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What happens when the whole world is Capitalist?-OR-Capitalism=Communism

  1. Oct 16, 2005 #1
    Until just recently, barely 1/3 of the world has truly been a part of the Capitalist system. The U.S., Canada, Western Europe, Australia and Japan pretty much comprised the entirety of the Capitalist world until just a few decades ago. Now, China, India, and the rest of South East Asia are hopping into the game.

    China, India, and most of South East Asia aren't really on equal footing with the old-school capitalist nations yet; they're pretty much just exporting goods and doing cheap labor, but that's how it starts. Soon enough (50-100 years or so), these countries will have generated enough capital to become important consuming countries as well. By then, some other part of the world will have picked up the slack as the region which all the cheap labor is.
    At this point, it'll be between Africa, South America, and the Middle East.

    Presumably, within a few hundred years, the whole world will be intergrated into the Capitalist system. With the effective doubling of the number of consumers in the world (China + India have over 1/3 of the world's population together), the demand for cheap goods will rise hugely, allowing for the effective employment of massive amounts of people in currently impoverished areas of the world.

    For the history of Capitalism, the situation has always existed that the poor became empowered through being employed by the rich. American workers 100 years ago still worked in sweat-shop conditions, but through the nearly full employment of the American labor market and wage competition, the American people became some of the richest people in the world.

    When internationalism became easier, the trend developed (and continues today) that rich countries would rely on poor countries for cheap manufacturing and cheap labor. This is pretty much what's driving India and China's economic booms.

    But when India and China catch up with the rest of the Capitalist world, we reach an interesting point. The potential for employment of people in cheap factory labor becomes hugely increased, since the amount of people on relatively equal footing in the capitalist world doubles to about 2/3 of the population of the world.

    Presumably, when the people in China and India have comprable wealth to those in Japan, Canada and England, the growth rate in the then 3rd world will grow at an increasingly faster rate, as more and more people are out there to demand cheap labor.

    Eventually, through rich countries relying on poor countries for work, the whole world (save a few particularaly troubled areas) should be synthesised into the Capitalist system.

    Further down the line, with wage competition and all that, most people should be on relatively equal footing. It obviously won't be perfect, just like how not every country in Western Europe is equally as prosperous, but the analogy should be simmilar to those between Western nations of today.

    But what happens at that point?

    Forever, the rich have relied on the poor to do their work, and profits were great if you could have your products made by the poor and then sell them to the rich.

    But when huge gaps in wealth are all but erased by wage competition, what happens?

    At that point, there is no more potential for the ridiculous growth that we have today.

    Furthermore, at that point (however many hundred years down the road), the world will be all the more intergrated, and presumably, it will matter less and less where a product is made in terms of it's cost and ease of aquisition.

    So what might happen? How might Capitalism survive if it has no room to expand?

    What I'm thinking is that when Capitalist Valhalla is finally reached, we might actually end up in a Dictatorship of the workers, through totally Capitalist means.

    When the whole world is on relatively equal footing, and there are no vast poor job markets to exploit, profits for companies of all sorts will naturally be much lower. Without vast numbers of unemployed people, competition will drive wages up dramatically, again cutting into profits. Laborers and Consumers will enjoy constantly increasing sway in all markets, while those who control the factors of production will have to be more and more atune to laborer's and consumer's needs and wants to actually attain a profit.

    Jobs that currently pay low wages, such as farming and factory work will have to pay substantially higher wages, since the demand for food and manufactured goods will be so high and there will be no impoverished markets to draw cheap labor and manufacturing from. Pretty much all jobs will have to pay relatively equal wages. It's a basic function of capitalism; that if one job pays unduly high wages, people will flock to it until wages are competed down, and that if one job pays unduly low wages, people will not want to work in it unless wages are raised. When you have a future in which all people are on equal footing, the wages for all jobs will have to be essentially cometed down to paying wages that are overall much more comprable than they are now.

    With all the competition squeezing out massive profits and the differences in wages, Capitalism seemingly leads to a place not unlike Marx's workers paradise. When the workers are the consumers, and they all have relatively equal sway, they will all fight for their own self interest so vehemently that the power of producers will seemingly fade away until there is barely any sort of profit left to be made.

    Capitalism = Communism.

    :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:


    Just to clarify a bit, there was a central question to this thread. Here it is restated and simplified:

    When profits have been competed down to the bare minimum possible, and there are no longer huge pools of unemployed workers to draw upon for cheap labor, what happens to Capitalism?
     
    Last edited: Oct 17, 2005
  2. jcsd
  3. Oct 16, 2005 #2
    I've read up to here. I disagree. South America is clearly moving in the direction of anarcism/socialism. I think that as this manifests we'll see a real divide between North and South America - perpetrated mainly by the US methinks. However, the US' future is a bit unclear, leading to a few interesting possibilities.
     
