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Author Topic: A Problem I See With Pure Capitalism
KnightEnder
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quote:
I've touched on this subject before but I will make it more explicit.

If you accept the premise that society is better off in the long run if everyone is trying to selfishly maximize their own gain, what argument can you make against criminal behavior, to those who are in situations where the "trickle down" effect does not figure to reach them in the forseeable future?

Put another way, it seems to me that there are two reasons why poor people should not steal even if they are sure they will not get caught. One is that they are in a system that will have a good chance of elevating them to a greater degree than another system would. So they shouldn't be a party to disrupting it. The other would be if the system frowns on people who live in lavish luxury and do nothing to help the downtrodden.

But say you are in a miserable situation (especially if it is due to little fault of your own) and the architects of your economy say there is nothing wrong with someone owning diamond toilet seats if they can afford it. And go on to justify this stance with the explanation that most poor people will do better in such a system. Then if you are not likely to be one of the poor people who benefit, why not steal from the guy with the toilet seat if you can get away with it?

Brought up on another forum by poker pro David Sklansky.

I post it because it eloquently expresses my view point.

What do you think?

KE

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goochy
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I believe capitalism is nothing short of being criminal. What is so good about capitalism when making others poor.

(And how many times i have heard in my life, "we are all equal") are we really?

I beleive who is wealthy because of a decent living, he or she has the right to earn that, but i do not believe capitalism is acceptable.

What makes the richer more worthy than the poor guy nextdoor.

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Automath
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Do you have a better alternative, KE?
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Everard
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Economies with moderate levels of redistribution of wealth seem to have happier healthier citizens then economies with lower levels of redistribution, without significant sacrifice in economic growth.
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Automath
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Evidence?
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Everard
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life expectancy

happiness

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LoneSnark
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The primary argument is that a free economy is more productive and advances more readily. Taxes prevent beneficial behavior, such as working harder or accumulating capital, meanwhile regulation prevents competition. In a country with a large and powerful government, corporations give up competing to be the most productive with the best products to win custmers and instead compete for political influence to use the government against their competitors.

Because a free economy would not allow for this, it would focus everyones attention on making life better through technological advancement and economic efficiency.

As the theory goes, a free economy would quickly render capital plentiful and competition fierce, particularly for labor, making the individuals we today call "poor" substantially better off thanks to higher wages. A separate argument can be made that much of what is today called "localized unemployment" (See Detroit) is a consequence of restrictive labor and minimum wage laws, so eliminating these laws would allow businesses to productively use this labor, eliminating the unemployment and thus the need for charity.

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Eric
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Why should others profit from my efforts?
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Everard
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"Why should others profit from my efforts?"

Because you end up profitting in the long run.

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LoneSnark
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Why should you profit from the efforts of others?

Because they have no ability to prevent you from doing so. It is nothing innate in us that we expect fair compensation for our labor but from the existance of other potential employers vying for our efforts.

Insert baker and butcher story from Adam Smith.

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Automath
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quote:
Originally posted by Everard:
life expectancy

happiness

Shouldn't there be a third statistic for domestic spending on welfare, or something along those lines?

[ February 04, 2007, 09:30 AM: Message edited by: Automath ]

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Everard
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Sorry, I thought you'd see the obviously socialistic nations that dominate the tops of those lists.
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Automath
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quote:
Originally posted by Everard:
Sorry, I thought you'd see the obviously socialistic nations that dominate the tops of those lists.

I suppose.

But how is happiness measured in this case? If you look at life expectancy, a more legitimate statistic in my opinion, the socialistic nations don't actually rank that well.

Also: When were these graphs made? And do you consider Australia to be a highly socialistic nation?

[ February 04, 2007, 09:56 AM: Message edited by: Automath ]

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The Drake
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Capitalism is not a moral code, it is an economic system. Why shouldn't I steal? that's a moral question.

"But say you are in a miserable situation (especially if it is due to little fault of your own) "

Anarcho-capitalists would say this is not possible. But it increases the typical definition of "fault".

eg. "It is your fault if the steel mill closes, and you have no other skill to trade in the marketplace."

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LoneSnark
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An anarch-capitalist would argue that just as you pay for insurance against the unexpected you should pay to keep a fall back career in case your primary career either goes away or is not as profitable as you predicted.

But even if you get stuck with no marketable skills in an anarcho-capitalist world there will always be no-skill jobs in sufficient quantity to act as a last-ditch safety net, see Wal-Mart and pizza delivery.

It also bears pointing out that many of those countries which you call "Socialistic" manage to score higher on the Economic Freedom Index. What people need to realize is that while America may spend a little less on redistribution America is no where near a free economy and is in many ways less free than many of our European counterparts.

