Why Capitalism Fails

reply to post by GreenBicMan


I'm being sarcastic.

Perhaps it doesn't come through in text like I thought it would.

reply to post by GreenBicMan



Adam Smiths free market was an early (pre Charles Darwin, but not pre Erasmus Darwin ) description of the forces of natural selection. Only he did not apply it to biology, and individual animals alone. He did consider individual people, but also the businesses themselves. It was imperfect, his description, because the idea was so new, and theoretical, and we had not yet had the chance to observe the workings of it objectively in biology, but he managed anyway to come up with a fine and coherent description of it nonetheless.

To the degree we can make a market act like natural selection acts upon biological creatures, it will meet that ideal of a free market and you will see, (as in nature) excellence rewarded. He struggled, even then when kings were the norm, with how to keep the free market free. He understood that self interest would also lead people to try to make the markets unfree. Fortunately for us, another brilliant thinker thousands of years earlier, had also been thinking along the same lines in his "Republic." Plato.

Both of these figures are well known for being inspirations for OUR republic and its economic system. But because we havent really seen what they were saying for what it is, and called it by the name "natural selection" we have failed to implement the conditions necessary for the benefits they predict. Or, because America was such an even playing field at first by virtue of being a new settlement and new country, we happened into the circumstances necessary, and over time, the self interested have been busily erasing those conditions.

Adam Smith did not realize he was describing "natural selection," it had not yet been further elaborated upon by the younger Darwin at that time, nor was it called that, though the rudimentary idea was freely floating around the university and among the intellectuals in the region. He did not really see the problem of inheritance, though he did see the need to keep governance from playing favorites. But Plato did see the problem with inheritance. He both knew he was describing natural selection, (which the Greeks were already working on) and he saw the problem of inheritance, and understood how that would spoil the conditions of a free market.

(Plato's Republic is also a free market, in case you are not familiar with it, and it spends a good deal of time working out a system by which anyone of excellence can rise to the level they merit.) Meritocracy is another word for "free market" or "natural selection" they are all describing the same system, the same dynamic that produces excellence, and allows excellence to rise to the level it must to benefit the group.

In order for this to make good sense, you have to have both a good understanding of natural selection, and have a working understanding of Adam Smith works, and the endless bastardized versions of his ideas from others will not suffice. If you have both, you can easily see them for one and the same. Understanding what Plato was doing in the Republic is just icing on the cake because you get to see how he remedies the things that Smith could not have foresaw with the more primitive understanding of natural selection he was working with. (Thanks to the church)

By overlaying these three systems, and by using the new information we have gained since they have all died, it is easy to see what is wrong with our system, why it doesnt act the way we think we want it to. There is no mystery at all. We are deliberately subverting the system at essentially every turn, and because even those who the system is set up to work against selfishly hope to subvert the system if by chance they ever get in a position to, no one wants to fix it.

It worked so well in America for a while despite our lack of understanding because we happened into (almost) the perfect circumstances. But that "almost" (our legal system derived from a system that was far from a free market) has acted as it had to to subvert those initially favorable circumstances. And, all the "fixes" we have put in have been equally wrong minded, as they have all been based on a misunderstanding of what it is we are trying to fix, and how that would have to look.

A truly free market looks terrifying. It isnt. It would be wonderful. But because it doesnt promise an advantage that can be guaranteed, to anyone, it looks horrifying. (Even though as you pointed out, advantage is never really guaranteed.) It is still the best, safest, and most productive system possible, because it is based on something proven by nature to work, and work well, for millions of years.

Even Plato realized implementing his system was virtually impossible. He knew that to overcome established advantage and fear was almost a pipe dream. But he was right. Darwin was right. Smith was right. It IS the most perfect system. And it would work. And we can understand it. We just have to want to.

reply to post by mnemeth1


Thats what I thought.

Because no doubt I am certainly jealous.

Reply to post by zroth

I'm just curious how you would expect a society to advance and get better without capitalism? On an equal playing field for all how many advances would be made? Unless you want a hitler type leader enslaving scientists and workers and well basicly the whole society. Sorry I don't want a government watch dog it's already bad enough.


