News Stability of Anarchy: Let's Continue Here, Smurf

[Art]

Like Smurf suggested let's look at Cuba. What a great example of the good times people can look forward to in a socialist society.


Supply and demand issues to no end is really something to look forward too...

If you look at the revision history for Cuba on wikipedia you will see there are a few dorks who keep editing the page with anti-Castro nonsense for the craic. I looked at the blog site of one of the worst offenders and it appears he thinks he is being funny.

 

[Townsend]

If you look at the revision history for Cuba on wikipedia you will see there are a few dorks who keep editing the page with anti-Castro nonsense for the craic. I looked at the blog site of one of the worst offenders and it appears he thinks he is being funny.

Yeah...I see that now. I won't be making that mistake twice...

 

[loseyourname]

I understand the ecconomy thank you very much! I just don't believe it is healthy for the global ecconomy to have these Bloated bigger than belief companies,who basically can print there own money becuase they have cornered a certain market... as I said before it takes away our scope of choice, and it can lead to stagnation of products development... **Pure** Capitialism can't be trusted for our future because the ideal prays to money and doesn't give a ****e about social values...

I don't think there is anybody here that is pro-corporate monopoly. The difference seems to be that you think these things are inevitable given capitalism. Russ and Townsend and I do not. We see that, historically speaking, corporations have only been able to grow to their ridiculous sizes and market shares with help from governments. Corporations are legal entities that would not even exist in a pure capitalist state. Essentially, you are arguing with a strawman, something that pure capitalism does not either sanction or result in (at least theoretically - in practice, we have never experienced pure capitalism and so cannot know for certain).

About Microsoft: They do not have a monopoly. There are plenty of operating systems out there, many of which are available for free, many of which can use file formats that work across all platforms. People don't have to buy a computer with windows preinstalled and use only Microsoft programs. They're just too lazy to look around for a better option. I've never used a Microsoft program or OS (on my own computer, anyway) and it has hurt me none. People do have choices, many choices. They simply choose not to exercise that faculty.

 

[selfAdjoint]

Capitalism doesn not produce monopolies, but it does produce oligopolies. Contrary to the Austrian school of economics (who only site the misleading case of Germany), it is a natural evolution, not something promoted by government.

It is in the interests of the larger competitors in an Adam Smith landscape to buy out the smaller, so as to reduce competition. This will go on until the smallest competitors are all gone, and eventually until only a few huge competitors remain. These can well arrange to lower competition between themselves under the table, and this is apparently a stable condition. Look how many products you depend on, from fruit juice to automobiles are from industries with just three biggies and maybe a handful of pigmies.

 

[Anttech]

About Microsoft: They do not have a monopoly

I have to say I think they do, when you have more than 90% share of the desktop market, it is fair to say you have a monopoly in that sector, isn't it?

I use Linux too, but I am a Network Engineer so I know my way around, for a novice to intermediate use Linux is NOT an alternative...

There are 2 Major player in the desktop Market Mac and Windows... Linux right now just isn't user friendly enough for it to be used in this environment (server sector : yes)..

This is Capitalism in work, the consumer looses..

Selfadjoint hit the nail on the head to be honest, and communicated what I was getting at more elegantly

 

[loseyourname]

I have to say I think they do, when you have more than 90% share of the desktop market, it is fair to say you have a monopoly in that sector, isn't it?

I use Linux too, but I am a Network Engineer so I know my way around, for a novice to intermediate use Linux is NOT an alternative...

I actually rarely use Linux. My primary OS is Mac OS X. The main point I'm trying to make is that while you might say that Microsoft has a de facto monopoly, they do not have a stable monopoly. There are increasingly more options out there and non-Microsoft products are becoming more and more popular. They were simply the first ones there. Not too long ago, AOL had a de facto monopoly on internet service, with very few people using alternatives like Prodigy or Compuserve (which was bought by AOL anyway). What we see in the software market is a move away from concentration in the area of further choice. It is pretty much inevitable in a market where anyone with a computer can write a program. This isn't like the airline industry, where you must invest hundreds of millions of dollars to get off the ground. A new software venture can be launched with pocket change.

This is Capitalism in work, the consumer looses..

Come on, the consumer loses? How spoiled must one be to say that? What industry has ever advanced faster than the software industry? Consumers have thousands of times the choices, performance, and ability that they had just ten years ago. There wasn't even a public internet until 15 years ago, and now half the world is fully wired. Sound mixing, video editing, online conferencing, can all be done by anyone that is willing to invest several hours to learn how to do it, at least at an amateur level. A teenager sitting in the basement can do things that government-trained PhD's could not dream of when I was a kid, and you want to tell me that the consumer is losing?

