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  • Fletch

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    Art Carden goes through 10 objections to capitalism and responds to each. It's about an hour long, sound quality kind of sucks, but the talk itself is very engaging and informative.

    Art Carden speaking @ In Defense of Capitalism conference on Vimeo

    An abbreviated message, in article form, with pretty much the same objections and responses, can be found here, with 8 of the 10 objections:

    Campaign For Liberty — Common Objections to Capitalism **| by Art Carden

    Capitalism Exploits the Poor

    Capitalism Is Structurally Racist and Sexist

    Capitalism Deadens the Soul

    Capitalism Destroys the Environment

    Capitalism Is Inherently Unstable and Prone to Recessions

    Capitalism Is Prone to Resource Monopoly

    Be That as It May, Some Things Are "Just Too Important" to Be Left to the Market."

    Well, Capitalism Is Just Ugly
     

    dross

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    Can't watch the video until later. In my experience, the criticisms of capitalism blame capitalism for the results of the government's attempts to tinker with it.
     

    Fletch

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    Can't watch the video until later. In my experience, the criticisms of capitalism blame capitalism for the results of the government's attempts to tinker with it.
    Yes, that's a large part of his rebuttals. He also introduces some interesting thought problems in response to others...

    For example, in response to "some things are too important to be left up to the free market", he wonders what objective criteria we should use to decide whether something is "too important".
     

    smoking357

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    Can't watch the video until later. In my experience, the criticisms of capitalism blame capitalism for the results of the government's attempts to tinker with it.

    My criticism of capitalism is that market participants immediately corrupt the system by getting the government to enact regulation that bars or hinders new market entrants.
     
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    I've never even heard most of these.

    Yes, Capitalism does exploit the poor, but so does every other economic system.

    So long as this world has finite resources, there will only be enough value created to represent the resources remaining.

    And to the degree which any monetary system does not represent that fact, so will inflation and the lessening of all currency in circulation de-value itself until it does represent that fact.

    The biggest problem I have with socialism is its inhibiting effect on personal success, upon the ambition to do well. Why bother to work harder than your neighbors when you get the same share - or perhaps less - than he?

    And the biggest problem I have with unrestrained Capitalism is the tendency to produce unstoppable oligarchic financial powerhouses, sometimes even monopolistic financial powerhouses, who often don't make altruistic decisions.

    But, short of completely turning this country upside-down, I don't see any solution to the problem.
     

    Von Mises

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    I reject the notion that "capitalism" exists.

    Just as the term “Dark” is a word derived to describe the absence of light,
    And “Cold” was derived to describe the absence of heat,
    Or “Evil” was derived to describe the absence of God,

    Capitalism was derived to describe the absence of government.:D

    Still, I’ll watch it.
     

    Fletch

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    And the biggest problem I have with unrestrained Capitalism is the tendency to produce unstoppable oligarchic financial powerhouses, sometimes even monopolistic financial powerhouses, who often don't make altruistic decisions.

    Neither of these is the product of capitalism. They result from the State entering the market to protect, promote, or replace certain favored companies.
     

    Suprtek

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    So long as this world has finite resources, there will only be enough value created to represent the resources remaining.

    I must respectfully disagree with the premise of this statement. Resources are never "finite". A resource is not necessarily a "hard" product. Services provided, technology created, etc. can also be considered resources. Correct me if I am misinterpreting you, but your statement seems to imply the existence of a "zero sum system". Meaning that there will never be more than a certain amount of value available in the economy. This is not the case. Value can be created.
     
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    Neither of these is the product of capitalism. They result from the State entering the market to protect, promote, or replace certain favored companies.

    You mean to say that companies do what's in their best interest because government mandates it?

    Monopolies/oligarchies naturally arise in a free-market.
    Whoever is able to provide the best product for the best price will make the most profit and thus continue to do so. Even with initial competition, upon any lessening of quality or increase of price, and the slightly-advantaged company will eventually take all. And that's assuming initial competition is even allowed by the companies in the market.
     

    smoking357

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    You mean to say that companies do what's in their best interest because government mandates it?

    Monopolies/oligarchies naturally arise in a free-market.
    Whoever is able to provide the best product for the best price will make the most profit and thus continue to do so. Even with initial competition, upon any lessening of quality or increase of price, and the slightly-advantaged company will eventually take all. And that's assuming initial competition is even allowed by the companies in the market.

