Spoonful of Socialism: Examining Capitalism's End Result

[Jonny_trigonometry]

So I was wondering what the end result of capitalism would be... Being that it is essentially a system where both the seller and the buyer come out happy, the buyer will kill off sellers that don't offer a product and/or service at the best value (value as perceived in the eyes of the buyer). The sellers compete with each other by referancing what the demands of the buyer are, and trying to meet those demands, but they also create fads that the buyers love to take part in (such as the pet rock, or the ipod). So the buyer influences the seller and the seller influences the buyer.

As sellers get killed off (I don't mean the sellers themselves, but their establishments) while others become more powerful in their social scope and diversity of products and advanced technology that is obtained by their ability to spend more on development of products at low prices (ie sony, canon, intel, amd, ford, toyota, imation/3m, GE, supervalu, walmart, mitsubishi, Merril Lynch, Visa, BP, AOL/Time Warner, Clear Channel, etc. etc.), the new companies (sellers) either get bought out if they pose a threat with the larger ones, or they get stamped out by the larger ones when the larger ones take up the development of a similar product which does one extra thing and is marketed more and is cheaper. Also as these larger companies become to dominate the markets of their diverse products and services, they make it utterly impossible for others to start a company selling the same type of product (for example the oil industry).

This makes me wonder more so than I have before, with all the mergers taking place, where is capitalism going to in its limit? In the early 1900's there were over a hundred car manufacturers in the US, now there are less than 4 (I think, but the point is, I see a trend here). There were more corner grocery stores decades ago than there are now. We have it better off too, we drive cheap, reliable cars to the huge and expansive supermarkets with rows and rows of foods that most of us have never heard of let alone tasted. We benefit and so do they. I hear walmart is installing gas stations at their stores, and is also now interested in starting a walmart bank, so you can get all your home ammenities and cash your paycheck at the same store (it could even be a walmart paycheck... eh, creepy). In my mind, This is leading towards one company offering all of us the things we want, and the jobs we want, and at the same time, all those things that we want are influenced by their ability to market to us. But we can't complain because we want it to happen, because it is the most convenient thing in the limit of the definition of convenience. It would be so much easier to live in the same building you work right? You have an office upstairs, you live in a condo in the middle floors, you receive your paycheck on the 18th floor, you cash it there too, and then you can go to the bottom floor to pick up groceries and shop the local mall, or you could take your company car to another company owned building, or go on a road trip somewhere and stay at one of the companies finest hotels, maybe even put it on the company credit card as a business expense for a meeting with someone from another department! How could we complain? Sure the United states of america would now have a new name, it would be the United States of Walmart, and it's just one of the plots of land on the Earth that Walmart owns! The whole world would be tied together into what Michio Kaku calls a type 1 civilization!

Is the end result of Capitalism Socialism? What about our laws against the creation of monopolies? Could those be viewed as limiting the powerful in order to give the less powerful a chance? In otherwords, to prevent the aforementioned limiting case of capitalism (which sounds like it has an extremely creepy bad side to it), we need to implement laws which limit the power of big business, and thus prevent them from becomming too large and powerful such that they don't end up ruling us by shear strength. Rule by strength/force is unjust according to Rousseau (which I think most can agree with). Those laws take power from the powerful, and put the power into the less powerful; they are essentially socialist laws, but they keep capitalism in check. So I guess my argument is that a spoonful of socialism helps the capitalism go 'round. What do you think, any counter-arguments, supportive-arguments, off-tpoic tangents...?

 

[wasteofo2]

Is the end result of Capitalism Socialism?

Not at all, https://www.physicsforums.com/showthread.php?t=95078&highlight=capitalism"

 

[ron damon]

Capitalism is the brightest incarnation of ourselves. If anyone wishes to glance at the beyond, she/he must start by embracing the human, not fleeing from it.

 

[pi-r8]

I think you're vastly oversimplifying a complex economic system. Sure, there's a lot of really big businesses these days, but there's also a lot of really small ones. And it's not like there aren't any new big businesses- Microsoft went from nothing to a giant in about 15 years. Where's your evidence that Wal-mart would own everything if they weren't held in check by the government? It's a big jump from putting in gas stations and banks to owning EVERYTHING.

 

[Smasherman]

Sure, the guy with the big stack loses on occasion, but only if he plays badly. Walmart doesn't play badly.

