|Oct12-12, 05:31 PM||#18|
Can Capitalism continue?
Marx's explanation as I heard David Harvey explain, which I vaguely understand goes something like this. In das Kapital volume ii Marx does a gedanken experiment in a society with just two classes workers and capitalist. He argues that demand comes from capitalist paying workers who then spend their money on goods and demand comes from capitalist buying means of production so total demand comes from means of production and the wage bill. The total supply that a capitalist creates in surplus is profit. Marx argues the demand for the surplus is generated by the capitalist. That is the capitalist create the surplus and create the demand for the surplus. In order for this to work it has be an expansive system by which you pay off yesterday's debts with today's expansion, a credit system. So the accumulation of capital is also the accumulation of debt.
Whether you believe this or not I still find it hard to believe that a steady state economic system would resort to speculative economics in such a large way.
I think the life cycle of capitalism is like the fusion cycle of a star. At first it has access to lots of available resources to spur growth like a young star has lots of easy fuel. Then it uses up this easy fuel and starts burning more exotic fuel more fictional speculative forms of capital like synthetic credit default swaps then it runs out of fuel and dies.
|Oct12-12, 05:34 PM||#19|
The OP framed his argument equating capitalism with growth. The OP may not have been scientific. Neither was your reply. You seemed to accept his equation without question. I don't know if there is a "scientific" way to compare capitalism with communism.
There was a question underlying the OP that may be addressable by science. The question is whether any social system (not socialist!) can have unlimited growth.
Communist and socialist societies in the industrialized world have promoted growth. From Stalin's five year plans to Maos great revolutions, they have worked hard to expand the economic production of the society. It seems to me there is at least as much pollution and destruction of resources as in capitalist societies. I may post such studies later. However, I can post at least as many studies showing how capitalist societies pillage the environment.
In fact, the words communist, socialist and capitalist don't really refer to societies. They refer to governments. Governments don't affect the detailed interactions between people. On the level of local interactions between people, and local transactions, governments don't do all that much. In terms of cooperative action involving large groups of people, governments make a difference. However, governments can't repeal the laws of physics. A large corporation can end up doing the same things as a communist government. In fact, a "anarchist" or "libertarian" group of people can consume and pollute just as much as people led by a capitalist or a communist government.
Primitive tribes bang their heads against limits to growth, which is why I mentioned a book describing the Marang. I don't know if one would call the Marang, or the Yanamano, or the Mayans communist or a capitalist. Primitive societies are interesting as their cultures don't always fall into the dichotomy of "communist" or "capitalist". The Marang grow trees, and we build missiles. As a fan of the space race, I prefer missiles. However, can we really keep on building missiles forever?
A capitalist government can ban the teaching of evolution, but they can't stop evolution or natural history. A communist government can promote Lysenko heredity, but that won't make Mendelian heredity any less valid. The government can't decide what is a "law of nature". An economist can't decide what is "a law of nature." Nature decides what is a "law of nature." Scientists should be searching for these "laws of nature" based on physical evidence.
The OP was making statements about capitalism not being right. However, right and wrong is not a scientific question. The biological questions have to be asked in terms of physics and chemistry, not Marx versus Jesus.
The real issues that the brought up, which most readers understood, concerned economic growth. There is no physical law that distinguishes between wealth as concentrated in a few or distributed among the many. You were the one who made the comment that implied that there is no limit to growth.
There are many questions one could ask which have nothing directly to do with capitalism versus communism. Is there such a thing as carrying capacity that an environment places on a population of human beings? Are we currently near this sustainable carrying capacity? Will the human species survive if growth expands beyond the sustainable carrying capacity?
Your answer implied that there is no such thing as a carrying capacity for human beings. You did not mention either capitalism, socialism, or communism. You said that only kooks and jerks thought there was any limit to growth. You stated that there is a law of growth that is part of nature.
