replaced with something that will generate rising standards of living for most people.

It will not be replaced by an ideal free market, either, as that would not solve the problem of production of wealth without much labor.

That's what I'm saying, expressed without using the word "capitalism" at all, thus illustrating that what that word means is quite irrelevant here. Now, if we could discuss the idea itself instead of engaging in linguistic cheese-paring, I'd appreciate it.

 

[DSGE]

Pseudo-free market economists are interested in filling their own wallets like everyone else, and are just as corruptible as anyone else. Name a single pseudo-free market economist not lobbying congress for the green aka deregulation or lower taxes for their own companies.

I can't name a pseudo-free market economist. I don't know what that term is supposed to mean. And "lobbying congress for deregulation or lower taxes for their own companies"? Economists who shape mainstream knowledge and opinion within the field aren't those who hold a bachelor's degree and work to make profit for big companies; they're academics who hold PhDs and teach in universities. Not exactly the lobbying kind.

Some possible steps to move forward: Stop corporate welfare and subsidies, open the door to trade with all nations, put money into education not war and welfare.

Okay cool. Not exactly reforming capitalism though. That's reforming government.

 

[TakeAStepBack]

Arguments by definition are a way of dodging an issue. Unless the subject is linguistics and nothing else, they are always fallacious. At most, they make the point "you are using the wrong word," which is a nit-pick, not a real criticism.

Look, here is what I'm saying, avoiding the word "capitalism" altogether.

The economic system we have today is dependent on full employment to work. That's what allows wealth to be distributed to the people, and (sometimes with help from things like labor unions and government regulations) creates rising standards of living for most people as productivity improves.

However, advances in automation and information technology are decreasing the need for labor to produce wealth. We are entering an economic situation characterized by persistent and intractable high unemployment. This breaks the implicit social compact. Without full employment, we cannot (under the present economic system) see rising standards of living for most people. Instead, we will see (and are seeing) great riches flowing to a very few, while most people's standards of living decline.

For that reason, the economic system we have now is failing, and will be replaced with something that will generate rising standards of living for most people.

It will not be replaced by an ideal free market, either, as that would not solve the problem of production of wealth without much labor.

That's what I'm saying, expressed without using the word "capitalism" at all, thus illustrating that what that word means is quite irrelevant here. Now, if we could discuss the idea itself instead of engaging in linguistic cheese-paring, I'd appreciate it.

Wealth is not created without labor, even in automation and information technology. The wealth you're referring to is mainly hinged on the monetary system in place. Where "money" is printed out of thin air and passed out to the corporations, banks, etc favored by govt. that wealth is largely an illusion. There will be no fix to this until the system breaks down on itself and people, which is really what the market is, return to physical wealth exchange.

The answer is capitalism and anchoring run away monetary inflation (a gold standard/return to or a serious fed reserve policy change), govt. collusion with corporation/industry and allow people to pursue their passions in true market competition.

Your assessment is somewhat accurate, but your comclusions, division of labor understandinig and belief that true wealth is being created without labor don't really pass the test.

 

[Dragon]

Wealth is not created without labor, even in automation and information technology.

There are numbers larger than zero but less than infinity. Creating wealth with increasingly less and less labor creates high and intractable unemployment; creating it literally with NO labor would mean that nobody is employed at all. Which one of those situations am I saying we're in?

The wealth you're referring to is mainly hinged on the monetary system in place. Where "money" is printed out of thin air and passed out to the corporations, banks, etc favored by govt. that wealth is largely an illusion.

Well, that describes some of what we refer to as "wealth," but not all. I agree that too much of the economic activity in this country consists of shuffling money around without actually producing anything of value, but that's not what I'm referring to here. I'm talking about the real economy that produces goods and services for market, which still exists even if the financial overlayer has grown too big relative to the whole.

The answer is capitalism and anchoring run away monetary inflation (a gold standard/return to or a serious fed reserve policy change), govt. collusion with corporation/industry and allow people to pursue their passions in true market competition.

How is that going to solve the problem of high and intractable unemployment? That is not a result of monetary policy, but of advancing technology (together with free trade and outsourcing, but an end to the latter would only increase use of the former).

 

[Wry Catcher]

I'm waiting to read a 'true' definition of capitalism. So far the only statements made assert what we have today is not capitalism. How about defining what is capitalism.

Well, as I know you can use a dictionary or encyclopedia as well as any of the rest of us, I'll assume you're looking for the reasons apologists are saying that what we have today isn't "real" capitalism. I can take as stab at that.

