Supporters of capitalism are crazy, says Harvard

reply to post by Techsnow


no, poor education and ignorance are. But thanks for making that point.

I'm a capitalist.

What we have in today's market is not even close.

In capitalism, you create incentives for the things you need in order to increase overall wealth. That would imply that the 40-1 leveraging, the wholesale exchange of peoples homes for overly risky loans and the subsequent insuring of all of that then would be anti-capitalist, because it does not allow for sustained flows of capital, which capitalists want.

It's tough to be a capitalist, if there is no capital flowing.

This isn't a flaw in capitalism people... that's much too short sighted. This is a flaw in those who had the responsibility to maintain conservative and sustainable growth in capital flows.




[edit on 21-3-2009 by HunkaHunka]

reply to post by Frankidealist35


Aye carumba! Free Market Fundamentalism is what buggered everything up!

Here's a littgle tip, when money's involved people can't be trusted. Someone has to monitor and regulate and according to the principles of our Constitution that's what government is for. The problem creeps in when the regulated are in charge of the regulators.

Originally posted by xmotex
reply to post by Frankidealist35

 

Let's turn that around: do you really think that business is free of blame from this problem?

I've said it before and I'll say it again: "pure" free-market capitalism is an ideology, one that just like Marxist state socialism, simply doesn't work in the real world.

AMEN

Originally posted by Frankidealist35
reply to post by drwizardphd

 

Okay, then let's get rid of regulation altogether.

At least then the regulators wouldn't be able to cause more problems.

Uh, in case you hadn't noticed, that's what the agenda has been for the lat 30 years. Get rid of regulation as far as possible. Hows that worked out.

Anyone who trusts a businessman to do the right thing when money's at stake is an idiot.

reply to post by incoherent_television


Brilliant!

“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”

John Maynard Keynes

And I'll tell you all right now that I for one don't believe it. A scarcity mindset breeds greed which breeds evil.

Always.

Originally posted by Illusionsaregrander
Capitalism has precisely the same flaw as communism does.

Both look good on paper, but both fail to assess the implications of human nature sufficiently.

A free market would be a beautiful thing. Adam Smiths model is brilliant. And we have never used it. The portions of it that suit the powerful and wealthy are used, and the portions that do not suit those individuals are discarded.

Same with communism. The portions that suited the powerful were implemented, the portions that did not suit them were discarded.


One of the problems with most people are that they are utterly unaware of what both communism and a free market economy would actually look like, and they believe the propaganda about both systems, rather than actually find out.

Exactly. All these economic theories work in principle but they fall apart in the real world because they fail to address human behavior in the face of percieved scarcity. Even the most decent person will seek self interest - the evolutinary imperitaive - when resources arte limited. Then you get into the pathology of insatiable greed. We live in a society where the measure of a person's worth is the value of the STUFF they have. Everything else is secondary. To expect that a "free" market would produce the greatest good for the greatest number of the members of society in these circumstances is infantile Pollyanna wishful thinking.

Originally posted by HunkaHunka

In capitalism, you create incentives for the things you need in order to increase overall wealth. That would imply that the 40-1 leveraging, the wholesale exchange of peoples homes for overly risky loans and the subsequent insuring of all of that then would be anti-capitalist, because it does not allow for sustained flows of capital, which capitalists want.

Ummmm, no. Thats not really how the theory goes.

The theory is based on the idea that our own natural selfishness and self interest will work toward the greater good under specific circumstances. (where monopolies, oligopolies, and government intervention do not prevent this)

www.capmag.com...

Adam Smith, author of "The Wealth of Nations" (1776) and popularizer of modern economics said about people in general and businessmen in particular, "By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it."

You dont need to create incentives for things you need, you need them. You will seek out and purchase the things you need. You will also seek out and purchase the things you want. Capitalism has a harder time providing for public goods, (roads, infrastructure, etc.) and governments in "capitalist" countries generally take on that role.

Capitalism also has a hard time preserving resources. (the tragedy of the commons)

en.wikipedia.org...

"The Tragedy of the Commons" is an influential article written by Garrett Hardin and first published in the journal Science in 1968.[1] The article describes a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared limited resource even when it is clear that it is not in anyone's long term interest for this to happen.

