Capitalism, the Good Society

[Aquamarine]

Research overwhelmingly shows that the road to long-term reduction of poverty and more wealth for all is more capitalism.
The Fraser study also found that economic freedom is strongly related to poverty reduction and other indicators of progress. The United Nations' Human Poverty Index is negatively correlated with the Fraser index of economic freedom. People living in the top 20 percent of countries in terms of economic freedom, moreover, tend to live about two decades longer than people in the bottom 20 percent. Lower infant mortality, higher literacy rates, lower corruption, and greater access to safe drinking water are also associated with increases in economic liberty. Indeed, the United Nations' Human Development Index, which measures various aspects of standards of living, correlates positively with greater economic freedom.
Nor are those benefits shared unequally. The Fraser study found that there is no correlation between economic freedom and inequality, while a World Bank study has found that the incomes of the poorest 20 percent of the population rise proportionately with the average rise in income.
a recent World Bank study that looked at growth in 65 developing countries during the 1980s and 1990s. The share of people in poverty, defined as those living on less than a dollar per day, almost always declined in countries that experienced growth and increased in countries that experienced economic contractions. The faster the growth, the study found, the faster the poverty reduction, and vice versa. For example, an economic expansion in per capita income of 8.2 percent translated into a 6.1 reduction in the poverty rate. A contraction of 1.9 percent in output led to an increase of 1.5 percent in the poverty rate.
http://www.cato.org/research/articles/vas-0109.html
http://www.freetheworld.com/papers.html
http://www.hazlitt.org/e-texts/poverty/

Yes, child labor, low pay, long working hours and dangerous working conditions existed in the period following the industrial revolution. But the comparison should be made to period before that, a period when population growth was regulated through starvation and disease. The industrial revolution in agriculture and industry made it possible for almost all people to survive, but in the beginning at price of the above.
The reduction in working hour, the part of life in work and working conditions have been due to capitalism, not from socialistic reductions in capitalism. The primary mechanisms have been increased wealth/capita and competition for the workers among the capitalists.

One criticism is that recently the poor in the US has not seen their income rise or rise much less than those with a higher education. However, increasing international trade and competition means that the group for comparison must include people doing similar and competing work worldwide. And that group as a whole, which includes Chinese and other Asians, have had increasing income. Especially when considering that the size of the group suddenly increased very rapidly after the fall of communism.
And it is not possible to protect workers in the US by making those in other countries poorer, for example by tariffs:
http://www.mises.org/fullstory.aspx?control=1429

Further discussion about the apparent rising inequality:
http://www.mises.org/fullstory.aspx?control=1229
http://www.mises.org/fullstory.aspx?control=1230
http://www.mises.org/fullstory.aspx?control=1231

A Malthusian catastrophe as the end of growth has been predicted many times before and always wrongly. Ironically, Malthus formulated his theory exactly when it ceased to work. The industrial revolution (or more correctly capitalistic revolution, since that was primary cause both in agriculture and industry) caused the amount of wealth to increase much faster than population growth. There is no reason that this cannot continue in the future.
http://physicsforums.com/showthread.php?t=46384
http://www.j-bradford-delong.net/TCEH/1998_Draft/World_GDP/Estimating_World_GDP.html

Of course, the capitalistic system must continue for growth to continue. Sadly, capitalism is in retreat in western civilization.
http://mwhodges.home.att.net/intl-spend.htm

[Aquamarine]

Capitalism should be understood as what the various indexes of economic freedom try to measure: Rule of law, property rights, low taxes, few regulations, small state, sound money, and free trade. In short, a state that prevents people from gaining from others though the use of violence, but let voluntary cooperation build the rest of society.

[selfAdjoint]

What job growth in the past few years has been in government. The private sector has shown very little growth and within it, the manufacturing sector has shrunk. The US is evolving into a state that produces little and buys from abroad on credit. See the recent special section on China and the US in The Economist.

[Aquamarine]

What job growth in the past few years has been in government. The private sector has shown very little growth and within it, the manufacturing sector has shrunk. The US is evolving into a state that produces little and buys from abroad on credit. See the recent special section on China and the US in The Economist.
This is true but I am uncertain if you mean that this is the fault of capitalism. That is not the case, it is the decline of capitalism, measured for example by the constantly growing government share of GDP, that is causing real growth to falter. Se the last of the links above. The same author has many more good articles on the current state and future of the US economy.

[russ_watters]

Research overwhelmingly shows that the road to long-term reduction of poverty and more wealth for all is more capitalism. Yeah, as you can probably tell, I'm a big fan. What job growth in the past few years has been in government. The private sector has shown very little growth and within it, the manufacturing sector has shrunk. The US is evolving into a state that produces little and buys from abroad on credit. See the recent special section on China and the US in The Economist. That's socialism and it scares me that we're moving in that direction. The USSR subsisted by selling its natural resources while using massive social welfare to sustain its internal economy. What they did (and we are now doing) is basically financial bloodletting. It needs to stop.

One caveat, I'm not so much concerned about outsourcing low-end job as buying finished-products from other countries. Right now people are outsourcing anything and everything they can. But the pendulum is swinging back: Dell recently stopped outsourcing its support because of the negative respone it got. Of more concern though is the finished-products: buying a Chinese product made in China means both the salaries of the employees and the profits stay in China.

[False Prophet]

I don't understand how we are even close to anything but capitalism, or how we could be moving toward socialism. Two and a half minutes three times per half hour on telivision, a 90 page magazine filled with 40 pages of actual content, commercials not only before the movie, but integrated into the movie, wasted trees on the doornob, mailbox, and under the wiper, park benches with some inconsiderate hobo feeding ducks covering up half of State Farm's phone number, telemarketers, collosally commercial corporate collages covering those stock cars that look like puke if you squint your eyes and those sexy beer-drinking babes in bikinis distracting me into smashing into the car in front of me on the expressway; all of these things pretty much tell me we have a free-market economy.

In fact, outsourcing, importing and exporting are all functions of global capitalism. Competition among the international free market for control of capital fits the definition. I do agree that it is worse for the United States and its economy to import everything from China, Taiwan, etc. but the U.S.A. still does plenty of its own stuff, including electricity, recording music, etc. plus plenty of internal trading (stocks, bonds, currency, etc.) commodities, and a wide range of products that say "Made in the U.S.A.", a lot of these things exported for U.S.A. profit.

[Aquamarine]

Advertising is only a small part of the economy and not inherently evil:
http://www.econlib.org/library/Enc/Advertising.html

The diminishing of capitalism can be seen in such trends as the ever increasing government share of GDP or constantly increasing regulations in all parts of society, making, for example, medical research or energy production constantly more expensive. There is a link for government share of GDP above, here is another for regulation by the same author. (Who has the endorsement of Milton Friedman, one of the most prominent economists of this century).
http://mwhodges.home.att.net/regulation.htm

Free trade is a necessary part of the capitalistic system that has increased wealth for all where applied, including the poorest. However, it should not be denied that capitalism and free trade can temporarily make some groups poorer. One examples would be the very large group of people dependant on horses when the combustion engine appeared. But it would not have been a good idea for society to protect these people by prohibiting the combustion engine. Long term, not even for those states most dependent on the horse industry.
Similarly, certainly some workers in the US can be affected negatively by international competition while competing workers abroad are gaining. But for humanity as a whole, more people are gaining than are losing. And also similarly, a little more long-term, all people in the US will gain from the increased growth from free trade.
http://www.mises.org/fullstory.aspx?control=1429

[russ_watters]

Something else just struck me - it annoys me greatly that one of the biggest complaints people have about capitalism is inequality. Though it is mostly true that the division between rich and poor is bigger in capitalism (unless you compare the peasants to the king...), but so what? Pre-industrial revolution, everyone was pretty much equal -- equally poor. How is that a good thing? In industrialized countries, yes, its true that the rich can be a thousand times richer than the poor, but the poor are a thousand times richer than the poor in non-industrial countries. Do people complaining about the income gap really want us to go back to living in dirt-floor log cabins?

"Equality" is politically-correct B.S. Give me freedom instead.

[Burnsys]

Capitalism has not future with our current money suply system...
Fractional reserve banking is a fraud legalized by the goverment for the private bankers... have Proffs..

Please Read:

Abstract: This paper looks at the history of money and its modern form from a scientific and mathematical point of view. The approach here is to emphasize simplicity. A straightforward model and algebraic formula for a large economy analogous to the ideal gas law of thermodynamics is proposed. It may be something like a new ``F=ma'' rule of the emerging econophysics field. Some implications of the equation are outlined, derived, and proved. The phenomena of counterfeiting, inflation and deflation are analyzed for interrelations. Analogies of the economy to an ecosystem or energy system are advanced. The fundamental legitimacy of ``expansion of the money supply'' in particular is re-examined and challenged. From the hypotheses a major (admittedly radical) conclusion is that the modern international ``fractional reserve banking system'' is actually equivalent to ``legalized economic parasitism by private bankers.'' This is the case because, contrary to conventional wisdom, the proceeds of inflation are not actually spendable by the state. Also possible are forms of ``economic warfare'' based on the principles. Alternative systems are proposed to remediate this catastrophic flaw.

