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Problems with Capitalism?

  1. Apr 8, 2015 #41

    russ_watters

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    You said "last two decades": that's 1995. 1987 is closer to three decades. If that's what you meant, the situation gets even worse for your claim because now it includes most of the computer revolution in addition to the internet revolution. Those are real revolutionary advancements.
    You can go back as far as you want: In 1929, the economy was also completely wiped-out by a bubble. The reality is that every 5-10 years there is an economic downturn of some size. In your now 28 year timeframe we've had 3 significant and one minor recession -- yet here we are, with no net damage. You are focusing on the "crashes" but ignoring the rockets in between them. The net effect when you combine them is at worst very little change over 28 years. And given that we are still recovering from the last one, which is the most significant one, it stands to reason that over the next couple of years we'll be in strongly positive territory again.
    To preach the opposite ignores more than half the history (most of the positives).
    No it isn't: you didn't list any "highly regulated times", so you haven't provided any basis for, much less the data itself, to support your claim!

    Here's a graph of the S&P 500 since 1987, is that where you want to start? http://finance.yahoo.com/echarts?s=^gspc+interactive#{"range":{"start":"1987-02-03T17:00:00.000Z","end":"2015-04-08T16:00:00.000Z"},"scale":"linear"}

    In 1987, right before the crash, the S&P was at 317. Today it is at 2,080. Adjusted for inflation, despite two substantial bubbles/crashes, it is up by a factor of four. The data is clear: in total, the economy has risen over the past 3 decades, despite the problems of the bubbles.
     
  2. Apr 9, 2015 #42

    lavinia

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    Quoting levels of the S&P is irrelevant. That is sort of like saying that even though small pox killed hundreds of millions of people the population of the earth is higher now than it ever was.

    As far as data on regulation goes, I am no expert on economic history but it would be a pleasure to review with you the laws that came out of the Roosevelt Administration such as Glass Steagal, the regulation of credit during work war 2, what agreements on oil prices were like after the war, what the importance of Bretton Woods was and how Nixon's ending of it affected the economy. It would also be interesting to examine the eurodollar markets since they can be viewed as a from of deregulation. You seem to be an economist so perhaps you could point to research that would shed light on this.
     
  3. Apr 9, 2015 #43

    Evo

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    Do you have any sources for anything you've posted? It appears that we need to bring this thread in line with our rules, so please post your sources. Thanks!
     
  4. Apr 9, 2015 #44

    russ_watters

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    Yes, despite smallpox (or better example, the plague) killing a high fraction of the worlds' population, the population has still increased. That sounds like a good analogy to me: you are the one claiming these crashes have destoryed the economy, when they have not and indeed those diseases did not destroy the human race. The data illustrating fact that the economy isn't destroyed would seem me to be a relevant counter-example to the claim that it is.
    [Thanks to Evo] You have to give me something here to prove your claims. You've claimed that lax policies over the past 28 years have destroyed the economy, when it isn't destroyed, so there may not be anything you can do but admit you erred in your claim. I'm not asking you for an essay on regulation, I'm asking for evidence of the economic "disaster". Let me remind you, this was your initial claim:
    So in order to show the "disaster" actually happened overall, you need to show that today we are in a much worse position economically than we were two or three decades ago. If you can't show that our current situation is a "disaster" compared to 20-28 years ago, then there is no need to go the next step in explaining why the disaster happened.

    More specifically, I remember the news reports of the "disaster" which was the crash of 2000. But if you want to claim a bubble-caused crash is a "disaster", you have to include the bubble itself in the analysis! The easy headlines read that people lost half their retirement savings (the S&P 500 dropped by rougly half from 2000 to 2002). But there is a clear inflection point in the graph starting in 1995 when the WWW was introduced and from 1995 until 2000, the S&P tripled, so after the bubble burst, people were left with half what they had 2 years earlier, but still 50% more than they had before the bubble started. So the net result of the bubble and its bursting was a 50% gain, not a 50% loss.
     
  5. Apr 9, 2015 #45

    Siv

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    Accepting the imperfections in human nature is one thing .... encouraging those very things which make us imperfect and short sighted is quite something else.

    Communism was not the right system for us I know - as E O Wilson said - "Great system, wrong species!" but capitalism is really not much better.

    Who is looking for a third alternative? No one.
    They are all worshipping at the altar of capitalism :wink:
     
  6. Apr 9, 2015 #46

    Siv

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    Thanks, lavinia.

    There are tons of examples .... http://www.biospectrumasia.com/biospectrum/analysis/192973/worlds-big-pharma-frauds [Broken]
    http://www.theguardian.com/business/2012/jul/08/pharma-misbehaviour-gsk-fine

    Why would pharma companies bother about researching long term health benefits of humans when they can quickly mint money today?

    The world is run by corporates today, so you can imagine the inherent dangers there.
     
    Last edited by a moderator: May 7, 2017
  7. Apr 9, 2015 #47

    russ_watters

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    I didn't say "encouraging", I said "harnessing". I even bolded it, so there would be no possibility of confusion.
    Yes, capitalism is the worst system except for all the rest.
    That's just rhetoric. There is no "worship": we're using a system that works because it works, but we're still trying to improve it.
     