Central to Hardin's article is a metaphor of herders sharing a common parcel of land (the commons), on which they are all entitled to let their cows graze. In Hardin's view, it is in each herder's interest to put as many cows as possible onto the land, even if the commons are damaged as a result. The herder receives all of the benefits from the additional cows, while the damage to the commons is shared by the entire group. If all herders make this individually rational decision, however, the commons are destroyed and all herders suffer.

The author that I took the first quote from, cites capitalism as being responsible for saving the whales,

www.capmag.com...

When whaling finally stopped at the turn of the 20th century, there were an estimated 50,000 whales left. Surely, if an average annual kill of 15,000 whales a year continued, whales would now be extinct. What saved the whales? Was it a triumph by Greenpeace or early animal rights wackos? If you say yes, put on the dunce cap.

Whales were saved by the self-interested motives of the much-maligned "robber baron" J.D. Rockefeller. The first step was made by Dr. Abraham Gesner, a Canadian geologist. In 1849, he devised a method whereby kerosene could be distilled from petroleum but it took Rockefeller to make kerosene production a commercial success. With his partner Samuel Adams, Rockefeller set up a network of kerosene distilleries that would later become known as Standard Oil.

He is using this one example as evidence that capitalism will preserve resources. But it is a horrible example. We are seeing a coincidence here, that kerosene just happened to be developed at a crucial point in whale history. You can find many more examples of the individual self interest of humans acting to decimate, destroy, and drive to extinction vast numbers of species and environments. Capitalism simply does not work to preserve things. It may coincidentally happen that it does, but that is just a coincidence. Not an expected action of capitalism.

The capitalist thing to do is in this economic meltdown would have been to let the banks fail. Period. Not to try to ensure the capital keeps flowing. Adam Smiths model of capitalism and his "invisible hand" are essentially the same forces that drive evolution. Competition among many individuals, all striving for their own advantage, and the invisible hand being natural selection. In capitalism and natural selection, you let the failures of the process fall by the wayside. You let them be removed from the market, or gene pool.

The problem with Adam Smiths model is the same one that early evolutionary theorists made. It assumes that individual selection is the only driver. But it isnt. Its more complex than that, and there is selection at the group level as well. (which is, by nature, more socialist)

The most successful economic theory will be the one that most accurately reflects reality. What really works. Evolutionary processes DO work. They have been working consistently for billions of years here on Earth. Adam Smith may not have known his system was a reflection of evolutionary theory, but it was. It was, however, an imperfect one. Humans are social animals, and the vast majority of our success is attributable to our social nature. Our capacity to work together, to pass on information and build upon the work done by our ancestors. Our cooperativeness and willingness to sacrifice for the greater good. Capitalism fails to capitalize on this most defining human strength. It overemphasizes individual selfishness, which is a quality we possess, but it neglects to account for and utilize our cooperative social nature and skills effectively.

Communism and capitalism are both failures because they each only take into account on side of the equation. Not both.

Originally posted by sadisticwoman
Come on now, do you really believe that capitalism is synonymous with freedom?
Freedom of what?

REPLY: Religion, assembly, speech, an education among others (did YOU go to harvard?)

"Freedom" to buy from monopolies?

REPLY:If you go to your local mom and pop store exclusively, then THEY are a monopoly, are they not?

"Freedom" to watch your small business get taken over by Walmart?

REPLY: So you didn't grow "your" store enough to be competitive, you decided to close, and it's Walmart's fault?


"Freedom" to barely be able to buy food?

REPLY: Better educate yourself, work two or three jobs, or modify your eating habits. In other words, quit placing the blame on someone else and DO something... take responsibility for your own situation, because THE BEST HELPING HANDS are on the end of YOUR arms.




This (the lead title) is not surprising, actually, since most all of the colleges are Socialist/Marxist anyway. It just shows you that college "educations" are useless for the most part, and yet people of generation "DUH" hired a Pied Piper that supposedly graduated Harvard to lead our country into destruction. Harvard, Yale, Cornell, Berkley........... raze them to the ground, drain the swamps, and start over.

