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Entry 1647, on 2014-04-22 at 13:57:32 (Rating 4, Politics)
When I look at the problems we are facing in modern western societies today they seem to often result from an unhealthy faith in capitalism. If you listen to many people who support the "common wisdom" you might think that there is no question about it: capitalism is the only economic system which works and if you don't like it you must be a communist who wants to live in a Soviet style socialist dictatorship. Actually, no.
Not many people would want to live in a type of society like that from the Soviet era. But many would say that the society we live in now - where wealth inequality is out of control and the planet's resources and environment are being thoughtlessly exploited for the benefit of big corporations - also has significant problems.
The problem is that the issue is presented as a false dichotomy: just because a person recognises problems with capitalism doesn't mean they want to live in a Soviet (or Chinese, or North Korean) style of state instead.
To see why capitalism fails look at the definition of what it actually is. Here are the first few paragraphs from Wikipedia, along with my comments on them...
Quote: Capitalism is an economic system in which trade, industry, and the means of production are controlled by private owners with the goal of making profits in a market economy.
Comment: And that is the problem. If the primary aim is just making profits then "higher" goals are forgotten. The environment is ignored, social injustice is justified, and longer term research and progress which doesn't fit in with a short term profit-making strategy is forgotten.
Quote: Central characteristics of capitalism include capital accumulation, competitive markets and wage labor. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.
Comment: That phrase "capital accumulation" is one of the sources of the problem. In most countries wealth (and consequently power) is concentrated in certain groups who have accumulated money in the past, often through quite questionable means. Once the accumulation starts it continues without necessarily providing any benefit beyond making that group richer.
Quote: The degree of competition, role of intervention and regulation, and scope of public ownership varies across different models of capitalism. Economists, political economists, and historians have taken different perspectives in their analysis of capitalism and recognized various forms of it in practice. These include laissez-faire capitalism, welfare capitalism and state capitalism; each highlighting varying degrees of dependency on markets, public ownership, and inclusion of social policies. The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy.
Comment: So the type of capitalism which a country has is just a result of the political regulations in force. There is little about capitalism which is natural or inevitable. It's a system which maintains itself because those who get rich through capitalism use the resulting power to reinforce the system which made them rich. In many ways it is just as corrupt as the Soviet socialist system it despises.
Final quote: Many states have what are termed capitalist mixed economies, referring to a mix between planned and market-driven elements. Crony capitalism, is a state of affairs in which insider corruption, nepotism and cartels dominate the system. In Marxian economics this is considered to be the normal state of mature capitalism, while in anarcho-capitalist theory it is considered a political distortion of capital and markets.
Comment: I know that quoting Marx immediately opens you to being labelled a far-left nutter but that's really just a way to easily dismiss any good points he might have made - and he did make plenty! It seems to me that he is absolutely right: capitalism has clearly reached a point where "insider corruption, nepotism and cartels dominate the system". Would anyone really deny this?
So while the world has mainly moved to a capitalist economic system and that has resulted in a lot of good (although I would debate how much of that results from economics and business, and how much comes from science and technology) we need to be very aware of the problems inherent in that same system. We can do a lot better but the blind faith that capitalism is the only system worth considering has to go.
I am pleased to say that more people seem to be seeing things the same way as me too. For example, economist Thomas Piketty has mined 200 years worth of data to support the theory that capitalism doesn't work. Well obviously... that's what I've been saying for years. Capitalism sucks!
Comment 31 (3941) by OJB on 2014-05-05 at 21:40:54: (view earlier comments)
Re comment 28, about private police forces...
I dislike rules as much as anyone else (read this blog and you sill see that) but we have to be realistic when we propose alternative systems. I think your anarchistic/libertarian system would end up creating a society where most people are far more repressed that they are under our current democracy. And please remember, I am talking about what would happen in the real world, not in some libertarian theory!
Without some detail on how the people would establish and maintain these rules it's hard to comment on how practical your idea is. Note that in a representative democracy, such as we (theoretically) have now the politicians are there to carry out our wishes. Doesn't always happen does it? Because reality is never quite the same as theory.
Comment 32 (3942) by OJB on 2014-05-05 at 21:41:34:
Re comment 29, about Apple's pricing...
Apple's price aren't inflated? They are certainly not the "cheapest possible prices". Why do you make statements like this which aren't true and can easily be shown to be false?
There are plenty of places where production costs of Apple products can be found and we know their approximate R&D costs. A large part of the cost of Apple products is pure profit.
And here's your "gun pointing" junk again. Please stick to reality. How many people have guns pointed at them each year because of tax problems?
Comment 33 (3943) by OJB on 2014-05-05 at 21:42:23:
Re comment 30, about tax...
Not sure if taxation is necessarily commerce, but even if it is I don't know if I accept your definition of commerce anyway. Also, please stop talking about this "point of a gun" nonsense, unless you can provide details of how many people are held up or shot as a result of not paying taxes.
Comment 34 (3952) by Peter Vandyke on 2014-05-17 at 21:19:28:
No real Democracy has ever been allowed to expand in any modern nation, because of one old dark age mentality rule "whom ever has the gold rules" this is very unfortunate, for my country USA which legally is a Republic or hands of the few rule & control plus ownership! Real Democracy would oppose all of this with co-ownership plus direct rule & control by all citizens.
Comment 35 (3953) by OJB on 2014-05-17 at 21:23:24:
Thank you for that. I totally agree. Giving the business sector, and especially corporations, too much freedom just allows them to use their power to control everyone else. What libertarians don't realise is that their search for freedom would inevitably end up with the complete opposite: a virtual slave economy controlled by a few rich corporations and individuals which the majority would have zero control over. Whatever faults there are with current governments they would be trivial in comparison to that nightmare!
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