  8. Apr 9, 2015 #48

    russ_watters

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    I don't think I responded specifically to this, and since it has been quoted again:
    You're probably right that people don't think of it that way, but they should because as you agreed, that's what it is. People would be better-off if they analyze/understand their actions in terms of how they will profit or lose because of them.

    And again: there are criminal at all levels of society. Calling the criminals typical of capitalism is not only false and insulting, it also downplays the crimes.
     
  9. Apr 9, 2015 #49

    lavinia

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    this is not a thread in which very many sources have been quoted. There is a lot of unsubstantiated statements and lots of opinion. The things that I have said cover a large span of history. Nothing is controversial. And only the question of the entire history of regulation has been questioned. I suppose you would like me to document Glass Steagal - the key regulatory measure that was eliminated during the Clinton Administration - do you need documentation for that? I disagree with you.

    If you want to go after what I have said then you should close the entire thread.
     
  10. Apr 9, 2015 #50

    Siv

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    The foundation of capitalism is motivating people using the profit motive. You can use nice sounding terms like "harnessing" but the fact is that the whole free market encourages this short term, selfish thinking in humans.

    Can you post me some evidence of whats being done to "improve" capitalism so that it does not encourage our innate short term and selfish traits ? Thanks.
     
  11. Apr 9, 2015 #51

    lavinia

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    How do you know that people would be better off by looking at their own balance sheet rather than the balance sheet of the country and how that affects them and their future? Can you provide data on that?
    There is unsubstantiated talk of human nature here. Can anyone provide the scientific basis for this? What are the paper in the literature?
     
  12. Apr 9, 2015 #52

    lavinia

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    There is unsubstantiated talk of human nature here. Can anyone provide the scientific basis for this? What are the papers in the literature? Evo where are you?
     
  13. Apr 9, 2015 #53

    lavinia

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    Do you think the crash of 1929 and the ensuing decade of Depression was a disaster? After all we are far beyond that now.
     
  14. Apr 9, 2015 #54

    lavinia

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    What are the scientific papers on human nature here.?Can you provide references in the literature? And your statement about no other system. What is the research on that?
    Again references? Evo where are you?
     
  15. Apr 9, 2015 #55

    lavinia

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    The argument that some scientists make is that basic research, that is scientific understanding of Biological systems, is retarded in private research whose goal is to produce a product. Companies will for instance look for "biologically active" substances found in Nature and then modify them to have a particular effect and then monitor them through various test trials to assess the side effects and if all goes well, bring them to market. To some scientists - like my father and his wife - both of whom were research biochemists - this is not basic research. To them the problem is not whether some basic research does in fact happen in drug companies or bio-tech companies - but rather that the "profit motive" slows the process.

    But perhaps I shouldn't have said this since they are now both dead so I can not get their testimonials. Sorry Evo.
     
  16. Apr 9, 2015 #56

    Siv

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    Whoa ... whats with all this pouncing around?
    PF certainly has lost a lot of its warmth and charm :wink:

    So Lavinia, you want evidence for the existence of human nature??
     
  17. Apr 9, 2015 #57

    lavinia

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    I never said the economy was destroyed. You are misquoting me.
    And since you feel that plagues are a good analogy what about wars or incidents of genocide? Not disasters I suppose since we have more people now that ever.

    This feels like a semantic argument over the meaning of the word "disaster" rather than an argument of substance.
     
    Last edited: Apr 9, 2015
  18. Apr 9, 2015 #58

    lavinia

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    I think the monitor - Evo - should not be arbitrary especially in a thread where opinion and non-scientific ideas are being used. If documentation of everything is required then everything should be documented. Human Nature is certainly an idea that demands scientific scrutiny especially since it has been used to explain why an entire economic system actually works. Otherwise it is an un proved - and vague assumption - or a philosophical concept. All of these are unacceptable in a scientific form.

    There another example in this thread, the stylized claim that capitalism is the only system that works. According to the rules of PF this should require documenting several thousands years of economic history. And I would add not only with graphs and indicators but analysis of how various systems worked and why they failed or went out of existence. What is even the entire list of economic systems? What is the data? What was for instance the economic system under the Roman Empire? Did it work? How about the feudal system which seems to have lasted for centuries? What about the British colonial system? And how did it differ from the French and the Spanish? Were they the same or different systems? Did they work or were they terminated by wars or some other cause? What about the Mesopotamian economic system under the Sumerians? What about the economic system in India prior to the British?
     
    Last edited: Apr 9, 2015
  19. Apr 9, 2015 #59

    lavinia

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    This suggested reading on drug companies was just sent to me by the same physician - and he is also a molecular biologist - who sent the previous links. Here is his email.

    "
    There is a book about the pharmaceutical industry written by one of the most respected people in American medicine - she was Editor-in-Chief of the New England Journal of Medicine. Here is the citation if you’re interested:

    Angell, Marcia, The Truth About the Drug Companies, Random House, 2004"
     
  20. Apr 9, 2015 #60

    Siv

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    There is plenty of evidence for human nature, but it is vast, volumes and volumes of research papers and books.
    I would have a tough time citing a few links for a forum debate.
     
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