[ February 04, 2007, 10:33 AM: Message edited by: LoneSnark ]

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potemkyn
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Lonesnark,

"In a country with a large and powerful government, corporations give up competing to be the most productive with the best products to win custmers and instead compete for political influence to use the government against their competitors. Because a free economy would not allow for this, it would focus everyones attention on making life better through technological advancement and economic efficiency. "

This is a logical fallacy. Free market capitalism is in the business of making money. What would occur would be an attempt to make money as cheaply as possible. The technological advancement and economic efficiency are by no means required to follow this. Additionally, they are hardly likely to 'trickle down' to the lower classes without some intervention.

Potemkyn

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Everard
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"But how is happiness measured in this case?"

At the bottom of the link.

"If you look at life expectancy, a more legitimate statistic in my opinion, the socialistic nations don't actually rank that well."

Lets knock off andorra, Macau, san marino, Guernsey, Gibraltar, Liechtenstein, Monaco, and the caymans. I'll leave hong kong and singapore to be generous, but this is only to skew statistics against the position I'm taking. These nations are too small to tell us anything meaningful about life expectancy in a modern nation.

What we see is that the top of the list is REALLY dominated by tiny populations. Easier to keep people alive when you're only dealing with 20,000 of them compared to 100,000,000.

So lets look at nations that have sizeable populations, until we get to the united states.

Japan, socialist
Singapore, capitalist
Australia, trending capitalist
Switzerland, socialist
Sweden, socialist
Hong Kong, capitalist
Canada, socialist
Iceland, socialist
Italy, socialist
Spain, socialist
France, socialist
Norway, socialist
Israel, socialist
Greece, socialist
Netherlands, socialist
New Zealand, trending capitalist
Belgium, socialist
Austria, socialist
United Kingdom, socialist
Germany, socialist
Finland, socialist
Jordan, trending capitalist
United States.

The labeling is relative to the US. a label of socialist does not mean a fully socialist economy.

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Cytania
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If I read this thread's notion of 'pure capitalism' correctly we are talking no government intervention. Yet time and again markets show their potential for excess. It is the job of government to prevent market excess through regulation; a simple restriction for the common good.

One good example of 'pure capitalism' not working in the 'trickledown' way many here claim it should is the 30s depression. Here is a recession made worse by extremely cautious consumer behaviour. Wealth was present in the system but locked up under mattresses. The economy should have revived but stalled doing so - you might call this 'the inertia of thrift'. Until war employment broke the mindset government intervention was required to keep the substantial numbers of unemployed from destablising the whole nation.

We need government to take action on bubbles, pyramid schemes, enrons etc.

[ February 04, 2007, 12:26 PM: Message edited by: Cytania ]

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velcro
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As with almost everything, somewhere in the middle is best.

In pure capitalism, corporations have no accountability to the public, only to their owners. You can argue that the good corporation considers the public in the long term, but that is no consolation to someone poisoned by corporate pollution. Sure, the corporation may lose money somehow down the road (all their customers are dead?) but history has shown that is no real deterrent - there are too many people willing to be in it for the short term.

All the "theories" about how capitalism evens things out in the end are great, until you and your family die in one of the ditches that don't get evened out for a few years.

Obviously a purely planned government is not very efficient either. My preference is capitalism with enough government oversight to prevent the worst excesses. Of course one man's excesses are another man's hard-earned pay. That's where all the fun discussion comes in.

Getting back to the original question, I agree with The Drake. Capitalism doesn't say anything about stealing. Maybe it does if you consider enforcement of contracts to be part of capitalism, and assume a contract between all citizens not to take or use property without approval. But I don't think capitalism would object to extortion or blackmail, so that might be a better example.

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Jesse
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Of course, without government intervention, there is no freedom in markets at all.

Having siezed control of the vast majority of available capital, Elites are able to crush competition. A brief review of late 19th and early 20th century America makes that pretty clear.

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Jesse
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KE-

quote:
The romantic-libertarian notion that "market laws are natural laws" simply flies in the face of the way 99% of humansocieties organized themselves. In those cultures, elites of both power and mysticism colluded to ensure that free markets would NOT happen. Following simple darwinian logic -- seen in all species on Earth -- they applied both force and culture to ensure themselves reporoductive advantage (wealth, power, access to mates) at the expense of other people.

This predatory scenario especially manifested whenever a society got both metals and agriculture, where big guys with metal implements quickly took other mens' women and wheat... and nerds in spangled cloaks then hopped around singing fables and incantations, telling the poor how GOOD the social order was! Ah, Joseph Campbell.

