Why Capitalism is Worth Defending

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  • Stschil

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    Good read, Fletch.

    It really does outline the fact that people have no idea what true capitalism really is.

    On the other side that coin, people don't understand what true communism is either.

    Neither system ever really has much of chance lasting success, though. Human nature is always what spoils it. Someone always thinks they deserve more, whether the earn it or not and someone is always willing to champion the cause of the lazy.
     

    Plinker

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    Pure Capitalism works best in a moral and self-disciplined society. Unfortunately this, for the most part, no longer exists.
     

    Fletch

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    Pure Capitalism works best in a moral and self-disciplined society. Unfortunately this, for the most part, no longer exists.
    Anything works best in a moral and self-disciplined society. Capitalism works better than anything else in a society fueled by self-interest, provided its laws of property are enforced.
     

    Fletch

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    Neither system ever really has much of chance lasting success, though. Human nature is always what spoils it. Someone always thinks they deserve more, whether the earn it or not and someone is always willing to champion the cause of the lazy.
    Capitalism harnesses human nature, rather than attempting to pretend that it doesn't exist or can be punished/educated out of people. Someone may think they deserve more, and someone else may be willing to champion their cause, but those people are not capitalists and the system they wish to work in is not capitalism.

    What you're arguing is that capitalism doesn't work because some want to abandon it. This is not a criticism of capitalism, but of people and government. It's like saying that shooting criminals in self-defense doesn't work because some people don't want to do it. Remove the power of government to subvert capitalism, and you remove the ability of leeches to do anything but contribute.
     

    pudly

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    Pure Capitalism (and Communism) works best in a moral and self-disciplined society. Unfortunately this, for the most part, [STRIKE]no longer exists[/STRIKE] never existed.

    FTFY.

    One major advantage of Capitalism over Communism is that it assumes that people are self-interested and not entirely altruistic (a more realistic assessment of human nature). It just makes the primary way of satisfying that self interest producing products/services that others want. Thus you are trying to improve your life will benefit others in the process. Capitalism provides a motive for you to serve others. Communism simply assumes that you want to produce for the good of the collective. Some amount of laws/enforcement is always needed to handle those who want to take shortcuts and find ways to take without giving- fraud, theft, etc. (further evidence that self-interest is a primary motivator).

    Dang Fletch- beat me to the point. :)
     
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    Stschil

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    Capitalism harnesses human nature, rather than attempting to pretend that it doesn't exist or can be punished/educated out of people. Someone may think they deserve more, and someone else may be willing to champion their cause, but those people are not capitalists and the system they wish to work in is not capitalism.

    What you're arguing is that capitalism doesn't work because some want to abandon it. This is not a criticism of capitalism, but of people and government. It's like saying that shooting criminals in self-defense doesn't
    work because some people don't want to do it. Remove the power of
    government to subvert capitalism, and you remove the ability of leeches to do
    anything but contribute.

    I'm not arguing that pure capitalism isnt good, just saying that many things work in the vacuum that do not once exposed to outside forces.
    Humanity is the outside force that will screw it up every time. If WE as a people were purely without emotion, we could ensure that no one would step in and subvert the system, as it is, emotion plays a huge part and is the very reason the laws that were once in place to promote progress are now defunct.
     

    ATOMonkey

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    I'm not arguing that pure capitalism isnt good, just saying that many things work in the vacuum that do not once exposed to outside forces.
    Humanity is the outside force that will screw it up every time. If WE as a people were purely without emotion, we could ensure that no one would step in and subvert the system, as it is, emotion plays a huge part and is the very reason the laws that were once in place to promote progress are now defunct.

    I don't understand what you're saying.

    How can someone "subvert" capitalism?
     

    Expat

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    Thanks Fletch, good read indeed. As the article notes, we have allowed capitalism to become a dirty word. While actually it is the straying from capitalism that is usually the cause for the complaint. Our society is virtually ignorant of economic theory. It should be taught in every public school in this country. But the left has taken over our school curriculum, so actual economics and government/civics can not be taught.
     

    Stschil

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    I don't understand what you're saying.

    How can someone "subvert" capitalism?