I merely asked you to support your facts. Show us some study by a physical or biological scientist that shows that growth is a law of nature. Please don't refer to economists, as we all agree that is a soft science. Find us an actual study by a physicist, a chemist, a paleontologist or any science that involves physical fact that shows that there can be unlimited growth. Show us how energy will not run out, how fisheries don't collapse, that the oceans can't be acidified by CO2 or that man made global warming can't occur at any time. If these things are limited, then show us how we are not anywhere near these limits.
As a retired physicist, I am really interested in "growth as a law of nature." Please provide references.
|Oct12-12, 09:32 PM||#20|
Many of the core aspects of capitalism cannot simply fail or be removed (well, not without the unlikely event of world domination). It's a system that, similar to evolving biological systems, seeks to minimize cost functions (efficiency) and propagates by appealing to human nature (marketing).
The aspect of capitalism that will not survive is that which gives too much power to one entity (similar to the reason capitalism was born in the first place). The "too big to fail" financial institutions are currently such entities. They need to be broken up by sector so that they can't all bet on important things like food, gas, and housing at the same time. I.e., we need to take away their 'too big too fail' status. It's unlikely that any politician will, in the immediate future, move towards breaking up these companies in a meaningful way, so we get regulation. But regulation is like security in hacking. Hackers will always find a way (and financial hackers are currently the best equipped with the research to exploit "bugs" in the rules).
If a good security program against these organized corporate hackers isn't put in place via regulation (or the companies are broken up to make more competition) we run the risk of continued economic instability, which leads to more social instability (Occupy Wall Street) which, if it ever reaches critical mass, could have serious consequences and bring about more dramatic change.
|Oct13-12, 08:11 AM||#21|
If population grows, then there is a need for more goods.
Economist mean by growth 'larger GPD' (in PPP dollars) but I suspect that GROWTH is considered desirable because it brings in more taxes so governments can pay on DEBT ..
There does not seems to be much difference between rhetorics of socialisms and capitalisms in the way these systems would deal with shrinking resources. Traditional methods, limiting population growth and beyond that -- wars are tested and universal human response to scarcity --to starvation.
Socialism - in theory at least - is more likely to preserve egalitarian society - and so may handle
the reduction in standard of living in a more peaceful manner.
But capitalistic (and democratic) society can also redistribute and tax wealth (of those who own
resources) to feed those who just gave their hands (and brains) ...
first we would have to answer :
Can mankind continue?
and then define what we mean by capitalism, socialism, communism, etc
|Oct14-12, 09:48 AM||#22|
Here is a nice introduction to his work: http://www.ted.com/talks/geoffrey_we...porations.html
We can take a few things from his talk:
First, all biological systems tend towards growth.
Second, some biological systems tend towards exponential and therefore unsustainable growth, leading to collapse. All businesses and empires have followed this route.
Third, some biological systems tend towards stable growth and do not collapse. This is the route followed by cities.
I think you will greatly enjoy this lecture, and I highly suggest you read up on some of his published works. It is awesome to see a physicist come in and 'clear the decks' in social sciences.
Let me suggest you read chapter 15 of Joseph Schumpeter's book, "Capitalism, Socialism and Democracy." PF may have a general disdain of social scientists but Schumpeter is probably the best general social theorist that ever lived (important contributions in both economics and sociology that are not just foundational, but still relevant).
We can conceive of two general categories of the social organization of production, one commercial and one socialist. Commercial society is characterized by the use of markets to coordinate the efforts of buyers and sellers to reach spontaneous organization of the supply and demand of goods. A subset of possible commercial societies is capitalist, which specifically means the introduction of banks as lenders of credit and a monetary system regulated by interest, itself regulated through supplies of government bonds.
Socialism, on the other hand, has production and distribution controlled by a central authority. Here private property figures less prominently and 'markets' are not the primary means of coordinating suppliers with buyers and vice versa, but a central authority is. Banks might figure in a socialist mode of production but they are not necessary, since the authority doing the lending and the authority doing the borrowing are one and the same.