(poker reference)

 

[Jonny_trigonometry]

I think you're vastly oversimplifying a complex economic system. Sure, there's a lot of really big businesses these days, but there's also a lot of really small ones. And it's not like there aren't any new big businesses- Microsoft went from nothing to a giant in about 15 years. Where's your evidence that Wal-mart would own everything if they weren't held in check by the government? It's a big jump from putting in gas stations and banks to owning EVERYTHING.

I understand your point, but I don't think the premise of capitalism is complex. The essence of capitalism is simple. I'm not saying that walmart will own the world. Look hundreds even thousands of years down the line, even millions. What trends do you think will occur without the implementation of socialist programs to keep capitalism in check? IF Capitalism is left 100% pure, what problems will occur in a sufficiently large amount of time? What is the end result of 100% pure capitalism? What type of structure will emerge from it?

Thats the idea here, not wether or not putting in gas stations will lead to walmart owning the world. I suppose you take the stance that capitalism will leave room for a portion of small businesses to exist forever, and the portion of large businesses will never grow past a certain point. Would you say that in the long run the statistical distribution of large and small businesses will tend to a constant between the two, or perhaps a continuous spectrum between the two (in a 100% pure capitalist system)?

If you make the argument that the system will always allow new businesses to make it big time, and big ones to go bankrupt, and there will never be a company that dominates over the rest forever, then the biggest company at any givin time in the future will never own more than a certain percentage of things ownable in the US. So you believe that they will never chose to merge with the second biggest company at that point in the future because that would make the new company own more than the aforementioned percentage of things ownable in the US.

Ok, I can accept that stance. I don't think it fits well with the essence of capitalism though, because when two companies merge, it usually allows the new company to run more efficiently than the previous two combined, and it will be able to produce the same things more cheaply. I think that we basically agree with my main point though, that a little socialism is needed to keep capitalism from turning our society into total socialism, that way capitalism is never 100% pure. yeay? nay?

 

[Jonny_trigonometry]

Capitalism is the brightest incarnation of ourselves. If anyone wishes to glance at the beyond, she/he must start by embracing the human, not fleeing from it.

this is a good point, I shouldn't be so deterministic.

 

[RunDMC]

Didn't some economist once propose that since business always involve some form of finance, banks would end up owning everything (since they always take their %)?

I think it is vital that we continue to question the models of economy and society we set up for ourselves.

In fact, I'm working on a model myself based around the current Western system, but with a bit of tinkering using Game Theory as the guide.

The astonishing conclusion from my thinking was that Microsoft should be able to pursue a complete monopoly on the desktop in exchange for a hefty tax on its profit. It was astonishing because I'd always thought of a monopoly as a Very Bad Thing.

But after thinking very hard about human responses to "the commons dilemma", "the prisoner's dilema" and "Colonel Blotto's battle" (google for more info) along with the benefits of a standardised desktop, I changed my mind about the role of monopolies.

So far, I have come up with three parts of my amateur economics "Game Theory Model" (with apologies to serious game theory researchers):

Zero-Sum games (if I win, you lose):
This occurs when more than one entity competes for limited, finite resources (the commons dilemma). The classic scenario is fishermen who know that they will reap more returns in the next fishing season if everyone agrees to limit their harvest, but I can win in the short term by 'cheating' and grabbing more of the resources now.
Examples: Fish, land, (people's) time, natural resources, copyright on dead author works, all-or-nothing patents, gambling
Control method: TAX?

Positive-sum games (win-win)
This is a scenario where we create from our inspiration to seek reward (Colonel Blotto's dilemma). The classic scenario is that there are always improvements that can be made to software, and the 0's and 1's in the code are not a limited resource.
Examples: Technology, tourism, energy, leisure, healthcare, food production, shared patents, creative endeavours, worth-for-toil
Control method: REWARD?

Negative sum games (lose-lose):
This is a scenario where competition is in a negative cycle (the prisoner's dilemma). If I see that another country has just spent a gazillion on defence, I must act similarly to protect my interests -- even if the budget can't afford it. If airline A drops its price below operating cost, airline B must match until a victor emerges. All parties act competitively but the outcome is overall negative.
Examples: Defence machines, price manipulation, product dumping, import tariffs
Control method: PUNISH?

:)

 

[Skyhunter]

Capitalism is the brightest incarnation of ourselves. If anyone wishes to glance at the beyond, she/he must start by embracing the human, not fleeing from it.

I wouldn't characterize it quite like that. You make it sound almost like a religion.

As an institution capitalism, has been a great motivator and contributed greatly to social evolution in the past century. War and slavery also contributed to social evolution, however like all institutions, which by nature are stagnant, they eventually reach the end of their usefulness in a dynamic world. The OP is addressing the future obsolescence of capitalism.