  4. Oct 16, 2005 #3
    I think there's a few flaws in your little fortune prediction.

    1. The possibility that it will just become the West that is (by comparison) "poor" and incidently, used as cheap labour - leading to another flip (barring any anti-capitalist revolution of course)

    2. The possibility of massive corporations dominating politics. Thus reducing competition in all areas of economics, and preventing any serious manifestation of the latter developments you mentioned.

    3. Misconceptions of "Communism". Equality alone does not make Communism.
     
  5. Oct 16, 2005 #4
    South America right now is totally moving in the direction of Socialism to solve their problems.

    So were China and India in the middle of the 20th century.

    The problem was massive poverty in China and India, and is the problem in South America.

    The reason was that there was such a relatively small consumer market, that there was no demand for much more goods to be produced than currently were.

    China and India had no industry of their own to employ people, so they went the government-controlled route to employ people and provide them with likelyhoods.

    In neither of these countries did Communism/Socialism work well.

    Over the years, the global consumer market has grown, and with it has the demand for cheap goods.

    Thus, people began to turn to China and India, very poor countries consisting of unemployed poor people, for cheap labor.

    In that the people in China and India are now being employed by the rich people of the world, they're getting money, and growing at fantastic rates.

    The same reason China and India had little employment is the same reason South America has little emplyoment. When you're in abject poverty, radicalism must seem like a great idea. But as the global consumer market increases, producers will go searching for cheap labor somewhere.

    Unless South America totally closes itself off to all foreign investment, companies will build factories and centers of production in South America, where everyone is poor and will work for little money. South America will then likely follow the same path as the rest of the world once it's intergrated into the Capitalist system - gain money through working for the rich, until you become realtively equal with them.
     
  6. Oct 16, 2005 #5
    Typical capitalists. Defend your propositions by over-generalizing and over-simplifying - misinformation for everbody! Have you no honour?
     
  7. Oct 16, 2005 #6
    It's totally possible that the West will be comparitively poor in the future. Afterall, during Europe's middle ages, the East and Middle East were where the great powers of the times lied. The point is, regardless of who is relatively poor, if the whole world is entrenched in a Capitalist system, no one will be significantly poorer than anybody else, as is the case now.

    You will likely agree that technology will continue to advance, correct?

    With advancing technologies, globalization becomes easier and cheaper.

    It costs less to transport goods from one place in the world to another. You can do a job anywhere in the world and transfer the results to anywhere else in the world, etc.

    With further innovations making it less and less relevant where you actually are, competition will become relatively globally uniform.

    When it really doesn't matter if your product is made in Bali or Detroit, you would naturally choose to have it made in the cheaper place. It's simple wage competition. Once markets become fully globalized, wage competition will drive wages to be almost totally equal for equal work, regardless of where you are.

    This, I'm going to think about and respond to in detail later. With all the profit-cutting that will be going on by increased competition, I don't think corporations would really be able to manipulate the market in ways that they have and currently do. I'm thinking that what'd be more likely is that global workers unions would arise and try to play the role of subverting the market for their own benefit, but with the entire world broken up into workers-unions/cartels, I don't see how it'd be any different than regular comptition, if all the unions were competing against each other. Afterall, you need the general populace to buy your product; an industry cannot be self-contained. So how any force, whether it be monopoly or union could really subvert the global market seems very elusive to me.

    I've read the manifesto, I know what Communism is. Equality alone wasn't what I was describing.

    Again, as the labor market becomes nearly fully employed, wages will be driven up substantially, cutting into profit potential. Also, as the market for goods becomes more global, and anyone can compete for anywhere, prices will be driven down, further cutting profits for the owners of the means of production.

    In this situation, the workers and the consumers (who in a future fully capitalist world are uniformly one group) hold increasing sway in the markets, while producers hold less and less sway, as huge markets of unemployed people vanish and global competition becomes cheaper and cheaper.

    This will essentially lead to the workers/consumers having much more control in matters of production, and getting nearly all of the money that there is to be gotten out of the system. This is very much like the worker's paradise Marx envisioned, where all the profits that the Capitalists had been stealing from the workers were rightly claimed by the workers.

    The workers owning the means of production was another big tennent of Communism. In this scenario of global capitalism, the workers will increasingly own the means of production, as they become more and more valuable and demand higher and higher wages, the Capitalist himself will hold less and less sway as individual workers and organizations of workers gain power.
     
  8. Oct 16, 2005 #7
    The day when I would be grouped among the "typical capitalists", I'm just waiting for Russ or loseyourname to read this thread...

    Though it's weird that you're accusing me of over-generalizing and over-simplifying, when those statements are ALL you said. What am I over-generalizing about specifically, and what am I over-simplifying about specifically? You're being far too general and simple for me to actually respond to you.

