Why Capitalism?

[Vlerchan]

It's generally accepted across mainstream society that the liberal-capitalist system of production trumps all, though the reasons why are never clearly outlined. I'm not asking why in the past it might have bested other economic structures - that's irrelevant - but why going into the future we should continue to hold this religious-like faith in the truism of capitalisms superiority: a system that in modern times has become analogous with an increasingly concentrated number of economic powerhouses engaging in non-price competition and then running to government when it seems that they look clear to lose market-share.

[Harry Smith]

Because it's easy to pretend that any-one can climb the ladder, that's why people buy it because they claim if they work hard they can carve out their own portion. Also because the downsides have only reached our doors in the last 5 years

[Korashk]

Economic freedom correlates to higher standards of living for all involved, not just those at the top. I dislike the Heritage Organization as a whole, but their "Freedom Index" ranking countries using metrics related to this concept consistently ranks countries at the top that are among the best places to live on Earth with very high standards of living.

Of course their data isn't free from criticism but just look at history. When a country veers away from a "capitalist" system often what follows is other aspects of that society go down the drain. The USSR, China in the 1900s, Cuba, etc being prominent examples. I think the best examples of this are comparing East and West Germany, and North and South Korea. In both of these instances the half that adopted a more capitalist system did better for themselves, their people, ad the world.

It's not necessarily a comparison of good v bad, but of better v worse, and I think it's clear that the more free an economy is for individuals and business the better off everyone involved is. I'm not opposed to collectivist systems necessarily, but I also think that most, if not all, first world societies are too large for collectivist systems to work effectively.

[Miserabilia]

I don't know (true story).
I don't know a better system that could be implented right now either.
I don't beleive in the climbing up the ladder idea, since it's not possible.

[TheN3rdyOutcast]

Capitalism is all we know, besides, it gives the people the "Fuck yeah 'Murica!!! Look at all the freedom we have!!!" kind of feeling. Besides, we're not COMPLETELY capitalist. A pure capitalism would be one where anything goes, and though, it may not be enough at times, we have some legislation involved in the economy.

[Harry Smith]

. The USSR, China in the 1900s, Cuba, etc being prominent examples. I think the best examples of this are comparing East and West Germany, and North and South Korea. .

Although I'd rather be ill in Cuba than the United States if I was poor.

Interesting to draw the parallels for the cold war as many nations that had been abused by capitalism wanted to embrace socialism and in some degrees communism

[Vlerchan]

Economic freedom correlates to higher standards of living for all involved.
Norway (31 - 70.05)
Australia (3 - 80.26)
Sweden (18 - 72.9)
Netherlands (17 - 73.5)
Germany (19 - 72.8)
Ireland (11 - 75.7)
Switzerland (5 - 81.0)
Iceland (23 - 72.1)
Denmark (9 - 76.1)
Slovenia (76 - 61.7)
Finland (16 - 74.0)
Austria (25 - 71.8)
Canada (6 - 79.4)
Czech Republic (19 - 70.9)
Belgium (40 - 69.2)
I've listed the top 15 countries by HDI above alongside there ranking on the Heritage Foundation's Economic Freedom listings. It is the inequality adjusted HDI I included because I felt it would give us results that are closer to the truth - it being said on Wikipedia that the "[HDI-lacking-adjustment for-inequality] can be viewed as an index of “potential” human development" - and it then implying that the one I'm using is more useful. It's noteworthy that of the top 15 countries by inequality-adjusted HDI only 4 countries find themselves within the top 15 countries by Economic Freedom. If I'd expanded the listing to Top 20 the ratio would have improved but not hugely.

Let's look at the non-inequality adjusted HDI to Economic Freedom measures though:

http://i17.photobucket.com/albums/b68/dantond/HDIvIEFAll.jpg

Korashk is right that there is a correlation between Economic Freedom and high HDI. It's noteworthy here however that as we reach the higher levels of HDI we see a slight reverse in the trend - many countries find themselves to the left of the the line: indicating lower than what their levels of Economic Freedom should be to reach such prosperity.