    Don't overlook the proclivity of companies to exert coercive pressure on vendors, customers, etc. to make non-market choices. In short order, cartels and trusts emerge that outright suffocate competition and market entrance.

    After all, if you're a flour supplier to a large baker and a new baker seeks your raw materials, you face the threat of immediate cancellation of your contract should you abet any new market entrant.

    Corporate interests only pay lip service to capitalism.
     

    Fletch

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    You mean to say that companies do what's in their best interest because government mandates it?

    Monopolies/oligarchies naturally arise in a free-market.
    Whoever is able to provide the best product for the best price will make the most profit and thus continue to do so. Even with initial competition, upon any lessening of quality or increase of price, and the slightly-advantaged company will eventually take all. And that's assuming initial competition is even allowed by the companies in the market.

    This has not been the case historically. Companies which achieve monopolistic power invariably do so with the aid of government. Where the market remains free, new competition threatens the largest firms which are weighed down by the inertia of their size.
     
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    I must respectfully disagree with the premise of this statement. Resources are never "finite". A resource is not necessarily a "hard" product. Services provided, technology created, etc. can also be considered resources. Correct me if I am misinterpreting you, but your statement seems to imply the existence of a "zero sum system". Meaning that there will never be more than a certain amount of value available in the economy. This is not the case. Value can be created.

    I may have over-generalized my position, and for that I apologize.
    To clarify, there are finite natural resources. Everything. Even energy, of which there is more than perhaps anything else.

    If someone takes a tree and chops it down to produce a chest of drawers or firewood, or provides some object of value to me greater than the existence of that tree as a tree, then yes, value has been created. But if the utility of those item(s) provided to me is less than what the tree was in its natural state, value has actually been destroyed/lessened. (Say, for instance, it provided shade to my home in the summer, which is now gone.)

    Even replanted, it will take some time to replenish that value to me. But, to plant one tree is to merely replace. To create value in that sense would require the planting of more than one tree... and, granted, with seeding living things, it's harder to make the case for finite, but I think my point is somewhat apparent in virtually all cases. There shall come a time when all materials - steel, plastics, even oxygen itself - are consumed by those both creating and those consuming. Save plants counter-balancing our consumption of oxygen, for instance, oxygen is readily consumed by our lungs and the mere fact of living.

    A long time distant, to be sure, but save massive energy inputs to recycle these materials, which may or may not be cost-(cost being whatever input required in order to recycle these materials; heat, energy, light, catalyst materials) efficient at that distant break-even point, but for all practical purposes, all but the most abundant things are finite. Even the amount of hydrogen in the universe - perhaps the most abundant thing EVER - is finite. It's just of a huge amount. Petroleum, natural gas, even uranium ore - there's only so much of it to start, and save some violation of the law of conservation of matter, there cannot be any more, at least, not within a timeframe to make things feasible.

    Yes, petroleum is produced by the rotting of organic materials with compression and heat, and as there is organic material on this planet now, there shall surely be more of it at some point in future if conditions are at all similar to what created the first batch of petroleum - but it shall take so long as to be considered non-renewable (finite), even with the most conservative consumption now. We simply cannot wait millions of years for the supply to replenish when we need it now. I also do not buy into the notion that we're a mere tens of years away from exhausting our supply, but I do know that once the current supply is finished, the time it will take to produce more is so long that we can consider it, with every practical application, to be quite finite.

    I'm not saying that we won't have cars and machines and cast-iron and plastics and nuclear energy for years and years and millenia to come - if we last that long - I'm simply saying that once it's gone, it is quite truly gone, however long it takes to deplete and exhaust it. Whatever 'it' is.

    :ingo:
     
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    This has not been the case historically. Companies which achieve monopolistic power invariably do so with the aid of government. Where the market remains free, new competition threatens the largest firms which are weighed down by the inertia of their size.

    With tacit approval and aid of the State - or not - has this not been the outcome in a great many a case? Microsoft for decades, AT&T, most large energy companies with their so-called-natural monopolies, telecommunications services-at-large...

    As to whether in the absence of a State capitalism would behave as expected, I doubt we'll ever get a chance to observe it in practice save in 'black markets' in which the State still plays a hand.