Growing populations require more goods but they also produce more goods. Externalizing our energy demands on fossil fuels in technology means that additional populations can always produce more goods than are required to sustain themselves, so long as the fuel lasts.
Economic growth can mean a few different things. We normally think of it as increases in GDP, but increases in GDP don't necessarily mean we are consuming much more resources - the development of financial instruments have drastically increased total GDP but don't actually use much hard material.
We can also talk about growths in the value of goods and services provided, with an emphasis on services. Growth in 'value' - meaning the subjective benefits of utilizing some service or thing - can continue almost indefinitely, but the easiest types of value to grow this way are the hardest to monetize. Google and Facebook have provided supremely vast amounts of value but this is difficult to monetize directly.
The easiest value to monetize is the classical consumer goods or industrial goods. Inventing a new helicopter or toilet or what have you provides value to the user, but the user can't get it without directly paying. Value that is easily monetized is usually resource expensive with the exception of consultation services.
Capitalism has the advantage that the system as a whole is not directly in the control of any one person. This is also the biggest disadvantage, because we essentially have to wait until the system blows itself out before we have much hope of changing it.
I think its essential to realize that capitalist commercial society is far and above the optimal means of organizing the supply of resources to maximize total growth every year. The reasons for this can go on and on, and if your curious we can go there. But the real point is, it is a system of structured incentives that always reward the highest return on investment (i.e. growth of a fixed capital quantity), and therefore nearly impossible to reign in before it over extends itself.
If you watch the talk by Dr. West you might keep this in mind when he explains how every business in history has failed.
|Oct14-12, 09:53 AM||#23|
|Oct14-12, 12:57 PM||#24|
Alright. Maybe this is all true. You are saying that capitalism always has structured incentives that reward the highest return for the highest gain. Further, any system with such incentives eventually over extends itself. Then there are three questions.
1) What has happened after the over extension of capitalism?
You said that businesses and empires end up collapsing, although the society drives on. However, people in the U.S. and others seem to be trying to establish a global capitalist society.
All the Republicans seem to think that way, at least. However, they don't seem to acknowledge that there are environmental problems. Romney wants to downsize or eliminate the EPA. It is too socialist for him.
2) What will happen to the global capitalist system when the resources, including pollution sinks, are overextended?
While capitalism always has such incentives, socialism does not always have such incentives. You pointed out that socialism isn't usually egalitarian. However, you also pointed out that it doesn't give incentives for the highest gain. The OP was rambling about the advantages of socialism over capitalism. I addressed his other issue, about the ability to sustain growth. However, your point about over extension brings back the issue of how stable can a socialist economy be. So I have to ask the question.
3) Does a socialist system always over extend itself?
I think the answer to the third question is, "yes". However, I would like to hear your opinion on it. My opinion is that socialist systems always end up either collapsing or otherwise replacing itself with a capitalist-like society. By capitalist-like, I mean having the incentives for the highest rate of growth.
Socialist systems that don't put incentives on highest gain are destroyed by the systems that do. So socialist systems that survive have to eventually place incentives for the highest gain. Like China. So they end up overextending itself anyway.
So the fourth question:
4) Will the human species soon go extinct?
I as an individual like living in a world where expansion seems unlimited. However, it doesn't look viable in the long run.
|Oct14-12, 01:07 PM||#25|
Socialism is by far the least likely to preserve egalitarian society in a situation of declining resources
But this is not supported be empirical data:
That is not at all clear and not supported by data. After Russia adopted capitalistic model, number of
magnates emerged - who definitely are 'more equal' then population at large and -- in contrast to post-Stalinist but
pre-capitalistic regime, are able to deal with 'their property' as they please.
Export it to London, buy real estate abroad etc etc.
"Members of this central authority have the power to collect .."
but their power is limited bu political pressure
(if we consider somewhat democratic country).
That is a general rule (not a law) for all post-communistic countries.