Capitalism works better than any other economic model yet devised. (Show me different). American Capitalism has raised the baseline of human existence, in a shorter time, higher than it's ever been in our entire history, and will continue to do so unless government sticks it's weenie in the soup, which is what happened and we are now in the economic situation we find ourselves in.

True, America consumes about one third of the energy produced in the world, but we feed the world, we cloth the world and we heal the world. What does Socialism, Marxism or Communism do? You need to find out, because America is now headed in that direction in a big way, thanks to the anointed one currently (possibly illegally) in office.

Originally posted by Henry Fnord
“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”

John Maynard Keynes

And I'll tell you all right now that I for one don't believe it. A scarcity mindset breeds greed which breeds evil.

Always.

This is horribly misinformed. Also, the Keynes school of economic thought is quickly losing its tenure.

There is always greed. That's what you get when you put 6 billion individuals in a relatively closed system. Limited resources will always result in the emergence of a system of prioritization. If you have a large set of relatively identical individuals, at least in terms of biology, then a commonality will emerge in terms of such prioritization. People will always be drawn towards a particular set of goals, such as wealth, prestige or power. Not everyone gets those things; such is reality.

The thing with economics is that you should not describe the world as it ought to be, rather how it can be managed in terms of a preexisting set, or ideal type, of particular agent attributes. You can't change the human psychology, you can't change how we perceive the world, nor can we currently change genetics to such an extent that, for example, we no longer require food or sleep to operate. And even if that were your goal, it would be awfully difficult. Now, I don't want to play the Hitler card, but if you look at this case independently of whatever political rhetoric allows for me to make such a compelling argument based on his identification alone, then this is quite a good example. Hitler attempted a normative solution to society and history through the introduction and development of cultural reeducation. He systematically prioritized particular attributes based not on positive emergence, but on an artificially designed ideal type. It failed downright. His plan entailed genocide, forced acculturation and the elimination of probabilistic randomness. It was impossible to control, and so naturally the world responded aggressively. His goals were incompatible with existing social and economic equilibria.

So what's better than capitalism? Some have suggested a resource-based society. It doesn't seem far fetched to me. It could be constructed relatively non-pervasively, however, that would require a tremendous amount of technical expertise. That demand for expertise would place a selective pressure on cultural attributes most conducive to the development of such a system. So that is why I fear the emergence of some form of cultural or design-based orientation toward a specific set of participant, or agent attributes. That system would naturally collapse on itself.

Originally posted by HunkaHunka
I'm a capitalist.

What we have in today's market is not even close.

In capitalism, you create incentives for the things you need in order to increase overall wealth. That would imply that the 40-1 leveraging, the wholesale exchange of peoples homes for overly risky loans and the subsequent insuring of all of that then would be anti-capitalist, because it does not allow for sustained flows of capital, which capitalists want.

It's tough to be a capitalist, if there is no capital flowing.

This isn't a flaw in capitalism people... that's much too short sighted. This is a flaw in those who had the responsibility to maintain conservative and sustainable growth in capital flows.




[edit on 21-3-2009 by HunkaHunka]

This is too often ignored. When people begin to confuse failures in the inextricably interrelated world political and economic systems, for failures of market capitalism itself then we enter dangerous territory. We are clearly using two words in the place of one. This was apparent in the Communist movement in the early 20th century and beyond. People would use the word "capitalism" as a pejorative describing a corrupt, ineffective and most importantly hypocritical way of life. It certainly ruins my mood when people use term "capitalism" interchangeably with the actual system of capitalism.

Anyway, it's clear why the system is failing and why people are now criticizing it. If you take the game theoretic approach, you can easily see that short-term rationality is a dominant strategy. Well, what the hell! When was that ever the sane approach? It shouldn't be. Our entire modern society is based on the long term. When you're in college, you pursue for the most part a rather intangible education. How do you know exactly that you're safe studying for twelve years to become a doctor? For one, you believe in the system. You believe there will be some kind of demand for your expertise in the future (a decade is a very long time to believe in such a thing); you believe that the world isn't going to go up in flames by the time you're prepared to make a living. What about investment? The 401k's?