When a country veers away from a "capitalist" system often what follows is other aspects of that society go down the drain.
Is this to say that bad things happened because they veered away from capitalism?

The USSR, China in the 1900s, Cuba, etc being prominent examples.
I know for a fact that Cuba does a lot better than most of its neighbours.

It's third (http://www.caribjournal.com/2013/06/21/barbados-continues-to-lead-caribbean-in-human-development-index/) in the Caribbean after Barbados and the Bahamas as far as HDI goes.

In both of these instances the half that adopted a more capitalist system did better for themselves, their people, ad the world.
In both those instances one side received massive amounts of funding from the West and continued access to the West's markets.

Whilst I think what happened is noteworthy I do hold that it's a lot more complex than the economic model that both countries followed.

I'm not opposed to collectivist systems necessarily, but I also think that most, if not all, first world societies are too large for collectivist systems to work effectively.
I agree with this.

Our economies are too complex for the 'hard' state-socialism that was prominent in the 20th century.

Edit: well, I've spoken to socialists who would claim that computers are sufficiently advanced to run a command-economy, or that if planning was decentralized it would be a lot more feasible, but I haven't looked into it enough to back either solution right now.

[Korashk]

Although I'd rather be ill in Cuba than the United States if I was poor.
I wouldn't. After some cursory research I've found that it seems that while Cuba has a wonderful system (http://ije.oxfordjournals.org/content/35/4/817.full.pdf+html) for healthcare, it's not great in practice (http://www.aljazeera.com/indepth/features/2012/06/201265115527622647.html) for those in poverty (http://www.global-politics.co.uk/issue9/hanna/) that need it. Doctors are often absent to other countries, their medical technology is far behind, and while care is free, medicine is expensive and scarce.

Capitalism is all we know, besides, it gives the people the "Fuck yeah 'Murica!!! Look at all the freedom we have!!!" kind of feeling. Besides, we're not COMPLETELY capitalist. A pure capitalism would be one where anything goes, and though, it may not be enough at times, we have some legislation involved in the economy.
Businesses in America are very regulated. The index I referenced in my first post ranks the US as #17 for business freedom. The real problem in America is cronyism, not lack of regulation.

Remember to use the 'edit' button. ~Typhlosion

[Stronk Serb]

For starters, I have no problems with capitalism if it's handled right. In my opinion, a country could function with both a national and private sector. National sector should encompass extraction of natural resources, telecomunications, healthcare, power and water supply and road/rail/air transport/maintenance. Of course, private enterprise should be allowed, but it only makes sense to have one in transportation, telecomunications and healthcare. In Socialist Yugoslavia, all major industries were nationalized, but there was room for private enterprise which was also successful in some sectors.

[Korashk]

I've listed the top 15 countries by HDI above alongside there ranking on the Heritage Foundation's Economic Freedom listings. It is the inequality adjusted HDI I included because I felt it would give us results that are closer to the truth - it being said on Wikipedia that the "[HDI-lacking-adjustment for-inequality] can be viewed as an index of “potential” human development" - and it then implying that the one I'm using is more useful. It's noteworthy that of the top 15 countries by inequality-adjusted HDI only 4 countries find themselves within the top 15 countries by Economic Freedom. If I'd expanded the listing to Top 20 the ratio would have improved but not hugely.
That's an interesting metric to use when judging nations. I'm not very knowledgeable about this adjusted HDI. However, disregarding different specific statistics I think we can agree that most places near the top of all of these lists are great places to live.

Let's look at the non-inequality adjusted HDI to Economic Freedom measures though:

image (http://i17.photobucket.com/albums/b68/dantond/HDIvIEFAll.jpg)

Korashk is right that there is a correlation between Economic Freedom and high HDI. It's noteworthy here however that as we reach the higher levels of HDI we see a slight reverse in the trend - many countries find themselves to the left of the the line: indicating lower than what their levels of Economic Freedom should be to reach such prosperity.
So what you're getting at is that there seems to be a plateau where economic freedom no longer correlates to high HDI? I can see that. Diminishing marginal returns and all that jazz. After all an economy can only get so free and then you have to do other things to improve your society.