 

[Anttech]

The main point I'm trying to make is that while you might say that Microsoft has a de facto monopoly, they do not have a stable monopoly

There "Monopoly" maybe under threat in the Long term, BUT as a corp they are under no threat, sure there share will decrease, but who will take it? Linux maybe, Mac more probably.. So you come to what selfadjointed said, we will have 2 (a few) very large companies splitting a huge market 2 (a few) ways, which is an "oligopoly" ... this equates to far less choice for us...

I am talking only about the Operating System Sector.

Software is a different Animal, however within this sector we see the same things, take Adobe.. You know who they just bought out? Macromedia.. Well you see what will happen there, don't you.. Two companies offering the same sort of software, both geared towards multimedia, the bigger company just ate the smaller one, and will merge the products and give us less independent choice...

Another example Databases/ERP, Oracle a huge company, has just swallowed whole one of its main competitor, Siebel... what does this mean for us, well we will soon enough has less ERP choice, I can think of only two other serious main competitors in the ERP field (I am sure there are a few more) SAP, and Peoplesoft... Ohh wait Oracle also eat Peoplesoft.. Ok 1 main competitor, SAP... Not much choice is it?

We really don't have that much choice, and as these huge corps get bigger and bigger we are going to have less and less choice...

 

[Townsend]

We really don't have that much choice, and as these huge corps get bigger and bigger we are going to have less and less choice...

I feel as though if a corporation gets too big it should be broken up to keep competition going. This has worked with AT&T twice...I don't understand why they haven't broken up MS yet? I think they need to. Make one section the OS, one section the office and business software and one section for games.

 

[TheStatutoryApe]

There "Monopoly" maybe under threat in the Long term, BUT as a corp they are under no threat, sure there share will decrease, but who will take it? Linux maybe, Mac more probably.. So you come to what selfadjointed said, we will have 2 (a few) very large companies splitting a huge market 2 (a few) ways, which is an "oligopoly" ... this equates to far less choice for us...

Do you seriously think that you would have any more freedom of choice in a system other than capitalism? If a community or state owned the means of production why would they waste resources on multiple projects with the same end goals?
Remember that the creators of Linux hadthe benefit of a capitalist system where they could own means of production and use them as they saw fit. Just because they don't make a profit doesn't mean it isn't a capitalist endevour. If you look up capitalism you will find that profit is not required for a system to be capitalist.

 

[Smurf]

Do you seriously think that you would have any more freedom of choice in a system other than capitalism?

Yes, of course. Well, maybe not *I* (actually definitely not me, I'm pretty well off on account of my family) but more people would have more freedom of choice, yes.

 

[TheStatutoryApe]

Yes, of course. Well, maybe not *I* (actually definitely not me, I'm pretty well off on account of my family) but more people would have more freedom of choice, yes.

How so?



8910

 

[Smurf]

How so?

Well it wouldn't help me any, I'm shamelessly taking loads of money from my parents to pay for my education. But not everyone has that financial aid, and often times people sink themselves into debt trying to pay for it. Even more limiting if someone has a baby or other relative to take care of. This is touching on education alone. Do you seriously think this is the most freedom of choice people could ever get?

 

[TheStatutoryApe]

Well it wouldn't help me any, I'm shamelessly taking loads of money from my parents to pay for my education. But not everyone has that financial aid, and often times people sink themselves into debt trying to pay for it. Even more limiting if someone has a baby or other relative to take care of. This is touching on education alone. Do you seriously think this is the most freedom of choice people could ever get?

I don't entirely get what you're saying here...

As far as whether or not what we have now gives the most choices, I couldn't say. If we didn't have such a corporatist business environment it's possible. It could also be possible that without large corporations doing business over large areas our only choices would be what ever we can find locally which may not be much depending on where you live.
The problem I am pointing out is that capitalism allows for diversity of product and choices because the people own the means of production and are able to compete with one another. If there was no private ownership of the means of production why would the community allow for competition between providers of product? Wouldn't that be a waste of time and resources that could better be alocated else where? Just let one operation come up with the product that is needed and a lot the man power and resources that would go toward competition in a capitalist model toward other things. That would seem the logical solution to me for the anarchistic model you are advocating as well as communism. So where are the choices? It looks to me like they disappear in both of these models.