Still, humanity did make glacial progress and a tipping point was reached with the Enlightenment. Several factors: American democracy, Adam Smith's persuasive theories of commerce, rising education and the productive leverage of machinery began having multiplier effects, making social mobility a desideratum that pushed back against the age-old driver of natural human predation.

It was difficult. Markets were not, are not and never were "natural". EVERY generation featured attempted aristocratic or kleptocratic coups. It took ferocious intervention - often on the part of governments - to regaulate markets to a point where elites could not easily do WHAT THEY OTHERWISE WILL ALWAYS DO... act to cheat, manipulate market rules and forces in secret, steal and stifle the ability of others to compete.

Markets are not natural, but they do seem to have many traits of what we in complexity theory call "emergent properties"... they have a capability of "taking off" spectacularly, leveraging knowledge and capital in ways that Marx only began to grasp, but that Hayek seemed to understand quite well.

Alas, libertarians of the romantic wing are able to hypnotize themselves to ignore the myriad blatant ways that the trait of cheating-by-elites is inherent and inevitable to human nature, or the ways in which a well-run and democratically supervised, open and transparent government can vitally counterbalance this human trend... though again, with the proviso (difficult) that government must be used right. It is simply psychotic that so many market-mystics disparage universal public education, for example, in having vastly stimulated the creation of a vast modern middle class. Yes, that public education system is now creaking at the seams, unable to respond to new demands/circumstances. But to ignore its role in reifying markets in the past is simply loopy.

David Brins Blog
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Snowden
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quote:
Why should others profit from my efforts?
Because they exist. It's the same reason I don't charge my sister for babysitting.
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LoneSnark
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quote:
This is a logical fallacy. Free market capitalism is in the business of making money. What would occur would be an attempt to make money as cheaply as possible.
Ok, how do you make money in a free market economy? You have to somehow convince others to give it to you, usually by giving them something they want. But anyone can give it to them, so why should they give you their business if not because you can provide it cheaper and of a higher quality, which requires economy and technological advancement?


quote:
One good example of 'pure capitalism' not working in the 'trickledown' way many here claim it should is the 30s depression. Here is a recession made worse by extremely cautious consumer behaviour.
There is no mystery left from the Great Depression, and it had nothing to do with cautious consumer behavior. The Great Depression was nothing more than a collapse of the monetary system as managed by the Federal Reserve. It had nothing to do with unfettered markets and everything to do with Government Mis-Management by both the Congress and the Federal Reserve. Had Congress not stamped out international trade the recession would not have been so severe. Had the Federal Reserve not drawn down the money supply the banks would not have failed. Had the banks not failed the recession would not have turned into a Depression the likes of which the world had never seen before or since.

If you need me to elaborate further let me know.

quote:
You can argue that the good corporation considers the public in the long term, but that is no consolation to someone poisoned by corporate pollution.
To be someone's customer is to empart imense trust in that individual. And as any one can tell you, trust is hard to earn and easy to lose. The surrest way to lose customers, and thus face bankruptcy, is to be accused of poisoning your customers. Sure, you may kill a customer or two, but in doing so you have lost everything. No one will ever trust your products again, no matter how cheaply you price them, because your competitors will harold your crimes upon the street. They will compose catchy jingles to your folly and make sure every waking human being knows you ****ed up, even just once.

And poisoning non-customers is folly, as well, because they have a tendency to sue if courts are available or otherwise retaliate. The theory of "Least Cost Avoider" suggests that even in a purely no-government world no individual will ever suffer from pollution.

quote:
Having siezed control of the vast majority of available capital, Elites are able to crush competition. A brief review of late 19th and early 20th century America makes that pretty clear.
Perhaps we read different histories. No anarcho-capitalistic societies existed in the late 19th and 20th centuries. If that era shows anything it is that man cannot be trusted with a Government. I recommend the renound Marxist Gabriel Kolko's book entitled The Triumph of Conservatism. His theory is that Big Business needs Government regulation to survive, otherwise they will eventually be buried by smaller more competent and motivated entrants to the market. This is because large corporations are a contradiction, a classic case of principle/agent conflict. This conflict breeds waste and inefficiency over time, dooming the corporation to ever smaller market shares unless it is able to capture Government protections in the forms of either tax brakes or burdensome regulations because big companies have a competitive advantage at filling out paperwork and navigating legal hurdles.
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The Drake
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Personally, I think the best way to sum up competitive capitalism is that it produces the greatest average gains for society, but carries a huge "Beta", or risk.

Much of our federal economic policy is an attempt to keep the average growth untouched, while reducing the Beta that leaves many thousands jobless, whereupon they often resort to crime rather than apply their efforts to legitimate pursuits.

