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Monday, October 15, 2012 - 03:42 am  What is "Capitalism" and does it actually work? This is a double bladed sword question...so is anyone daring enough to answer it..
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| Monday, October 15, 2012 - 03:52 am to maximize profits, by generating as much revenue as possible, while paying as little as possible into the production process, (wages, repairs, overhead, rent, taxes, etc)
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| Monday, October 15, 2012 - 05:23 am Well, Khnome that is one way to summarize a portion of it. I would like to add the freedom to conduct business in any means possible. But you didn't answer the second half of the question...still a respectable response though
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| Monday, October 15, 2012 - 06:20 am Bah your all disillusioned communists get over it capitalism works very well especially in the right conditions
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| Monday, October 15, 2012 - 06:22 am an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.
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| Monday, October 15, 2012 - 06:33 am Capitalism's definition can be easily be looked up. But I will use just my thoughts on this one. Imagine a system that can create and regulate every facet of our lives based simply on the reactant behaviors of people. This regulating process is determined by profit maximization. So takes houses, capitalism has deemed that house prices are determined by what price point will result in the highest profit with consideration to price elasticity and supply and demand. If prices are too high volume sold goes down, if prices are too low money is left on the table. The natural reaction of how people respond to these situations regulates the industry and every industry for that matter. This system is replicated in where wages result in the level of skill workers can accomplish in the future as well as the morale and productivity and also the accessibility of workers in comparison to the competitors in the employment vocational specific industry. If equilibrium (or the basis of capitalism) it can not be competitive and it will die off. The capitalist system then is able to purge those that move away from this equilibrium point out of the system and ensure a self regulating system of management. In this capitalist system the government or laws or rules or policies can essentially take 1 of 2 completely opposite roles. 1 is they can attempt to stay completely out of the way and establish a sense of anarchy outside of the regulating capitalist system. And the other is to take a far more active approach in systematically eliminating the transgressions against the equilibrium force due to limited competition and the effects of a supply driven market. But essentially in a capitalist system all rules, all regulations, are put into effect to set the level of access one has to also adhere to profit maximization in a way in which every aspect of life is taken care of. With that said, I was incredibly objective and the unsaid flaws with the system ruin the system, capitalism is crushing the world right now, and if capitalism in its true form is allowed to exist then global disaster will follow.
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| Monday, October 15, 2012 - 11:43 am Yeah, let's have the government regulate the hell out of business and spread the misery...they do so well with the DMV, etc. (sarcasm alert)
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| Monday, October 15, 2012 - 03:18 pm I can see the benifits of a lot of systems , including Communism . But as always there is always one flaw . US . As humans there will always be people with the motivation to get to the top and then abuse the system to ther own ends . Greed , Arrogance and Dilusions of self importance . The sad thing is the compassionate people often lack the motivation to be at the top , were they should be , and the people who should not be there , are at the top .
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| Monday, October 15, 2012 - 07:54 pm Maclean that seemed like a cheap shot. Let's have self servicing individuals control inflation in this country. If 95% of people who make 35k/year salary goes to necessity and 25% of those who make 300k/year salary goes to necessity. The inflation rate stays between 1.1~1.3 yet food and housing inflates at 3%-12% what does that mean happens to the inflation rate of pools, yauchts, and rolls royces? People who don't see these kind of things aren't getting the big picture. Has anyone noticed that the Market Value of houses has decreased nearly 50% but the cost of rent hasn't been moved? This class warfare is spawned by Capitalism in which necessity items (those in which are the primary expense of those in economic distress) has an infinite price elasticity. Pending my definition in which has not been validated or discredited, will call for these prices to be used at whatever price will bring the largest return. While those that only few can afford and maintained and regulated through the capitalist system. The capitalist system can only work as long as the floor of society can adequately be prepared to handle the ceiling of necessity expenses in the country. But this can never happen because in a capitalist society there can be no ceiling to the cost of necessity expenses. Even if we can propel society to a better state the equilibrium prices of necessities will increase as elasticity of survival is infinite. This is true because in order to reach profit maximization prices need to increase because once again people will spend it as survival has infinite elasticity. So as you can see in plain English Capitalism will never work, it will continue to encourage class warfare until every person is either rich or poor. This is only 1 point, true one of the biggest, but I felt it necessary to take this one point at a time. We can argue and fight without getting sent off in a crazy direction. Once I win this topic I'll throw in another topic. +1 MantoArms but I'd like to remind you that there are infinite solutions to every problem and infinite ways to lead they are potential ways to stop the corruption and still allow for motivation. It's sheer ignorance and pride of ideals that people rally behind two extreme ideals afraid to ACTUALLY supply a system that works
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| Monday, October 15, 2012 - 08:38 pm Heh Drew, well done for not actually saying "death to the capitalist infidels!"
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| Monday, October 15, 2012 - 09:11 pm Re: M2Arms " As humans there will always be people with the motivation to get to the top and then abuse the system to ther own ends . Greed, Arrogance and Dilusions of self importance. The sad thing is the compassionate people often lack the motivation to be at the top, were they should be, and the people who should not be there, are at the top." You got that right!!!!!!
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| Monday, October 15, 2012 - 09:42 pm Pheww ...Drew , I have to tell you I am not sure i could follow everything in youre statement . Not because of its quality but probally of my inability to understand it fully . But i will try . I dont agree that the valae of housing has gone down by 50% , there has been a sligth decrease but not a lot , people can not afford to sell a house for less than they bougth it for , therefore the price of houses can not go down by much , you can sell new builds cheaper and drive the price down , but Capitalism being wat it is the people building the houses will always get the max profit out of them that they can . Mind the market for new builds has decreased a lot . I agree that Capitalism does create a class war . I also believe there is a possibilty that Capitalism will destroy itself , in that the people at the top will never want to stop taking more from the working class . Once they have it all , the working class , the majority , will seek and find a new system which they will enforce by force - The one big lesson in history is that everything will always change , we often forget that . for example , people in Rome must of thougth that there way of life was the ultimate and would never change , nearly a thousand years , but it did end . The U.S.S.R always seemed to be so strong and would never change , but it did . The supremacy of Capitalism in the west may seem like the best and never change , but it will . To get back on topic . My Difination of Capitalism would be . To create the most efficent way to make a profit , money and profit being the first priority and the health and welfare of the workers being the lowest . This is achieved by giving the control off all business to the "Private Sector " Who dont have to answer to the public . The motivation between the Director of a private bussiness to the manager of a state run bussiness is totally differnt . For example the value of pensions between private and public sector . Public sector get more because they work for the goverment and the people , the private gives as little as they can . I am no expert , my comments are my thougths based on what i think i know . My perspective is one from a working class man , with 20 years experiences in a trade union as a branch president .