 

[Smurf]

If there was no private ownership of the means of production why would the community allow for competition between providers of product? Wouldn't that be a waste of time and resources that could better be alocated else where? Just let one operation come up with the product that is needed and a lot the man power and resources that would go toward competition in a capitalist model toward other things. That would seem the logical solution to me for the anarchistic model you are advocating as well as communism. So where are the choices? It looks to me like they disappear in both of these models.

Oh right, talking about products, I don't know. In many forms of anarchism (and communism) it would be entirely localised. You could get a different product just by going to the next town.

If your talking about nationalised production like in Cuba or something, then yeah I guess there would be fewer brands. But I don't really see any real practical reason why you would need any more. You could have 1 brand of say, organic tomatoes, and then non-organic tomatoes, and then specially GM spliced tomatoes with fingernails sticking out of them for that "other" crowd. Why do you need 10 brands of the same product with pretty much the same ingredients?

 

[TheStatutoryApe]

Oh right, talking about products, I don't know. In many forms of anarchism (and communism) it would be entirely localised. You could get a different product just by going to the next town.

If your talking about nationalised production like in Cuba or something, then yeah I guess there would be fewer brands. But I don't really see any real practical reason why you would need any more. You could have 1 brand of say, organic tomatoes, and then non-organic tomatoes, and then specially GM spliced tomatoes with fingernails sticking out of them for that "other" crowd. Why do you need 10 brands of the same product with pretty much the same ingredients?

Imagine if Windows really had a monopoly and it was the only OS available to use...

 

[Smurf]

Imagine if Windows really had a monopoly and it was the only OS available to use...

I'm assuming that "windows" was a joke. okay, I'm imagining there's an OS monopoly in a socialist-like country, what's the problem?

 

[TheStatutoryApe]

Oh! Come on! You can't take a capitalist scenario and apply it to a non-capitalist enviroment. That's like saying "Imagine if monsanto really had monopoly and it was the only company experimenting with the gene code."

What I mean is without choice of "brands" or "designs" you're stuck with the "choice" that has been made by the rest of the people in your community, even if they are too ignorant of the possibilities to make an informed choice. Consider the US elections... You are now stuck with the Bush of OSs.

 

[TheStatutoryApe]

Ofcorse I'm not saying this is the way it has to be but just the way that it would logically occur in my mind. If you have an idea of how that would be circumvente please let me know.

 

[Smurf]

What I mean is without choice of "brands" or "designs" you're stuck with the "choice" that has been made by the rest of the people in your community, even if they are too ignorant of the possibilities to make an informed choice. Consider the US elections... You are now stuck with the Bush of OSs.

of course it could happen. But it happens here too. There are lots of stuff that I can't buy here that I wish I could. Because no one else wants to. Everyone buys the sugar-filled synthesized easy-bake-oven crap these days. So that's the only thing companies sell. I'm stuck with the 'choice' that has been made by the rest of the people in my community. And yet there is almost no way I can change this.

I don't see why it would be any worse, and I think it could quite possibly be improved by a command economy that made sure several choices were available to people.

 

[loseyourname]

We really don't have that much choice, and as these huge corps get bigger and bigger we are going to have less and less choice...

You missed the main thrust of my post, though. When we have technology today that seemed impossible five years ago, can you seriously complain about lack of choice? Do you really think the average consumer of Microsoft or Adobe products has any real reason to complain? We've got the world at our fingertips and the ability to do just about anything with media for the price of an airline ticket or two. We're talking about arguably the most successful, quickest advancing market/industry ever. It's not a good example to use if you're looking for flaws in capitalism.

 

[TheStatutoryApe]

of course it could happen. But it happens here too. There are lots of stuff that I can't buy here that I wish I could. Because no one else wants to. Everyone buys the sugar-filled synthesized easy-bake-oven crap these days. So that's the only thing companies sell. I'm stuck with the 'choice' that has been made by the rest of the people in my community. And yet there is almost no way I can change this.

I don't see why it would be any worse, and I think it could quite possibly be improved by a command economy that made sure several choices were available to people.

If there are types of food that you want but can't get that means there is a market there to be tapped. If it's just a market of a handful of people you may not have much hope excepting that a good grocery store do what they ought to by finding what you want and supplying it in order to intice you to shop at their store. If there is a decent market then someone, possibly even you, could open a store that caters to it. The consumer and the business owner both win. And young college students who need jobs win too since there is now a larger job market.
Considering foods that aren't junk food crap there are actually grocery stores around here where I live that are all about organic health food and what not. They do really well even though the majority of Amercans are fat and lazy and could give a crap about their diets.

 

[Smurf]

Yes, and why couldn't a command economy couldn't provide these options too?

