Does the game of capatalism only have one winner?

BilPrestonEsq

CAPATALISM "free-market system: an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit" Encarta World English Dictionary.

Will a free market economy, on it's own with no regulation, inevitably leave only one person with all of the money, in a closed system were the currency is not manipulated?

We have monopoly laws but should we have more regulations? If we could count on everyone to use common sense and abide by a moral code, laws wouldn't be necessary but obviously thats not going to happen any time soon. Do you see us moving in that direction I described? If so what are some ideas to prevent that scenario. I do believe that a free market is necessary to evolve as human beings, but only 'free' enough to continue to advance while still maintaining a more level playing field. Just interested in your thoughts.

Hurkyl

If all but one person have very little money, then prices go way down to compensate, except that merchants will charge the one rich guy exorbitant prices.


Why do you think things will converge that way, by the way?

BilPrestonEsq

Well look at walmart, if there were no monopoly laws then eventually everything would be sold at walmart. One walmart could take the place of a hardware store, pharmacy, autoparts store, grocery store, electronics store, etc. and they do and that has happened all over the country. Thats what I am refering to. I am just using walmart as an example.

WhoWee

Not unless the individual is an immortal - they would need to acquire every conceivable asset on the planet. I think it's fair to assume that would take more than a few years.

BilPrestonEsq

Where did I say it would take a few years? That would be a ridiculous question. But let's just say everyone IS immortal and the population is fixed for this question.

BilPrestonEsq

The reason for making everyone immortal and having a fixed population is that money is passed down to each generation of powerful families and political power is passed to the next generation essentially creating a possibly immortal corporation. We have to create boundaries in a question like this or else you spend to much time adding up all the factors that may or may not have an effect completely missing the point, even if you are comprimising accuracy of your results.

talk2glenn

What do you mean when you say one person has "all the money"? If you mean literal units of currency, with currency defined as a medium of exchange, then the answer isn't important.

Even if true, one person holding all of the currency in an economy would make it worthless; what is the value of a medium of exchange if there is nobody to exchange it with. Everybody else would find other means by which to exchange their goods and services, and the person holding all the currency would lose.

In practice, such a concentration of any good in a free market is unlikely. Abstract away from limiting it to money for a moment, and just consider anything that has value for any reason (a "good" by definition). As the amount of some good available to an individual goes up, and the amount to other individuals go down, the relative values for the "wealthy" person go down, and for the "poor" person go up. This encourages trade.

In your case, the person rich in currency may be poor in, say, grain, and has an incentive to trade some of his currency for somebody elses grain, and vice versa. This goes on until a general equilibrium is reached and all gains from trade are exhausted (everyone is as happy as they can be made without making somebody else unhappy).

WhoWee

In other words, they would start a new game - and the world's richest person would once again be poor?

BilPrestonEsq

"Even if true, one person holding all of the currency in an economy would make it worthless; what is the value of a medium of exchange if there is nobody to exchange it with. Everybody else would find other means by which to exchange their goods and services, and the person holding all the currency would lose."

I just wanted to highlight that statement. But first the original question. Let's use walmart as an example. With no regulation and no 'moral code', eventually walmart would take over every business, everyone would work and shop at walmart. Thats what I am talking about. So not really one person exactly its just the way I worded the question.

BilPrestonEsq

Oh I was too late

BilPrestonEsq

BilPrestonEsq

Companies only dictated by there inherent drive for monetary gain in a totally free market system would eventually lead to one company supplying all the work and all the services and goods that a civilization needs. That is the nature of a free market.

BilPrestonEsq

So where do we draw the line?

WhoWee

There is another potential outcome - after someone "wins". A dictator might emerge from the masses and nationalize all industry (probably the rich guy's butler).

russ_watters

Though I suppose it is possible in a limited case that what you are saying could happen, the real world is so vast and dynamic it isn't really possible for one company to be so large that it supplies the vast majority of our goods/services, regulation or not.

What's your point, though? This all seems very contrived.

BilPrestonEsq

The example I used, walmart, is already doing this in the real world. But this is not an attack on walmart, just an example. I'm not saying that walmart is bent on taking over the business world what I'm pointing out is that they could. They have the ability, the only thing thats stopping them is the law. They probably don't want to, but if they did want to they could. I am trying to point out a major flaw of the free market. Trying to point out it's nature. Which wouldn't be relevant except for that it's the system we have adopted, I was looking to start a discussion on how it can me made better. Monopoly laws exist, so that that scenario can't happen. What would you change? What laws would you impose to create a better system? Or is it just perfect the way it is? I am curious about what ideas people might have, I guess thats my point.

Antiphon

No. The economic system will self-organize into a pattern of maximum utility of the capital in the system for the participants.


The most moral economic system is the one most free of coercion and the one which creates the greatest material and moral well-being of it's participants.

This has always been and always shall be the capitalist system.