Witness the Fed's adjustment of interest rates for just one example.

Are these good things? I'd tend to say so, overall. While I might dream of sugar plums and Objectivist communities in the Rockies somewhere, I've come to understand that human beings are not principled enough to accept that they are economic "losers" and take responsibility for themselves.

The same could be said of pure Communism. If all the members of such a society were principled to accept that economic system, it would probably work also.

Capitalism, at the least, matches what people most commonly accept to be true. A person deserves to be paid as much as possible for their own work and ideas. No person deserves to force another to provide their well-being. Society is served best when each member of the society has a personal interest in producing something of value for their fellow citizens.

There are some things the different levels of government do to protect people from raw capitalism, and there are many other things that it does to exacerbate the effects of raw capitalism.

[ February 04, 2007, 11:26 PM: Message edited by: The Drake ]

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martel
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Lonesnark-
I think you have a very valid point that the free market does not cause immediate death or even long term decline in economies. That much is nearly self evident from a study of high school level macro economics.

The argument of laissez-faire capitalists thus has been the oft-cited trickle down effect, or some variant thereof, where the poor are helped by the increased economy, etc.

But is that really true? The arguments for a socialized (to a degree-I am not a socialist)economy, welfare, etc. are persuasive when you consider the countries that employ them. And, for comparison, let's look at the change in Great Britain. For much of the 19th century, they followed laissez-faire step by step. The result: read Dickens. The economy boomed, production skyrocketed, Britain became the leading economic power in the world (excuse me if they already were, I'm not sure), and...the coal miners, the textile workers and the dock hands got the short end. They starved, they froze, they were killed in workplace accidents...and the trickle down never really happened. The capitalists just got richer and richer.
You may argue that the difference from then to today is due to the brutality of the factories, or something else, but most of the causes of poverty and death among the workers can be traced to the free-market policies of the British government.

So in my opinion, the point of the economy should not be itself, to sustain itself. It should be the people, and all of the people. An economy that does not provide for as many of the people as possible has failed, no matter how much the quarterly real GDP rises. And a completely open market cannot ensure that all will be provided for, simply because people are greedy. Business owners, industrialists, and the like would run rampant with profits, just as they did in industrial Britain.

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The Drake
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quote:
Originally posted by LoneSnark:
And poisoning non-customers is folly, as well, because they have a tendency to sue if courts are available or otherwise retaliate. The theory of "Least Cost Avoider" suggests that even in a purely no-government world no individual will ever suffer from pollution.

Of course, for the anarcho-capitalist, there wouldn't really be a court system. The big problem with this situation, is that those being harmed are not necessarily a set that intersects with your customer set. Very few individuals cared how many employees lost limbs in the textile mills of Lowell, MA. People were buying the sweaters just as much as ever. Let alone when the slaves picked the cotton.

So, I think there's a need for and a legitimacy to agencies like OSHA and the EPA. To expect the consumer to act as watchdog for the rights of citizens is to abdicate one of the true responsibilities of government - the assurance of certain basic rights, including health.

Germane to the discussion is my previous observation about Beta. In the long run overall, there might be less pollution, but in the short run certain communities may pay an appalling price for that gain.

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potemkyn
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Lonesnark,

quote:
Ok, how do you make money in a free market economy? You have to somehow convince others to give it to you, usually by giving them something they want. But anyone can give it to them, so why should they give you their business if not because you can provide it cheaper and of a higher quality, which requires economy and technological advancement?
Why not just slash wages? Why not just cut out the middle man or form a monopoly? All of these things will make a corporation much more wealthy and won't improve technology one bit.

Note what I'm not saying. I'm not saying that technology and the economy aren't connected, but I am suggesting that the relation you think they have is overstated.

Technological advancement does tend to prelude a booming economy, but that's not always the case, and it certainly isn't shared equally without some form of government mandate. Just consider the simple supply and demand graph, all those that are unable to meet the equilibrium price won't get access to the product. That can be a large portion of the people.

Additionally, the freer the market the more prone to busts it becomes. Every 20 some odd years from 1853 to 1929, there was an economic depression that threw tens of thousands out of work in America, not to mention the world. England saved itself from the worst of this in the 1870s by basically starving close to 60 million Indians. The free market economy as it was concieved of in the West was a failure, which is why people left that model behind. A mixed economy provided some protection from the whims of the free market while still maintaining the better elements of competition and advancement.

Of course, we haven't even begun to consider the concept of the 'purpose' of the economy. Does it even have one?

Potemkyn

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LoneSnark
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Drake, you quit reading aparently. The theory of "Least Cost Avoider" was coined in the 90's and is a good explanation for how economic actors are able to mitigate situations that were previously considered intractable externalities in an anarcho-capitalist world and they do it without the need for courts or third party intervention.