Full Paper (PDF) (http://econpapers.hhs.se/scripts/redir.pl?u=http%3A%2F%2Feconwpa.wustl.edu%3A80%2Fe ps%2Fmac%2Fpapers%2F0203%2F0203005.pdf;h=repec:wpa :wuwpma:0203005)

More simple and short version:
I Want The Earth Plus 5% (http://www.relfe.com/plus_5_.html)

(If you read this text you will understand where this mises.org came from:

The Mises Institute's coat of arms is that of the Mises family, awarded in 1881 when Ludwig von Mises's great-grandfather Mayer Rachmiel Mises was ennobled by the Emperor Franz Josef I of Austria. In the upper right-hand quadrant is the staff of Mercury, god of commerce and communication (the Mises family was successful in both; they were merchants and bankers). In the lower left-hand quadrant is a representation of the Ten Commandments. Mayer Rachmiel, as well as his father, presided over various Jewish cultural organizations in Lemberg, the city where Ludwig was born.)

[Burnsys]

by the way.. you talk about how more capitalism help the poor.... i am from a 3rd wrold country.. Argentina.. and i can tell you, here it didn't help much....
In the 90' our ex president "Liberalized" the economy.. what happened?
Us and europeans banks came in, and with them us and european multinational corporations... the banks gave credits to this corporations and with this credits the corporations buyed our bigest and more rentable industries and companies. That simple.. now we depend on them for everything.. including water, Electricity, comunications, fuel, media, etc. and of course they are no more than 3 or 4 corporations by sector and they bribe our corrupted politicians... so they can charge anything they want. they services are deficient, they have no competition (couse they buy them all with credits), and they are monopolics. in 10 years, 50% of the population are poor and can't access any of these elemental services.

Sorry my english i don't speak very well..
Pd: the same happened in every country of latin america, almos synchronized..
Pd2: in 15 years these companys have no care for the enviroment, my father use to swing in a river called "Riachuelo" now if you dive,, you die... it is so polluted it is BLACK, the soure of the pollution, REPSOL from espain, SHELL from usa, and other..
PD3: why do we have to pay for the oil to US corporations at dolar price, if we export half our production and us imports half of its needs in oil?

[russ_watters]

by the way.. you talk about how more capitalism help the poor.... i am from a 3rd wrold country.. Argentina.. and i can tell you, here it didn't help much.... As already said, it has to be implimented correctly before it can help.

[Aquamarine]

by the way.. you talk about how more capitalism help the poor.... i am from a 3rd wrold country.. Argentina.. and i can tell you, here it didn't help much....
In the 90' our ex president "Liberalized" the economy.. what happened?
Us and europeans banks came in, and with them us and european multinational corporations... the banks gave credits to this corporations and with this credits the corporations buyed our bigest and more rentable industries and companies. That simple.. now we depend on them for everything.. including water, Electricity, comunications, fuel, media, etc. and of course they are no more than 3 or 4 corporations by sector and they bribe our corrupted politicians... so they can charge anything they want. they services are deficient, they have no competition (couse they buy them all with credits), and they are monopolics. in 10 years, 50% of the population are poor and can't access any of these elemental services.

Sorry my english i don't speak very well..
Pd: the same happened in every country of latin america, almos synchronized..
Pd2: in 15 years these companys have no care for the enviroment, my father use to swing in a river called "Riachuelo" now if you dive,, you die... it is so polluted it is BLACK, the soure of the pollution, REPSOL from espain, SHELL from usa, and other..
PD3: why do we have to pay for the oil to US corporations at dolar price, if we export half our production and us imports half of its needs in oil?

1.
http://www.mises.org/fullstory.aspx?Id=1120
http://www.mises.org/fullstory.aspx?control=1472&id=73
http://www.mises.org/fullstory.aspx?Id=868

And many more here:
http://www.google.com/u/Mises?hl=en&submit.x=0&submit.y=0&&q=argentina

2.
The environment unfortunately tend to become a secondary issue for most people when a country is poor. When the country get richer, there will be more protection for the environment.

One thing to ponder: Rivers are usually examples of "The tragedy of the commons", meaning that since the river has no owner (except vaguely a mostly inefficient state), there is no one with a strong interest in protecting the river. Yes, private owner(s) would demand payment for getting drinking or agricultural water, fishing, bathing or otherwise using it, but he would also work to protect it so he could continue to get those payments.

3. I am not sure what you are asking. This may be an answer to your question, otherwise ask again.
http://www.mises.org/fullstory.aspx?Id=1518

[Ba]

Capitilization might work for a country if it is a closed system but when you open it up to have the inequalities of the countries, then I believe you have a problem. A few people from developed countries bring the development into the less developed countries for themselves, and there they have no real competition. Our economy in the US is unstable because manufacturing is outsourced and then they bring it back to sell it to the people in the US for a highly inflated price, at least most of your giant corporations. If capitilism was introduced equally throughout the world everyone standing on the same footing it might work but then again it might not.

[Burnsys]

another thing.. capitalism today is controled by a little group of very very powerfull corporations and banks worldwide, they are the ones who pushes globalization..

for example in america 90% of the media, newspapers, radios etc. is controled by 8 corporations..

Acumulation of power is more dangerous than capitalism or comunism.

about the money..

Why are countrys poor??
for example.. argentina we have food to feed 3 times our entire population, but 30% is starving... The food industry is controled 80% by 5 foreing corporations.

----------------------
"There are four things that must be available for paid work to take place:

-The work to be done.
-The materials to do the work.
-The labor to do the work.
-The money to pay for the work to be done.
If any of those four things are missing, no paid work can take place. It is a naturally self-regulating system. If there is work to be done, and the material is available and the labour willing, all we have to do is create the money. Quite simple."

"Ask yourself why it was that depressions happened. All that went missing from the community was the money to buy goods and services. The labour was still available. The work to be done was still there. The materials had not disappeared, and the goods were readily available in the shops, or could be produced but for the want of money.

-----------------------------
quote:

"The understanding of this issue of money into the community can be best illustrated by equating money in the economy with tickets in a railway system. The tickets are printed by a printer who is paid for his work. The printer never claims the ownership of the tickets … And we can never imagine a railway company refusing to give passengers seats on a train because it is out of tickets. By this same token, a government should never refuse people the access to normal commerce and trade by claiming it is out of money."
---------------------------------------
quote:
Extract from a letter written by Rothschild Bros of London to a New York firm of bankers on 25 June 1863:

"The few who can understand the System (Cheque Money and Credits) will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class. While on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint and perhaps without even suspecting that the system is inimical (hostile, hurtful) to their interests.

The following quotation was reprinted in the Idaho Leader, USA, 26 August 1924, and has been read into Hansard twice: by John Evans MP, in 1926, and by M.D. Cowan M.P., in the Session of 1930-1931.
-----------------------
again:
http://www.mises.org/ is a banker controled website:
The Mises Institute's coat of arms is that of the Mises family, awarded in 1881 when Ludwig von Mises's great-grandfather Mayer Rachmiel Mises was ennobled by the Emperor Franz Josef I of Austria. In the upper right-hand quadrant is the staff of Mercury, god of commerce and communication (the Mises family was successful in both; they were merchants and bankers). In the lower left-hand quadrant is a representation of the Ten Commandments. Mayer Rachmiel, as well as his father, presided over various Jewish cultural organizations in Lemberg, the city where Ludwig was born.)

The mises is a family of bankers, i don't belive what they say
-------------------------------
Please Please read this: http://www.relfe.com/plus_5_.html

[Aquamarine]

Capitalism has not future with our current money suply system...
Fractional reserve banking is a fraud legalized by the goverment for the private bankers... have Proffs..

Please Read:

Abstract: This paper looks at the history of money and its modern form from a scientific and mathematical point of view. The approach here is to emphasize simplicity. A straightforward model and algebraic formula for a large economy analogous to the ideal gas law of thermodynamics is proposed. It may be something like a new ``F=ma'' rule of the emerging econophysics field. Some implications of the equation are outlined, derived, and proved. The phenomena of counterfeiting, inflation and deflation are analyzed for interrelations. Analogies of the economy to an ecosystem or energy system are advanced. The fundamental legitimacy of ``expansion of the money supply'' in particular is re-examined and challenged. From the hypotheses a major (admittedly radical) conclusion is that the modern international ``fractional reserve banking system'' is actually equivalent to ``legalized economic parasitism by private bankers.'' This is the case because, contrary to conventional wisdom, the proceeds of inflation are not actually spendable by the state. Also possible are forms of ``economic warfare'' based on the principles. Alternative systems are proposed to remediate this catastrophic flaw.

Full Paper (PDF) (http://econpapers.hhs.se/scripts/redir.pl?u=http%3A%2F%2Feconwpa.wustl.edu%3A80%2Fe ps%2Fmac%2Fpapers%2F0203%2F0203005.pdf;h=repec:wpa :wuwpma:0203005)

More simple and short version:
I Want The Earth Plus 5% (http://www.relfe.com/plus_5_.html)

(If you read this text you will understand where this mises.org came from:

The Mises Institute's coat of arms is that of the Mises family, awarded in 1881 when Ludwig von Mises's great-grandfather Mayer Rachmiel Mises was ennobled by the Emperor Franz Josef I of Austria. In the upper right-hand quadrant is the staff of Mercury, god of commerce and communication (the Mises family was successful in both; they were merchants and bankers). In the lower left-hand quadrant is a representation of the Ten Commandments. Mayer Rachmiel, as well as his father, presided over various Jewish cultural organizations in Lemberg, the city where Ludwig was born.)
Both "papers" want a world without interest rates and the first also without growth.
This is the common socialistic idea that the capitalist do no work, and therefore should get no pay. Anyone doing serious investment can tell that it takes enormous work to decide which projects should get resources.