Exactly

From my perspective, the most important redeeming feature of capitalism is its ability to decentralize power in society. It does this by keeping political power and economic power separate. That's the whole point of 'laissez faire'. That doesn't mean the government has no part to play - they set the basic ground rules and protect property rights - but otherwise they don't get involved in our economic decisions.

Got it

It's the fact that modern "capitalist" states have largely failed to honor laissez faire that leads me to say that what we have isn't capitalism. More and more we are merging economic and political power - with the state becoming more and more involved in managing our economic affairs, and corporations becoming more and more involved in politics. I think this is a very dangerous centralization of power.

Interesting. At first read I agree with all but your first sentence

That's why it's so frustrating to hear pronouncements that 'capitalism' has failed. We've failed to maintain the separation of political and economic power that is required for capitalism to even exist, so it's sort of hard to see how it's failed.

It seems to me the failure to maintain the separation of political and economic power threatens our democratic institutions and puts us on a slippery slope to devolve from a republic where the representatives represent the best interests (as best as can be determined by honest men and women using due diligence) of all of the people into a republic in name only, where the interests of the wealthy are fully represented and only enough is provided to the hoi polloi to prevent insurrection.

As for total deregulation, as implied by lassiez faire, the consequences of such have been seen in past centuries, where rules were absent the rich got richer, the poor got poorer and the environment suffered. Regulations protect capitalism from the capitalists. To borrow a phrase, it's really that simple.

How much regulation is the question begging for an answer.

 

[TakeAStepBack]

There are numbers larger than zero but less than infinity. Creating wealth with increasingly less and less labor creates high and intractable unemployment; creating it literally with NO labor would mean that nobody is employed at all. Which one of those situations am I saying we're in?

It only frees labor up for other pursuits and changes the dynamic of the division. It does not intrinsically cause "high and intractable" unemployment. Only in the system I have described where govt. is issuiing out "the wealth" through a terrible monetary policy and intrusion into the market creating monopolies in vast amounts of industries does high unemployment become intractable. There is no technology available to build, maintain and run itself be it information tech or automation. So there will never be a zero sum of labor and diminishing high unemployment is about freeing up the market to all participants as earlier indicated.

Well, that describes some of what we refer to as "wealth," but not all. I agree that too much of the economic activity in this country consists of shuffling money around without actually producing anything of value, but that's not what I'm referring to here. I'm talking about the real economy that produces goods and services for market, which still exists even if the financial overlayer has grown too big relative to the whole.

This is self answering. That "overly" as you call it, is the reason we see a vast of amount of "wealth" being concentrated in fewer hands. It's the pay your govt. to play system. Central planning squeezing the life out of the markets (which is simply people in exchange and in pursuit).

How is that going to solve the problem of high and intractable unemployment? That is not a result of monetary policy, but of advancing technology (together with free trade and outsourcing, but an end to the latter would only increase use of the former).

No, it is not. Unemployment is not a result of technological advance. History has shown us this. It is the crippling of competition and the pooling of "wealth" in fewer and fewer hands that is causing this. Coupled with smaller capital vnetures being pushed out by govt. intrusion to keep their favorites without more competition, but with less. We see this in almost every industry today. Capitalism (a free market) changes that dynamic, but in order for it to happen govt. must adhere to sane monetary policies as well as keep out of business and let the market do the planning (which is everyone) instead of a few bureaucrats.

 

[Intense]

Arguments by definition are a way of dodging an issue. Unless the subject is linguistics and nothing else, they are always fallacious. At most, they make the point "you are using the wrong word," which is a nit-pick, not a real criticism.

Look, here is what I'm saying, avoiding the word "capitalism" altogether.

The economic system we have today is dependent on full employment to work. That's what allows wealth to be distributed to the people, and (sometimes with help from things like labor unions and government regulations) creates rising standards of living for most people as productivity improves.

However, advances in automation and information technology are decreasing the need for labor to produce wealth. We are entering an economic situation characterized by persistent and intractable high unemployment. This breaks the implicit social compact. Without full employment, we cannot (under the present economic system) see rising standards of living for most people. Instead, we will see (and are seeing) great riches flowing to a very few, while most people's standards of living decline.

For that reason, the economic system we have now is failing, and will be replaced with something that will generate rising standards of living for most people.

It will not be replaced by an ideal free market, either, as that would not solve the problem of production of wealth without much labor.

That's what I'm saying, expressed without using the word "capitalism" at all, thus illustrating that what that word means is quite irrelevant here. Now, if we could discuss the idea itself instead of engaging in linguistic cheese-paring, I'd appreciate it.