 

[TheStatutoryApe]

Yes, and why couldn't a command economy couldn't provide these options too?

It's plausible but a command economy generally isn't very dynamic and responsive to consumer needs and demands.

 

[Smurf]

It's plausible but a command economy generally isn't very dynamic and responsive to consumer needs and demands.

hmmm okay. and what do you base that statement on?

 

[Townsend]

hmmm okay. and what do you base that statement on?

Common sense perhaps?

 

[Smurf]

Common sense perhaps?

the problem with your "common sense" townsend, is that it's too common and not enough sense.

 

[TheStatutoryApe]

It relies on the central planning body to predict trends in supply and demand which historically has been shown to not work out so well. They fix their numbers and put their plan into action but something goes wrong and the plan barely limps along or they have to go back to the drawing board and rework the plan while the economy and the people wait for them patiently, or perhaps not so patiently.

 

[Townsend]

the problem with your "common sense" townsend, is that it's too common and not enough sense.

Ok, then how about years upon years of empirical evidence? Any kind of government control on price or supply creates either a surplus of inventory which leads to a loss by producers or an excess of supply which also leads to a loss by producers. Now I realize you don't care about the well being of the suppliers and only the well being of consumers but those consumers are also the suppliers so they need to be successful to be able to be consumers.

If you don't believe me just look at examples where price ceilings or floors or government subsides have thrown markets all out of whack. It happens every time Smurf...this should be common sense since it is pretty much common knowledge.

 

[Smurf]

It relies on the central planning body to predict trends in supply and demand which historically has been shown to not work out so well. They fix their numbers and put their plan into action but something goes wrong and the plan barely limps along or they have to go back to the drawing board and rework the plan while the economy and the people wait for them patiently, or perhaps not so patiently.

This is the common exageration of inflexible "command economies".
Multinational corporations do it all the time; they allocate resources to their stations in New York and Hong Kong directly from various producers and storehouses in, say, LA and Sydney. They calculate what is needed by sales records and blah blah blah - various other records. This whole bogus that no one but capitalist corporations could do that is totally unfounded.

 

[Townsend]

This whole bogus that the government can't do it equally well is completely unfounded.

Reality doesn't mean much to you does it Smurf?

 

[Smurf]

Reality doesn't mean much to you does it Smurf?

If it's as obvious as you imply it is then why don't you show me these mountains of "Empirical evidence" you have. Where's the problem?

 

[Townsend]

If it's as obvious as you imply it is then why don't you show me these mountains of "Empirical evidence" you have. Where's the problem?

The mountians of empirial evidence are everywhere...the only problem is your refusal to see it...

For price floors go here
The second hit is a word document that I would recommend you read..

For price ceilings go here

Any case where the government sets or controls prices you create supply and demand problems...very inefficient and it only serves to make everyone's lives worse.

A command economy has the government controlling factors of production...in a capitalist economy the consumer is god...what he buys or doesn't at any given price determine equilibrium. With a command economy, the government has to determine what the consumers want and what it is worth to them. How could this be done efficiently? Government is nothing more than a massive bureaucracy...it is the epitome of inefficiency. Most people in the know seem to blame the bureaucrats in Washington for ruining the space program. In fact, Dr. Gibbs just talked at our school and directly blamed bureaucrats for many of the problems with space program.

Therefore, we have system that requires flexibility or everyone loses and you want to put the government in charge of it. I think it is a very safe assumption to say that there will major issues and everyone, especially the poor and weak, would be worse off.

 

[Smurf]

The mountians of empirial evidence are everywhere...the only problem is your refusal to see it...

Maybe you should point me towards it then. Give an explanation - try to make a case, instead of just pointing me towards generic google searches. All you've said is "I don't trust the government" which doesn't mean a whole lot to me.

 

[Townsend]

Maybe you should point me towards it then. Give an explanation - try to make a case, instead of just pointing me towards generic google searches. All you've said is "I don't trust the government" which doesn't mean a whole lot to me.

Do you know what price floors are Smurf? Do you know how they affect supply and demand?

Answer me these basic questions Smurf. What puts supply in demand in equilibrium? What happens if the government sets the minimum price above that equilibrium? What happens if the government set the maximum price blow that equilibrium? How can the government be expected to know where to set prices? They have none of the indicators available to do so...what happens when a business has a excess of inventory they cannot sell? How is anyone expected to make profits in your command economy?

It's like your asking me to teach macroeconomics 101 to you...I don't feel the need to teach some socialist teenager economics. There is more than enough information out there for you to look through. Get off your duff and defend your position. You have been shown a hole the size of the grand canyon and your response is to ask someone to prove basic economics before you will believe that the hole exist.