    Monsanto may have arisen to power through the help of the Clinton administration - and it did, there's little dispute of that - but now that it has the power, it no longer needs government assistance to maintain it. Anyone who challenges their right to plant genetically-modified corn - some 85% of the corn grown in America today - is silenced through lawsuit after lawsuit after lawsuit. Any farmer who grows pure, healthy, un-modified corn - who has even one seed of Monsanto-GM corn growing on his field - is sued for growing their corn without an agreement between the two parties having been established. There's no question that Monsanto is unstoppable now, and their stated goal is having 100% of all food crops in the world being genetically-modified. Say the government turns against them and stops favoring them. How, precisely, would it begin to reverse the work of its now-enemy-former-friend?

    I'm not saying Capitalism is bad - for what little it's worth, I think it's a decent system - the most decent system yet tried in that it maintains personal liberty insofar as it can be respected with transactions between free agents - but for whatever attributable reason(s) or cause(s), it does seem to tend to favor growth and establishment of large powerhouses.

    :twocents:
     

    Suprtek

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    I'm not saying Capitalism is bad - for what little it's worth, I think it's a decent system ...

    :twocents:

    While I may have some issues with some of your positions on this subject, this statement tells me we are on the same side. I don't think anyone is saying capitalism is perfect. No human system can be. Our overall system of government is far from perfect as well. We can only do the best we can. :yesway:
     
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    While I may have some issues with some of your positions on this subject, this statement tells me we are on the same side. I don't think anyone is saying capitalism is perfect. No human system can be. Our overall system of government is far from perfect as well. We can only do the best we can. :yesway:

    On that we can most certainly agree, sir.
     

    chizzle

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    +1 For Fletch

    This has not been the case historically. Companies which achieve monopolistic power invariably do so with the aid of government. Where the market remains free, new competition threatens the largest firms which are weighed down by the inertia of their size.

    I'd have to strongly agree with Fletch on this point. For those wishing to understand the point better, I recommend reading:

    Capitalism: The Unknown Ideal by Ayn Rand

    The book explains the difference between monopolies that are held in place by goverment intervention (Prohibition bootleggers, mass transit, etc.) and companies that control significant market share by providing products that customers are willing to purchase (Microsoft, Alcoa, etc.). The book also explains goverment intervention into so-called monopolies, specifically the breaking up of Alcoa when they had been running a business so efficiently that it made it difficult for competition to enter the market. If either Microsoft or Alcoa made such an inferior product that no one would buy it, alternatives would exist, at least indirectly (i.e. Linux, Mac OS, etc. for Microsoft, or using more steel, copper, etc. for Alcoa). Remember, nobody is forcing you to buy these products, you are voting by giving them your money.

    I also think it's important to understand the difference between fairness and equality when discussing this issue. "Fairness" is Alcoa making a lot of money and controlling the largest market share in the aluminum industry because they had met customers needs so well that nobody could do it better. "Equal" was forcing Alcoa to share their technologies with their competitors.... I liken this to a race; it's fair for people to compete under the same set of rules and for 1 person to be the winner. It's equal to just give everybody participation ribbons, but it doesn't encourage man's best effort. Just because the rules are fair, doesn't mean that there won't be winners and losers.
     
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    Fletch

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    With tacit approval and aid of the State - or not - has this not been the outcome in a great many a case?

    No, it hasn't. The vast majority of businesses fail to dominate their markets at all. Of the ones that do, their dominance is short-lived except in instances where the State protects them.

    Microsoft for decades
    Microsoft has market share, but it is eroding. Apple has a fraction of its market share, but is nearly as large (in terms of dollars), implying that it is the more profitable company. And neither is able to exercise the greatest monopolistic power, which is preventing any competition at all.

    AT&T, most large energy companies with their so-called-natural monopolies, telecommunications services-at-large...
    Having worked in both energy and telecommunications, I can confidently say that any monopolies in those sectors are purely driven by regulation, ie the State.

    As to whether in the absence of a State capitalism would behave as expected, I doubt we'll ever get a chance to observe it in practice save in 'black markets' in which the State still plays a hand.
    There are sectors in which the State plays a lesser role, and in some cases is nearly absent or at least oppresses all competitors more or less equally. These sectors would be the "purest" examples of capitalism. If your theory is to hold true, then obviously you should be able to point to monopolistic power on the part of some porn company. That sector is almost completely capitalistic, yet no "dominant" player has ever managed to maintain its position for very long.

