Author Topic: What is Capitalism?  (Read 1717 times)

TheDeamon

  • Members
    • View Profile
What is Capitalism?
« on: February 04, 2019, 08:24:04 PM »
I noticed a comment made on a gaming site where someone was responding to how Gaming companies jumping on the "Micro-transaction" bandwagon was in keeping with Capitalism because:

Quote
Capitalism is all about short-term gains

And Adam Smith wept. As well as numerous other prominent historical figures.

Fixation on Short Term Gains in business without meaningful regard for other consequences has a name, and it isn't called Capitalism. It's called profiteering.

Capitalism is about the free movement of good between individuals, groups and eventually between markets. Where when a "capitalist" sees an opportunity present itself where they can provide a good or service and obtain additional capital as part of the exchange(ideally after a "mutually beneficial agreement" has been reached, as per Adam Smith; Operative part "mutually beneficial") they will seek out that opportunity.

As I consider it further, perhaps the best, and truest way to define "a capitalist" is somebody who does not view (mutually beneficial) trade/commerce as a zero-sum game.

Smith's argument essentially was that through mutually beneficial trade, Specialization would occur(basic economics even now). As specialization progressed and that mutually beneficial trade continued, everyone would end up with more stuff than they would have had than if they had relied on themselves to accomplish everything. (This remains true in every iteration of economics existent to this day)

This can cycle into some other recent posts made recently about how the vast majority of self-identified "Capitalists" are not in favor of exploitative trade practices. They're interested in fair, and mutually beneficial, trade relationships, and where the differences start to occur is disagreement over the mechanisms that should be utilized in order to keep things fair and mutually beneficial. But there are Profiteers, who will happily hide under the banner of Capitalism, that are all for exploitative practices and policies.

Although another constant for Capitalists is they also will hold "to the power of markets" and as such will NOT go "all in" on any kind of construct that is likely to destroy the ability/incentive of a person to perform the most basic part of capitalism: Identify a need, and attempt to "make a profit" from fulfilling that need in a mutually beneficial way.

Some forms of socialism/"socialized practices" are easily compatible with this approach, others not so much. Communism is pretty much non-compatible by definition, as the personal profit motive has no meaningful outlet.

Pete at Home

  • Members
    • View Profile
Re: What is Capitalism?
« Reply #1 on: February 04, 2019, 10:22:51 PM »
Karl Marx is having a kapital-asm in his grave

Since he's the one that destroyed Communism
by remaking it in his image
as a subset of materialism
whereas the previous little c communists were spiritual
and understood that communism only bore its own fruit
as opposed to stealing the fruits of others
when it was seeded in faith
or in some other form of imagination
of which marxists have none
to speak of
« Last Edit: February 04, 2019, 10:25:19 PM by Pete at Home »

Fenring

  • Members
    • View Profile
Re: What is Capitalism?
« Reply #2 on: February 05, 2019, 12:16:42 AM »
I'll make a small post on this topic now, quickly as I can, but I do intend to get around to answering Seriati's post on the other thread when I have time. Right now I'm taking care of a newborn so the time intervals when I can sit around and write posts isn't what it used to be...

As I consider it further, perhaps the best, and truest way to define "a capitalist" is somebody who does not view (mutually beneficial) trade/commerce as a zero-sum game.

This is the basic flaw in traditional definitions of capitalism, and why I proffer a different one. Not because I fail to understand the classic model, but because I reject it as being relevant. The cornerstone of your definition here is "view": it's about perspective and intent. And no study of intent can be relevant without a comprehensive study of psychology; for this reason I consider economics to be a subset of psychology for the most part, although obviously it has aspects that require fluid dynamics analysis and other mathematics as well. Certainly nothing that Adam Smith would have been expert in, though. This is the major difference between looking at economics as a moral theory versus a practical science. For the most part I think that historic economic theories have been moral theories for the most part, despite their stated intent to be analyses of what is. Kynes seemed to try to veer away from that and to inspect numbers in practice, but even so arguments about economics - even at the highest levels like on the Federal Reserve board in the 70's-90's (that I read about) - have typically boiled down the philosophical differences in what an economic practice *should be*. And just like this definition offered here, the arguments tend to take the form of "capitalism should be X", whereas what I try to do is describe what it actually is with real humans involved. The game is never the same when interested parties are playing it! 