Why don't you explain how this command economy is suppose to know where to set prices and how much of a certain good it should produce. It is not correct to present a theory with NO evidence supporting it and then demand I prove it false and then when I show a counter example that you don't agree with you ask me to prove it and so on...pathetic Smurf.

 

[selfAdjoint]

Townsend, I don't believe Smurf would deny that when the govenment intervenes in the market to set prices (a lefty strategy) or limit supply (protectionism -favored by some right wingers) that the resulting perturbed market in the given quantities will not be optimal. However there are so many sources of suboptimal behavior in the real marketplace as distinguished from the idealized one in econ 101 that this is a pretty weak argument. What is the actual loss to the economy from government intervention, versus other sources of inefficiency? Does it really make that much of a difference? What is your evidence for that?

 

[Smurf]

Why don't you explain how this command economy is suppose to know where to set prices and how much of a certain good it should produce. It is not correct to present a theory with NO evidence supporting it and then demand I prove it false and then when I show a counter example that you don't agree with you ask me to prove it and so on...pathetic Smurf.

Townsend, a command economy is NOT a free market. It is not subject to the same rules.

Above you talked about price floors and ceilings. The reason these lead to surplus and deficits is because a free market predicts that, as price is raised, the demand will go down and supply will go up.

If the government is already regulating demand and supply then this does not happen. The problems come when the government interferes with an already existing free market economy. A command economy is not a free market economy - therefore they will not be subject to the same problems.

 

[alexandra]

Price controls are terrible business practices and every government is inefficent. Combine the two and you get conditions exactly like in Cuba's hospitals...hell!

I don't suppose you'd countenance the argument that US sanctions against Cuba would have anything to do with the 'economic mismanagement' you are quoting, you true-blue lovers of lovely, lovely capitalism and 'democracy'?

Thursday, 19 March, 1998, 21:22 GMT
US sanctions against Cuba explained

The United States imposed sanctions against Cuba in 1962 shortly after Fidel Castro seized power in a revolution on the island.

The embargo was a response to Castro's nationalisation of American-owned enterprises; it sought to deprive Cuba of foreign exchange and hasten the end of communism.

Before 1962, more than two-thirds of Cuba's foreign trade had been with the United States -- so when the embargo came into effect Cuba had to find alternative markets, and itbecame highly dependent on the Soviet Union.

The embargo has since been strengthened, most recently by a 1996 bill -- the Helms-Burton bill -- which punishes foreign companies dealing with Cuba. http://news.bbc.co.uk/1/hi/world/americas/67554.stm

Go to the US Treasury's website if you don't trust the above information: http://www.treas.gov/offices/enforcement/ofac/sanctions/

You know, this wilfull blindness is quite tiresome. If all you ardent defenders of 'democracy' and capitalism are going to defend your so great 'democratic' capitalist system, I think you should do some serious research so you all know what you're talking about. Listening to propaganda you hear here and there and on Fox News is just not scientific, you know

 

[alexandra]

I don't think there is anybody here that is pro-corporate monopoly. The difference seems to be that you think these things are inevitable given capitalism. Russ and Townsend and I do not. We see that, historically speaking, corporations have only been able to grow to their ridiculous sizes and market shares with help from governments. Corporations are legal entities that would not even exist in a pure capitalist state. Essentially, you are arguing with a strawman, something that pure capitalism does not either sanction or result in (at least theoretically - in practice, we have never experienced pure capitalism and so cannot know for certain).

This point you make (that pure capitalism does not sanction or result in monopoly corporatism) is arguable. Extending on Marxist theory, Lenin clearly foresaw that capitalism would have to result in monopoly corporatism. If you look at capitalism from a critical point of view, it *must* develop the way it has - there is no other option. How exactly do you propose that monopolies be tamed? Legally? Ha! Who makes the laws? Who can afford to 'buy' the laws that suit themselves? Honestly, I just cannot understand what part of this very clear picture you cannot see?

 

[alexandra]

Remember that the creators of Linux hadthe benefit of a capitalist system where they could own means of production and use them as they saw fit. Just because they don't make a profit doesn't mean it isn't a capitalist endevour. If you look up capitalism you will find that profit is not required for a system to be capitalist.

This is an intriguing statement, TSA - what defines capitalism then, if not profit? I am really interested in seeing an alternative definition of capitalism that does not include profit in it; I've never, myself, come across such a definition (not a technical one, in any case).