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| Monday, October 15, 2012 - 09:50 pm One more thing i would like to state . Capitalism does seem to work , in that the Quality of life does seem to be better in Capitalist countries . I HATE that fact . Or is it just that the countries with a better quality of life have adopted Capitalism
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| Monday, October 15, 2012 - 10:31 pm capitalism...simply put in my own terms. Freedom of commerce.
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| Monday, October 15, 2012 - 10:51 pm Capitalism is a monetary system and thats it. But when adopted as a way of life its becomes a legitimate way to rob someone under the guise of profit and intelligence.
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| Monday, October 15, 2012 - 11:14 pm You are on your own, earn money however you can, competition... Free Market ja, all of that.
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| Tuesday, October 16, 2012 - 03:08 am lol drew cant just let me revel in my apparent genius i can also not understand your posts o well and manto arms your logic is stupid  W00t W00t crony capitalism and long live the elite enviornment destroyers!!!!!!!
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| Tuesday, October 16, 2012 - 04:45 am Quote "an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth. " Yes , I agree . But why does this work better than any cooperatively or state-owned means of wealth . Because the private or should we say wealthy can than pay us all less wages while they make bigger profits and they do not have to answer to the public for there greed or lack of concern for the quality of life off its employees . But people have a breaking point when they are constantly being riped off . The Goverments are happy because they have the power to brush shoulders with the wealthy and play there silly power games . Lets be honest if there was no regulation from democratically ellected goverments and the private corpoations were giving free riegn , What do you think the world would look like ? Quote "and manto arms your logic is stupid " Come on , you have to give more than that lol .
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| Tuesday, October 16, 2012 - 05:12 am "we learn from history that we learn nothing from history" look at any communist country in the world it hasn't worked it ends up being an autocratic authoratative genocidal plutocracy....quite the oppiosite of actual communism.....people are incapable of interconnecting so thoroughly as to be able to run an entire economy....thus far....it could work and try if you want just not.in my country because I love crony capitalism....you are trying to achieve utopia but I hope you don't succeed because then the world will be boring
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| Tuesday, October 16, 2012 - 05:14 am oh yah and its not just a coincidence that all wealthy country's are capitalist.....what else could attribute so significantly to a country's wealth...you have ti give me more then that
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| Tuesday, October 16, 2012 - 05:30 am Quote " oh yah and its not just a coincidence that all wealthy country's are capitalist.....what else could attribute so significantly to a country's wealth...you have ti give me more then that " democratically ellected goverments are the differnce between a poor country and rich , and when i say rich I mean the Quality of life for the joe public .I think communism has been more open to abuse from the top because they dont have to figth an election, they do not have to answer to the public .Hence once again the the public are being riped off . Yes i would like a fairer world were kids dont have to starve , families dont have to break up because of financial worries ,and the few dont control the many . This does not have to be boring . I can still have my Holiday in disny land , or go out on the piss at the weekend , more so with a shorter working week and more money to spend . Juat the rich havnt got so much any more . A fairer distrubution of the wealth in the world . Lets try this . There is a copper mine , run privately at a profit for the owneres , and they get rich . Now why cant a public run mine not run just as profitable but its wealth is more evenly distrubuted to its workforce , instaed of the few owners . The answers is it can , and we can all be better off .
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Tuesday, October 16, 2012 - 05:39 am Isn't that the principle of a co-operative?
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| Tuesday, October 16, 2012 - 06:14 am I apologize for using economic terms. But they are basic concepts I'm sorry many of you don't understand. When dealing with such a loaded question it is difficult not to use them. Essentially I just stated that the poor will always stay poor, even if economic situation of the country increases the built in mechanism in capitalism will systematically raise particular costs to deal with the change in financial situation. If you don't believe me I can try to re-explain it, if you don't believe me and don't want me to re-explain then you shouldn't be here. @ Mantoarms- The housing market may not have been as severe as I stated but it is in excess to 30% average decline in the price of homes. I have heard 42% quite oftenly but also as high 57% and as low as 34%. So it is difficult to get the proper numbers there. But this economic collapse isn't the point of this situation. A good example of my point would be the rapid inflation rate pre-disaster on a necessity such as housing. As the economy is in expanse water, shelter, and food or things required for life prices went up to somply raise the price point to ensure the largest gain. That is the real point also paired with the concept of an equal balanced substitute in renting (class warfare at its root). @ Demitri- Communism isn't the only alternative to capitalism. Socialism isn't what I'm referring to either as socialism IS capitalism. In an effort to create a self regulating government for profit maximization investments in the public are instated to perform profit maximization. @ Maclean- Since when is the DMV a for profit institution? It is there to ensure safety and provide services, for a low cost. If you want it to run ore efficiently who have to pump money into new locations a very uncapitalist approach to the problem. As it does in fact perform its function with its current budget. If you would like it more efficient and still be part of a capitalist situation, then the DMV would need to generate more revenue broad based GDP in order for it to stay consistent with the capitalist agenda. @ Crafty- I understand you feel strongly on that issue, but we are not talking about that issue at the moment, If the thread gets revived I'll talk to you there, but this constant bringing up of that issue just wastes time.