Furthermore, a capitalist is someone who have saved and could consume something enjoyable now, but instead chooses to let someone else use his savings in return for getting more enjoyment in the futures. Without this possibility of getting more in the future, there would be no lending since there is always a risk of losing the investment.

Regarding mises.org, I am unsure of your point. The first paper had them as a good reference and not among a capitalistic conspiracy. They are also very critical of the fractional reserve and fiat system, but from the viewpoint of too little capitalism.

[Aquamarine]

Capitilization might work for a country if it is a closed system but when you open it up to have the inequalities of the countries, then I believe you have a problem. A few people from developed countries bring the development into the less developed countries for themselves, and there they have no real competition. Our economy in the US is unstable because manufacturing is outsourced and then they bring it back to sell it to the people in the US for a highly inflated price, at least most of your giant corporations. If capitilism was introduced equally throughout the world everyone standing on the same footing it might work but then again it might not.
Proven wrong by empiric research. More capitalism have made all richer were introduced, including the poorest. This has worked although there are enormous variation in capitalism in the world. See my first links. And there is not more capitalism in the US today, but much less than before.

[Aquamarine]

Why are countrys poor??
for example.. argentina we have food to feed 3 times our entire population, but 30% is starving... The food industry is controled 80% by 5 foreing corporations.

----------------------
"There are four things that must be available for paid work to take place:

-The work to be done.
-The materials to do the work.
-The labor to do the work.
-The money to pay for the work to be done.
If any of those four things are missing, no paid work can take place. It is a naturally self-regulating system. If there is work to be done, and the material is available and the labour willing, all we have to do is create the money. Quite simple."

"Ask yourself why it was that depressions happened. All that went missing from the community was the money to buy goods and services. The labour was still available. The work to be done was still there. The materials had not disappeared, and the goods were readily available in the shops, or could be produced but for the want of money.
Regarding Argentina, read the links given before.

Regarding depressions, they follow a period of malinvestments. If resources have been invested in many pointless projects without use and the bubble suddenly collapses, it will take some time to change society and start new, more productive companies. If a house poorly built collapses, it cannot immediately be replace by a new.

Regarding the developing world, it is certainly not lack of printed money that is missing. Latin America have tried hyperinflation many times, always with a catastrophe as a result.
Third world countries generally have, in no particular order: corruption, bureaucracy, inflation, many regulations, crime, lacking property rights and socialism. In short, to little capitalism.

Both developed and developing countries must realize that it is not someone else who are primarily to blame for their problems. There is no conspiracy, you are not automatically entitled to anything and you should consider that bad results may actually be caused by yourself. Grow up.

[russ_watters]

Your points are excellent, as usual (are you an economist?), but let me expand just a touch on this one: This is the common socialistic idea that the capitalist do no work, and therefore should get no pay. Anyone doing serious investment can tell that it takes enormous work to decide which projects should get resources. You can expand this to talk about the pay gaps between workers and managers that are a key point of socialists. Why should managers make more money if they don't do any "work?" The answer is that managing requires making decisions that affect a large number of people and have a large influence over the company. Being a manager is a big responsibility and that responsibility is worth a lot of money.

[selfAdjoint]

Marxists do not say managers do no work. Managers are employees just like factory workers, and Marxists would advise them to look to see if their own class interests don't in fact match those of the factory workers. Recent white-collars layoffs may encourage them to do so.

The people who do no work and are class enemies to the Marxists are the "owners of the means of production". Rich people who own the corporations, and whose work, if any, is more of a hobby than a productive enterprise. Great example, G.W. Bush before he entered politics.

[Burnsys]

I am not a marxist. i am not against Capitalism neither... but yes against The economic model "Neoliberalism" that US and europe are forcing us to adopt using the IMF now and Military dictatorships in the 70's...

This economic model only makes richer the richers, and poor the poorest, i am middle class here, and each year we are closer to the poor class.. while the rich, a little 10% who owns 80% of the whealt is getting richer..

60% of our salary goes to pay services (Water, Communications, Oil) who are all oligopolic foreing corporations from us and europe.

50% of the government national budget go to pay "International Creditors" IMF, WB, IDB, while 30% of our population is starving....

I have a text i would like you to read.. it's an interview to the winner of the nobel prize in economics. Ex director of the World bank, He was fired for telling the trut:

http://www.gregpalast.com/detail.cfm?artid=78&row=1

[Aquamarine]

Communism have killed more than 100 million people since 1917.
http://www.hawaii.edu/powerkills/COM.ART.HTM

There have also been "experiments" where people with a similar culture and prosperity have been divided into capitalistic and communistic parts: North and South Korea, East and West Germany, China and Taiwan/Hong Kong.

One big problem with socialism it that there must be a small group of people making the decisions for all. It is not possible to vote on all small details and the capitalistic price system leads to inequality and should be abolished. But this small group of people have much less computational ability than when all people participate in the capitalistic price system. Socialism is inherently more stupid than capitalism.

One other problem is that people will not work as well when paid regardless of results or efforts. Trying to reward only effort, even if possible to measure, will mean that much work is wasted without result.

[Aquamarine]

I am not a marxist. i am not against Capitalism neither... but yes against The economic model "Neoliberalism" that US and europe are forcing us to adopt using the IMF now and Military dictatorships in the 70's...

This economic model only makes richer the richers, and poor the poorest, i am middle class here, and each year we are closer to the poor class.. while the rich, a little 10% who owns 80% of the whealt is getting richer..

60% of our salary goes to pay services (Water, Communications, Oil) who are all oligopolic foreing corporations from us and europe.

50% of the government national budget go to pay "International Creditors" IMF, WB, IDB, while 30% of our population is starving....

I have a text i would like you to read.. it's an interview to the winner of the nobel prize in economics. Ex director of the World bank, He was fired for telling the trut:

http://www.gregpalast.com/detail.cfm?artid=78&row=1
The IMF, WB and so on should be abolished. They have created a very wealthy aristocracy of people living on the poverty in the thirld world. They transfer money paid by tax to themselves and to the ruling elite in the thirld world. The worse result they produce, the more money they get. They have become an institution for creating poverty. Opposite to what would happen in a free market and a typical example of why the state should interfere as little as possible.

Argentina have been in default to IMF and others since 2001, so those numbers are incorrect. The default is good and you should certainly not seek new loans from the mentioned state agencies. Hopefully, this will mean that after a while, foreign investment will be from people with a real interest in building society: capitalists.

Argentina is not a capitalistic society, in fact one of the least. Here are some of the problems that should be fixed by yourself, not by others:
http://cf.heritage.org/index2004test/country2.cfm?id=Argentina

I am well aware of the tragedy of Argentina. Not long ago having a living standard least equal to that of Europe, it's recent economic history is the opposite of more capitalistic countries like Hong Kong.

[Aquamarine]

How Excessive Government Killed Ancient Rome:
http://www.cato.org/pubs/journal/cjv14n2-7.html

And in my opinion, many other empires in history. For example, this gives an excellent explanation of the cyclical collapses of the various Chinese empires.

[Selbstüberschätzug]

Capitalism can’t function by it self. It has to much tendency to monopolize the power of a view. The tragic experiment of the UDSSR doesn’t mean that communise don’t functions ore has to be Stalinism. What defeated the communise was dictatorship and not the economical system. Ever seen a repressive system witch worked better because of capitalism?

Only one element of Capitalise is good: responsibility and competition. Deadly competition with damage worse then any real war ever fought. 100 Million casualties.. Peanuts.

[Aquamarine]

Capitalism can’t function by it self. It has to much tendency to monopolize the power of a view. The tragic experiment of the UDSSR doesn’t mean that communise don’t functions ore has to be Stalinism. What defeated the communise was dictatorship and not the economical system. Ever seen a repressive system witch worked better because of capitalism?

Only one element of Capitalise is good: responsibility and competition. Deadly competition with damage worse then any real war ever fought. 100 Million casualties.. Peanuts.
The Soviet Union, Eastern Europe, China, North Korea, Kampuchea and Vietnam tried somewhat different variants of communism. And they continuously tried to vary the system to make it work, seen for examples in the various catastrophic experiments by Mao. All attempts failed.

And communism cannot work even theoretically, see posts above.

Furthermore you are ignoring the massive empirical evidence that supports the capitalistic system.

Vietnam and China is examples of repressive systems that have worked better since abandoning communism in favor of capitalism.

[Selbstüberschätzug]

Oh the Post above must be written by absolute geniuses. In a view sentence they proved that communism don’t work.I’m so impressed.

It’s easier to prove that capitalism don’t work at least in theory. Ore only for the stronger this will be less and less people.


Witch different kind of communism where there? All the same no new elements, of no deadly competition, responsibility and freedom.

All systems where repressive and isolated. Even China from the Soviet union.

[Aquamarine]

Feel free to publish your empirical evidence that capitalism doesn't work. Or you arguments against these studies:
http://www.freetheworld.com/papers.html

[Selbstüberschätzug]

I believe what the authors had written (the first 1/3). But you have to consider that we life in a globalise world and in this world is the economy Capitalism. This Capitalism loves to be on places in witch it can make what it wants. Therefore its no surprise that countries witch builds the best habitats for capitalism benefits most. So what is proven with all this books?

[armrecon123]

George Soros says ...