 

[alexandra]

It relies on the central planning body to predict trends in supply and demand which historically has been shown to not work out so well. They fix their numbers and put their plan into action but something goes wrong and the plan barely limps along or they have to go back to the drawing board and rework the plan while the economy and the people wait for them patiently, or perhaps not so patiently.

But all command economies of the past were in less industrialised countries. One of the main reasons the USSR 'failed' is that it did not have a well-enough developed industrial base to meet the needs of the population. 'Socialism' was first achieved, contrary to Marx's prediction of how societies would progress, in a 'backward' country (Russia was barely emerging from feudalism at the time and had not developed anywhere near full capitalism). So they tried to make up for the backwardness by instituting these 'plans'. But the world is very different today - you wouldn't have to rely on central planning bodies predicting trends. For starters, the Internet provides a great tool for facilitating planning for meeting global needs. The very integration of the world economy and of production sets up a perfect system for global socialism. As I've said before (in other threads), I have never discounted the value of capitalism - it is a necessary stage of social development and results in many technological innovations. Capitalism was progressive, but it's not the best we can do...

 

[loseyourname]

This point you make (that pure capitalism does not sanction or result in monopoly corporatism) is arguable. Extending on Marxist theory, Lenin clearly foresaw that capitalism would have to result in monopoly corporatism. If you look at capitalism from a critical point of view, it *must* develop the way it has - there is no other option.

And what? Lenin had a problem with this? Had a problem and then went on to create state monopolies that created consistent shortages and oversupply dilemmas and produced crappy products that were not current with consumer demands (unless that product had military utility, then it was good)?

Alex, the answer to everything is not "(insert Marxist theorist here) said this must happen, therefore it must happen." For one thing, we don't have a corporate monopolist economy. There are certain industries that are very capital-intensive that naturally support oligopolies, such as the airline industry, energy industry, large munitions contractors (pharmaceuticals are getting to be that way and software/ISP is moving away from it). The only true monopolies we see are the government-run monopolies, like trains, buses, postal service, space travel, and security (there is private security, but most people are protected by the police). Even some of the industries that naturally support oligarchies have companies propped up with government assistance, such as subsidies, bailouts, and protection laws, which are hardly "pure capitalism." Then there are industries like clothing retail, electronics, food production, food service, housing, and film production, that are pretty close to pure competition.

How exactly do you propose that monopolies be tamed? Legally? Ha! Who makes the laws? Who can afford to 'buy' the laws that suit themselves? Honestly, I just cannot understand what part of this very clear picture you cannot see?

Who bought the Sherman Antitrust Act and all the trust busting that ensued? Who bought all of the collusion busts that have occurred since and the recent rulings against Microsoft and AT&T (was it AT&T?)?

Of course Marxist theorists thought that capitalism would have to result in monopolies. Look at the time they lived in! Industry was extremely expensive then and just about every market was capital-intensive and resistant to new entries. If they predicted that we would move in the direction of further concentration of industry power, they were wrong. Almost every market, even the few that naturally support oligopolies, has greatly expanded since to include more competitors now than then. Look at the major industries then: oil, steel, railroads. Emerging industries: telecommunications, automobile, electricity. Every one had one or two major providers of service. Every last one of those industries (except railroads, which are now a government monopoly) has more companies operating today than then. Honestly, I just cannot understand how you can look at markets moving in the direction opposite of what the Marxists predicted and still think they are correct.

I take it that you, and all the others who ridiculously argued this, have simply conceded the wealth creation point, as no one has responded to what was posted on it more than a week ago now?

 

[loseyourname]

This is an intriguing statement, TSA - what defines capitalism then, if not profit? I am really interested in seeing an alternative definition of capitalism that does not include profit in it; I've never, myself, come across such a definition (not a technical one, in any case).

How about exactly what he just said? Private ownership of the means of production. Capitalism, as a system, exists in such a way that it takes advantage of the profit-motive, but that doesn't mean that any and all providers of goods and services need to make a profit to be capitalistic. Profit can even be non-monetary. There are plenty of businesses out there (especially small shops and restaurants and such) that simply break even monetarily, but the owners keep going because they make enough to provide for themselves and enjoy what they do. Many self-employed people simply enjoy the freedom it gives them, even though, in practice, they end up with less free time. Very few artists ever turn any kind of profit from their work, but their industry is still capitalistic. Capitalism is predicated on one feature primarily: competition. A given industry is capitalistic when multiple providers of goods/services compete for consumers. Generally (not exclusively), they compete because they hope to profit, but profit itself is not the defining characteristic of capitalism.