Posted Via ATS Mobile: m.abovetopsecret.com

reply to post by Illusionsaregrander


That was a lot of words.

I think if I may offer some advice. You are a victim of over thinking things. I am guilty of the same in a lot of aspects in my work. When I over think things I lose money. Fortunately, our thoughts/creativity/opinions are all free (to an extent). I just don't think your 10,000 word essay really portrays the reality of the situation.

I just cannot see though for the life of me why we should reward the wasteful and punish the smart. I know you argue for other points, but in the end this is really the case IMO if we played by your rules.

Originally posted by FritosBBQTwist
reply to post by queenannie38

 

We would have monopolies ruling everything.

i don't mean not any laws or regulations about business, because that's impossible.
there can, and should, be laws about monopolies and fair business and honest advertising, but the laws, once made, should be good without alteration, pretty much, like everything else.

but the government has so much involvement in corporate america and the causes are numerous, but the effect is that rulings reflect the interest of the parties involved, on the gov't side. it is a conflict of interest in the 9th degree, say, when the president is an oil man. we end up waging war on another country because they have tons of oil!

the laws that were initially made to protect and uphold the private citizen in business affairs have been convoluted so much that in some cases, it is a 180 degree turnaround!

for example, what they did to Bill Gates (monopoly law)
and also, the ruling about the oil well moratorium that was overturned by a judge heavily invested in the oil and gas industry.
Exxon Mobil didn't even pay taxes last year and in fact, got money back from the IRS! legally! and it is the most profitable business ever in US history!

i think there should be separation between bank and state just like church and state.

everyone always wants to criticize the federal reserve system, but who knows what might have happened if it had stayed in the gov't realm?

there must be a third alternative, however, as far as the banks - as long as the feds aren't profiting from the average joe's losses.

Government intervention is necessary.

then we need a new government.

Checks and balances...always needed.

i agree - the concept is beautiful, too, and should work.

somehow, though, it's not been carried out in our present administration. things are too far out of hand in several areas and so things haven't been checked nor balanced.


imo.

reply to post by silent thunder


How can you say that too much capitalism is bad when Hong Kong and Singapore, the most capitalist countries in existence, have zero death by poverty-induced starvation. The poor in those places are well off compared to less capitalist places. If Hong Kong and Singapore moved from about 85% capitalist to 100% you imply there would begin to be or at least a trend toward death by starvation and other terrible effects because you say too much capitalism is bad.

Well then, please show either the logic and/or statistics behind that idea, because I don't believe it. I'm sure the studies show that as support for government extortion goes down, generosity levels go up. Therefore in a purely capitalist society I would expect generosity to increase to the maximum levels and therefore everyone to be in the best possible economic situation when compared to all alternative economy types.

In other words, socialists/communists tend to be stingy because they figure people should go to the government if they need help, and capitalists tend to be generous because they believe people should go to them if they need help.

Originally posted by ExPostFacto
It really speaks truth about the fallacy of capitalism. On paper it sounds great, but in reality, when a few control the plight of many, it will inevitably fail.

And yet American capitalism invented the modern Western World in a mere 100 years, after Europe and Asia struggled for thousands of years to barely bring us out of the Stone Age. There is no part of the world, no culture on Earth that has not been touched and elevated by American innovation in the last 200 years.

We're not here to massage each other's ego, okay? Life is too short — we're here to kick ass and chew bubblegum, and an unmanned drone just blew up the bubblegum factory.

That's why we're here, to compete, to cast the weak aside that the strong may inherit their parking spaces.

That’s called natural selection, of which I’m a big fan, although I’m not a follower of Darwin or social Darwinism, per se. I simply appreciate the Law of the Jungle, Nature’s answer to our whimsical concept of Justice. Where I differ from the social Darwinists of the 19th Century is that I think natural selection should also be allowed to weed out and collapse the financial giants preying on the common man.

Face it, without the multi-trillion-dollar bail outs of the Bush and Obama administrations, a good many of the stumbling, bumbling financial institutions ruling our lives would be bankrupt right now — as they should be in a market economy.