Arguments by definition establish rooted foundation.

 

[Dragon]

It only frees labor up for other pursuits

What other pursuits? Economic productivity (that is, production of real wealth) falls into three categories: agriculture, manufacturing, and services. When only agriculture was automated, farm workers moved into the factories. When manufacturing became automated, factory workers moved into services. As services are now being automated, jobs are simply disappearing and not being replaced. There is no fourth category.

There is no technology available to build, maintain and run itself

That's actually not true. Software can now write software. Human input hasn't totally disappeared and may never completely disappear, but it is being reduced there just as in everything else.

This is self answering. That "overly" as you call it, is the reason we see a vast of amount of "wealth" being concentrated in fewer hands.

Frankly, I think you're reversing cause and effect here. The reason why we see so much financial game-playing is because of an excess of capital accumulation. Capital will be invested in production of real wealth only to the extent that consumer demand is believed to exist for the goods and services to be produced, which in turn is a function of income equality. As income becomes more unequal, the ratio of capital to consumer demand increases, and that means increasing amounts of capital will go into non-productive areas where a "return" can be achieved independent of consumer demand.

 

[TakeAStepBack]

What other pursuits? Economic productivity (that is, production of real wealth) falls into three categories: agriculture, manufacturing, and services. When only agriculture was automated, farm workers moved into the factories. When manufacturing became automated, factory workers moved into services. As services are now being automated, jobs are simply disappearing and not being replaced. There is no fourth category.

Innovaiton for new ideas as one "fourth" category. You seem to be of the impression we have no where else to go but laterally here. That's short sighted. If it wouldn't cost me massive amounts of time, I would break down each case you provide categorically and show that govt. subsidies.regulatory measures is what causes the accumulation in an industry to push others out of corner a market. Agriculture is a good example of this. That concentrates the capital as well.

That's actually not true. Software can now write software. Human input hasn't totally disappeared and may never completely disappear, but it is being reduced there just as in everything else.

It is true. Computers are not set up and left to run independently indefinitely. Quite the opposite. the larger the formation, the more hands required to maintain a system in this instance. Softwares that write their own codecs still require labor hands to, the production of the hardware, the energy, set up, maintenance. There is never a zero sum in the labor pool regardless. Diminishing labor need in one area still frees it up for other pursuits. it does not cause intractable idle hands unless those hands have no ingenuity, no drive and most of all, no capital expenditure ability.

Frankly, I think you're reversing cause and effect here. The reason why we see so much financial game-playing is because of an excess of capital accumulation. Capital will be invested in production of real wealth only to the extent that consumer demand is believed to exist for the goods and services to be produced, which in turn is a function of income equality. As income becomes more unequal, the ratio of capital to consumer demand increases, and that means increasing amounts of capital will go into non-productive areas where a "return" can be achieved independent of consumer demand.

I have the opposite opinion. It seems you are confusing cause and effect. You're right about consumer demand. So when the concentration becomes so great that very few can afford a product, even if it is in high demand, what is to happen from there with production? That wealth disparage will cause, under normal free market conditions failure in businesses that produce goods/services. Setting the stage for new production. The areas you speak of in throwing capital into "nonproductive" outlets does not exist. Even in the world of finance and stock exchange, shares are driven on true commodities, products, etc...the entire financial world comes to a siezing hault without production. So there will be no outlet in that regard if very little true production ever occurred.

It's like putting the carrage before the horse.

 

[EdwardBaiamonte]

increasing amounts of capital will go into non-productive areas where a "return" can be achieved independent of consumer demand.

how is that possible? Does the return come from the Girl Scouts?? Please tell us where it comes from.

 

[Brutus]

Regulations protect capitalism from the capitalists. To borrow a phrase, it's really that simple.

of course capitalism itself is the most stringent regulator of all. We have the least government regulation , the most capitalist regulation( 10,000 bankruptcies a month) , and the highest standard of living in human history.

A liberal will have no where near the intelligence to understand that, sadly.

 

[Brutus]

How is that going to solve the problem of high and intractable unemployment? That is not a result of monetary policy, but of advancing technology (together with free trade and outsourcing, but an end to the latter would only increase use of the former).

Of course if advancing technology caused unemployment, unemployment would have been 100% 100 years ago. To a liberal it is something impossible to understand.

In a free market there is no unemployment since supply equals demand . Again a simple concept but not one a liberal can understand.

If you want to nudge jobs here make unions illegal again and ship 20 million illegals home! There's 25 new million jobs with upward wage pressure in a flash. Sadly, again, way over a mere liberal mind.