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| Tuesday, October 16, 2012 - 06:22 am I think you guys give capitalism to little credit with the exception of Nix there. Capitalism controls everything. Money spent on education, the level of innovation we are able to pursue, the quality of medicine, tax levels, loopholes, even what interests we are allowed to pursue. Case in point, software has an initial cost, but the material costs of software are pennies sold for lets say a video game at 60$ up to Maya Autodesk in the thousands. The justification of this to gain the most money, however pursuing these interests are something that is not at your discretion but that of others. Imagine if Maya was freeware substidized through donations, where would are visual technology be right now?
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| Tuesday, October 16, 2012 - 03:16 pm Quote " Case in point, software has an initial cost, but the material costs of software are pennies sold for lets say a video game at 60$ up to Maya Autodesk in the thousands. The justification of this to gain the most money, however pursuing these interests are something that is not at your discretion but that of others. Imagine if Maya was freeware substidized through donations, where would are visual technology be right now? " Yes , i agree with that . War has also been the motivation for some big technology advances , just a shame it takes a war to drive this , as it is a shame that only money has the abilty to drive some peace time technology advances . But it is a fact . Keeping on that theme , perhaps the perfect system is one that manipulate the motivation of people for the better off all . mmm that thougth just occurred to me , does it make sense ? lol
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| Tuesday, October 16, 2012 - 07:16 pm It makes perfect sense it is the roots of socialism. Not my perfereed method but +1 neverthrless
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Tuesday, October 16, 2012 - 07:42 pm Conceited little jerk. Dont you be condescending to me pal.
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| Tuesday, October 16, 2012 - 08:12 pm Here's some quotes from Friedrich Hayek: "If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion." "It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only those individuals know." Capitalist is just freedom, letting people do what they want to do with their money. That some people don't benefit from voluntary trade is unfortunate, but if they can't succeed in getting what they need or want with the consent of others, I fail to see how simply creating an institution to simply take the thing by force to give to the person or people in question is somehow an improvement.
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| Tuesday, October 16, 2012 - 08:42 pm Love this debate lol How about this one . Capitalism clearly has some good points , I dont think i can deny that . But left unregulated has the potential to destroy society . So paired with a democratically ellected goverment that creates the regulation to keep it under control . It can and has worked . Maybe the problem and my negative view on it is based on the fact that the balance has failed in that the Goverments have themselves become the capitalist , or influenced to much by the Capitalist . I still lean more to socialism , but with a capitalism system run by a democratically ellected goverment by proportional representation .
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| Tuesday, October 16, 2012 - 08:44 pm Quote " Capitalism is a monetary system and thats it. But when adopted as a way of life its becomes a legitimate way to rob someone under the guise of profit and intelligence. " Would this be what you mean by " a way of life " ?
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| Wednesday, October 17, 2012 - 09:05 am Shoot Crafty that wasn't directed at you at all there was no condescension to begin with, that was targeted at those who didn't understand my initial argument. I figured price elasticity wasn't a term that many understand. MantoArms Socialism is Capitalism. But I like the way you put it. But if regulated away from policies that support profit maximization or put in the hands of people that will not grow or promote growth but merely leach off the society that allows them is not capitalism but yet also a common conception of socialism. However nearly all of American Capitalism have this self servicing issue in which hurts a society and doesn't help it. @ Scarlet - 2 things it would appear Hayek supported the opposite idea of the rest of your posting. I could of course misconceived the idea because I don't know him, and the surrounding context might be different. Second more important point, Capitalism=Freedom? Far from true there are built in rules of capitalism that eliminates freedom for many. Most easily put if you don't have money you don't have accessibility to the things that the world has to offer. That is one of the most restrictive ideas the world has ever conceived. To use an example though not meant to advocate if you look at Native Americans systems of administration they are far more free, or take the barter system if you want another example that doesn't utilize this restrictive policy. Capitalism allows you to be free to make money, but as far as many other facets of society it restricts them to a level of payment outside the control of an individual. In my opinion far far from free. On that note there is not only one alternative to capitalism and there is much more then an authoritative approach of redistribution. Why everyone believes that is beyond me.
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| Wednesday, October 17, 2012 - 09:39 am I was really hoping I'd get someone to confirm my definition of capitalism but I'll just ignore that fact. It appears that almost all of you believe that unregulated capitalism does cause bigger differences in wealth disparity and encourages a classist aristocracy at least to some level. So I'll go on to point two. Capitalism steals money from a society, lowering the value therein of: This is complex idea but can be said in simple ideas. For the basis of this argument MV doesn't really matter, hopefully you will understand why during your reading of it. So... I had mentioned earlier that someone making 300K only 25% goes to necessity spending, this is inaccurate but it fits the trend I was attempting to explain before. So I'll still use these numbers. Let's say that another 25% goes into luxurious spending, which leaves 50% remaining. Now everyone knows that money not spent should not sit but be invested to make more money despite the fact that money before investment was not being utilized anyways. Capitalism puts money as the sole indicator of success so to be successful you need more. So in fact why wouldn't you invest that excess 50%. This should be a good thing though not a bad thing. But it isn't! Not at all! A new company sets forth an IPO (Initial Public Offering) when it goes public for the first time. Occasionally it will sell more shares off of its principle ownership however most transactions after this point do not ever reach the company's financial assets ever again, in fact shares after an IPO are much more likely to diminish the assets because share prices go up much more readily then they go down. The reason for this is simple. The stock market accumulates much more cash in investment then it liquidates. People invest in the market continuously and the heaviest players will not liquidate but instead reinvest their earnings. To be successful at this of course you need to cash out a higher value then what you bought in for. This increases the worth of the stock market. And so people buy in and very few ever truly cash out. This remember doesn't inspire growth as the majority of transactions are between two brokers. The stock market then will turn into a vacuum. All the money put into it is not spent on consumption, and is not spent on investment for the company only to be used for resale and/or dividends, in which primarily though not exclusively will just be reinvested into the vacuum. This phenomenon leads to less money in circulation, and though value is high most of the value is in fact excess Market Value or companies off of equilibrium. This is an observation most brokers understand and take full advantage of. So people can make loads of cash as a company that has not made any fatal moves stands to gain anyways. As the size of money invested in this capitalist institution continues to grow endlessly. As money gets added to the equation value has to resemble it. What the capitalist approach to utilization of investment has lead to is a shortage of usable dollar. This shortage decreases the buying power of the dollar as it causes inflation. The trade off of this added inflation against the dollar is the inflation of an imaginary number of Market Value. This does two crippling things, it makes ownership in companies more expensive and also ties money to an imaginary value. This means the actual intrinsic value of ownership of a company is less tied to actual assets involved in the ownership of the company. All of this money no longer has any value. Of course this is in reference to a societal issue as for as personal gain it is very beneficial. This is true for almost all investment opportunities the exceptions are Bonds/IPO's/Savings accounts/Purchasing of Cash Flows. The largest the share of the economy that is owned by Stocks/Miscellaneous Securites/Mortages/Rental Properties the less accessible money there is for an economy to use and or grow. So that is my second anti-capitalist argument. The first is that it drives a wedge to disempower the buying classes, and the second is it destroys the accessible amount of money in a society. I've never truly mentioned my alternative but I haven't finished my book yet... so... sorry folks. It is fairly complicated but I'm willing to divulge it in another thread upon request. (when i have the time)