    Though if I get the general gist of what you're saying, you believe that comparing South America's shift towards Socialism cannot be compared to China and India's shifts towards Socialism in the middle of the 20th century. Is that about right? If so, explain how they're particularaly different.
     
    Last edited: Oct 16, 2005
  9. Oct 16, 2005 #8

    loseyourname

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    Better question - who will win the battle of the 18 year-old political/economic scholars?

    I'm inclined to agree with you, Waste, but I do see one problem arising that I don't think Smurf has addressed. That is resistance by the upper-middle classes of the United States. We see it starting today, as the very high wages that engineers and programmers and such have enjoyed for years are being brought down by foreign competition and the cushy manufacturing jobs enjoyed by the lower middle classes all but gone. These people could easily constitute a significant political force if they ever combined their ranks, a force that could destroy the prospects for a worldwide capitalist movement through the enacting of protectionist measures.

    Edit: Actually, it looks like you have started to cover this, as it is essentially the same thing as your scenario regarding worldwide unions, only I envision them being more localized. A lot will depend on the extent to which we can break down national barriers.

    Oh, and to defend your over-simplifying and over-generalizing - isn't that what all economic models do?
     
    Last edited: Oct 16, 2005
  10. Oct 16, 2005 #9
    Actually I don't know anything about India. But we are still talking about USSR-ish, Mao-ish "Red Tide" right?
     
  11. Oct 16, 2005 #10
    :biggrin:

    For the record:
    :biggrin: :biggrin: :biggrin:

    Protectionist measures might isolate the US from the world's progress, and might slow it down, but the US cannot stay isolated forever. Maybe there will be measures enacted to stop US companies from investing overseas, but hell, what would stop overseas companies from starting up to begin with and selling their products in the US? Could you really protect yourself against products engineered by companies outside of the United States? I don't think that there could possibly be a situation where you were only allowed to buy products that were THOUGHT OF by Americans.
     
  12. Oct 17, 2005 #11

    loseyourname

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    That would be the market forces overcoming resistance through their sheer inertia, which I do believe they will.

    I think communism and capitalism (if you are going to consider capitalism in its ideological incarnation, which is not really the way it was conceived) have essentially the same goal, but there is huge difference in the methodology employed and the details of that end goal. There is never going to be the kind of egalitarian paradise of communism existing in a capitalist world, but we can already see things like public ownership of corporations, employee-controlled portions of certain companies (particularly airlines), and massive middle classes that make up most of the country's population.

    In theory, when a market becomes saturated, it does become nearly impossible to profit over any but a very short span of time, but that doesn't mean we don't see socioeconomic stratification of any kind in those markets. Take the airline industry, for instance. Almost nobody profits these days, as there really isn't much room in which the market can realistically expand at this point, but upper management still makes more money than the flight attendants. That will continue to be the case for as long as I can see. We might not see, say, auto-workers making substantially more than coal-miners, but there will always be scarcity in the market for those who can make decisions for companies as opposed to those who can simply do the grunt work. The middle point that I think you see being reached will be an equilibrium across fields of those who do similar work, but management will still make more money than those being managed (both, of course, are workers, not capitalists).

    Also, there is the obvious difference in that capitalism simply calls for market forces themselves to perform this equalizing process, not revolution and state controls.
     
  13. Oct 17, 2005 #12
    Why is that? Assuming the whole world is on relatively equal footing, and people can enter into any job market they choose, why wouldn't cross-market competition eliminate differences between different career salaries and make almost all people equal in terms of salary? And furthermore, with a global consumer market, it's pretty much certain that everyone would have whatever they need.
    What would stop this from continuing?
    For several hundred years, I agree that management positions will almost always make more money than those that they manage. But with societies all around the world becoming more and more equal in terms of money, what would stop there from being a flood of people looking for management jobs? What would then stop the wages for management from being competed down to the same level as everything else? If everyone starts off on equal footing, and can choose whatever job they want, and can acess training for whatever job they want, why should management pay more than manual labor?

    But then, there are always going to be good grunts and bad grunts. What makes you so sure that being able to make good decisions for companies is a rarer skill than being able to grunt well? I mean, look at Europe when it was all monarchies. There was no competition for the jobs really, people were born into being the ruler of whole nations. Some people did poorly, some people did well. The amount of people who managed countries decently (compared to others, that is), has always been evidence for me that the skill of leadership and good management is no more rare than any other skill. There was no competition for those jobs, and yet they got done with regularity. Do you think that if another family were dubbed the "royal" family of some european country a few hundred years ago, that their offspring would've done statistically worse or better at ruling that country over several generations? It seems to me that being able to manage things is just a regular skill that some people are born with and some people aren't, and I can't see how it's a special skill that remarkably few people are born with.
    One and One and One is Three.
    6/2 = 3

    One and One and One = 6/2.
     