 

[loseyourname]

But all command economies of the past were in less industrialised countries.

The USSR is not the only example of central planners failing to fly with the dynamics of a fluctuating marketplace. Even in the US, when bureaucrats mess with the market, they generally create shortages or surpluses. Examples abound from California alone. Rent controls in Santa Monica create bad housing shortages. Price floors on dairy products have resulted in surpluses. Government-provided subways and trains in Los Angeles are empty half the time. Government-employed civil servants either have no work to do half the time (Parks and Rec maintenance) or way too much (constant long-lines at the DMV). Private industry does not make these mistakes because it cannot afford to make these mistakes. When a company does, they go out of business and a better company takes their place. The government just raises taxes or cuts spending in other areas that probably supported more important programs.

 

[Smurf]

Of course Marxist theorists thought that capitalism would have to result in monopolies. Look at the time they lived in! Industry was extremely expensive then and just about every market was capital-intensive and resistant to new entries. If they predicted that we would move in the direction of further concentration of industry power, they were wrong.

Actually Marxist economics has been developed for some time after Marx's original writings. It's been developed quite a bit by many other people over the years.

 

[vanesch]

Price floors on dairy products have resulted in surpluses. Government-provided subways and trains in Los Angeles are empty half the time. Government-employed civil servants either have no work to do half the time (Parks and Rec maintenance) or way too much (constant long-lines at the DMV). Private industry does not make these mistakes because it cannot afford to make these mistakes. When a company does, they go out of business and a better company takes their place. The government just raises taxes or cuts spending in other areas that probably supported more important programs.

Even accepting the capitalist "dogma" that it leads to the best possible overall use of resources, as you point out which often happens when one intervenes (in a naive way) in the market, one will be less efficient with resources.
The question is, however: do we have to maximize the efficiency of resources at all cost ? You mention half-empty trains. Yes, this is slightly more costly than an optimized scheme where you only have crowded trains and yes, people will pay some more taxes for it etc... But if this increases the measure of happiness (even though it lowers the measure of wealth), then to me, that's a good thing.
A more controversial example: minimum wage. The idea is that people should only work for a certain minimum of revenue, otherwise this is considered unworthy. Now, typical market mechanisms will then create, as you point out, some surplus (small underpaid jobs that would find takers if it weren't forbidden) and shortage (unemployment). The question is: is that necessarily a bad thing ? If unemployed people are considered not able to provide a minimum of wealth for themselves by working (their value on the work market is worth less than the minimum wage), why not just let them have some human living conditions without them having to work for it ? This will of course diminish overall wealth, but that is honestly no problem, there is more than wealth enough, on average. Of course, the proportion of people living off others should be kept to a reasonable level (say, less than 10-15 %) - something which defines in fact the level of the minimum wage.

So although I agree with you that intervening in the market usually leads to a less efficient use of resources, I do not think that we should, at all cost, optimize that efficiency. What should be optimized is "reasonable happiness for most" and not the use of resources. We do not necessarily want more total wealth, if that leads to such unequal distribution that it leads to less happiness. We're focussing on the wrong parameter to optimize if we do that.

In fact, do you think that people were so much less happy 20 years ago ? Now when you look at the overall economic growth per capita, we have now more than 20 years ago. But we didn't get that much more happy. So economic growth is not what is increasing happiness, apparently.

 

[loseyourname]

Actually Marxist economics has been developed for some time after Marx's original writings. It's been developed quite a bit by many other people over the years.

And if they predicted that markets would move in the direction of more concentration, they were wrong as well. Even the traditional oligopolies, like car manufacturing, airlines, and package delivery, have seen greatly increased competition in recent decades, to the good of each market. Heck, even space travel may soon see a competitive market! The only notable industry I can think of that has become more concentrated recently is mass media. The large parent companies around today aren't so dissimilar from holding companies of the 20s which I believe were eventually found to be illegal. We'll see what happens with these.

 

[loseyourname]

The question is, however: do we have to maximize the efficiency of resources at all cost ? You mention half-empty trains. Yes, this is slightly more costly than an optimized scheme where you only have crowded trains and yes, people will pay some more taxes for it etc... But if this increases the measure of happiness (even though it lowers the measure of wealth), then to me, that's a good thing.

It's hard to see how a virtually unused subway and train system in Los Angeles is making anyone happy, although the trains are quite nice if that's what you mean. I do see your point, but I don't think that building a public transit system far in excess of the demand for one is a good example.