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| Wednesday, October 17, 2012 - 03:03 pm Yeah, the first built in rule of capitalism is that you need the consent of both parties in any transaction. In a capitalist system, I'm not required to part with any wealth that I don't want to for any reason. Requiring me to do so does constitute a direct violation of my freedom. This is what is required when you imply we should provide others with access to things. If you still require my consent in the distribution of my property, the system is still capitalist (to the degree this is true) because I can still disagree and act on that disagreement. If you do not, the system is not capitalist (to the degree this isn't true). The fact is that you're arguing that people should put their resources to use in the manner you deem best rather than the manner each of them deem best. How this is not authoritarian is beyond me.
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| Saturday, October 20, 2012 - 03:05 pm I didn't get that from the post Scarlet. I see it saying for capitalism to work then the money needs to circulate. Spending fuels industry fuels employment, creates more available cash to continue the cycle. This is how real growth (not paper asset growth) happens. I didn't see anyone saying people must use their resources in any particular manner. So it's not authoritarian at all, it's just one opinion of how to make our financial system work. Spend our way out of debt. And I agree with it on the whole, but then I am no economist by any means, I just like to think I have a bit of common sense.
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| Monday, October 22, 2012 - 12:06 am I just feel capitalism is far more authoritative. There is one object with ultimate power and the people have no say in the value of that object. It decides the life they want to live, and people do NOT got to determine how much they can make and become slaves to the system. Forced into these harsh rules. This goes back to my first point of the infinite price elasticity on necessity goods. Too say a person can't attend a movie because the price to see it is 14$ when the distribution of the movie to theaters is practically free how do people have a choice? The only choice they have is for people not to go see and let the industry fall a part before their is ample time to correct it. Freedom? Bah! Give people the ability to experience as much life as possible that is for sure way better, you might find a little more nationalism, compassion, and charity by doing so.
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| Monday, October 22, 2012 - 02:32 am When I see these sort of questions, I wonder to myself... why should anyone care?
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| Monday, October 22, 2012 - 05:15 pm You dont seem to have anything constructive to contribute Laguna. Maybe the subject is over your head?
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| Tuesday, October 23, 2012 - 01:09 am Isn't Laguna an economist? Over-exposed maybe? Crafty, my response was more directed at the post previous to the one directly above my response. Of course, it is partially relevant to everything. There is no means of implementing any economic system except capitalism without using the powers of a government or government-like organization. This is definitional as capitalism is about reducing the role of government in the economy to the bare minimum of preventing the use of fraud and coercion. The use of government to enforce any economic system is anti-capitalistic. Of course, we're talking about a manner of degrees, the degree to which government does not interfere with the economic decisions of its citizens is the degree to which the system is capitalistic. Many people do agree with having a mostly, but not completely, capitalistic system. Think anti-trust laws, various regulations, etc. However, this does not make the statement that capitalism is about reducing the government interference any less true, it merely means the degree to which capitalism may be implemented varies. The problem with what Drew is saying is that those are the decisions that people make. His opinion on how to make the financial system work is to prevent people from being able to make the decisions they make. If somebody doesn't want to spend, how do you get them to spend without using the government as a vehicle to drive spending by taking the money from citizens and spending it as the government sees fit? Even in a representative democracy, how do the decisions of elected representatives somehow represent the public better than the decisions of individuals? There is only one conclusion to Drew's reasoning: the use of government power to coerce people into not making the decisions they would make normally. In reference to the notion that we should spend our way out of debt, I'm sure there are many different opinions, but the first disagreement coming from me is that the money that is spent is inevitably, if not immediately, coming from the pockets of taxpayers. It isn't "government money", it is the money of citizens... shouldn't it be the decision of citizens as to what they should do with their money? Why should anyone acknowledge the authority of the government to do this? If people believe spending money is good, let them do themselves. If they believe saving money is good, let them do it themselves. Let people figure out their own individual and community responses. Very ideological, I'm sure. The point I'm trying to make is that capitalism isn't primarily about profit, money, or debt. It's about keeping the government from interfering with individual economic decisions. Beyond that, the whole circular flow doesn't take into account where the money is being spent. This is very important. Even if government spending can drive forward growth, it can only do so as long as the government continues to spend more and more money. The problem is that this growth is fueled by the government spending and encourages growth and contraction in certain sectors that are different than the sectors that would grow or contract given "normal" patterns of individual behavior. The result is overconsumption and malinvestment in certain sectors. Once you remove the spending that drove this type of growth, what do you imagine is the result? Government spending behavior is simply not a substitute for individual spending behavior. Drew, it is not compassion to order people to provide charity. You don't show compassion by forcing people to charity. Nobody learns compassion when you force them to pay for others. They resent the authority that took their money and the people that use it. You want to see compassion? Let people provide their own damn charity of their own volition... and let them choose not to. Don't point the gun of government power at people's heads and demand they follow your orders. All the economic authority in a capitalist system is distributed amongst everyone. There is not one object with ultimate power, it is simply a means of exchange. Everyone has a say in the value of this object. How much gas is a dollar worth? How much bread is a dollar worth? It is determined when people engage in voluntary trade. The "harsh rules" people are forced into are the rules of voluntary exchange. You don't get to exist or experience life at the expense of others and use government authority to simply take the money from others. This is theft, there is no other word for taking money from people. The harsh reality is that nothing is free. Bread doesn't magically materialize in bakeries, movies don't magically materialize in theatres, gas doesn't magically materialize in pumps. People produce and trade these things for their own reasons. They spend their time, effort, and resources to do so. It's not like they make the decision on whether something is worth producing or what its value is alone, everyone that makes the decision on whether to buy or not buy, to invest or not invest, to produce or not produce plays a role. That's how you balance the competing demands and limited resources of a society. Bottom up, not top down. Let people determine how their own efforts are utilized. Let people make their own economic decisions. Let theatre owners decide how much to charge, let individuals decide whether it's worth spending their money on. Don't force people to pay for (or produce) "free" stuff for others. Never forget that nothing is free, someone pays for it whether in time, effort, or money.