But what you seem to be asking is far less complicated. Specifically, it is the responsibility of a worker to avoid jobs that potentially claim limbs. This is not to say a worker will never risk a limb for a job, surely for the right price any of us would accept a degree of risk. But is it not a worker's right to trade safety for cash? An anarchist would say it is their choice to accept a risky job over a non-risky job at less pay.

And none of this requires customers to watch out for anyone but customers. Workers do not need to watch out for anyone but workers. Owners do not need to watch out for anyone but owners. Citizens do not need to watch out for anyone but citizens.

quote:
change in Great Britain. For much of the 19th century, they followed laissez-faire step by step. The result: read Dickens.
Yes, Britain attained fairly free trade in the late 19th century, but the crown continued to issue writs of monopoly and Parliament collected a large percentage of the annual GDP in taxes to fund military adventures overseas in efforts to build and maintain a British Empire, so laissez-faire it most certainly was not. Then again, 19th century Britain was also a peculiar situation in history. You see, prior to the industrial revolution it was the norm for individuals occupying the lowest classes of society to starve to death every winter because the resources did not exist to keep them alive, thus maintaining a fairly stable population. However, with the rise of early 19th century industrial revolution, a new situation arose: the "iron law of wages." As prosperity increased, individuals that under the old system starved to death stopped doing so, thus the population exploded. As the economy increased, the population increased faster, straining both goods and capital markets to keep up with an ever wider labor market. It took a lot of economic advancement to get ahead of this "iron law," when it finaly did the annual human die-off was finally completely eliminated and wages among the lowest classes finally began rising.

quote:
Why not just slash wages? Why not just cut out the middle man or form a monopoly? All of these things will make a corporation much more wealthy and won't improve technology one bit.
Well, why don't they do those things now? Surely you considered what I would say back to you. A Business cannot just slash wages without the workforce quitting; no workers means no production means no customers means no profit. A Business cannot just "form a monopoly", what if competitors refuse to join? What is to stop other firms from entering the market and eroding your monopoly?

quote:
A mixed economy provided some protection from the whims of the free market while still maintaining the better elements of competition and advancement.
I disagree. The creation of a responsive Federal Reserve System has worked to stabilize the economy and combat the boom/bust cycle by stabilizing the money supply, which has historically been the sole propagator of economic instability. Everything else we could have purchased on our own.

[ February 05, 2007, 01:30 AM: Message edited by: LoneSnark ]

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WeAreAllJust LooseChange
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Back to the original post:
"the premise that society is better off in the long run if everyone is trying to selfishly maximize their own gain..."

I fail to see how executives, who influence the board of directors / finance dept., etc. of the companies they run to back-date stock options they issue, are not stealing from the companies they are managing.
After all - they are selfishly maximizing their own gain...
If government regulations and prosecutors are not there to stop such practices - the richer will have one more way to get more wealth out of a publicly owned company, to which they are supposed to be a "servant".

And this shows that there are many definitions of "stealing" too.

So no, thank you very much - laissez-faire capitalism may have been good for the time Adam Smith was writing in, but not for today's economy and world we live in.
Too many examples of Free capitalism gone bad.

Although it's getting that way again - see M$, Media companies, Telecoms. I don't think any one of those industries will have the public interest as one of their top 10 goals.

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potemkyn
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Lonesnark,

quote:
Well, why don't they do those things now? Surely you considered what I would say back to you. A Business cannot just slash wages without the workforce quitting; no workers means no production means no customers means no profit. A Business cannot just "form a monopoly", what if competitors refuse to join? What is to stop other firms from entering the market and eroding your monopoly?
Sure they can slash wages. Any history of unions and workers in the 19th century (and 20th century) shows that workers are next to powerless in the face of a determined employer. Strikes happen, but they were almost always broken with workers returning to their old jobs with little to nothing to show for it. Do you think employers would pay minimum wage for unskilled labor if it wasn't required for them to do so? The government is the only protection for workers in the face of recalcitrant business leaders. One needs only look back to the Sago mine disaster or the McWane Corporation for a look at how corporations can act even with government oversight. It doesn't take much of an imagination to wonder what they would look like without it. And note, this is merely between (technically) contracted agents. What about the community? You think coal mining towns don't know that the corporation is polluting the mess out of their living area? You think that they can force them to stop without the government's help?

quote:
I disagree. The creation of a responsive Federal Reserve System has worked to stabilize the economy and combat the boom/bust cycle by stabilizing the money supply, which has historically been the sole propagator of economic instability. Everything else we could have purchased on our own.
With what? What sort of purchasing power do you think the lower 20% of the population possesses? And how exactly does a responsive Federal Reserve System handle Standard Oil? Or Enron? Or the McWane Corporation?
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potemkyn
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KE,

Pure capitalism has never existed because it would never work. It's essentially Hobbe's war of all against all with manners. Total baloney pipe dreams, like communism.