Lorenz curve (income inequality curve) for USA (a capitalistic country)
shows less equality then European 'socialistic countries (Norway, Sweden ..)
You may say we are not as yet in era of declining resources but I do not see
likely change if crisis will depend and even more people in US would become unemployed.
They may loose their homes and become very poor - under the cold dictate of the market.
Socialism has a program and strong bias against such trend. It pays the price in not being efficient. There are no homeless - but people may live 8 per room. I am not advocating any system. Just coming back to the question how would these two systems respond to a real decrease in resources and declining standard of living.
"Definitions are a good starting point"
I agree. right now - still - the use of the word socialism and communism are used differently
in the USA, in Europe and e.g. post-communistic countries and Russia.
Communism is now (and perhaps forever) contaminated with dictatorship.
It became synonym with Stalinist, while it was once 'a promised land' utopia.
Meaning of all these terms was shifting with time and place. We need some quantitative measures.
|Oct14-12, 01:11 PM||#26|
IMO it would be best if members defined what form socialism they mean when they use the word. Some people seem to be equating it to Stalinist communism and others not so.
|Oct14-12, 06:27 PM||#27|
I did not mean to turn this into a compare and contrast of Socialism and Capitalism. I guess it was to be expected. It is far easier to dismiss someone whose opinion of Capitalism is less than glowing by thinking of them as leftist Commie instead of doing an actual critique of the System. Note, I never mentioned the words Socialism or Communism in my OP.
I do not want to get bogged down in what is Socialism, Capitalism, and Communism. Let's just say whatever you want to call the predominant form of economics now practiced across the world, Corporate Socialism, Neo Feudalism, Capitalism, ... it's an amoral system that is not mutually beneficial to society as a whole. What's good for GM is not necessarily good for the country.
The answer for why Wall Street didn't predict the 2008 housing crash was systemic risk. To me this implies that they treat systemic risk as an extrinsic. That is, they do not take into consideration that their actions might crash the entire economy. I guess the fossil fuel industry treats global warming in much the same way. It's just some variable that they don't need to take into consideration. The incentivising of short term gains over long term sustainability is idiocy.
The responses to this thread seem to fall into one of two categories. One is that Capitalism is the best system there is and the end is inevitable so just hang on for the horrifying decline. The other response wants to get into the semantics of the meaning of growth, sustainable, and Capitalism turning this into a question of linguistics.
Ryan was the only one who attempted to answer my questions.
The questions were is capitalism sustainable?
If so, how and why?
If not, what are some sustainable steady state alternatives?
Please don't just answer a return to the dark ages or something like that.
To clarify again, I'm not a Marxist. Stalinist Russia and Maoist China were totalitarian political regimes and international corporations are a form of economic totalitarianism where a few people make all the decisions that may affect us all. I hate totalitarianism in all its forms political and economic.
|Oct15-12, 02:14 AM||#28|
Putting that ill-defined word 'capitalism' (mis)lead people to discuss alternatives.
Perhaps formulating the question thus:
Is decision A or decision B more likely to lead to a catastrophe of the type described in Revenge of the Gaia
in next N years (in 2100)?
The A or B can modify the current system of most countries, which are a mixtures of the 'pure states' socialism or capitalism.
We want to avoid conclusion like
"Capitalism is the best system there is and the end is inevitable so just hang on for the horrifying decline"
since the current system (e.g. of USA) can lead to decline or it can survive the current lean, hard time and lead to
sustainable era of cheap clean energy (=CCE) from gen IV reactors.
The US presidential elections, Peter Russel says, are example of metastable state, where small disturbance can lead to vastly different futures.
The A and B choices may be as simple electing Mitt or Barry president.
A. Mitt (that seems to be one view he never changed) is more likely to start new round of arms race -> more scarcity and so on in a vicious circle.
B. If they elect Barry - it will still be capitalism (if we do not believe extreme election rhetoric's) --- but it may lead to success in abolishing nuclear arms and and allow more international cooperation, which may solve current problems and lead to "sustainable era of cheap clean energy form gen IV reactors"= era of CCE.