Might does not make right and therefore the United States of America has made a tremendous mistake in using its military supremacy to force democracy on Iraq .

[selfAdjoint]

The book, The Market System by Charles E. Lindblom is an excellent discussion of issues surrounding captialism and the market system. Some of his points:

- The government is not just a regulator but is one of the biggest players in the market, buying and selling to the tune of billions of dollars for road construction, armed forces materiel and support, park needs and much else. If Bush's plan to provatize social secuiruty goes through the government will be even bigger in the market.

- Free markets have done much better under strong governments than under weak ones. Where has capitalism floourshed more than in the United States? But the Us government is anti-big business in several ways. Even under Republican administations the trust busting spirit lives on, witness Microsoft's troubles. And the requirement that companies that want to acquire entertainment organizations have to shed other enterprises in the public information sector to get approved. And until the recent Bush elimination the capital gains tax, it and the income tax hit the capitalists twice. None of this prevented enormous investments from flourishing in the US market.

[Aquamarine]

The book, The Market System by Charles E. Lindblom is an excellent discussion of issues surrounding captialism and the market system. Some of his points:

- The government is not just a regulator but is one of the biggest players in the market, buying and selling to the tune of billions of dollars for road construction, armed forces materiel and support, park needs and much else. If Bush's plan to provatize social secuiruty goes through the government will be even bigger in the market.

- Free markets have done much better under strong governments than under weak ones. Where has capitalism floourshed more than in the United States? But the Us government is anti-big business in several ways. Even under Republican administations the trust busting spirit lives on, witness Microsoft's troubles. And the requirement that companies that want to acquire entertainment organizations have to shed other enterprises in the public information sector to get approved. And until the recent Bush elimination the capital gains tax, it and the income tax hit the capitalists twice. None of this prevented enormous investments from flourishing in the US market.
I am unsure of your points. Certainly the government has socialized and regulated a large part of the economy in the western world during the last century. However, other parts of capitalism are still relatively strong in the western world: Rule of law, property rights, low corruption and free trade. So the western world is still more capitalistic than most of the rest of the world.

The US was during the nineteenth century the most capitalistic state the world has ever seen. That this started to decline at the end of the century and continue to this day, as in other western countries, has not affected that the US is still one of the most capitalistic countries.

[Ludwig]

(jumping in the middle of the discussion...)

I find it strange to see people promoting/debating capitalism, as if there were still an ideological battle in the world. Now that communism has failed, capitalism is not the best system, it's the only system. So why all the discussion?

All the same, I find it funny when I see people promote capitalism as the way to end poverty in the world, when most of that poverty was caused by capitalism itself. It's like a rich man who says everyone could get rich the way he did, without realizing his wealth comes from the people who work for him. That is a fact neither rich man nor rich capitalist societies like to admit.

Suppose every country were as rich as the United States. Where would we find enough oil to fuel 6 billion gas-guzzling vehicles? How many more forests would we have to destroy to make arable land, so we can plant more corn to make enough Doritos for the 5 billion people who currently don't know what Doritos is? And where would we put all the garbage? How about a world with 10 times more weapons of mass destruction than we currently have? (remember, most rich countries have WMDs in large quantities). How about a world with 3 billion air-conditioners? (those people in warm climates, where most of the poverty is, would buy ACs as soon as they can afford it)

The more you think about it, the more we have to thank God that most of the world is not "capitalist" (read: "rich"). At least we have one billion people who can have some fun in their lives; otherwise we'd all be miserable as we have always been throughout history.

[selfAdjoint]

I am unsure of your points. Certainly the government has socialized and regulated a large part of the economy in the western world during the last century. However, other parts of capitalism are still relatively strong in the western world: Rule of law, property rights, low corruption and free trade. So the western world is still more capitalistic than most of the rest of the world.

The US was during the nineteenth century the most capitalistic state the world has ever seen. That this started to decline at the end of the century and continue to this day, as in other western countries, has not affected that the US is still one of the most capitalistic countries.

Your first paragraph illustrates my points (actually Lindblom's points). Capitalism is not opposed to government, as the libertarians believe, the two of them have historically done better together than either has done by itself. Where "itself" in the case of the market means with a weak government, since there is no case of capitalism without any government.

Lindblom cites the case of post-soviet Russia, where there was a rush to establish capitalism and the market, while the "rule of law and property rights" (and contract enforcement) were neglected, with disasterous results.

[Selbstüberschätzug]

@Ludwig (Are you from Germany?): You said we have only one system on the world. I say we haven’t even one. Just think about how Capitalism was Invented.... You are right it wasn’t invented because it was more or less an accidental development founded on the good old exchange of goods in Stone time-villages… If you think of the developments which mankind has made in the meantime you can see on which primitive level capitalism is.
Only if Marx hadn’t had access on psychological facts which were explored mainly after his time (Motivation was unaccounted) his theory mustn’t be wrong in its core. But there are more then only this two extremes of an economical system imaginable… You have to see the execution of the Communism as a natural reaction of the early industrial age and therefore as to extreme.

What’s wrong whit end the poverty in the world? If there where everywhere enough money there where less or negative growth in World-population. The main problem we will face soon. Also you would have more people to develop new technologies to solve the energy problem you mentioned. Because since is depended on richness, they would be only part of the problem like today they would also be a part of the solution.

But I have to say It too: The USA has to change its course of energy consuming. It was a clever strategy in the past but the more time passes the less it works anymore and will do damage to the countrys competition-ability .

[Ludwig]

@Ludwig (Are you from Germany?):

No, but I have a profound admiration for German culture.

You said we have only one system on the world. I say we haven’t even one.

That's true. Capitalism is not a system, it's just a primitive way of organizing society, as you correctly pointed out.

Just think about how Capitalism was Invented.... You are right it wasn’t invented because it was more or less an accidental development founded on the good old exchange of goods in Stone time-villages… If you think of the developments which mankind has made in the meantime you can see on which primitive level capitalism is.

To me capitalism is the law-of-the-jungle applied to economics. Capitalism in its pure form is a failed system, as the depression of 29 made very clear. Capitalism only survives to this day thanks to heavy government intervention in the lives of citizens and corporations. Left to its own devices, "laissez-faire", capitalism succumbs to speculation and fraud.

Only if Marx hadn’t had access on psychological facts which were explored mainly after his time (Motivation was unaccounted) his theory mustn’t be wrong in its core.

Marxism is a flawed idea. Marx correctly saw that every system harbors within itself the seeds of its own destruction, but he failed to see that communism, being a system, would also one day destruct itself.

The only system that works is no-system. Some form of anarchy, in the good sense of the word. Get rid of governments, police, armies, lawyers, judges, all the ilk of useless people whose main purpose is to guarantee whatever social order privileges the dominant elite. Power is and always will be associated with corruption; getting rid of powerful people is the only way to get rid of corruption.

But there are more then only this two extremes of an economical system imaginable… You have to see the execution of the Communism as a natural reaction of the early industrial age and therefore as to extreme.

I don't think it happened that way. Communism started in a mostly agrarian society. Marxism arrived in Russia way before factories and machines. The Russian revolution was against their corrupt government, not against rich industrialists.

What’s wrong whit end the poverty in the world? If there where everywhere enough money there where less or negative growth in World-population. The main problem we will face soon. Also you would have more people to develop new technologies to solve the energy problem you mentioned. Because since is depended on richness, they would be only part of the problem like today they would also be a part of the solution.

You are probably right about that. I doubt we can all have as much wealth as the Americans, but I think it's perfectly possible for the whole world to have the standard of living of, say, Spain.

But I have to say It too: The USA has to change its course of energy consuming. It was a clever strategy in the past but the more time passes the less it works anymore and will do damage to the countrys competition-ability .

They already know that, that's why they have so much interest on everything that happens in the Middle East. It would be interesting to see what will happen 200, 300 years from now, after all the oil wells have dried up. If they find an alternative cheap source of energy to drive vehicles, no problem, but I suspect there will be a major transportation crisis in the future. Good thing we won't be around to see it.

[Aquamarine]

Many things to reply to :smile:

1. Communism have mostly died but there are many other systems competing with capitalism, is not the only system. Left and right-anarchism, fundamentalism and feudalism are examples. More importantly, there are different degrees of capitalism and research shows that more is better.

Regarding left-anarchism and the welfare state in Europe, for example in Sweden:
http://physicsforums.com/showthread.php?t=48717

2. Regarding poverty, read through this forum again. Capitalism is the system that has the overwhelming empirical evidence for reducing poverty long-term. Note that inequality is not the same thing as poverty as some seems to think. If you have any other opinion, give an explanation for the empirical studies given.

3. There will be no malthusian catastrophe due to too little energy, there is plenty available. And the world population is stabilizing:
http://physicsforums.com/showthread.php?t=46384

4. Regarding war, if the world was democratic, there would be little need for a military since democracies never goes to war.
http://www.hawaii.edu/powerkills/PK.APPEN1.1.HTM

And more political freedom generally gives more economic freedom:
http://www.handels.gu.se:81/epc/archive/00002319/
http://www.appstate.edu/~dawsonjw/ejpefinal.pdf

5. Regarding garbage and recycling:
http://www.perc.org/pdf/ps28.pdf

6. Regarding libertarians and government, some advocate no government (right-anarchists), but most advocate a small government (minarchism). Those, like the Libertarian party, are very strong advocates of the Rule of Law and property rights.