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| Tuesday, October 23, 2012 - 10:49 am People NEED food to eat, people NEED a house to live in (so they don't die from the man made and naturals elements), people for the most part NEED transportation to supply them with money to afford the other necessities. People don't have a say when MV makes the rules on necessities. I have brought this up a few times I'm not sure if you don't believe me or refuse to refute this claim. People don't decide what things cost or what they make, they minutely influence it. The movie example was a perfect example in one respect and a horrible one in another. I understand production costs but then there are replicated costs. When a farm has all the equipment it pays for expenses not for investments. Most companies in the world are charging fees for products and services without regard to actual cost the influence of new competitors don't bring prices down because they don't have the same level of infrastructure. The system doesn't make any sense. I glanced at some episode of some show where rich people throw money at people to finance their project for ownership and you see stuff like this product needs to sell at 4X the cost otherwise I'm out. This is the behavior that goes on. Products not needed for survival or one that heavily dictates quality of life is far easier to live without and can be controlled by demand but if you think the price of transportation, education, health, shelter, food are not be subjected to these same rules you are mistaken. These principles of demand driven self regulation doesn't work in these areas, they impose the contrary a lack of freedom as SOMEONE ELSE HAS COMPLETE CONTROL OVER THEIR LIVES!!! If you also add in the effects of, this is truly a supply driven market system, and that debt makes the value of a dollar completely more volatile, then people don't even have any concept of what their money is worth. People are lied to everyday coerced into believing that a car payment should equal 1/3 sometimes even more of the monthly income. They don't control car prices they don't control interest rates. They only control how mad they are that their last car that they just finished paying off just broke down. So yes I don't believe in people buying a TV for 600$ when it takes about 4.50$ to construct the TV, the price will go down if enough people follow suit, but that gallon of gas cost how much? how much to produce? How much have we produced? How much of that did we sell foreign-ly? What company in the world has the highest profits? This issue is exasperated more so with my last point that money invested in taken out of circulation. Making that dollar price even more volatile and even more coercive. The truth is having money controlling everything isn't freedom your new authoritative regime is the dollar in your pocket, and divisions get created that sets up horrendous limits to peoples abilities to experience life. The complete inability to control most aspects of life is slavery the opposite of freedom. Economic servitude. So Mizore the purpose of being argumentative is to listen to what other people say and refute their claim to a point where they realize they are wrong. You can not win if you don't defeat your opponents points. And if you are not going to win an argument then why take part? This is why I will refute your analysis on charity as well if you want but I don't really see it as relevant. If anything I know you are knowledged on many subjects and are very elegant with your words, but I have no interest in your posts (not saying stop as others may appreciate them) if we are simply going to go back and forth rephrasing our arguments. I also don't believe capitalism is defined by lack of intervention, but has a more important basis on a self regulating system of exchanges, and employment. But as this is subjective it is impossible to argue. so...
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| Tuesday, October 23, 2012 - 02:06 pm sarcasm alert: Oh, yes, capitalism is a pure evil, and the font of all ills in any society. We must have a Government to regulate all prices and wages, to tell us what our labor is worth; only then will all people be happy and free. everyone should donate their time and energy to the State, and look fawningly to the State to dole out largesse to all and sundry. the entrepreneurs must be reined in, for if they make any money, it must be by defrauding others. Why, look at microsoft, Apple, and the automobile industry: the visionaries who make these ideas into reality should get the same reward as anyone who performs 8 hours of meaningless labor and then zones out on the couch watching the Colbert report and "Beavis and Butt-head" while guzzling a couple six-packs. No more capitalism, folks, it is a ruination and no country that has allowed it has ever prospered or had a decent standard of living! I will stop now, before I go on a rant...
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| Tuesday, October 23, 2012 - 04:55 pm But I like "Beavis and Butt-head" while guzzling a couple six-packs.
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| Wednesday, October 24, 2012 - 01:02 am Yes, I'm an economist, one of my M.Sc.'s courses was History of Economic Thought, where we dealt with questions such as this and yet I'm remarkably indifferent to this sort of endeavour. And, pragmatically, so should everyone else. To our social life, it matters not what which is the most capitalist or socialist proposal. The main question we should ask is does it work? That is to say proposals should be judged on their own merits to the objectives they are assigned; which implies ideology ought to bear no weight in that judgement. Plus, the definition of capitalism belongs more to Law than to Economics, so, quite naturally, the answers to these sort of questions are always convoluted. In that sense, here's my small contribution: The birth of capitalism is usually associated with the rise of protestantism. Whatever sets capitalism apart from the rest, must lie with the conditions which gave its origin, and therefore with protestantism.