If anything, I’d call my persuasion economic Darwinism. These corporate giants pursuing their worst practices at our expense should be permitted to collapse and be divvied up among the various phoenixes that will rise from the ashes.

In bailing out the financial giants, Bush and Obama merely prolonged our battle with a socialist cancer that is destroying American capitalism.

— Doc Velocity






[edit on 7/14/2010 by Doc Velocity]

Originally posted by Carseller4
This example makes no sense.

What happens if no matter how hard you work in class the highest grade you could receive was a "C", and if you did nothing at all your grade you would receive was a "C"???

Would the ones at the top continue to strive to do more? Would the ones at the bottom even do any work at all?

This would be the result of socialism.

Perhaps in a society where the people have been conditioned to be antisocial and only care about themselves.
I mean look at the sociopathic ego monsters on "My Super Sweet 16"..
It's basically the mentality and mindset of the uber rich psycho elite trickling down as conditioning on the masses.. reflected in almost every aspect of our lives.

I'm afraid it's the decadence signifying a coming collapse of society.

reply to post by GreenBicMan


No, Im really not. I am trying to condense three huge bodies of work into a few small posts. Unsuccessfully I might add, if somehow you are taking away from this the idea that natural selection rewards the wasteful and inefficient, and punishes the efficient and strong.

How can you even get that? I honestly dont know how to address that concern when it is impossible to get to there from anything I have described. Do you have a working understanding of natural selection? I am not being rude, but I do recognize that some people because of religious beliefs, choose not to learn it in school, or are sent to schools that do not teach it.

If you do understand it, how can you get that a system based on it would do what you claim? It is unthinkable that it would.

Originally posted by Doc Velocity

If anything, I’d call my persuasion economic Darwinism. These corporate giants pursuing their worst practices at our expense should be permitted to collapse and be divvied up among the various phoenixes that will rise from the ashes.

Thats what a free market was intended to be. Technically, you are an Adam Smith capitalist, or at least what he was aiming at, with his rough understanding of natural selection. (The idea was in its infancy in his day, still in the formative stages)

reply to post by Illusionsaregrander


I don't know.

Later.

Originally posted by truthquest
How can you say that too much capitalism is bad when Hong Kong and Singapore, the most capitalist countries in existence, have zero death by poverty-induced starvation.

I don't think you can fairly showcase the tiny cities and city-states as examples of economic or political "success," regardless of your political leaning.

I mean, the socialists out there also hold up Singapore as a success story for nationalized health care. Singapore has a tiny population of only about 4.5 million — about the same size as a single major American city (such as Houston, TX).

Point is, you can't really showcase a social experiment on a small scale and claim that it is a role model for a nation of 300 million.

What we know about socialism is that it always implodes when applied to large populations and multinational populations, as in the USSR and EU.

What we know about capitalism is that American capitalism alone brought the entire world into the modern age.

— Doc Velocity

reply to post by Doc Velocity


Would it be a reasonable suggestion that we make the 50 states socialized states, state provided health care, retirement, etc. while removing that from the federal government?

If the argument is 'socialism works on a small scale' then while not 50 'small scales'?

I'd also have to argue the idea that America alone brought the upon the creation of the modern world. Other than the lack of competition during the 20th century can you provide any other examples from...say...the 19th or 18th century?

Originally posted by links234
If the argument is 'socialism works on a small scale' then while not 50 'small scales'?

Because that action would be diametrically opposed to the Global Union agenda. They do not want 50 sovereign American states, each with its own socialized healthcare system — the ultimate objective is to erase the sovereignty of states and of nations, drawing all the people of the world under one Utopian umbrella.

Except that they're learning, and swiftly, that multinational socialism does not work...

Witness the EU's fall from economic grace. Oh, golly, the Euro was going to kick the dollar's ass last year, wasn't it? Now Greece is trying to sell off islands to cover their national debt.

What works in Norway and Singapore and Mauritania IS NOT going to work on an American population of over 300 million citizens. Nationalized healthcare is falling apart in Britain, it's not working in France, and it's sucking wind in Canada and even in Japan.