Capitalism should be understood as what the various indexes of economic freedom try to measure: Rule of law, property rights, low taxes, few regulations, small state, sound money, and free trade. In short, a state that prevents people from gaining from others though the use of violence, but let voluntary cooperation build the rest of society.

But a "strong" government that socializes and regulates ever more parts of the economy is harmful,
http://mwhodges.home.att.net/intl-spend.htm
http://mwhodges.home.att.net/regulation.htm

7. Regarding the minimum wage and monopolies,
http://physicsforums.com/showthread.php?t=47769

8. For some answers to other objections see:
http://www.econlib.org/library/CEECategory.html

For example, on the dangers of regulating a "riskless society"

http://www.econlib.org/library/Enc/RisklessSociety.html
http://www.econlib.org/library/Enc/DrugLag.html

9. At last, a graphic illustration of the importance of economic growth and that the world is getting better:
http://www.whc.ki.se/index.php

[Selbstüberschätzug]

@Ludwig

The depression after 29 has made very clear that Capitalism don’t work. How US-Centric must someone be to say that. There really other examples. But I can’t blame you because you are probably a victim of the American schools…

Marxism is a flawed Idea? I don’t think so. You have to say what is failed of his Idea. There are more then one possible point which on can criticises and I don’t want to weaken a point if its not yours.

Yes, Marxism was established in Russia to early. Marx wrote that his theories has to establish in a developed Country. Maybe he would give himself surprised how well it worked anyway. but Lenin (which was in my country till he established the communism in Russia) thought internationally (“ Proletarier aller Länder vereinigt euch”) is the best known sentence witch Marx pointed out……

We have got anarchy. Capitalism and the use of force is anarchy in its purest form.. Woks it? Ore what do you mean? Where are the advantages beside to frighten some rich people?

[Selbstüberschätzug]

@Aquamarine

I have not the time to read your links. If you have an argument then say it in your on words. As fare as I can see all of your statements are holey like a swiss cheese.

[Aquamarine]

@Ludwig

The depression after 29 has made very clear that Capitalism don’t work. How US-Centric must someone be to say that. There really other examples. But I can’t blame you because you are probably a victim of the American schools…

Marxism is a flawed Idea? I don’t think so. You have to say what is failed of his Idea. There are more then one possible point which on can criticises and I don’t want to weaken a point if its not yours.

Yes, Marxism was established in Russia to early. Marx wrote that his theories has to establish in a developed Country. Maybe he would give himself surprised how well it worked anyway. but Lenin (which was in my country till he established the communism in Russia) thought internationally (“ Proletarier aller Länder vereinigt euch”) is the best known sentence witch Marx pointed out……

We have got anarchy. Capitalism and the use of force is anarchy in its purest form.. Woks it? Ore what do you mean? Where are the advantages beside to frighten some rich people?
Contrary to what you think, the great depression was caused by the socialistic intervention of Hoover and Roosevelt. Previous depressions had been relatively quick affairs, it was the the state intervention that prolonged and deepened the depression to levels never seen with less regulations before.
http://www.mises.org/freemarket_detail.asp?control=258&sortorder=subject
http://www.mises.org/fullstory.aspx?Id=1389

Regarding the theoretical and empirical failures of communism, read this thread again. See also the link about left-anarchism and Sweden in my previous post.

For the most famous theoretical destruction of socialism (very long),
http://www.econlib.org/library/Mises/msS.html

[Ludwig]

The depression after 29 has made very clear that Capitalism don’t work. How US-Centric must someone be to say that. There really other examples. But I can’t blame you because you are probably a victim of the American schools…

I have no idea what you are talking about. I said the same thing you said above about the depression of 29, and you accuse me of being US-centric? I don't get it! Let's clear some facts first:

- I am not American, don't live in the US, and don't intend to
- I am not an enthusiast of capitalism; I think it's a corrupt system
- Contrary to what some people claim here, most of the world is capitalist, including Latin America, Africa, India, and so on. Anyone can find plenty of proof that capitalism doesn't work in the streets of Bombay or Caracas. (for those ready to say "ah, but those countries are not really capitalist, otherwise they'd be rich" - please spare me the nonsense)

So Selbstüberschätzug, I don't know what prompted your response, but your apologies are accepted :smile:

Marxism is a flawed Idea? I don’t think so. You have to say what is failed of his Idea.

Back in school, I once asked this question to my Economics teacher, who was very enthusiastic of communism:

- Master, in capitalism fear of poverty is what motivates people to work. If a person can't be poor in a communist society, what motivates them to work?

His reply was:

- In communist countries, people are motivated to work because they desire the good of society.

I was very impressed with his answer, but this was back in 1986 (I think), before the Perestroika. No one really knew much what was going on behind the iron curtain. The truth, as Gorbachev let the world know a few years later, was that nothing motivates people to work in communism.

So the flaw with Marxism is that it doesn't have a strategy to motivate people to work. I believe you said so yourself.

We have got anarchy. Capitalism and the use of force is anarchy in its purest form.. Woks it? Ore what do you mean? Where are the advantages beside to frighten some rich people?

I said anarchy "in the good sense of the word", but perhaps that sense has been lost. There was a time when anarchy meant freedom from oppression; these days it means more a free-for-all chaos. I made a poor word choice. But I still think we need freedom from oppression. We need less policemen bullying honest citizens (that's what they do most of the time), less politicians passing laws to benefit the rich (that's what they do most of the time), less lawyers defending the "rights" of people who can afford to pay their fees, and so on.

[russ_watters]

This thread is starting to parallel the other similar one. Anyway, the most important point to me is this one: 2. Regarding poverty, read through this forum again. Capitalism is the system that has the overwhelming empirical evidence for reducing poverty long-term. Note that inequality is not the same thing as poverty as some seems to think. If you have any other opinion, give an explanation for the empirical studies given. [emphasis added] Quite frankly, most of you guys are quite simply refusing to accept reality at face value.

[Selbstüberschätzug]

@Ludwig, Aquamarine has already shown you way I'm not so pleased with your example from the short correction of and after 1929.

But if you take the stock-exchange as a hole as your example. Then you are probably right :cool:

[so-crates]

In a true implementation of capitalism, there would not only be no trade barriers, but no labor barriers as well. Thus if GM moves a plant to Mexico, the workers should be able to move with it. No immigration or trade barriers pretty much implies the elimination of states and governments. Its ironic that capitalism shares this trait with Marxism :-)

A pure capitalistic society would also have no intellectual property laws.

We can therefore conclude that pure capitalism is not a viable economic system in our present global society.

Capitialism has been dead for about 200 years or so. What we have now a form of corporate socialism.

[selfAdjoint]

Capitialism has been dead for about 200 years or so. What we have now a form of corporate socialism.

Capitalism as you define it - pure market without any government influence at all - never existed. Even in the time of Adam Smith and Diamond Jim Brady the government was enforcing contracts and levying taxes, to say nothing of performing its own transactions in the marketplace. It was government action that created the modern corporation, inculcated modern banking, and protected favored enterprises.

[so-crates]

Capitalism as you define it - pure market without any government influence at all - never existed. Even in the time of Adam Smith and Diamond Jim Brady the government was enforcing contracts and levying taxes, to say nothing of performing its own transactions in the marketplace. It was government action that created the modern corporation, inculcated modern banking, and protected favored enterprises.

This is true, thank you for clarifying. What I meant that society, especially in America, was headed towards a pure capitalistic model before the industrial revolution . I should have said "the idea of capitalism has been dead for about 200 years".

[Aquamarine]

An example of a capitalistic society without barriers to immigration, at least for whites, was the US of the nineteenth century. An enormous amount of people immigrated and found and created employment, industries and better living standards. A similar situation is now taking place in China, were hundreds of millions of people are moving in order get a better life. So capitalism can handle the desire of people to seek a better life. Other system have great difficulty, freedom of movement was extremely limited in the communistic states, with people ordered to work and live in a certain place.

Intellectual property rights can certainly exist in capitalism. Property rights in general is an important part of the capitalistic system.

Regarding the industrial revolution, there was very little capitalism before that. Look at what capitalism is: Rule of law, property rights, low taxes, few regulations, small state, sound money, and free trade. In short, a state that prevents people from gaining from others though the use of violence, but let voluntary cooperation build the rest of society.

Before the industrial revolution most of these were missing. Kings and nobility could arbitrarily decide rules and laws for the rest of society. Violence and crime was high, making for example trade and travelling very dangerous. The property rights of the common people were routinely ignored. Taxes were high and often enormously complicated with for example numerous tariff borders within a country. Guilds restricted competition in the towns. The peasants were bound to the land and village communities similar to guilds prevented competition. Usually the liege had monopoly on different services in his domain. Wars were very common and often paid for by high inflation.

It was first when this started to change that a revolution took place. The name "industrial revolution" is misnomer, it was a capitalistic revolution and equally important in agriculture. Estimates of gdp/capita before this revolution are essentially flat, is was first when capitalism was introduced that this started rise and poverty started to decline.
http://www.minneapolisfed.org/pubs/region/04-05/essay.cfm
http://www.j-bradford-delong.net/TCEH/1998_Draft/World_GDP/Estimating_World_GDP.html

[Aquamarine]

More on capitalism in this thread:
http://physicsforums.com/showthread.php?t=49793&page=10&pp=15

Contrary to what the communists, anarchists, greens and others claim, it is a fact that poverty is declining very rapidly worldwide. In fact, poverty defined as the percentage of people with an income of under 1$ (PPI adjusted), has halved in developing countries since 1980. Thanks capitalism. o:)
http://www.worldbank.org/research/povmonitor/

A more theoretical argument. There is the perception that rules are necessary to prevent the companies from exploiting the workers, for example by setting a very low wage. But what is preventing the exploitation is the fact that the companies are competing with each other for the available workers. More on why the minimum wage regulations actually causes unemployment and actually lowers average wages for those working:
http://physicsforums.com/showthread.php?t=47769

But who should help those that cannot work for example due to health or other misfortune? The answer is of course the same in all political systems, welfare/charity paid by those who are working. But must welfare/charity be organized by the state? Why assume that private welfare/charity cannot do the job?