Capitalism is not obsolete yet. The existence of strong monopolies just weeds out the weaker start ups. New companies that are able to compete with the established behemoths, in a tougher environment will of necessity need to be highly innovative.

I believe that capitalism and socialism are not incompatible. In a purely capitalistic society, if you are not competitive you end up left behind and eventually outcast from society. In a socialist society the rewards of hard work are distributed to the masses. What is needed, like the OP suggests is a system that is more inclusive. People are diverse with different wants and desires.

I work just as hard for nothing as I do when I am being paid. I know others who won't lift a finger unless they think they are gaining personal material wealth. I don't care so much about material wealth, so I am at a disadvantage in a capitalist society. My friend the capitalist, even though we have similar abilities and intelligence, has a far greater ability to acquire wealth and maintain a place in a capitalist society because he is motivated differently.

Why should someone like me be relegated to the fringe of society simply because I don't want to play the game. There should be more than one game. I don't like being forced to play one that in my view is harmful to the Earth and the creatures that inhabit it.

I am a prisoner of modern society.

How do I escape it?

If anyone has a suggestion I am all eyes.

 

[Dooga Blackrazor]

Capitalism will move towards socialism over time. After capitalism can no longer benefit humanity, people will search for a better solution. As a result, democratic socialism will take place. Socialism is already getting a bigger role in many developed countries - the UK for instance.

Marx would argue that a communist revolution will eventually take place. I would take a more Trotskyist stance.

 

[X-43D]

Capitalism as any other system of production has an end result. There are simply not enough natural resources. Profits cannot exceed resources.

 

[Jonny_trigonometry]

Didn't some economist once propose that since business always involve some form of finance, banks would end up owning everything (since they always take their %)?
I think it is vital that we continue to question the models of economy and society we set up for ourselves.
In fact, I'm working on a model myself based around the current Western system, but with a bit of tinkering using Game Theory as the guide.
The astonishing conclusion from my thinking was that Microsoft should be able to pursue a complete monopoly on the desktop in exchange for a hefty tax on its profit. It was astonishing because I'd always thought of a monopoly as a Very Bad Thing.
But after thinking very hard about human responses to "the commons dilemma", "the prisoner's dilema" and "Colonel Blotto's battle" (google for more info) along with the benefits of a standardised desktop, I changed my mind about the role of monopolies.
So far, I have come up with three parts of my amateur economics "Game Theory Model" (with apologies to serious game theory researchers):
Zero-Sum games (if I win, you lose):
This occurs when more than one entity competes for limited, finite resources (the commons dilemma). The classic scenario is fishermen who know that they will reap more returns in the next fishing season if everyone agrees to limit their harvest, but I can win in the short term by 'cheating' and grabbing more of the resources now.
Examples: Fish, land, (people's) time, natural resources, copyright on dead author works, all-or-nothing patents, gambling
Control method: TAX?
Positive-sum games (win-win)
This is a scenario where we create from our inspiration to seek reward (Colonel Blotto's dilemma). The classic scenario is that there are always improvements that can be made to software, and the 0's and 1's in the code are not a limited resource.
Examples: Technology, tourism, energy, leisure, healthcare, food production, shared patents, creative endeavours, worth-for-toil
Control method: REWARD?
Negative sum games (lose-lose):
This is a scenario where competition is in a negative cycle (the prisoner's dilemma). If I see that another country has just spent a gazillion on defence, I must act similarly to protect my interests -- even if the budget can't afford it. If airline A drops its price below operating cost, airline B must match until a victor emerges. All parties act competitively but the outcome is overall negative.
Examples: Defence machines, price manipulation, product dumping, import tariffs
Control method: PUNISH?
:)

Cool Run! I've been interested in this stuff for the last 5 years or so when i first read the book "The Computational Beauty of Nature" by Gary William Flake. I recommend that book to anyone who wants to study the intricacies between game theory, chaos theory and stochastic systems, fractals, and the like. He covers the iterated prisoners dilema in an ecological environment so it's kind of like a dynamic ecological environment where each time step is one complete iterated prisoner's dilema (he iterated it 100 times in his example). His result used 5 different personalities, all defect, all cooperate, tit-for-tat, random, and pavlov (win-> stay, lose-> shift strategy)... guess which one dominated the population in the long run? It was tit-for-tat. So in this experiment, the personality that punnishes a defector, rewards a cooperator, treats a random personality randomly. Tit-for-tat will always train pavlov to always cooperate also.