Let's take a peek at Japan's national healthcare system, courtesy of The Washington Post:

Japan's National Healthcare System Is Unsustainable, Will Match U.S. Healthcare Costs Within 10 years

Ah, so things aren't so rosy in Tokyo. Let's look at Canada's national healthcare system, courtesy of the Canadian press:

Canada's Healthcare System "Imploding" Says President of Canadian Medical Association ...

Oops. Not a pretty picture in the Great White North, either. Let's try the U.K. How's the most heavily funded NHS in the world working out? Courtesy of the UK Daily Mail:

UK Healthcare System Resulting in Bed Shortages, Poor Treatment ...

And courtesy of the Telegraph:

45,000 British NHS Staff Workers Call In Sick EVERY DAY

Ouch. The UK isn't exactly your nationalized healthcare Utopia, is it? No. It's not.

— Doc Velocity

Originally posted by links234
I'd also have to argue the idea that America alone brought the upon the creation of the modern world. Other than the lack of competition during the 20th century can you provide any other examples from...say...the 19th or 18th century?

Consider the premise of the creation of the USA: To provide a shelter, a safehaven, a "shining city on a hill" to which people the world over may escape from the tyranny and oppression of their homelands.

To say that the USA lifted the entire world into the modern age is not a cheap shot at the barbarism and oppression of the rest of the world... Rather, it is testament that people from around the world can, indeed, create a free and competitive environment that can rapidly ascend to power and prominence over their homelands. As long as the government keeps its hands off the pie.

The rest of the world was pulled along by this rise to power of immigrants such as Nikola Tesla, a Serbian genius who, essentially, gave us our modern technological world — but he would never have produced the alternating current induction motor or radio technology or any of the myriad other technologies he patented if not for the very competitive environment of the USA in the mid-to-late 19th Century.

The challenge of competing with and against Edison and Westinghouse and others drove Tesla to heights of technological genius that, frankly, he wouldn't have attained back in Europe.

If you're using AC electricity and a computer right now, you can thank Nikola Tesla, an immigrant to America who brought the entire world at least a hundred years into the future.

— Doc Velocity

The perfect society could be defined as one in which every person lives freely, with their best possibilites ultimately realized to the full. It is more usual in human society for the wealthiest to be free to realize their potential while the remainder have limited time and freedom. Many of these still find the right opportunity, and do well in work that brings out their talents and gives them much satisfaction. But many others lose, or never even know they had, great possibilties within them. They are bound to work at others behest, in circumstance far from ideal, often for long hours, at a return that is marginal once the unavoidable costs of being in that situation are met. And, if we accept the study data, the mere fact of, and awareness of the wealth disparity and social gap by the less fortunate, badly affects their biology and psychology - let alone their access to health care or (expensive) legal rights.

But very few seriously expect anything better, believing society has to be the way it is. The writer for example, grew up with a warm acceptance of the western style capitalist approach. There seemed enough opportunity if you wanted to work hard. People didn't worry about an ideal society, but about what goodies to buy, what house to prefer, what hobby or scheme should one pursue, what style of work should one aim for, what was the latest popular tune, or what film was on, what was everybody else up to, and who likes who, and why am I misunderstood,- and a thousand things that keeps one's mind from questions of economic justice. There were people in trouble or poor, but that of course, was their fault ... wasn't it?
One accepted influence and great wealth, clearly unable to be earned by ordinary useful direct service to others, being in the hands of a small group, because one's own life could proceed reasonably easily whatever they did. It was only later that one realised one had been personally lucky and had worked through a lucky time in the history of the country ... and that usually many are struggling or poverty stricken - even in the countries with the greatest natural resources.
Fortunately for the wealthy, the great mass of people in the middle of the range are kept well enough endowed by the continual build up of knowledge and technological advance (and consequent gradual increase in living standards) to support the status quo. Such also have a possibility of greater wealth if they strive and succeed above their fellows, and therefore accept the system and frown on complainers. The sentiment is that everyone should just put their shoulder to the wheel and it will all work out.
But it will do so largely for those who are at least average or better in position on the economic scale. Much below that, and people discover the general economic advance has increased the cost of access to location and opportunity by as much as they may have gained. The once bonus of a second income in a family becomes a necessity. The tendency is, as in older populous countries, to a sub-class that must permanently rent homes and frequently require welfare.
The real problem with normal capitalism is that it nearly works out well - if it was a clear disaster it would be changed. It is by far, the most likely path of the future. The privileged and stratified society, continuing indefinitely in one form or other, probably with some assistance to the poorest as a matter of conscience.