    The same goes for software, which is also largely unregulated. Look at Facebook -- currently the dominant player in social networking, but all signs point to a competitor -- any competitor -- taking them down within the next few years. Yahoo was once dominant in ad-supported search technology, but has been supplanted by Google. What PC game maker is dominant? Sure, Blizzard is dominant in MMORPGs, but others are dominant in FPS, Sim, and other styles, and Blizzard's World of Warcraft will one day be replaced by something else.

    Monsanto may have arisen to power through the help of the Clinton administration - and it did, there's little dispute of that - but now that it has the power, it no longer needs government assistance to maintain it. Anyone who challenges their right to plant genetically-modified corn - some 85% of the corn grown in America today - is silenced through lawsuit after lawsuit after lawsuit.
    And who adjudicates these lawsuits? Who writes the laws that guide the resolution of said lawsuits? Without government assistance and complicity in their anti-competitive practices, Monsanto would be taken down by the first person with a better product or business model.

    Say the government turns against them and stops favoring them. How, precisely, would it begin to reverse the work of its now-enemy-former-friend?
    The question itself implicitly acknowledges my previous statement, that Monsanto's continued dominance persists with the aid of the State. If the State were to be returned to its proper function of protecting property rights, it would remove the fanciful legal contortions that Monsanto has relied upon to maintain its monopoly, and replace them with enforcement and protection of property rights. This would require a morally sound revision of laws regarding patent and copyright, but it would not be impossible. Whether our present crop of politicians has the spine to see such a project through (if they could even be brought to understanding of the issue) is another question entirely.

    I'm not saying Capitalism is bad - for what little it's worth, I think it's a decent system - the most decent system yet tried in that it maintains personal liberty insofar as it can be respected with transactions between free agents - but for whatever attributable reason(s) or cause(s), it does seem to tend to favor growth and establishment of large powerhouses.
    Again, the existence of such powerhouses can in all cases be attributed to State interference in the market. They are not a foregone conclusion in a free market, and in those sectors where we see less interference, we see proportionately fewer dominant players and more vibrant competition.
     
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    No, it hasn't. The vast majority of businesses fail to dominate their markets at all. Of the ones that do, their dominance is short-lived except in instances where the State protects them.

    Microsoft has market share, but it is eroding. Apple has a fraction of its market share, but is nearly as large (in terms of dollars), implying that it is the more profitable company. And neither is able to exercise the greatest monopolistic power, which is preventing any competition at all.

    Having worked in both energy and telecommunications, I can confidently say that any monopolies in those sectors are purely driven by regulation, ie the State.

    There are sectors in which the State plays a lesser role, and in some cases is nearly absent or at least oppresses all competitors more or less equally. These sectors would be the "purest" examples of capitalism. If your theory is to hold true, then obviously you should be able to point to monopolistic power on the part of some porn company. That sector is almost completely capitalistic, yet no "dominant" player has ever managed to maintain its position for very long.

    The same goes for software, which is also largely unregulated. Look at Facebook -- currently the dominant player in social networking, but all signs point to a competitor -- any competitor -- taking them down within the next few years. Yahoo was once dominant in ad-supported search technology, but has been supplanted by Google. What PC game maker is dominant? Sure, Blizzard is dominant in MMORPGs, but others are dominant in FPS, Sim, and other styles, and Blizzard's World of Warcraft will one day be replaced by something else.

    And who adjudicates these lawsuits? Who writes the laws that guide the resolution of said lawsuits? Without government assistance and complicity in their anti-competitive practices, Monsanto would be taken down by the first person with a better product or business model.

    The question itself implicitly acknowledges my previous statement, that Monsanto's continued dominance persists with the aid of the State. If the State were to be returned to its proper function of protecting property rights, it would remove the fanciful legal contortions that Monsanto has relied upon to maintain its monopoly, and replace them with enforcement and protection of property rights. This would require a morally sound revision of laws regarding patent and copyright, but it would not be impossible. Whether our present crop of politicians has the spine to see such a project through (if they could even be brought to understanding of the issue) is another question entirely.

    Again, the existence of such powerhouses can in all cases be attributed to State interference in the market. They are not a foregone conclusion in a free market, and in those sectors where we see less interference, we see proportionately fewer dominant players and more vibrant competition.

    You've got sound points, all.

    I concede to superior reasoning and conclusion.
     
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