So, my answer is Yes, it may. But it would help to spell out the alternatives.
'it may' or it may not.
After reading about the USA house science committee
http://pm.8u.cz/pay etc. I am having doubts about the democracy and
wisdom of theamerican people...
|Oct15-12, 04:30 AM||#29|
Well, what is a "steady state economic system?' It could be a system that targets zero net growth. In that case it could be a capitalist system. Even the system we have now could function like that. The federal government would simply change its targets.
It could mean a system whose primary goal is to remain unchanged. In this case all forms of progress would be banned.
I think Marx's argument is completely bogus. He sees profit as a form of theft, and his argument is emotional.
Somewhat better is the idea that a fiat currency requires growth to pay off the interest. That doesn't convince me. There's always bankruptcy, so the interest isn't always paid off. Companies borrow because they believe they can use that money to make a profit, but it doesn't always work that way. I have been told by a number of well-informed people that the semiconductor industry has zero net profit. It still attracts investors because such feel that their acumen gives them a better-than-average chance.
I think the growth orientation has more to do with a growing population than it does with any particular philosophy. I never heard that the Soviet Union was anti-growth. I seem to recall Mao's Great Leap Forward which was a growth-oriented policy if there ever was one. I'd say it has more to do with human goals and psychology and capitalism has little or nothing to do with it.
It is traditional for companies to pay nothing for the damage they do to the environment. But in the USSR had even more environmental degradation, so that doesn't seem to have anything to do with capitalism either. People could screw up the world no matter what economic system they are under.
|Oct15-12, 04:37 AM||#30|
|Oct15-12, 07:04 AM||#31|
[QUOTE=Jim Kata;4115408The responses to this thread seem to fall into one of two categories. One is that Capitalism is the best system there is and the end is inevitable so just hang on for the horrifying decline. The other response wants to get into the semantics of the meaning of growth, sustainable, and Capitalism turning this into a question of linguistics.
I apologize if my post was drifting off topic, it seemed in-line with previous posts, however. I would like to make the point that, in a topic asking 'if capitalism can continue, is it sustainable, can we sustain indefinite growth...etc' A very logical starting point is defining precisely what you mean by capitalism, growth, and sustainability.
This isn't like talking about the Boltzmann constant or another completely unambiguous concept, people encounter the terms capitalism and sustainability in their every day lives quite frequently and generally develop different ideas or connotations about them than how they are used in academic settings. More importantly, these terms develop different meanings in the minds of everday folks according to their profession, disposition, and especially politics, so there is no singular 'layman usage'. So, when I offer a precise definition of capitalism, its not because I think thats what we should talk about, rather, that is a necessary precursor to having a mutually intelligible discussion without talking about different things or past each other. Its not just semantics (nor linguistics, unless you want to argue about pronounciation).
The question 'is capitalism sustainable' has a few interpretations, I'll do my best to hack out an answer for each I can think up.
'Can our current economic mode of organization continue indefinitely into the future?'
No, absolutely not. One basic way of looking at this is that the mantle does not convect enough hard metals up into accessible continental crusts to replace our current rate of consumption. Recycling has hard limits because processes like casting and alloying are often non-reversible. We can try 'asteroid mining', but not indefinitely, because this requires insane amounts of energy in the form of fossil fuels. These fuels are currently being diverted towards families 2nd and 3rd cars, because this resource is allocated by market mechanisms (i.e. whoever can pay for it) and not socialist mechanisms (i.e. where such resources will give the greatest societal value [see the important of definitions now -snark-])In straight material terms, and for straight material reasons, I think the answer is no.
'Can a market-oriented society that utilizes banks for lending and raising capital continue indefinitely into the future?'