Basically, the expected utility of going with your gut is higher than that of conformity. At this point, we've entered a social dilemma, where our best self-interests outrank the natural emergent properties of society. This will ultimately affect normal economic stability. This is a problem, but the solution lines in identifying what exactly is causing stable strategy equilibria from totally inverting upon themselves. The only way to readjust our perception of reality is to deflate psychological fear, or to somehow encourage confidence. Unfortunately, this can't be done unilaterally. As is evidenced by this discussion, everyone has a hard time believing in the actions of any government-inspired policy. I think this whole mess will require a lot of individual effort, especially risk-taking on the stock market by those of us who have capital to spare. All this will take is a single invention. Some company, such Microsoft in their early days, to change the world and spark demand for American production. For the last thirty years, this country has been riding on the back of silicon valley. If we fail to produce anything significant in this new global marketplace, then we are bound to fail.

[edit on 21-3-2009 by cognoscente]

I'm linking in this thread for relevance and interest.

I've linked to the middle of page 2 of the thread; there are some good responses that come before that, but that's the start of the real meat of the thread: a discussion between TheRedneck and ANOK (with contributions from some others, notably Rigel, also) on socialism and capitalism that's among the absolute best I've ever seen on ATS.

reply to post by Frankidealist35


when ats is going to let us give thumbs down not only up...?

Originally posted by Logarock

To me, in many cases labor is really after becoming little shareholders. There justifications are no different really than the stockholder. In other cases labor does believe that entities must serve them in their quest for higher standard of living.

Therein lies your basic misunderstanding of capitalism. You are running with the propaganda handed to you by corporations. You seem to be assuming that self interest is good if and only if that self interest is corporate. Thats not what free market capitalism assumes.

Labor also owns an input. That input being energy. They are entitled in a free market to the same considerations of self interest a business owner is. In this case, to sell their energy, time, labor for a price that meets the costs of making that labor available. (and they hope, like any business, to profit)

You seem to be saying that self interest is good when a business holds it, but not good when an owner of a resource holds it. And specifically, you seem to be coming down against the owners of the resource that is human energy. Labor.

reply to post by zappafan1


And how about those who do all of those things, and still struggle? How about those who work dangerous jobs and die working them, but since they didn't make more than minimum wage, they can't leave enough money to cover his funeral, let alone enough money for his family to care for themselves?

How about those too sick, too weak, or handicapped?

I personally know people who work 3 jobs, and their whole family is miserable and they're STILL barely making it.

Originally posted by cognoscente

There is always greed. That's what you get when you put 6 billion individuals in a relatively closed system.

No its not. Greed has nothing to do with how many of us there are. There has been greed since there were 100 million of us, as was the case for most of human history. Greed is a built in drive. And it operates regardless of scarcity or number of people. In some it is the dominant drive, in many it is subordinate to the drive for collectivism. Individualistic greed got us to a certain evolutionary level, but it was our ability to cooperate that has taken us to the level we are now at. Greed is becoming maladaptive for the species, where at one time it was adaptive. Thats the thing with evolution. What works at one point in time, in certain conditions will not necessarily always work, every time in every condition.

Originally posted by cognoscente
The thing with economics is that you should not describe the world as it ought to be, rather how it can be managed in terms of a preexisting set, or ideal type, of particular agent attributes.

I agree. That is what economics should do. But it doesnt. Economics like all sciences cannot deal with reality as it is because we dont know it fully enough. It is full of assumptions that are just not compatible with reality.

Originally posted by cognoscente
You can't change the human psychology, you can't change how we perceive the world, nor can we currently change genetics to such an extent that, for example, we no longer require food or sleep to operate. And even if that were your goal, it would be awfully difficult.

You are right. But then when you talk about Hitler, you seem to be making an entirely different argument.

Originally posted by cognoscente
He systematically prioritized particular attributes based not on positive emergence, but on an artificially designed ideal type. It failed downright. His plan entailed genocide, forced acculturation and the elimination of probabilistic randomness. It was impossible to control, and so naturally the world responded aggressively. His goals were incompatible with existing social and economic equilibria.