  14. Oct 17, 2005 #13

    loseyourname

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    Well, that's just a disagreement we'll have to live with. I think that managing people well is a rare skill. There are other reasons to think that the wage-levels will continue to be stratified, though. As Russ always asks, if management is making the same as the grunts, why would anyone want to go into management? Heck, I've personally turned down several management positions because it simply wasn't worth the increased workload for the scant increased salary I'd be making. Management jobs will always be scarce, as there simply isn't the need in any industry for a leadership structure equal in size to the labor base. As such, even if everyone starts out on fairly equal footing, someone has to win out in the competition for the scarcer jobs. That is, whether or not you think management is very easy and anyone can do it, it still isn't possible for everyone to do it. The most exceptionally qualified will inevitably end up in these positions, whether or not you feel its really necessary for management to be exceptionally qualified.
     
    Last edited: Oct 17, 2005
  15. Oct 17, 2005 #14
    I think I'm pretty opposed to any belief that Utopia is achievable by any means. There will always be problems with the system I think, as it always seems to be 1 step behind human evolution (societal).
     
  16. Oct 17, 2005 #15
    You state that consumerism is a major driving force behind (capitalistic) economic developement. Consumerism requires constant growth (or so I'm told). If all the world's markets are saturated, won't there be a huge depression from lack of growth?

    I suppose space expansion could solve the saturation problem, but wouldn't that just create more cheap labor? Afterall, first-world markets would be at least partially geared toward space expansion, causing a decrease in third-world growth (due to first-world lack of interest in such smaller markets compared to costly space expansion). And, once space colonies are present, won't the people there live under different economic conditions than Earth-goers?
     
  17. Oct 17, 2005 #16
    Well after reading into communism and calling myself one for a few years, im convinced that it is not any better than capitalism so in essence it is equal. Why? Because communism MUST yield a dominant ruling class. If society does not work at first, then people may rebel. If society does work at first, then people will become complacent to government actions and will be happy, but then the ruling class could dominate them and make subtle changes.

    Perhaps i am fueled by the belief in illuminati and its ties to marxism, but if you look at what the new world order desires, its basically a totalitarian marxist society, ruled by an olligarchy instead of the people.

    So i dont really have a belief in a dogma now. Call me an anarchist if you want, but i wont be found spraying big "A's" on buildings. Im just a humble kid who was subverted by ideology. If you live in an ideologic society, you always have to live up to something. Theory is infinitely amorphous, changing at will of the people.

    Dont support anything unless you understand everything about it. An idealogy is more than that, it could be shackles.
     
  18. Oct 17, 2005 #17

    loseyourname

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    Heck, even I believed in the promises of socialism/communism when I was in my late teens. I think almost everybody goes through that stage at some point.
     
  19. Oct 17, 2005 #18
    Why did you stop believing in the promises of socialism/communism? Just a summary, please. I don't intend to argue any points, I just want input on your point of view.
     
  20. Oct 17, 2005 #19

    loseyourname

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    I can give you some bullet points:
    • I learned to view events in greater context and ceased to be outraged by the more exploitative and corrupt aspects of contemporary capitalism.
    • In concert with the above, I became more utilitarian in my ethical thinking, realizing that, for all of communism's good intent, empirical data shows that capitalism results in increased prosperity for all, and that is what we are really after, is it not?
    • After studying a lot of biology, I ceased to believe that humans are as malleable in their behavior as I previously did, and could no longer blame the negative actions of humans on any system/culture/society they lived in.
    • Simply living in California over the last decade or so has really turned me off to state controls in general and economic planning in particular. The market just seems to get it right far more often than bureaucrats.
    • The Hegelian view of teleological history is very offputting and obviously incorrect besides. Even if Marxism is not by necessity wedded to this view, it certainly colored early Marxist thinking.
    • In the long run, what is best for business seems to coincide with what is best for consumers and workers as well.
    • Wealth is created under capitalism. For this reason, and for the above, the Marxist platitude that profit can only be had off of the exploitation of the working classes doesn't seem to cut it.
    • Furthermore, I think we can see that workers and consumers are far more often screwed over when businesses are not profiting.
    • In short, what it all comes down to is what seems to me to be the true statement that market mechanisms nearly always do a better job of allocating resources and setting prices than central planning committees. I've grown very distrustful of the state, and think that things almost always work out better when they stay out of the way.
     
  21. Oct 17, 2005 #20
    India wasn't as bad as teh USSR or Mao's China. They were solidly Democratic once they gained independence from Britain, it's just that the government took very socialistic stances to solve the problems of poverty. There were strict labor laws, very high taxes on the wealthy, nationalization of lots of industry, all that sort of stuff, but it was never quite as extreme as the USSR or China.
     
    Last edited: Oct 17, 2005
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