The welfare organized by the western states is in no way guaranteed. In fact, the long-term projections shows that the western welfare states are headed towards bankruptcy. In fact, it they were corporations, they would already be in bankruptcy. So state welfare have already failed. Not to mention the creation of a large class of people who only live completely or partially on state welfare without working while able to do so.

Private welfare could take the place of state welfare. People in the US give more than 10 times as much in charity as the people in Sweden, measured in percentage of GDP. If taxes are lower and there is less state welfare, people will give more to private charity. And private welfare will be exposed to competition and thus be much more efficient than state welfare. Only those truly in need will receive welfare and in a more efficient way.

[CharlesP]

American capitalism is a fraud perpetuated by such lie engines as the Cato institute and the Heritage Foundation. They say the words but what they do is really play monopoly. The rich have gotten richer and the rest of Americans have gotten poorer in recent times. See http://www.zmag.org/
Malthus has been proven correct. Today there are more starving people than ever before. The world is overpopulated and global warming is proof, accompanied by massive unprecedented extinction. The US is on the brink of economic collapse when the oil runs out. Hopefully this capitalism cult will be short lived.

[russ_watters]

The rich have gotten richer and the rest of Americans have gotten poorer in recent times. This is factually wrong and the facts have been given to you. You have no excuse for continuing to assert this: it may have been ignorance before, but now its a lie. Today there are more starving people than ever before. This, while (probably) not specifically facutally wrong, is highly misleading: since the population grows exponentially, there could well be more starving people today than ever, even as the starvation rate has fallen - and it has fallen dramatically.

edit: I'll be generous since I didn't see it on the last page: HERE (http://www.census.gov/hhes/income/histinc/h03ar.html) is the mean household income for each 5th of the population (and the top 5%) for the past 37 years. As you can see, even after adjusting for inflation (second table), over every period greater than 5 years in the past 37, household income has increased for the bottom 5th of the population and is currently 31.8% higher than 37 years ago.

Edit2: Just in case you are hoping to use the last 4 years of decreases for the bottom 5th to prove your point, look over at the top 5% - it has decreased for the past 2.

[Selbstüberschätzug]

@Russ Watters. I want to say that I’m not interested in only the USA.. As we seen before we life in a world witch is globalised. I would like to see figures witch includes the really poor on our planet.

But beside of that. The income really don’t says to much in your country. You have to see that relatively poor people have to pay more for healthcare, schools, food, security… then in your golden 60th. Therefore your Inflation numbers may be correct for the hole economy but isn’t the same fore all Income classes ore aren’t taken to account.

[russ_watters]

@Russ Watters. I want to say that I’m not interested in only the USA.. As we seen before we life in a world witch is globalised. I would like to see figures witch includes the really poor on our planet. Aquamarine's poverty rate figure (dropped by 50% in the past 25 years) is global. And while I would also like to see some numbers on wider segments of the population, the destitute poor are (were) a huge fraction of the global population by themselves. So really, you could say that capitalism has actually helped more poor people than rich people. :wink: But beside of that. The income really don’t says to much in your country. You have to see that relatively poor people have to pay more for healthcare, schools, food, security… then in your golden 60th. Therefore your Inflation numbers may be correct for the hole economy but isn’t the same fore all Income classes ore aren’t taken to account. I'm not sure what you mean - inflation is a measure of buying power and is largely based on consumer goods (like food). And the poor don't generally pay anything at all for healthcare, schools, or security.

[Tom McCurdy]

American capitalism is a fraud perpetuated by such lie engines as the Cato institute and the Heritage Foundation. They say the words but what they do is really play monopoly. The rich have gotten richer and the rest of Americans have gotten poorer in recent times. See http://www.zmag.org/
Malthus has been proven correct. Today there are more starving people than ever before. The world is overpopulated and global warming is proof, accompanied by massive unprecedented extinction. The US is on the brink of economic collapse when the oil runs out. Hopefully this capitalism cult will be short lived.

The US although heavily oil dependent will not go into economic collapse when the oil runs out... besides capatialism works and is probablly the best system for any country to use to be sucessfull. If the US were to go into economic collaspe that would severly F@#k up the enire world's economy. The only real danger to the US economy right now is the growing power of the EU.

[Selbstüberschätzug]

@Russ Wetters

The figures saying something about the earning from below 1 $ per day.

The second colon says something about 2 $ per day. Here the figures are 66.7 to 52.9.

Considering that the globalisation has reached in the last town in the world in the last 25 years the figures saying nothing. ( Before the globalisation many where able to live without any money now the situation has changed)

Aside of that what caused the increase the wealth (manly for the already rich / threshold countries) in the world ( and in this perspective) capitalism or technologies?

Yes Inflation is based on a common goods-basked. But if you are poor the things witch you are forced to by from this basked are others then if you are rich. Won’t explain this to the last detail.

[CharlesP]

This is factually wrong and the facts have been given to you. You have no excuse for continuing to assert this: it may have been ignorance before, but now its a lie.

A lot of people don't agree with you. I just heard (NPR) that three million people have died in the Congo in recent years.
http://zena.secureforum.com/Znet/zmag/articles/nov97sklar.htm
http://zena.secureforum.com/Znet/zmag/articles/hermanjulyaug98.htm
http://www.larouchepub.com/other/2001/2803_import_bubble.html
I don't think that capitalism or even humanity can stop this death sentence http://dieoff.org/page137.htm.

[Aquamarine]

A lot of people don't agree with you. I just heard (NPR) that three million people have died in the Congo in recent years.
http://zena.secureforum.com/Znet/zmag/articles/nov97sklar.htm
http://zena.secureforum.com/Znet/zmag/articles/hermanjulyaug98.htm
http://www.larouchepub.com/other/2001/2803_import_bubble.html
I don't think that capitalism or even humanity can stop this death sentence http://dieoff.org/page137.htm.
Congo is certainly not a capitalistic country. On the other hand, there have been a great reduction in poverty in those countries that have embraced capitalism. And as much of the world has embraced capitalism, there has been a huge reduction in poverty worldwide.

Looking only at income in the US and those poor there, read the thread from the beginning and especially my first post. In addition, I do not understand how capitalism can be to blame since government size and regulations are constantly increasing. In other words, those negative effects you think are due to capitalism have happened at the same that capitalism is slowly decreasing in the US.

And the malthusian energy catastrophe have been discussed in several other forums where your arguments have been proven wrong.

[polyb]

If I may interject,

aquamarine and russ, can you point out any problems with "capitalism" per se? Because all I have seen in this thread suggests that you guys think that it is some kind of pancea. For me that raises the flag!

So how about it?

[russ_watters]

aquamarine and russ, can you point out any problems with "capitalism" per se? Because all I have seen in this thread suggests that you guys think that it is some kind of pancea. For me that raises the flag!

So how about it? There are, of course, problems with capitalism and we've never claimed there aren't. Dealing with the power of large corporations is still difficult, even with the Sherman Act. Dealing with those who fail in the Darwinian process is a big problem. The US isn't anywhere near complete capitalsim because of such problems with it.

Neither of us have said anything like what you are implying. All we're saying is its the best system out there and has been enormously successful - and that is straightforwardly, factually true. What should raise a red-flag for you is the lies being told here against it!

[selfAdjoint]

I have a theory that capitalism, left to itself, tends toward oligopoly. I know that von Mises or one of the other gods of the Austrian school has an argument that this is due to government interference, but his data is from Germany, which was dirigiste from the git-go. If you look at the US, we do have the Sherman Antitrust act, and every generation there's a high profile prosecution under it - Ma Bell, Microsoft, etc. And yet in spite of this anti clumping trend in the US, practically every manufactured product the consumer buys is manufactured by a Pareto oligarchy: 50% of the products are made by one company, 20% by another, 10%-15% by a third, and the rest by a gaggle of small guys. In older product lines the small guys are thinned out. The evolution from Adamic competition to oligarchy is fast, too, see the history of the desktop computer.

[polyb]

Thanks selfAdjoint, you delivered a point before I even had a chance! :tongue2:

I would like to further your hypothesis and take it to a more generalized prospectus of economics: Any economical system will tend towards a system of oligarchy. I think Pareto demonstrated this in his work and sets a basis for which to come grips with the inherent problem of any economic system. Namely people who will do anything and everything to monopolize an economy for their own benefit. I don't care how you name it: capitalism, socialism, communism, etc., everyone of these has demonstrated that they can be manipulated by those willing to do so. Unfortunately many people can not see the factual forest for the semantic trees. So comes the question of what kind of system would best. Well I would have to contend that perhaps we can start with a rationalism that stands in recognition to the very simple fact of these human shortcomings. Fortunately many of the founders of the U.S. were painfully aware of this problem and has given us something to go by.