Are you saying that human society (including economics) should be designed taking into account human psychology? And, presumably, designed to serve it? Fit with it well? Or are you saying that "existing social and economic equilibria" are what economic theory should be designed around? How are you defining social and economic equilibria? I mean it does sound very impressive. But what do you mean by that? Because society and economic conditions are not resting in a state of equilibrium, not now, and not ever.

Economic equilibrium

Social equilibrium

Equilibriums are temporary resting points until change happens. Great in theory, not so practical in reality. Change is always happening.

Originally posted by cognoscente
So that is why I fear the emergence of some form of cultural or design-based orientation toward a specific set of participant, or agent attributes. That system would naturally collapse on itself.

You mean like ours is?

Originally posted by cognoscente
This is too often ignored. When people begin to confuse failures in the inextricably interrelated world political and economic systems, for failures of market capitalism itself then we enter dangerous territory.

Why? Is it reasonable to separate politics from economics? You yourself say they are "inextricably interrelated" so how is it a mistake to consider the failure of this system as a failure of market capitalism? How is it rational at all to pretend that something that is inextricably interrelated can be separated out and considered as stand alone issues?

Originally posted by cognoscente
Anyway, it's clear why the system is failing and why people are now criticizing it. If you take the game theoretic approach, you can easily see that short-term rationality is a dominant strategy. Well, what the hell! When was that ever the sane approach? It shouldn't be. Our entire modern society is based on the long term.

You bring up very impressive sounding theories, but then you fail to apply them correctly. Our society is not based on long term considerations. Our approach to resources, (use and allocation) population, hell, even the market idea of double digit growth and expansion being possible long term is utterly ridiculous in a closed system like Earth with limited resources. Virtually nothing we do is based on long term considerations. Free market capitalism does nothing to encourage long term rational decision making. Wall street with it rapid rises and falls actually encourages the opposite, quarter to quarter thinking and strategizing to drive up stock prices in the short run often at the expense of the long term good of the company.

Originally posted by cognoscente
For one, you believe in the system. You believe there will be some kind of demand for your expertise in the future (a decade is a very long time to believe in such a thing); you believe that the world isn't going to go up in flames by the time you're prepared to make a living. What about investment? The 401k's?

Two things. One, a decade is not really long term. Not for a culture, or nation, or economic system. Two, what does belief have to do with reality? Right now people are having to retrain to stay employable in many cases. Their college bets are not proving viable. Investments and 401ks are being decimated. Those bets are not proving viable. I am sure they believed they were doing the right thing, and they believed in the system. But what did that end up having to do with the facts?

Originally posted by cognoscente
This is a problem, but the solution lines in identifying what exactly is causing stable strategy equilibria from totally inverting upon themselves. The only way to readjust our perception of reality is to deflate psychological fear, or to somehow encourage confidence.

Why? Why should people whose life savings have all but vanished not be afraid? How is that logical for them? And why should we readjust our very reasonable reaction to economic collapse for the second time in 100 years to a state of calm confidence and trust?

Originally posted by cognoscente
All this will take is a single invention. Some company, such Microsoft in their early days, to change the world and spark demand for American production.

How would this help us? The labor would be sent overseas where it is cheaper. So it would not necessarily bring jobs. The company would be multinational, not American. How would a single invention of any kind in any way help America? I simply cannot follow your logic here. Perhaps if the inventor, patent owner or manufacturer refused to produce outside the US it could help us. But who who would be that loyal to America if they could produce it more cheaply overseas? Capitalism doesnt foster loyalty to a nation. (or company, or product, or anything) Loyalty is a socialist tendency.

Originally posted by Illusionsaregrander
Why? Why should people whose life savings have all but vanished not be afraid? How is that logical for them? And why should we readjust our very reasonable reaction to economic collapse for the second time in 100 years to a state of calm confidence and trust?

Why did this collapse happen in the first place? I think all our economic growth was occurring, at least on paper, in a financial market place based on relatively little wealth. People would rather make a buck on the derivatives market than invest in something tangible that might return an investment over time. If there were another Microsoft then perhaps Americans would invest and profit off something that actually produces significant wealth.

I never meant to imply we should just suck it up and deal with it. There's a reason people are afraid. I was merely describing what was happening. I have a habit of describing the absolute mundane in complex terms. It seems to annoy people actually...