A more controversial example: minimum wage. The idea is that people should only work for a certain minimum of revenue, otherwise this is considered unworthy. Now, typical market mechanisms will then create, as you point out, some surplus (small underpaid jobs that would find takers if it weren't forbidden) and shortage (unemployment). The question is: is that necessarily a bad thing ?

Actually, this isn't necessarily the worst thing for other reasons, too, the most obvious of which is the inflation dilemma for an economy with no unemployment. Unemployment is a pretty healthy thing just so long as it isn't the same people who are always unemployed.

Again, I see your point, and it's a pretty good one. I'd like to iterate, though (which I suppose I haven't done thus far), that I'm not advocating no market intervention whatsoever. There are markets out there that almost have to be controlled in certain ways. I'm just arguing against the feasability of a fully fledged command economy. It's interesting to me that the same people who are so distrustful of government and bureaucrats as it is also want to put our economy in their hands.

Actually, the best example of market interventions that I personally advocate are activity regulations more than price controls, which, outside of possibly minimum wage, are almost always a bad idea. The licensing of medical doctors and environmental standards, for instance, are market interventions that I think are great ideas.

In fact, do you think that people were so much less happy 20 years ago ? Now when you look at the overall economic growth per capita, we have now more than 20 years ago. But we didn't get that much more happy. So economic growth is not what is increasing happiness, apparently.

Hey, I was four years old in 1985. I have no clue how happy people were then, but people do generally seem to have more peace of mind when the economy is doing well than when it is doing poorly. I'm not sure what statistics exist to either confirm or falsify that hypothesis.

 

[TheStatutoryApe]

This is the common exageration of inflexible "command economies".
Multinational corporations do it all the time; they allocate resources to their stations in New York and Hong Kong directly from various producers and storehouses in, say, LA and Sydney. They calculate what is needed by sales records and blah blah blah - various other records. This whole bogus that no one but capitalist corporations could do that is totally unfounded.

Multinational corporations, while large, are still vastly smaller than the entire economic resource managment of any large country, let alone the world as a whole. Also corporations are not exactly democratic in their undertakings. An equitable and democratic managment plan for an entire nation would be quite a long arduous undertaking and every problem that arises along the way will require an equitable and democratic reworking of the original plan. In a capitalist society all of the various nodes in the system are free agents. They can do what ever they wish with their resources and it is not required that they wait for the entire system to decide what the best course of action is. You could create an economic planning body that parallels this where the various nodes in the system have a level of autonomy to do as they see fit when a situation arises. The issue here though is, as LYN pointed out, that any failing node in a capitalist model will sink and cease to absorb resources automatically but when these operations are sponsored by the state they will continue to aborb resources, even if mismanaging them, until the state decides to pull the plug. This could take place long after a capitalist node would have collapsed of it's own accord and politics could easily extend the life of a node that is greatly wasting resources (just as the corporatist environment does here in the US).

How exactly do you propose that monopolies be tamed? Legally? Ha! Who makes the laws? Who can afford to 'buy' the laws that suit themselves? Honestly, I just cannot understand what part of this very clear picture you cannot see?

This is a flaw in human beings not the capitalist system. Flaws in humans will still exist in other economic models. In a democratic capitalist society the consumers/voters can greatly influence these things. They do have quite a bit more power than the "elite few" but again due to flaws in humans most of them don't care enough to excersize their power meaningfully. Regardless of the system being utilized there will always be an "elite few" until you eliminate the flaws in the people themselves that allow this to happen.

This is an intriguing statement, TSA - what defines capitalism then, if not profit?

As already pointed out by LYN the vast majority of business owners don't make much more than enough to live comfortably, if even that. Almost every person who works in any capacity, whether it be a labourer or a business owner and regardless of the economic system, seeks to get something in return for the investment of their time, energy, and resources. At the very least they wish to have enough to pay rent and bills and feed themselves and their family. This, more or less, is profit. Profit is not an attribute specific to capitalism and a business can be run without ever making a profit and still be a capitalist endevour.

Be back later...

 

[Smurf]

At the very least they wish to have enough to pay rent and bills and feed themselves and their family. This, more or less, is profit. Profit is not an attribute specific to capitalism and a business can be run without ever making a profit and still be a capitalist endevour.

No, profit is gain after expenses. If you're only making enough to survive, you're not making a profit, are you?

 

[loseyourname]

No, profit is gain after expenses. If you're only making enough to survive, you're not making a profit, are you?

Technically, monetary profit is just defined as the revenue a business makes in excess of its operating expenses. A small business owner can turn a profit, but if that profit is say, $40k a year, he isn't making any more than the average Gap manager.