I was also trying point to russ that even though capitalism has it's merits, it also has it's detriments as well. An example can easily be seen in the current situation involving medicine. In the pursuit of profit people are not necessarily getting the treatment they need and quite a few are getting "bad medicine" which is lethal. Market forces do not work in the same way with medicine as it does say with tennis shoes. Sure, I can buy a pair of shoes that are lousy and not buy them again, thus implementing the "market force". But when it comes to medicine, well I may not have a second chance to exercise the same discretion and force the market into correction.

I would also like to reframe this whole debate into the system of game or graph theory. I think it would be more enlightening and robust in terms understanding the inherent complexities of economy. Otherwise all particpants in this "game" of internet chatroom discourse will actually lose because there will be nothing more than a bunch of huffing and puffing the the tune of "my sophistry is better than yours"! :yuck:

[selfAdjoint]

I would also like to reframe this whole debate into the system of game or graph theory. I think it would be more enlightening and robust in terms understanding the inherent complexities of economy. Otherwise all particpants in this "game" of internet chatroom discourse will actually lose because there will be nothing more than a bunch of huffing and puffing the the tune of "my sophistry is better than yours"!

Cosma Shalizi has some stuff in his archives in that direction. Here is his site:

http://www.cscs.umich.edu/~crshalizi/weblog/

[polyb]

Cosma Shalizi has some stuff in his archives in that direction. Here is his site:

http://www.cscs.umich.edu/~crshalizi/weblog/


WOW! Thanks selfAdjoint, a blogger right up my own wacky alley! I would like to do my graduate studies in complexsystems and Cosma seems like the kind of people I would like to study/work with. It is going to take me a while to find his stuff on game/graph and economics though. Once again, thanks! :biggrin:

[selfAdjoint]

Hope you can study with him; he's looking for work, as you will find if you study his site. All my best wishes for you; I think complex systems are the secret of a lot of what we need.

[Aquamarine]

Those thinking that capitalism most lead to a harmful oligopoly should read this thread. Skip to my last posting if in hurry. Read for example the history of why the Sherman act was created:
http://physicsforums.com/showthread.php?t=47769&page=5&pp=15

That there is a oligopoly in many markets is not an argument in itself. That reflects that fact that in those market that is the best structure, for example markets requiring very large investments cannot have many small competitors. Those arguing otherwise must show that oligopoly is more harmful than some regulated alternative, not that it exists in some cases.

There are those who for various reasons have less ability and may not be able to compete. But they would have those difficulties in any system and they must be supported by the others. That is charity, no matter if it is done by the state or individuals. And as I have pointed out in this article before, why cannot charity have competition and efficiency like other sectors of society?

Regarding medicine, it is no different than any other market. The demand is endless, for example it would be good if all people could have an complete body MIR scan and interpretation by the very best radiologist every year. But since that is not possible, the free market is the best way to organize the limited resources available.

Regarding the tennis shoe example, firstly there should be the possibility to sue for things like false advertisement or malpractice, secondly competition is not done by one individual but by many. And people are learning from the mistakes and experiences of others. This can be a market in itself, like magazines doing reviews of computer games, cars or various household devices.

There are of course problems in capitalism that may require limitations. One very interesting theoretical one is "The tragedy of the anticommons". But I think it is actually an argument that there are some property rights laws that are better than others, not an argument against property rights in itself. That problem can be solved by competition between many small states that have somewhat different laws.
http://www.sciencemag.org/cgi/content/full/280/5364/698

Other proposed problems (often imaginary or having good if less than perfect solutions or with no proof that there exists better solutions):
http://en.wikipedia.org/wiki/Market_failure

[selfAdjoint]

That there is a oligopoly in many markets is not an argument in itself. That reflects that fact that in those market that is the best structure, for example markets requiring very large investments cannot have many small competitors. Those arguing otherwise must show that oligopoly is more harmful than some regulated alternative, not that it exists in some cases.

You can say that, but it destroys the thing that the market is valued for: its invisible hand in setting prices. Oligopolies work by administering profits, and contrary to economics 101, when they don't sell enough product, they may not lower the price but raise it, to make their profit constant with the lower sales. Ford and GM have actually done this in the past. This behavior is known as inelastic prices, and the prices of an awful lot of what we buy in the US are inelsatic. What then becomes of the free market? What becomes of equilibrium economics?

[Aquamarine]

You can say that, but it destroys the thing that the market is valued for: its invisible hand in setting prices. Oligopolies work by administering profits, and contrary to economics 101, when they don't sell enough product, they may not lower the price but raise it, to make their profit constant with the lower sales. Ford and GM have actually done this in the past. This behavior is known as inelastic prices, and the prices of an awful lot of what we buy in the US are inelsatic. What then becomes of the free market? What becomes of equilibrium economics?
No, oligopoly means few participants, not that they are not competing. Since they are competing, they cannot raise their prices above their competitors. They can of course try to form an agreement with each other limiting competition, but in practice they will usually try to cheat on each other, breaking the agreement. And outsider will see the large profit potential and will enter the market as new competitors. In the end those companies keeping the agreement will be the losers, with their market share taken by those cheating and new competitors.

[russ_watters]

AKA - price fixing, which is not a market force (its a way to circumvent market forces) and is also illegal. The airlines have done this as well.

[Aquamarine]

AKA - price fixing, which is not a market force (its a way to circumvent market forces) and is also illegal. The airlines have done this as well.
Yes, but some argue that it not necessary to regulate that. Cheating and new competition will in the end stop price fixing by itself. The regulations have a cost in oversight and in bringing cases into the justice system. And more importantly, that in many cases the regulations have been used by weaker competitors to restrict a stronger competitor that produced superior goods to lower prices.

[Burnsys]

here in argentina in 2001 we had a mayor economic crisis.. 20% of the people went below the poverty line, i guess that means less demand. but oil prices rised, telephone, electricity, food, everything rised when lees people have the money to buy them.

oil corporations (Repsol, shell, exoon) in argentina always rise the prices togheter,they never fight each other, and when a new small company emerge, they buy it... they leave us no choise but to buy OUR oil extracted from OUR soil to them.
Btw, they have polluted our rivers too...

[Aquamarine]

here in argentina in 2001 we had a mayor economic crisis.. 20% of the people went below the poverty line, i guess that means less demand. but oil prices rised, telephone, electricity, food, everything rised when lees people have the money to buy them.

oil corporations (Repsol, shell, exoon) in argentina always rise the prices togheter,they never fight each other, and when a new small company emerge, they buy it... they leave us no choise but to buy OUR oil extracted from OUR soil to them.
Btw, they have polluted our rivers too...
Regarding Argentina and energy:
http://www.mises.org/fullstory.aspx?Id=1518

And we have discussed Argentina before in this thread, including the rivers.

[selfAdjoint]

No, oligopoly means few participants, not that they are not competing. Since they are competing, they cannot raise their prices above their competitors. They can of course try to form an agreement with each other limiting competition, but in practice they will usually try to cheat on each other, breaking the agreement. And outsider will see the large profit potential and will enter the market as new competitors. In the end those companies keeping the agreement will be the losers, with their market share taken by those cheating and new competitors.


That's just idealistic dreaming. It is in the interest of the CEO of any of these oligarchs to achieve the maximum profit for a given cost. Competition militates agains that, by driving down prices. Cooperation is more cost effective in many instances, and cooperation under the table is how they do it. Even Adam Smith understood that; he specifically stated that his invisible hand only worked if there were so many producers that they couldn't effectively collude.

[Aquamarine]

That's just idealistic dreaming. It is in the interest of the CEO of any of these oligarchs to achieve the maximum profit for a given cost. Competition militates agains that, by driving down prices. Cooperation is more cost effective in many instances, and cooperation under the table is how they do it. Even Adam Smith understood that; he specifically stated that his invisible hand only worked if there were so many producers that they couldn't effectively collude.
Yes, if they all keep the agreement, everybody gain a little. But those who cheat gain much more by taking market share from the others. A classic prisoner's dilemma. And do not forget the possibility of new outside competitors who see the huge profit potential.

But that is just theory. Let us instead look at the real world.

Yet the actual history of antitrust enforcement has never warranted this widespread academic and political support. There is little in the classic antitrust cases to convince anyone -- much less an economist -- that monopoly power is a free-market problem, or that the firms indicted (and convicted) under the antitrust laws were damaging the public interest. Indeed, the cases often demonstrate that the firms involved were reducing costs and prices and engaging in an intensely competitive process, and that the antitrust laws -- whatever their alleged intent -- were employed to restrict and restrain the competition process.[4]
Do read on in the original article:
http://www.cato.org/pubs/pas/pa021.html
http://www.econlib.org/library/Enc/Monopoly.html

[FZ+]

I'm curious how you are going to solve the public good/externality problem with a pure capitalist society.

[Aquamarine]

I'm curious how you are going to solve the public good/externality problem with a pure capitalist society.
The classic example is a lighthouse that could be built if many merchants contributes resources. But may not be built since many wait for the others to build it without wanting to contribute themselves. The point being that everyone can use the lighthouse, even those not contributing. This would be an argument for central planning of society, forcing everyone to contribute.

There are arguments against this. One being that if one large merchant or a group of large merchant gain from building the the lighthouse, they will build it even if many of the small merchants do not contribute. That everybody that gain something must contribute if usually false, in the real world there are usually many who gain without contributing themselves. Another example, if there is a new corporation creating employment in a town, the town stores will gain by the increased wealth without contributing themselves to starting the new corporation.