Originally posted by Illusionsaregrander
Equilibriums are temporary resting points until change happens. Great in theory, not so practical in reality. Change is always happening.

Some degree of change occurs. But I often wonder why we've been experimenting with some form of market economy for well over two thousand years now, starting with the the Phoenicians. That strategy seemed to dominate for a very long time. I think society's consistent tending toward this system shows how it's most conducive to natural human affairs, considering our circumstances. I wonder why agricultural societies so quickly replaced the ostensibly much more efficient short-term hunter-gather mode of consumption. Agriculture should have at least seemed totally counter-intuitive in the short run. In that case, I assume the productivity of a large society was favored above the efficient feeding of individuals. Long-term over short-term.

Originally posted by Illusionsaregrander
How would this help us? The labor would be sent overseas where it is cheaper. So it would not necessarily bring jobs. The company would be multinational, not American. How would a single invention of any kind in any way help America? I simply cannot follow your logic here. Perhaps if the inventor, patent owner or manufacturer refused to produce outside the US it could help us. But who who would be that loyal to America if they could produce it more cheaply overseas? Capitalism doesnt foster loyalty to a nation. (or company, or product, or anything) Loyalty is a socialist tendency.

You're right. I don't know why I said that.

See my thread about the globalization of productivity:
www.abovetopsecret.com...

You probably wonder why I'm not defending myself. I'm going through a lot of personal stress at the moment... but I can definitely see where I was simply spouting off theory.

[edit on 22-3-2009 by cognoscente]

Originally posted by cognoscente
Why did this collapse happen in the first place? I think all our economic growth was occurring, at least on paper, in a financial market place based on relatively little wealth. People would rather make a buck on the derivatives market than invest in something tangible that might return an investment over time. If there were another Microsoft then perhaps Americans would invest and profit off something that actually produces significant wealth.

There is at least one very good theory that should be considered when asking "why" this happened. It was proposed by the person who helped sort out the last collapse.

en.wikipedia.org...

Marriner S. Eccles, who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from November 1934 to February 1948, detailed what he believed caused the Depression in his memoirs, Beckoning Frontiers (New York, Alfred A. Knopf, 1951)[31]:

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. [Emphasis in original.]

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spend by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

Emphasis in bold my own.

It is eerie to read that knowing that he was talking about the last Great Depression. Not our current situation. Because humans are by nature predisposed toward short sightedness, a sort of intellectual myopia, we not only fail to predict the future consequences of our actions, we also fail to see the cause of our present crisis. We look at the housing bubble, or we look at something that happened in the 5-10 years preceding the collapse. We dont look backward far enough.

The current crisis had its beginning probably closer to 40 years ago. It just crept up on us, as it took a while for the policy changes to have their full impact on society. Something to consider, the polices that were implemented to pull us from the last Depression, (which worked, by the way) were removed in the 1970's and 1980's in large part.

en.wikipedia.org...

Most New Deal regulations were abolished or scaled back in the 1970s and 1980s in a bipartisan wave of deregulation.[28]

Here we have a correlation. Which does not prove causation, but it does merit a very close look. Weaken the incomes of the working people in a consumer economy, then offer them expensive credit that further weakens their position, and then everything that depends on those consumers collapses when they do. Break their unions, send their jobs overseas, encourage cheap illegal immigrant labor, whatever means you can think of, and then allow lending that is predatory with outrageous interest rates so that you can continue to profit from their spending, and guess what happens. Both times. You have that same "suction pump" operating to siphon wealth off in two directions from the working class. One, you undermine their earning capacity, and secondly, you loan them the money you have made in increased profits by cost cutting (labor cost reductions) at exorbitant rates and get them on the other end as well.

It is an utterly irrational and short sighted approach to economics.

Now mind you, I am not saying that individual people should not be responsible for their own borrowing. They should. But you certainly cannot place the blame on the working class for all of this. What happened was not their design. If they had designed it, they would have kept the jobs and good wages and they would have bought with cash, not credit. Their self interest would have operated in their favor had it been allowed to. Had our government not become absolutely enthralled, ( and I mean enthralled in its more archaic usage) to the version of a free market being sold to them by their rich friends.

