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Can Capitalism continue?

by Jim Kata
Tags: capitalism, continue
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Dec31-12, 12:21 AM
Drakkith's Avatar
P: 11,878
Quote Quote by enosis_ View Post
Companies that thrived making buggy whips were replaced by manufacturers of carburators - out with the old and in with the new. Capitalism allows for this evolution.
Agreed. I don't see what Gliese is getting at really, but it doesn't sound like capitalism to me.
Jan2-13, 06:13 AM
P: 141
Quote Quote by Drakkith View Post
Agreed. I don't see what Gliese is getting at really, but it doesn't sound like capitalism to me.
Sorry to make it sounds confusing. ^^/
John Creighto
Jan2-13, 01:57 PM
P: 813
Quote Quote by Jim Kata View Post
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.
Consider the case where scarcity leads to the value of some good “A” being very valuable so that people hoard a lot of “A” thereby driving up its price. Consider some other good “B” which requires “A” to make and people who own “A” require a certain amount of “B”. People who own “A” may try to minimize their consumption of “B” but because they have a need for “B” they will pay a certain amount of “A” to obtain “B”. If the supply of “A” is limited (say by the sun) than the supply of “B” will be limited by the minim of people’s needs for “B” which own “A” and the physical limits on the supply of “A”.

Now say “A” is non-renewable. Then the use of “A” will continue to decline limiting the production of “B” until either “A” is entirely used up or a cheaper alternative to “A” is found for producing “B”.

In conclusion scarcity will slow an economy but isn’t a sufficient condition to stop economic activity.

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