Every economy has been mixed because the accumulation of money means an accumulation of power. And governments need a near monopoly on that if they are to be considered legitimate. Of course in the absence of a legit government, some rich person would take over and become the government (oh wait, that's what the government is now...).

Your question is totally legit and difficult to answer in any way other than, do what you have to do. All I can think of against it would be that stealing, especially in your community, makes everyone there worse off, even you. So stealing makes sense only if you do it somewhere else to someone else. Kind of like don't sell drugs to your relatives thing. Of course, as Drake suggested, morality and capitalism are thought of as distinct and independent. That makes it hard to blur the line.

Consider the following idea:
Selling poor quality goods that will harm people is ok in capitalism (sans morals) if it is best for you. But can you have capitalism without morals? Ehhh... I don't think anyone ever concieved it that way. You see where I'm going with this? I think pure capitalism requires moral people in the same way that pure communism requires people to work hard solely for their neighbor's welfare.

Potemkyn

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LoneSnark
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quote:
Do you think employers would pay minimum wage for unskilled labor if it wasn't required for them to do so?
With that reasoning, one is forced to wonder how any worker ever earns more than minimum wage. Since 98.6% of workers are earning more than minimum wage you must recognize there are more forces at work than incalcitrant business leaders.

quote:
You think coal mining towns don't know that the corporation is polluting the mess out of their living area? You think that they can force them to stop without the government's help?
Yes they can. A "town" is a government entity with soverign rights over all activity in their jurisdiction. Even ignoring jurisdictional rights, the towns people can apply "least cost avoider" theory to the situation for an agreeably outcome.

quote:
With what? What sort of purchasing power do you think the lower 20% of the population possesses? And how exactly does a responsive Federal Reserve System handle Standard Oil? Or Enron? Or the McWane Corporation?
None of these corporations can be blamed for monetary crisis, so I don't see why anyone would need to do anything about them. Corporations are not responsible for unemployment, inflation, deflation, or civil unrest; we have the banks to thank for all these ills and that is why a responsive Federal Reserve System, absent a hard gold standard, is essential. Beyond that, and probably an Earned Income Tax Credit, there is nothing more our Federal Government "needs" to do to stabilize the various markets that make up our society. Everything else, likes roads and healthcare, is a local issue and should be dealt with as such. If workers accept dangerous work then they sould pay the costs in the form of disability insurance (call AFLAC). If workers are affraid of economic dislocation then I recommend they buy unemployment insurance.

quote:
Selling poor quality goods that will harm people is ok in capitalism (sans morals) if it is best for you.
To be someone's customer is to empart imense trust in that individual. And as any one can tell you, trust is hard to earn and easy to lose. The surrest way to lose customers, and thus face bankruptcy, is to be accused of poisoning your customers. Sure, you may kill a customer or two, but in doing so you have lost everything. No one will ever trust your products again, no matter how cheaply you price them, because your competitors will harold your crimes upon the street. They will compose catchy jingles to your folly and make sure every waking human being knows you ****ed up, even just once.
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potemkyn
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Lonesnark,

quote:
With that reasoning, one is forced to wonder how any worker ever earns more than minimum wage. Since 98.6% of workers are earning more than minimum wage you must recognize there are more forces at work than incalcitrant business leaders.
Not even close to an issue. Minimum wage is reserved for unskilled laborers for the most part who obviously have much less power to influence a corporation with their leaving. I mentioned minimum wage in specific relation to unskilled labor.

quote:
Yes they can. A "town" is a government entity with soverign rights over all activity in their jurisdiction. Even ignoring jurisdictional rights, the towns people can apply "least cost avoider" theory to the situation for an agreeably outcome.
"Least Cost Avoider" is economic claptrap. You're obviously not very familiar with WV coal mining because if you were, you'd see how hopelessly impossible this whole thing is. To say that the town chooses to have its land polluted is a fallacy because there are no chocies. Either pollute, run, or die. Whereas the corporation has multiple options which it can and does pursue at its leisure. LCA is bunk.

quote:
None of these corporations can be blamed for monetary crisis, so I don't see why anyone would need to do anything about them.
Really?
Standard Oil - monopoly
Enron - corporate theft in the billions
McWane - egregious violations of work place safety even tofay

You've no problem with these entities operating in the economy today? I find this fascinating.