Quote
Although another constant for Capitalists is they also will hold "to the power of markets" and as such will NOT go "all in" on any kind of construct that is likely to destroy the ability/incentive of a person to perform the most basic part of capitalism: Identify a need, and attempt to "make a profit" from fulfilling that need in a mutually beneficial way.

This feels Randian to me, and not in a bad way. I do like some of Rand's arguments in Atlas Shrugged, for instance, especially in that she links a philosophical perspective of life with the necessary conditions for industry to flourish. While I think she was making the 'classic error' in the details (that supposing herself right about what should be, that it could ever actually work that way) I do appreciate the idea there, and TheDeamon's here, that actors in a "capitalist" system are expected to obey certain standards. The problem is that people rarely obey anything unless there's incentive in it, whether in cash, social credit, or even personal satisfaction. What I consider to be a "system" is the set of possible moves, coupled with the reward structure build into it that can be tapped by people playing the game. The result of the game will be people playing at trying to obtain certain incentives, to an extent varies person to person, while some percentage of people *always* trying to break the game. That is basically a fact of the universe. If MMO's are going to be any indicator at all of human desire, it should be that some want to have an enjoyable experience by cooperating, while some want to troll others as their main objective; and others yet want to obtain full control of the server and bring it to its knees. Why? Because they can. And that "because they can" should be considered to be one of the fundamental principles in any economic (or other) system. Real observation of human desire is the only way to either construct or analyse a system involving humans, and so a systemic theory *not* based on psychological principles will be meaningless other than as a mathematical thought experiment.

TheDeamon

  • Members
    • View Profile
Re: What is Capitalism?
« Reply #3 on: February 05, 2019, 01:46:26 AM »
Quote
Although another constant for Capitalists is they also will hold "to the power of markets" and as such will NOT go "all in" on any kind of construct that is likely to destroy the ability/incentive of a person to perform the most basic part of capitalism: Identify a need, and attempt to "make a profit" from fulfilling that need in a mutually beneficial way.

This feels Randian to me, and not in a bad way. I do like some of Rand's arguments in Atlas Shrugged, for instance, especially in that she links a philosophical perspective of life with the necessary conditions for industry to flourish. While I think she was making the 'classic error' in the details (that supposing herself right about what should be, that it could ever actually work that way) I do appreciate the idea there, and TheDeamon's here, that actors in a "capitalist" system are expected to obey certain standards. The problem is that people rarely obey anything unless there's incentive in it, whether in cash, social credit, or even personal satisfaction.

I've largely avoided Rand myself, although from what I'm aware of, there is peripheral agreement between us on a number of fronts. However, Rand (allegedly) takes some more extreme positions that I don't hold to. At least if the Rand quoting Libertarians and the Rand Institute are any indication.
 
My only stipulation is "mutually beneficial" and that neither side is trying to actively deceive the other as to what they're buying. The pawn shop employee offering $30 for an item they know they can turn around for $300 is mostly okay in my book(but shady all the same), while someone knowingly passing off a $30 item as being a $300 item instead is another thing entirely and they deserve to be stomped on.

However, law of the jungle is do what you can get away with. Thing is, I prefer to live in a civil society, and civil society fails if "Can I get away with this?" Becomes the decisive criteria for how a person is going to behave.

Quote
What I consider to be a "system" is the set of possible moves, coupled with the reward structure build into it that can be tapped by people playing the game. The result of the game will be people playing at trying to obtain certain incentives, to an extent varies person to person, while some percentage of people *always* trying to break the game. That is basically a fact of the universe. If MMO's are going to be any indicator at all of human desire, it should be that some want to have an enjoyable experience by cooperating, while some want to troll others as their main objective; and others yet want to obtain full control of the server and bring it to its knees. Why? Because they can. And that "because they can" should be considered to be one of the fundamental principles in any economic (or other) system. Real observation of human desire is the only way to either construct or analyse a system involving humans, and so a systemic theory *not* based on psychological principles will be meaningless other than as a mathematical thought experiment.

The "Because I can" crowd is the single biggest problem in society at large, and they're the poster children for why regulations and other things, like AOC get traction. Which leads to regulations to prevent the abuses of "because I can" at the expense of other persons actually trying to do something beneficial for themselves and others alike.