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| Wednesday, October 24, 2012 - 09:01 pm Maclean your sarcastic rant is short sighted. Once again the only alternative to capitalism is some authoritative redistributing regime. THAT'S NOT TRUE!!!!! If anyone doesn't like capitalism they are commie/socialist. Instead of thinking hey let's improve upon capitalism because we don't like it, you condemn them without hearing them out. Nice post Laguna
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| Thursday, October 25, 2012 - 03:37 pm I concede one point, that is, capitalism can be improved on to better benefit society as a whole. However, yes, I stand by my belief (knowledge, rather) that anyone who hates capitalism is a socialist/commie/pinko.
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| Friday, October 26, 2012 - 03:45 pm Capitalism is slave labour of the poor and vulnerable, exploitation of the value of labour and organised crime on a global scale.
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| Friday, October 26, 2012 - 04:28 pm So many smart young minds in Simcountry. Anyone want to take on sorting out my check book for me??? ha ha ha ha
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| Friday, October 26, 2012 - 07:31 pm Aren't y'all tired of talking about boring ol' "capitalism"? Let's change this thread to something much more important and exciting! Can anyone define "Shoes"? Happy Weekend, Sim Peeps!!!!!
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| Saturday, October 27, 2012 - 07:51 am LLee: If that is how you define Capitalism, I would really hate to hear your definition of Communism. Laguna: How about a little more info on the relationship, Protestantism/Capitalism
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| Saturday, October 27, 2012 - 08:00 pm Max Weber Laguna? What I have heard is that his theory was, at best, debunked.
I'm quite enjoying reading deeper into this topic, good thread in general.
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| Saturday, October 27, 2012 - 10:46 pm That's interesting Crafty, thanks for the posting.
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| Wednesday, October 31, 2012 - 01:03 pm Laguna, I understand that such questions may not be of relevance to the "science" of economics. However, I disagree with the notion that these questions are not of importance when discussing the relative merits of which economic system to implement because any question of "does it work?" presupposes that we've answered the question "what are we working towards?" Both questions must be settled before determining which economic system to implement. To attempt to answer the first question without knowing the answer to the second question is silly, to presume that the answer to the second question is obvious to everyone is ignorant at best. The question of what works can only be answered once the objectives are known. Drew, the only alternative to a capitalist system is some form of authoritative regime... however, it need not be limited to authoritative redistribution. In either case, the problem that most people have with alternatives to capitalism is the authoritative-ness not the redistributive-ness. It just happens that most justification for authoritativeness comes from redistribution schemes. I made this argument in the previous post. Of course, I think it worth mentioning that I like the current system of the US mostly and I would much like to see the system being improved by becoming more capitalist. In any case, I think it important to point out that the observation that people need things to live is trivial. There seems to be an assumption that, somehow, I'm denying this... which is not the case. Of course people need things to live. It would be downright silly of me to refute this and it would be silly of you to think that I don't understand this. My point on this issue is that while people need things to live, people also need to produce the things that people need to live. Both statements are obviously true. I don't think you would even attempt to deny my additional observation... but what do these things prove? Nothing. These will be true in any system. Whatever the system is there must be producers for there to be consumers. The thing that we're arguing about is whether anyone's need provides sufficient justification for the use of government power to provide it. I'm not sure you understand the difference in the nature of control within the capitalist system as opposed to outside it. Within the capitalist system, you may be thinking "I don't have control", but this is technically true of everyone. From producers to consumers, nobody has full control of anything. That's kind of the idea. The price itself is a reflection of a huge variety of factors... the most important of which at this juncture is the relationship between the needs of people and the available resources. The reason the price elasticity of demand behaves the way it does is because everyone needs these things. Of course, I think you've blinded yourself about what happens on the supply end when the price rises. The increase in price is what drives investment in developing new resources, infrastructure, and methods that previously were not profitable to respond to the increased demand. Every great profit represents a great need for new resources to be developed. Price controls prevent this from manifesting and retards the growth of sectors that need to grow to fill demand. In other words, this is not a viable solution to any problem of shortage (the root problem of rising prices) as it greatly keeps down the ability of specifically new competitors and even existing competitors to spend the money developing new infrastructure and forging new methods. The price itself is a manifestation of deeper issues in the overall market, to ignore this is to break from reality. To put it another way, a car costs so much because people value it so much. The cost to produce is irrelevant... I'm sure it'll seem silly, but it is worth mentioning that people are fully capable of valuing things at less than the cost to produce is, people just aren't in the habit of wasting resources producing these things (well, unless it's like valuable in other ways, but that's why there are non-profits). Now, let me address your "lack of freedom" again... the lack of freedom imposed by a capitalist system is the lack of the ability of any one person to name the price. Just because I don't feel a car is worth $20,000 doesn't mean the guy next to me agrees. Of course the seller is going to sell to the guy willing to pay more. And it is right that he does. It would be selfish and irrational of me to expect that people producing the thing should trade it to the person willing to pay more than me. It would be equally selfish and irrational of me to believe that the people making bread, cars, and other necessities DO SO FOR MY SAKE. The world doesn't revolve around any one person. The thing you need to understand is that those "market value" represent the "social value" of a product: the relative value assigned by all producers and consumers competing, negotiating, trading, etc. The value something has within the society. The fact that the cost to produce isn't much compared to the value of the final product just goes to show the value of actually producing the good. The "fairness" of the capitalist system is that the "market value" of everything I put into the system as a producer corresponds to the "market value" of everything I take out as a consumer. Can everyone add a value equivalent to the value of everything they need to live? History shows this isn't always the case. Now, I'll take your argument on people experiencing life as they want as a hyperbole... the society at large is better off if those kind of people who expect other to provide their life and comfort for them to be ignored. Essentially, there is little reason to keep such parasites around. That's not the meat of the issue though. For those who are unable to provide for their own needs, I wouldn't use such harsh language, but the sentiment isn't all that different if they expect that others provide for them. This brings me back to the compassion point. I don't think you truly get the picture of compassion. It is easy to just say, we should pass laws to feed the poor and leave that responsibility to the government... which while I don't think it is justified, there is a deeper thing that I take offense to. That is the notion that the fulfillment of your personal values is somehow is not your personal responsibility. To say that the government should provide the necessities for people is one thing... to actually provide the necessities for people is another thing. I think you can see where I'm saying it's only compassion if you earned the money you're giving to others. I heard a slogan once that "Profit precedes Philanthropy", in other words, the idea I'm trying to get across is that you need to actually create the value that you give to other people. I think it shouldn't be too surprising that I accuse you of being more concerned about depriving the wealthy of their money than providing for the poor. You don't want to actually be inconvenienced to help the poor, you just want to feel smug by ordering others to do it for you. That is essentially what it means to say, "the government should provide for people." Everyone knows that we all can help each other out our own damn selves and we don't need the government to do it for us.