quote:
Beyond that, and probably an Earned Income Tax Credit, there is nothing more our Federal Government "needs" to do to stabilize the various markets that make up our society.
Your history is full of holes. Any time the government lets things be, collusion happens in the near and long term and results in the formation of monopolies, trusts, and powerful groups which either buyout or crush any competition.

quote:

To be someone's customer is to empart imense trust in that individual. And as any one can tell you, trust is hard to earn and easy to lose. The surrest way to lose customers, and thus face bankruptcy, is to be accused of poisoning your customers. Sure, you may kill a customer or two, but in doing so you have lost everything. No one will ever trust your products again, no matter how cheaply you price them, because your competitors will harold your crimes upon the street. They will compose catchy jingles to your folly and make sure every waking human being knows you ****ed up, even just once.

Yes, you've said this before. But you didn't notice I've changed the scenario. What if the poor quality good or the polution is worth it after analysis? Like with the Ford Pinto? The gas tank would explode from a rear collision, but they produced it anyway since the cost of changing it was less than the expected lawyer's fees and lawsuits. Furthermore, what 'jingle' are you refering to? You seem to have something particular in mind.

Potemkyn

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The Drake
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Yes, in a pure capitalist society, workers could sell their limbs, or accept high risk of the loss of their limbs, in exchange for goods or services.

As a society, we have decided that this is not acceptable, and won't allow it. I don't think that's bad, do you?

I also think you're missing potential harm to third parties, who are neither customers nor employees. Consider the cases of poisoning in Woburn, MA or Bhopal, India.

Under pure capitalism, such people are irrelevant.

I also think you overestimate people's ability to hold companies responsible. How many people avoided Union Carbide products after they killed so many people in Bhopal, India? How many people even know when they are buying Union Carbide products - and under pure capitalism, once again, there's no reason for anyone to care.

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DonaldD
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Pure oxygen isn't exactly healthy either.
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Daruma28
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A point that needs to be made here is to look carefully at the language used by opponents of Capitalism when discussing Capitalism.

More specifically, the conflation of economic behavior for self-interest with selfish greed.

To put it simply:

When a society is founded on its citizens working in their own self-interest, everyone benefits.

A dairy farmer produces 100 gallons of milk a day, but only uses half a gallon himself for his own family. So it is in his self interest to sell the other 99 and a half gallons on the market to gain money to purchase other things he and his family needs - while the people that need milk for their own families trade their own money to gain what they need - i.e. their own self-interest. In this way, the needs of the dairy farmer AND the consumers of his milk all gain benefits from acting in their own self-interest.

That is a far cry from "greed." Greed is a base human motivation and it will exist and continue to involve the selfish exploitation of fellow human beings REGARDLESS OF THE ECONOMIC SYSTEM that any group of human beings live in.

If the dairy farmer, acting greedily, where to water down his milk so he could sell 150 gallons of milk instead of 99 and a half, he would be acting greedy and selfishly...but NOT in his own self-interest - because his customers would recognize the cheaper, watered down quality of his milk, and pretty soon he cannot even sell one gallon of his milk.

So is one man acting unethically in a capitalist system an indictment of an entire econmic systemf?

One could easily take a look at a billion Chinese citizens who ride bicycles and live in tiny apartments while the governemnt officials are chauffered around in limousines from their mansions to their lavish governemnt offices to see greed manifest in a communist system.

Or to look at the historical examples of Stalin purposely (or one might say "greedily") starve millions of Ukranians so as to "greedily" consolidate his power. So is Communism based on greed as well?

Capitalism is NOT BASED on "Greed" or Selfishness anymore than Socialism is.

The reason why I am a proponent of free market capitalism is that it offers the greatest possible amount of personal and individual freedom of choice in how one wants to live their life - it empowers the individuals living in that system...whereas Socialism empowers the central governing authority.

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Colin JM0397
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On that note, I'm always troubled by the capitalism naysayers assuming government is somehow more benevolent than private industry or private citizens.

People run governments, so anything you think about human nature applies equally. Why is it government control of certain things more honorable and better for us all than private control?

Remove the system – any system - and we still have people being people. Some will do the best for the common good and some are assholes who will screw everyone any chance they get.

One of the examples against was the "evil" corporations poising their customers. How is that any different from an "evil" government doing the same?

-isms don't kill people, people kill people.

The simple fact is people are imperfect so any system we implement is also going to be imperfect.