Sure, I don't see any reason why not. You see, I think the market mechanisms are terribly efficient, and a big explanatory factor in the eastern-blocs dissolution was their coordination problems. So long as this kind of market organization is used for coordinating production and consumption of services and goods that are renewable / replenishable or at least not dwindling at terrifying rates, I think its a very good plan for society. Perhaps at some point in the future we will have enough 'big data' streams that can aggregate individual wants geographically and temporally and coordinate these with distributors and producers to coordinate the economy even better than markets. But until then, prices are likely our most effective signal mechanism.
Banks are also a very important social institution. Without such a thing as debt it would be nearly impossible to start big projects or take risks on the payoffs of future inventions, i.e. how can I start up a research lab that hasnt produced any value yet without a loan? Banks are dangerous when they mix functions, like speculations and savings, but before 1980 this wasn't a problem in the US (and still isnt a problem in Canada).
Now for sustainability...
Now, a lot of people use sustainable to mean 'can it go on for a fairly long time without crashing', but this isnt really what I think sustainable means. Sustainability, in a more technical sense, asks whether a process can continue by solely utilizing energy derived from Earth's daily solar input combined with geothermal emissions. We can call this the daily energy budget for Earth. Earth has acquired a respectable savings account of energy in the form of hydrocarbons locked up in the crust, produced over aeons by bacteria that built up complex organic compounds utilizing, you guessed it, the daily energy budget.
As a society we are burning through fossil fuels pretty darn quick. This isn't really taking a loan out, rather, our genetic grandparents left us a hefty inheritance and, like some 22 year old, are buying ferraris and hookers left and right. The inheritance simply won't last forever.
So, is capitalism sustainable? No, it isn't. Capitalist development is predicated on returns. We can't get returns on the daily energy budget of earth because of conservation laws. We CAN get returns on energy production by utilizing our energy budget to construct contraptions that extract energy from our savings account. This is precisely what began the industrial revolution, btw. The moment we started dipping into our savings account, our population, standard of living, rate of growth, all absolutely exploded.
So, our current model isn't sustainable in and of itself, simply because it eats up huge savings far in excess of our daily budget. What capitalist development CAN do, I believe, is get us to a point technologically where we can produce ample standards of livings within our daily budget, i.e. lets get efficient PV, significantly net-positive fusion, well insulated homes, small or 0 commutes, etc. So far, all the returns we have gained from accessing our savings account have been used to develop better and more viscious means of accessing our savings account, meanwhile our actual RoI is crashing horribly (turn of the centry you could get 100b of oil for 1b of energy input, in Alberta today thats more like 3 to 1). If we start diverting a sizable amount of our extacted savings into methods for more efficiently capturing energy from our daily budget, we will be in much better shape when crash time comes. If we are very good at it, maybe there wont be a crash time.
Metaphorically, we can use our inheritance to live freely and wildly for a few awesome years buying ferraris and hookers. Or, we can make some smart investments to live off the interest in later years. Right now our global economy is based on the hookers-and-blow model, and as I mentioned before, the persistence of incentive structures and the entrenched authority and power of those who benefit most from them make it difficult if not impossible to transition out of this mode without outright colllapse. At which point, we might be too broke in terms of cheap energy to make those wise investments.
p.s. apologies for the length.
|Oct15-12, 07:07 AM||#32|
When I walk through a walmart or similar store I see directly the great tragedy of the modern age.
Utilizing our one-time one-shot inheritance of cheap energy to produce plastic disposable crap that is useless within a couple years. Even worse, we burn through rocket-launches worth of fuel for the benefit of having it made in a far off land, so retailers get a cost savings of a few cents, an capture the market by underselling the competitors.
I could not imagine a more colossal or tragic waste of a finite resource.
|Oct15-12, 08:32 AM||#33|
You definition is too narrow.
sustainable era of cheap clean energy form gen IV reactors"= era of CCE
Alos, can we put sime time range on. Like till 2100. Otherwise we need to consider
exticyion of Sun and 'ultimate fate of universe'
|Oct15-12, 08:39 AM||#34|
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