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| Thursday, November 1, 2012 - 12:32 am @Laguna: "Plus, the definition of capitalism belongs more to Law than to Economics" Agreed. "The main question we should ask is does it work? That is to say proposals should be judged on their own merits to the objectives they are assigned; which implies ideology ought to bear no weight in that judgement." Agreed, and disagreed. To the extent that an ideology corresponds to reality, a proposal that accords with that ideology will work. With the qualification that not only the primary, first order effects of the proposal be considered, but also the secondary and tertiary effects, which can sometimes be quite long lasting and of great consequence.
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| Thursday, November 1, 2012 - 09:59 am OK you touched the point, but ignored some facts. Capitalism only works because society as a whole gets to determine the value by a choice of whether or not to purchase. If people refuse to purchase then the price goes down. The cycle continues until a new profit maximization point is hit. THIS IS IMPOSSIBLE with items necessary for survival. This is the whole food point, you don't eat ya die! No one can wait the time it takes to readjust sales figures too buy at a lower price point. There are goods with indefinite price elasticity it is immune to "capitalism." I'm not merely saying an individual has no control, I'm saying the society, the majority, the mob has no control. So it's not a complicated idea of people need certain things, but what I fail to see is your inability to connect those dots. Absolute capitalism also supports a monopoly which would take prices to a whole other level of servitude to the dollar. Smart Phones could sell for 2000$, I believe they would sell smaller volume but still. The point in that is the depravity of it all, only 2 companies actually make profits on smart phones ALL others lose but to change the price point society stops progressing and everyone becomes a servant to those with the supply. But I don't want to get sidetracked from this they aren't NEEDED but are accustomed to. With no suitable replacement to the cost we lose control. There is a reason inflation has hit necessity items harder than anything else, because a few people make the rules and the others abide by them, there is no freedom. Ignore the corn shortage, food still inflates faster, house prices decreased rent actually went up despite the increase in supply volume. Car prices are up, with interest rates down. The whole situaton is completely opposite to what should be happening. Why? because society as a whole can not influence this. And you are right in the system cost to produce has no relevance. So why? The cost to produce food is down, supply should rise, the prices of homes are down the supply of rental property is down, automobile production is up so supply is up and prices are climbing in all three of those areas. If the cost of heat, water, and electricity are up. All of these areas are things people can't live without and inproportionality target certain individuals. So you want to throw class warfare into the mix, well it is justified. You know I do my own taxes just so I can skip over some of the built in deductions because those scum of people you make my income and more don't pay their fair amount. The agricultural revolution was 250 years ago since then food is practically free and is not a luxury but a necessity of life that has been monopolized and exploits people all in the name of capitalism, all to be enslaved by capitalism. I don't know this argument doesn't seem to work with you, it is an obvious and concrete anti-freedom due to capitalism approach but you don't see the lack of influence society has in the most important markets, so whatever. Price controls eh? Price Controls ensure 2 things. One is that the market can ensure a buying base (very important because of a shrinking buying base due to wealth inequality) and the other to ensure availability to certain firms that innovate (as it is rare for consumer goods to have price controls, and it is much more severe in industrial goods, as there has been commercial freezes due to stockpiling many times in the past). You bring up price controls but you ignore corporate price controls, or capitalist price controls? Price floors get created between competitors much more frequently then government price controls. Why? To go against capitalism of course, it is a paradox. A capitalist approach to maximize profits is to get all your competitors to raise profits for everyone, yet at the same time the people lose the alternative and society no longer has any control to dictate their prices. Ahem... Slavery once more. Authoritative Regime is the only alternative to capitalism? That's right the Greeks never existed. The Indian Oligarchies of the BCE times in which the leader had 2 years to prove his leadership and the people decided whether he lived or not after that is completely made up. The Navajo that had leaders based on situations was completely ensnared with a single all ruling being. That's just dumb. Facsism or Capitalism, there are about a thousand other options, and trillions yet to be thought of. Also don't forget pre-capitalist societies also had leaders though in absolute power still did things for the will of the people, that isn't authoritative that is efficiency. As for compassion and philanthropy though off topic you are just simply wrong. You have knowledge of your own being through your own experiences, you do not no how I think, or anyone other than yourself. If you are stranded in the desert you have a canteen that will get you to the other side comfortably and pass a wanderer with bad luck and hydration problems will you give him water? You might. If you know that you will make it anyways but will have an uncomfortable trip, you still might, but maybe less likely. There are people who will give him water no matter what. So to downplay charity is something outside your realm of understanding, because people do not like to see others struggle, people make sacrifices without any gain. You do not need any benefit any profit to do the right thing. This is a difference in character between the two of us, I'm a good person, I don't know if you are but if I see someone who needs something that I want, need exceeds want. Money is wanted, Food is needed. Food is practically free so it should be given. The government's entire reason for being is to ensure the rights and liberties of all of its constichuents. You seem to align yourself to a foolish now common idealogy that you live your life to make money and seek out pleasures. While I understand that money can only buy simple pleasures that addict the soul to frivalous things. You downplayed my attachment to John Stuart Mill before but the truth is I know true happiness and I can't buy it. It comes down to this though, a capitalist society can not evolve because this Society Value has no consideration to the societies benefit.