Opponents would then assume a lighthouse not possible to build if not all or almost all contribute. But that means a lighthouse that takes all of the resources available in society to build. And it is usually very risky to invest everything available in a single project. It it usually not possible to predict exactly which project will succeed in the future, meaning that it usually better to have many project and let competition decide which one was the best in the real world. That is one of the fatal weaknesses of central planning, it requires perfect knowledge of the future. Regarding the lighthouse example, some of those not wanting to contribute may have a potentially better idea, like that of transporting the goods by a new land transportation system or have another system for navigating by night. But if he is forced to contribute everything he has to the lighthouse, he can never develop this potentially better idea. And even if he have some resources left, his potentially less expensive idea may not now be interesting to build since the more expensive lighthouse will be built anyhow by force.

[Aquamarine]

Regarding oligopolies, there is in fact at least one major problem. That is that they may be very effective in organizing lobby groups. They may have great difficulty in keeping an agreement about prize fixing due to the prisoner's dilemma. It often very hard for other to know when cheating occurs when large buyers ask for offers, when giving reduced prized on other goods in compensation for buying, when giving perks, when giving better support or when giving outright bribes to persons responsible for doing large wholesale purchases.

But regarding political lobbying, there is little conflict of interest and it is much easier for the others to know if someone is not contributing. So oligopolies may be very good for asking the government for regulations and subsidiaries for their industry. Those with opposing interests, like consumers and taxpayers, are so many that they have difficulty in organizing. And every special interest group cost them little, it is only when there are many that the taxpayers and consumers lose much.

This is probably one the main causes of the undermining of capitalism in the western world today.

[Aquamarine]

Beguiling curves of the Swedish model
http://www.washingtontimes.com/commentary/20040425-102740-9436r.htm

The Mystery of Capital
http://physicsforums.com/showthread.php?t=58265

Capitalism and Corruption:
http://alpha.montclair.edu/~lebelp/EconFreedomandCorruption.html

[CharlesP]

Do read on in the original article:
http://www.cato.org/pubs/pas/pa021.html
http://www.econlib.org/library/Enc/Monopoly.html
If you folks don't know about the Cato Institute, Heritage foundation and Discovery Institute, well it is an education. These outfits and many more are funded by industry to the tune of a hundred million a year each roughly. They have the staff and expertise to wage an effective public relations war against science and get the legislation that makes the most profit. They have even corrupted the study of economics itself with the "Trickle Down Theory" (invented by public relations operatives).

[Aquamarine]

The Discovery institute advocates conservative Christian views. Not libertarian economics.

Regarding the Heritage foundation and Cato institute, I would suggest attacking their arguments instead of their character. Their budgets are 30 and 15 million dollars.

[CharlesP]

Ward Churchill has recently made news. His writing is on this list which can introduce readers to a point of view not well understood in the USA. It is worth reading:
http://www.kersplebedeb.com/mystuff/s11.html

[X-43D]

The ideal social system is when there is no money or property at all. When populations were a few, humans traded goods and services but not for money profit.

[Smurf]

The point of wether capitalism increases prosperity or not is completely irrelevant because capitalism is inherently unethical because it imposes on the individual's freedom. Prosperity should be secondary to liberty.

[X-43D]

Freedom from economic authorities is also ideal for survival in nature.

[russ_watters]

The ideal social system is when there is no money or property at all. When populations were a few, humans traded goods and services but not for money profit. Why is that ideal?

[russ_watters]

The point of wether capitalism increases prosperity or not is completely irrelevant because capitalism is inherently unethical because it imposes on the individual's freedom. Prosperity should be secondary to liberty. How does capitalism impose on freedom and what is a better alternative?

[selfAdjoint]

How does capitalism impose on freedom and what is a better alternative?

The classic marxist answer is that the putative free choice between an employer and a prospective hiree is not a free one because it is not symmetric. Few employers who control all the jobs, and many people who, from no fault of their own but just from the capitalist organization of society, have to sell their labor power.

Fantasies about what all those poor people COULD do, if only they weren't themselves but the fantasiast, are not proper responses to this.

Smurf may have a different answer from an anarchist perspective.

[russ_watters]

Fantasies about what all those poor people COULD do, if only they weren't themselves but the fantasiast, are not proper responses to this. You mean like labor unions....? Smurf may have a different answer from an anarchist perspective. Yes, I'd really like to hear Smurf's explanation.

And in any case, though you mentioned Marxism, you didn't explain why it would be better.

[nanorobot]

Communism is still better than capitalism. If resources were to be shared equally around the world, perhaps we all would have been relativily poor but thus equal.

Sharing is the only way to stop poverty. There is enough food to feed everyone. The problem is that western nations have made money profit their god.

[Automagman]

Communism is still better than capitalism. If resources were to be shared equally around the world, perhaps we all would have been relativily poor but thus equal.
Sharing is the only way to stop poverty. There is enough food to feed everyone. The problem is that western nations have made money profit their god.

Oh my god. Before i get started on this one i have to ask. Are you serious or is this just a joke?:confused:

[Wishbone]

Communism is still better than capitalism. If resources were to be shared equally around the world, perhaps we all would have been relativily poor but thus equal.
Sharing is the only way to stop poverty. There is enough food to feed everyone. The problem is that western nations have made money profit their god.

absoultley rediculous. Communism is not better than capitalism, as can be seen by any communist system. We all know communism doesn't work for many reasons. Competition, the root of capitalism is the true root of human advancement.


That is not the problem, take for example what went on in mogadishu, you will see that although the help was coming from the UN, which right now is the lousiest organization on Earth, it was these african day-to-day dictatorships and the root of problem in africa...

[Wishbone]

The point of wether capitalism increases prosperity or not is completely irrelevant because capitalism is inherently unethical because it imposes on the individual's freedom. Prosperity should be secondary to liberty.



Wrong, learn the definition to capitalism. it infringes on no rights whatsoever....... Yay pretend economist trolls FTW! Stop posting. Prosperity and liberty go hand in hand with capitalism.

[selfAdjoint]

Wrong, learn the definition to capitalism. it infringes on no rights whatsoever....... Yay pretend economist trolls FTW! Stop posting. Prosperity and liberty go hand in hand with capitalism.


The practical situation that the majority have to sell their labor power at a disadvantage because of the asymmetrical transaction between many would-be laborers and few rich employers is in fact an unjust restriction of the laborer's right to a fair deal.

This is not economics it's social justice. Economics, as you have apparently studied it, just assumes the capitalist system and then describes (rather poorly) how it works.

[jim mcnamara]

As a quick aside, it seems very interesting that two economists, using different axioms (belief systems) take what seem to me to be identical data sets and reach diametrically opposite conclusions.

As an example: tax cuts vs. tax increases and their impact on economic growth.

During the Reagan Presidency the economy got better (i.e, unemployement declined, GDP increased) because taxes were lowered.
Or. During the Clinton Presidency the economy got better (same metrics)
during a period of tax increases - which reduced the deficit and made things improve.

I've seen presentations making both these points. Obviously both speakers have to be ignoring what really is going on. Or are promoting a political point of view in the guise of economic "reasoning". Or both.

[nanorobot]

Wrong, learn the definition to capitalism. it infringes on no rights whatsoever....... Yay pretend economist trolls FTW! Stop posting. Prosperity and liberty go hand in hand with capitalism.

Not always. Capitalism has its own hierarchial and authoritarian institutions. It is not really free for the poor.

[Wishbone]

The practical situation that the majority have to sell their labor power at a disadvantage because of the asymmetrical transaction between many would-be laborers and few rich employers is in fact an unjust restriction of the laborer's right to a fair deal.
This is not economics it's social justice. Economics, as you have apparently studied it, just assumes the capitalist system and then describes (rather poorly) how it works.


none of this infringes on any liberties. the liberty with capitalism not shared by communism, is the liberty to compete. Although you may see a market where wealth is highly tilted towards owners, and the labor base is lacking, that description lacks the idea that any may rise to the level he or she wishes. The laborer's right to fair deal comes from the competition between employers for the supply of labor. This right, this liberty, is not given in other economies.

Economics, doesn't assume anything, but basic human thoughts, recorded through thousands of years (incentive, etc.). Then, everything is built from there.

[Wishbone]

Not always. Capitalism has its own hierarchial and authoritarian institutions. It is not really free for the poor.

it is free to the poor, because they have the choice to rise or not. This isn't a caste system...

[nanorobot]

it is free to the poor, because they have the choice to rise or not. This isn't a caste system...

No it's not. They do not always possess the money, resources and access to education to go up.

[Wishbone]

No it's not. They do not always possess the money, resources and access to education to go up.


you can go up without money, if you had money, you'd already be up. Access to education is up to them, sometimes its more difficult to work your way to the top, however it is always within reach.

[nanorobot]

Free cooperation between free individuals is more effiecient than a system of involuntary competiton and hierarchial domination.

[selfAdjoint]

you can go up without money, if you had money, you'd already be up. Access to education is up to them, sometimes its more difficult to work your way to the top, however it is always within reach.

This is a fantasy if we interpret "always" as meaning "for everybody". You can't show it's available even to everybody who is capable of carrying on an independent social life (i.e. not institutionalized). At its worst this attitude is used to blame poor people for their poverty, because the opportunity of getting rich "was always available" to them.

[nanorobot]

We all depend on one another for survival and development. This is why there is a division of labor in current societies.