[ February 05, 2007, 03:56 PM: Message edited by: jm0397 ]

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LoneSnark
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quote:
Yes, in a pure capitalist society, workers could sell their limbs, or accept high risk of the loss of their limbs, in exchange for goods or services. As a society, we have decided that this is not acceptable, and won't allow it. I don't think that's bad, do you?
Honestly I would not vote in favor of such laws. You want to be stupid, as long as you understand what you are getting yourself into, then I have no objection to you risking your own life, whether it be for a job such as performing a stunt for a movie, or for your own entertainment such as sky diving.

quote:
Standard Oil - monopoly
Enron - corporate theft in the billions
McWane - egregious violations of work place safety even tofay

I have no objection to any corporation providing its customers with affordable high quality products, whether it is Standard Oil or Food Lion, I have no objections. Then again, I must object to Standard Oil being described as a monopoly, it most certainly was not. While its detractors revel in pointing out it refined 90% of the U.S. Oil Market in 1890, that is an over-simplification, as there was a World market at that time and Standard Oil was in fierce competition with foreign producers even then, primarily Russian. By the time of the first anti-trust suit against Standard Oil its market share had been eaten down to below 60% by refiners in Texas, California, and Oklahoma.

If we analyze the history of trusts and monopolies the only conclusion we can draw is that "corporations" are a poor means of organizing production and as time passes complacency breeds inefficiency and waste, openning the market for new entrants and ultimately producing the downfall of the old to be replaced with newer younger corporations.

Also, Enron was dealt with quite capably by the market: the stock collapsed, the company declared bankruptcy, and the owners which allowed the corruption were ruined financially and reputationally. To imply that a corrupt corporation means we need to abolish corporations is akin to saying a cheating wife means we need to abolish marriage. Crooks are crooks, charge them with fraud and move on, don't make things worse.

quote:
What if the poor quality good or the polution is worth it after analysis? Like with the Ford Pinto?
If you want to risk your life by buying a cheap car that could burn you alive then go ahead. But if I'm buying a car and "Car and Driver Magazine" reports the car is deadly, I'll buy an even cheaper Honda that does not explode.

quote:
I also think you're missing potential harm to third parties, who are neither customers nor employees. Consider the cases of poisoning in Woburn, MA or Bhopal, India. Under pure capitalism, such people are irrelevant.
Not at all. They are economic actors capable of numerous options. If the damage is cheap to avoid then third parties could pay the offender to avoid dangerous behavior. I must ask, are you expecting me to defend an anarcho-capitalist World? While I have spoken with anarcho-capitalists on this issue I do not remember their responses. But in accordance with anglo-saxon traditions, "unforseen accidents" are supposed to spawn lawsuits from injured parties, in effect forming the "invisible fist of liberty," avoid accidents or we will crush you with liability.
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velcro
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The corporation valuing its customers, the farmer not watering down his milk - all assume repeat customers, or customers who can research vendors thoroughly.

I go to a rural area of a 3rd world country, and sell the town a diesel generator for $300 and show them how it can run on palm oil. I leave and the next day it blows up because it can only run on palm oil for a few hours. I repeat this exercise in a new town everyday for the next 20 years. How does capitalism prevent me from doing this? I am not losing customers, I am not going bankrupt. Unless there are laws against selling faulty products, nothing will stop me. I can make enough money so if the occasional villager tries to track me down, I hire a bodyguard to make him go away. Or even better, I can give him $150 to go away, and still make $100. Pure capitalism in action.

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LoneSnark
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Hmm, ok, let us say you are a villager and that happened to you. Do you intend to tell me that you have no idea how to get back at them? I see several right off the bat.

First, contact them and demand a refund, contact a lawyer and threaten to sue, get your $150 to go away.

Now, contact the village leaders of every village you can reach and notify them of the faulty equipment being peddled.

Of course, how stupid are you that you spent $300 on a generator from someone you did not know? Surely you would not buy a used car from someone you don't know without getting it checked out by a mechanic, why would a diesel generator be any different?

The point is, that will happen once. You buy a worthless $300 generator and you will feel like an sucker. The next time someone comes alone to sell you something maybe you will show them the skepticism they deserve.

What I do not appreciate is the belief that the Government is going to protect us from scam artists trying to take advantage of us. Since most people believe the Government is going to protect them against crooks, they are less likely to call a mechanic to have the generator looked over, check with prior customers, or verify with reputable sources the claims being made by the would-be swindler. As a result of this false sense of security, the crooks get away with much more now than they did in the age before the Better Business Bureau. This is because the Government cannot arrest swindlers that vanish overnight and leave their victims with no valid name or address.

There are stories of quack doctors performing rediculous procedures on patients and getting away with it for decades because, well, they were state certified, and surely a wacko could not get a medical license. Well, it turns out they do; and people are going to be killed by them because someone we trusted in authority, our Government, told us they were worthy of trust.

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