Originally posted by cognoscente
I think society's consistent tending toward this system shows how it's most conducive to natural human affairs, considering our circumstances. I wonder why agricultural societies so quickly replaced the ostensibly much more efficient short-term hunter-gather mode of consumption. Agriculture should have at least seemed totally counter-intuitive in the short run. In that case, I assume the productivity of a large society was favored above the efficient feeding of individuals. Long-term over short-term.

Because there is variation in our species. Not all humans are equally short sighted. I am willing to bet that at the time some individual discovered the art of planting crops intentionally, they were laughed at and mocked by the majority. Much like the Grasshopper mocked the hardworking Ant in that fable. Until it worked. And the mockers saw the mockee happily eating a surplus of grain they had stored away in the less favorable times of years.

Humans may be short sighted, but we arent completely stupid. If something works, and it is in the short term, (one year cycle) we dont hesitate to adopt it. It takes us longer to figure out longer term issues like the problems certain types of farming create by depleting the soils. The cause effect chain is too long for most of us to catch on to. Much like the cause effect chain that causes our economies to collapse.

We are calling what we have now by a label, "free market" but what we actually have is the exact same unstable and prone to collapse system that we have had throughout most of recorded history. One where a group of wealthy and powerful people manipulate the rules of society overtime to favor themselves, (which again, is NOT a free market) and they them marginalize the working class into as abject a state of poverty as the working class can stand until their is an uprising. (When credit is not available and slavery or serfdom is legal) or an economic collapse, (when credit is available and slavery and serfdom are not legal.) Depending on the politics of a nation you can end up with economic collapse or revolution but what you should notice is the remarkable similarity of the conditions that lead to both ends.

That similarity being, allowing wealth and greed to dictate policy and law. Allowing those who reach the top of the game first to thereafter ensure the invisible hand, or natural selection, never again touches them.

We could have a free market. I think any successful economic system MUST include this type of competitive market movement. But it also has to account for, and correct for the natural human desire to rig the game in ones own favor. The natural human tendency to make the free market anything but free. Which is why I admire and laud Plato's Republic so highly. It is the only system ever devised that I am aware of that allows for the one, (the free market) and not the other, (the rigging of that market into a non-free state.)

The free market in its purest form is attractive to us because it reflects the action of nature. That evolutionary force. And it does allow for some pretty awesome things to occur for our species. But not when the invisible hand is handcuffed. That force has got to be allowed to operate, and it is not the working class that tie that hand. History has shown over, and over, and over, precisely who is the one with the set of handcuffs. The wealthy. They should be allowed to become wealthy. That is the nature and beauty of the free market. To allow people to rise to the level their intelligence and effort merits. But they should not be allowed to ensure they stay there indefinitely.

Originally posted by cognoscente
I'm going through a lot of personal stress at the moment... but I can definitely see where I was simply spouting off theory.

You have a fine mind even under stress. I am honored to argue with you

reply to post by cognoscente



Just call it for what it is: some people are more intelligent at hunting and farming than others. Those who aren't as intelligent must find alternate means to attain provisions. Sometimes this comes from bartering objects like fish or butter. Sometimes it comes from providing a service. Sometimes it comes from deception (by the way, deception plays a big part in natural order). All of these things must be evaluated. An easy way to express value is through the use of money.

Lots of things besides agriculture require a scientific consensus.

Over-regulation occurs when keeping people in check becomes part of the problem. This can manifest in a number of ways:

• Value of goods and services stagnates
  
• Value of labor stagnates
  
• Production becomes unreasonably inconvenient
  
• Enforcement becomes unreasonably inconvenient
  
• Overall quality of life seems to decline
  
• Value of enforcement declines
  
• Authority is undermined
  
• The people rebel or revolt
  

Saying that everybody should be equally tyrannized is socialism, sorry.

There will always be a segment of the population who are not able to perform up to par. Failure occurs when there isn't enough available capital, usually because a large segment of the population has pulled out their resources in a relatively short time span.

Whoo, go Harvard! I wonder whether Harvard researchers have found a good alternative for (non-free-market) capitalism.