    I think present day mess is the best explanation and example of diversion of capitalism

    Dont get me wrong, I am for free market enterprise, worldwide. It is the only real way of dragging us out of the quagmire we've gotten ourselves in to. My point is only that there are too many people who believe that it is a sin if one has more than another because (s)he worked for it and the other didn't/couldn't/wouldn't. Pure capitalism would take a monumental change in the present sociopolitical mindset. One that I believe is not forthcoming unless the present system finally breaks completely and we are empowered to rebuild.
     
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    I don't understand what you're saying.

    How can someone "subvert" capitalism?

    The best merits of capitalism come from competition.

    Monopolies, oligarchies, price fixing, undercutting the competition to drive them out of business so that you can raise prices... the human factor weighs on capitalism also... it just weighs on it less than other systems because capitalism at least takes into account human motivation and self interest to some degree - it just isn't perfect (but hey, what is).

    Any economic system that humans can think of, humans will find a way to subvert.
     

    ATOMonkey

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    The "subversion" of capitalism just makes is stronger.

    Monopoly, and/or "undercutting" are the only actual things that can be done in a capitalism system. Oligarchy and price fixing (or central planning) are not capitalist systems.

    Even so, a monopoly lowers opportunity costs for competitors. Only by keeping your price low in a monopoly can you hope to maintain it. Any artificially high price will always be short lived in a truly capitalist market.

    Or just flat out ignorance of the consumer, but then, how is that the responsibility of the supplier?
     

    ATOMonkey

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    Just to make my position clear. The only time an "Adam Smith" type capitalist market has ever been in play, is in the absense of government.

    At all other times, even in the early US, there were outside forces manipulating the market through tariffs and taxes and regulations.
     
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    The "subversion" of capitalism just makes is stronger.

    Monopoly, and/or "undercutting" are the only actual things that can be done in a capitalism system. Oligarchy and price fixing (or central planning) are not capitalist systems.

    Even so, a monopoly lowers opportunity costs for competitors. Only by keeping your price low in a monopoly can you hope to maintain it. Any artificially high price will always be short lived in a truly capitalist market.

    Or just flat out ignorance of the consumer, but then, how is that the responsibility of the supplier?

    A corporate oligarchy is not the same as a governmental oligarchy... and corporate oligarchies generally only flourish in sectors that have high start up cost. Think of a monopoly that is not just one corporation, but a chain of corporations working together to dictate the price - if my company will make more profit agreeing with my competition to set the price of our goods at X, and we can manipulate that price to drive out the chance of competition (or persuade them that their gains become higher by joining) - investors have a lot less to gain and more risk financing competition. In most if not all instances, the prices yielded are still better than other systems... but it is definitely still a flaw.

    If you are selling something easy to make/distribute - monopolies would be much harder to maintain - but that is not the case in every situation.

    No other system can handle these problems any better though, so....
     
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    Fletch

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    The best merits of capitalism come from competition.

    Monopolies, oligarchies, price fixing, undercutting the competition to drive them out of business so that you can raise prices... the human factor weighs on capitalism also... it just weighs on it less than other systems because capitalism at least takes into account human motivation and self interest to some degree - it just isn't perfect (but hey, what is).

    Any economic system that humans can think of, humans will find a way to subvert.
    I disagree with capitalism being characterized as a "system" that humans have "thought of". Capitalism is what naturally arises when property rights are respected and enforced. It is an emergent condition, not a constructed system. Indeed, any attempt to "construct" part of the "system" necessarily destroys capitalism. This why, for example, "free trade" agreements never result in actual free trade.

    Capitalism is subverted when the process of emergence is hindered by force, usually as a result of government action. Theft, destruction of others' property, fraud, and restricting the rights of others to trade as they so choose are all activities that retard the emergence of capitalism and reduce the wealth it generates.
     