Perfect society


This is a very good explanation on why capitalism fails... feel free to read the entire thing.

[edit on 14-7-2010 by ldyserenity]

reply to post by ldyserenity


That last paragraph you quoted was too true. The real tragedy is that it almost works. It works just well enough to keep us hopeful, and to keep trying to make this Frankenstein monster of an economic system bumbling along.

Originally posted by mnemeth1
reply to post by ANOK

 

Capitalism doesn't lead to oppression because capitalist systems are purely voluntary.

You can't have oppression in a system of voluntary exchanges.

That's BS. As ANOK said, in a capitalist system all methods of production are owned by the rich. A person may want to drill for oil in his backyard, or start building things out of his garage to sell for profit, however they would need to get licenses and many times go through the paperwork of officially starting a business before they are allowed to do that, and then there are further legal ramifications to consider afterward. Patents, copyrights, and bureaucracy are all the tools of the rich to keep the workers from gaining financial independence and becoming competitors in their system. So it is the rich who set the prices for things, not the worker class. I sure as hell can't influence the prices of things at Wal-Mart, or anywhere else, and neither can any other member of the working class. You try telling the cashier that you don't want to pay 300 dollars for the ipod, you only want to pay fifty. That might seem a fair price to you, but it is not you who decides what the price is.

The rich will pay the working class the least that they can, and when the workers demand more, they take their jobs away and give them to people who are happy to work for less. This is a fact, and we have seen it happen in the United States, as most of our industry has been outsourced to China. As our worker class earns less and less, we are forced to buy the cheapest things we can, however the prices for those things are always set by the rich business owners. I wouldn't call this a voluntary system, and consider that most people cannot support themselves by their land alone; most workers have to buy all of their food and clothes to keep living, else they would suffer and die. Buying necessities is not a voluntary transaction. Unless you consider death to be a considerable and logical voluntary option. I do not.

Then you must consider that there are also legal ramifications for not purchasing certain goods and services, insurance for example. You must buy car insurance or you will lose your privilege to drive your vehicle and may even go to jail. Health insurance will soon follow in that regard. What about taxes? I would love to stop paying taxes, but several different kinds of taxes are taken from my paycheck automatically, without my consent. I can't ask my boss to stop taxing my paychecks, she would laugh in my face. She doesn't have that power.

I would love to live in a society where workers have power over the market, as I know to my core that that would be a much more fair system. But to realize that, workers must control the means of production.

... What kind of system is that called?

While it would be foolish to argue the contributions from Tesla there are a few things I wanted to bring up.

Originally posted by Doc Velocity
The rest of the world was pulled along by this rise to power of immigrants such as Nikola Tesla, a Serbian genius who, essentially, gave us our modern technological world — but he would never have produced the alternating current induction motor or radio technology or any of the myriad other technologies he patented if not for the very competitive environment of the USA in the mid-to-late 19th Century.

Nevermind the fact that he thought of this is the 1870's, along with numerous other electrical engineers. However Tesla was the first to patent the idea...only to sell the patent to Westinghouse who he ultimately worked with, not against.

The challenge of competing with and against Edison and Westinghouse and others drove Tesla to heights of technological genius that, frankly, he wouldn't have attained back in Europe.

I could argue that he already had that genius in Europe, speaking something like 8 languages and having attended (but never completing) at least two universities in Europe and working for years as an electrical engineer for Edison International before migrating to America to work for Edison directly.

All of this only to face the true demon of capitalism by not only not being paid by Edison for his work but also dying with a substantial amount of debt. Using his economic failure and the greed of his rivals, as some admirable example to the greatness of American capitalism is a weak argument, at best.

Yes, while Tesla was a genius, American competetive capitalism was not a friend of his.