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Thursday, November 1, 2012 - 01:47 pm
Haha, I'm not the only one rankled by the "expert" tone. Drew, the reason people upthread complain about not being able to understand what you're saying is not that you're talking above them. It's that you write as though English is your second language. I don't mean to pick on you. You have a few good insights, I think. So much of what you write isn't clear enough to even engage with, though.
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Thursday, November 1, 2012 - 02:15 pm
That's insightful. Drew, when you say "the things that the world has to offer" are you talking about natural resources, or are you talking about goods and services that people produce? The people who produce the goods and services are real people, who have their own motivations. If not offering them money, which they can exchange for other goods and services, what incentive will you offer them to produce things for you?
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| Friday, November 2, 2012 - 06:41 am Thanks jojo you put that in a better way for me to clarify. I'm not trying to say there shouldn't be a way to earn things, I'm merely trying to point out that not all things can be evaluated fairly with extremely capitalist means. An IPhone can easily be adapted into the free market, but there are things that can't. If all food prices increased by a factor of 100 all at once people will begin to try to make preparations to produce their own, but they would be forced to buy them in the mean time. So my point or at least the point I'm forced to defend is that for items that do not have the option to say no to cannot be subjected to the free market. If you can say no, then its fine. But not all items are luxury items you can do without. Now this can be construed as a small section of commerce, but it is easily 90% of the products that poverty consumes. This is not okay. People will always be put in poverty because something that is essentially free elevates to a point that actually has the power to keep the lower class from ever having the freedom to have any extra money whatsoever. On that point when has anyone lately had the ability to go to a gas station and say I will buy your gas but only if they lower the price to 2.00$. Then when does a person have the ability to say fine I won't buy your gas? This doesn't happen because people don't have the right to denial, only products with a right of denial can function properly in a capitalist system. And regarding my linguistic ability, hmmm all I can say is that on simple things usually I write very well. But the topics often brought up in SC are complex and complicated I often get swept away in too many directions I agree it could be hard to follow. I didn't mean to be offensive, it's usually obvious when I get frustrated with a person. So I'm sorry If you also took offense to my language.
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| Friday, November 2, 2012 - 11:47 am Capitalism is a monetary system and thats it. But when adopted as a way of life its becomes a legitimate way to rob someone under the guise of profit and intelligence. I take it you have all heard of the Petro-Dollar? LOL Who robbed all the Gold!......Who robbed all the Gold!......You Fat Bas'#rds!......You Fat Bas'#rds!......You robbed all the Gold! Capitalism was created by the Zionists so they could tap into the Worlds wealth and resources to create the Worlds biggest Army (USA) with the aim of re-taking Jerusalem. Simple ;)
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| Friday, November 2, 2012 - 03:40 pm Lord Lee: You are proving my point. Nix: I reserve comment on your idea of capitalism until I am sure you are not joking.
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Monday, November 5, 2012 - 04:25 am
But to a large extent the price of food is determined by the free market, and over the long term the price of food has steadily fallen, not risen (in real terms, adjusting for inflation). In free, capitalist countries you just don't have the situation you are describing.
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| Monday, November 5, 2012 - 08:46 pm Food Inflation 2008 4.5%/2009 6.3%/2010 -.6%/2011 1.8%/2012 5% Inflation Rate 2008 2%/2009 0%/2010 0%/2011 1.5%/2012 1.3% I think you are wrong. And it is the no course for deniability there is no FREE market. Like I said before I understand the use of the free market for everything other than things required for survival but those items that are needed for survival have a positive correlation with the approximate buying power of those in poverty, and do not with the general inflation rate.
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| Tuesday, November 6, 2012 - 05:54 am This is interesting. As Share of Income, Americans Have the Cheapest Food in History, and Cheapest Food on the Planet
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| Tuesday, November 6, 2012 - 12:05 pm We'll thats because your all being fed GM food. Did you know Monsantano spend millions to make sure the health risks of eating GM crops are not labeled? Mmmmmmm wonder if there will soon be a 'tobacco moment' for your food soon?
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| Tuesday, November 6, 2012 - 06:22 pm That quote has outside variables. It doesn't account for changes in income. <-Minor, but my figures represent only the figures in the beginning of the year, and if you at my numbers with that information then the day day 2009 ended food was in deflation. So you are using out of date figures with too small of a scale. That quote was perfect to explain your point however it is an outlyer to the long term effect. Also I try the link and it sends me SC, so I can't trust a quote until I can realize the significance of the biased spin the journalist takes. I'm merely attempting to say I'm right and your wrong but I've already seen this 1 period and it is inconsistent with the larger trend.
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| Thursday, November 15, 2012 - 05:54 pm While econometrics did develop as a way to help prove or disprove a particular hypothesis (theory), it is somewhat amusing to see it applied to the case of Weber's The Protestant Ethic and the Spirit of Capitalism. While I would use it in this case as well, I would treat it as a mere curiosity. I imagine so would many economists. Econometrics has its failings, and, in this particular case, we could be seeing poorly chosen regressors or just plain crappy data. I do have to stress, that Weber did say that his answer was only probable. As probable as it may be, it still has traction to this day, because it remains one of the best explanations to date. The number of times I see Weber mentioned in a topic about capitalism in the ecosphere is rather impressing. We should have a Godwin's Law version for Weber and capitalism. When Weber proposed that protestant ethic was one of the factors that enabled the rise of Capitalism, he had to take into serious consideration this question: what was so different then that allowed Capitalism to appear at that time and not before? And this change in behaviour, fruit of a new religion, is what he found. Maybe it wasn't "sufficient", perhaps not even a necessary "condition", but I believe it helped. To assume a more "durkheimian" view that greater population density is the origin of capitalism is a poorer explanation, that leads me to ask why it didn't appear in China centuries before. Although, I do think that population density (urbanization) played a relevant role as well. Mizore, I hope that only your first paragraph is directed at me. I agree with you and I believe I was very specific in what I wrote:
In other words, objectives are defined before, and the instruments are chosen based on their efficiency. As objectives are chosen is up to Society as a whole. Laguna
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