    Fletch

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    A corporate oligarchy is not the same as a governmental oligarchy... and corporate oligarchies generally only flourish in sectors that have high start up cost. Think of a monopoly that is not just one corporation, but a chain of corporations working together to dictate the price - if my company will make more profit agreeing with my competition to set the price of our goods at X, and we can manipulate that price to drive out the possibility of competition - investors have a lot less to gain and more risk financing competition.
    Even this cannot be sustained without the use of force. It may take longer to gather the capital reserves necessary to enter a particular market segment, but if someone sees the opportunity to do so, they will, and the stranglehold will be broken. What usually happens in these cases is that the oligarchy turns to government and appeals to some BS "quality standards" to keep the upstarts out of the market by force of government, not by economic power.
     
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    Even this cannot be sustained without the use of force. It may take longer to gather the capital reserves necessary to enter a particular market segment, but if someone sees the opportunity to do so, they will, and the stranglehold will be broken. What usually happens in these cases is that the oligarchy turns to government and appeals to some BS "quality standards" to keep the upstarts out of the market by force of government, not by economic power.

    Yes - if someone sees the opportunity, if they can gather the finances, and if their bottom line will be greater by not joining the bunch - but generally to create a start up with that much competitive power, you have to streamline a system of production. Creating the product for cheaper will always win, and in that instance capitalism yields great incentive - but if your cost are as on par with your competition - undercutting one another is not always in the interest of your company.

    Over a long period of time no market domination can be sustained forever... but it is a manipulation of the system that exists at any given time that works against competitive pricing.
     
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    orange

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    Gary! Not cool.
    I think present day mess is the best explanation and example of diversion of capitalism
    And I think the present day mess is a perfectly logical, even natural consequence of the system.

    Once large enough and rich enough a business will purchase congressmen to protect and enrich itself. Bailouts for instance. Once, there was such a thing as trust-busting, and now there is giving money to companies too big to fail, directed by former employees moving into government positions. Then there's SB 1080 from Arizona, my favorite example of an industry writing legislation, then bribing legislators to make it law. Quite blatantly. After all it's business as usual.

    Some regulation seems necessary to prevent this sort of thing, and to prevent other excesses.. I'm seeing a disturbing trend exemplified by Maine's recent bill to eliminate limits on work hours performed by people under 16 years age. Are we going back to pre-Great Depression conditions? Anyone remember the robber baron era? Anyone besides me recall the Triangle Shirtwaist Company? Ludlow? Thibodaux? Pinkertons? How about the United Fruit Company and what it did to Colombia and Honduras?
     

    Fletch

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    And I think the present day mess is a perfectly logical, even natural consequence of the system.

    Once large enough and rich enough a business will purchase congressmen to protect and enrich itself.

    How is abandoning capitalism a natural consequence of capitalism? This is the part that always gets glossed over, as though government involvement is somehow capitalistic. It is not. As soon as government steps in, capitalism is being destroyed and abandoned, not maintained, not enhanced, not participated in... DESTROYED and ABANDONED.

    Bailouts for instance. Once, there was such a thing as trust-busting, and now there is giving money to companies too big to fail, directed by former employees moving into government positions. Then there's SB 1080 from Arizona, my favorite example of an industry writing legislation, then bribing legislators to make it law. Quite blatantly. After all it's business as usual.

    Some regulation seems necessary to prevent this sort of thing, and to prevent other excesses.. I'm seeing a disturbing trend exemplified by Maine's recent bill to eliminate limits on work hours performed by people under 16 years age. Are we going back to pre-Great Depression conditions? Anyone remember the robber baron era? Anyone besides me recall the Triangle Shirtwaist Company? Ludlow? Thibodaux? Pinkertons? How about the United Fruit Company and what it did to Colombia and Honduras?
    These are regulations that need to be made against government, not against corporations. Keep government out of the market, and capitalism protects against all of these abuses. The robber barons were propped up by government violence. United Fruit was as bad as it was because of military support. And so on. You will be hard pressed to find an example of egregious corporate practices that did not somehow involve the government playing enforcer, introducing violence into the peaceful system of trade and cooperation that is the essence of capitalism. In the rare cases you do, you find the government standing by idly while the corporation in question violates property rights with impunity.

    This is what the author is talking about when he says most people nowadays have no idea what capitalism is. Capitalism is an ecosystem. Government is a bulldozer. To the extent that the bulldozer is employed, the ecosystem is destroyed. The only possible exception I can think of is government enforcement and protection of property rights.
     
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