Is this to say that bad things happened because they veered away from capitalism?
More like the people that wanted to do bad things veered away from capitalism to make things easier for them to accomplish. I don't think it's controversial to make the claim that the more centralized a system, any system, the more susceptible that system is to corruption.

I know for a fact that Cuba does a lot better than most of its neighbours.
Yeah, but it's still a third-world country. That's mostly America's fault, but what can you do? Cuba would be a much better example if they weren't forced to exist with an embargo. Who knows what side their situation would support if it was allowed to naturally develop?

In both those instances one side received massive amounts of funding from the West and continued access to the West's markets.
Access to markets is a very significant aspect of capitalism, however one could easily argue that the explicit withdraw of economic options from these areas is what caused their squalor. I definitely think that was a factor, but it couldn't have been the only one considering just how bad these places were and are. Foreign markets are hugely important to every economy and capitalism simply provides more readily available access to them.

Whilst I think what happened is noteworthy I do hold that it's a lot more complex than the economic model that both countries followed.
Oh most definitely.

[Vlerchan]

However, disregarding different specific statistics I think we can agree that most places near the top of all of these lists are great places to live.
Yes. Though I'm not sure if I'm in agreement with the idea that it's due to the levels of economic freedom existent in each country. There's a much higher correlation between GDP per capita and non-adjusted HDI (http://www.nytimes.com/images/blogs/freakonomics/posts/Human1.jpg) than there is between Economic Freedom and non-adjusted HDI. I also question how levels of Economic Freedom actually impacts on HDI or living standards: several measures just seem to me like 'businesses freedom from oversight' - one portion of the examination also measures the 'freedom' within the labour market, which through my pink-tinted lenses I can't help but pick up as 'the weakness of labour's bargaining position'.

It's effectiveness if also questioned (http://www.mises.org/daily/1724) by some guy on the Ludwig von Mises institute, which you might find interesting.

So what you're getting at is that there seems to be a plateau where economic freedom no longer correlates to high HDI?
I'm actually not quite sure what arguments can be drawn from the results, especially when you consider Karlsson's critique in regard to the Economic Freedom Index, and my own thoughts about how Economic Freedom actually impacts on living standards.

I don't think it's controversial to make the claim that the more centralized a system, any system, the more susceptible that system is to corruption.
It's not, and I agree.

I think it should be noted here however that socialist states don't require authoritarian rule or the hyperconcentration of powers.

Yeah, but it's still a third-world country.
My point was though that relative to its immediate neighbours, which possess similar historical backgrounds and culturals; in my opinion: Cuba's most useful comparisons, Cuba is doing quite well (HDI - 59th), despite it's low ranking (176) in terms of Economic Freedom.

Foreign markets are hugely important to every economy and capitalism simply provides more readily available access to them.
It wasn't 'socialism' or 'a lack of capitalism' that stopped East Germany from penetrating international markets. It was the then political climate.

[Gamma Male]

I'm not some hardcore Stalinist that wants to outlaw private enterprise, but my ideals are pretty far left for America.

I believe that many major industries such as natural resources, water/electricity/internet, healthcare, etc need to be nationalized. But instead of the complete government control that some of the more authoritarian socialists support, I think workers and the American voterbase as a whole should have a much bigger say in what goes on. I would give more control to unions in nationalized businesses to accomplish this, among other things. Private enterprises would be allowed and be able to do what they wish, but they would also be subject to certain regulations. Worker safety, environmental, minimum wage, that sort of thing.

Economics isn't exactly my strongsuit, or a particularly big interest of mine. But that seems like a pretty good system. If I'm not mistaken that's how many of the nations with the highest standards of living seem to operate. I'm not sure if that makes me a democratic socialist like it says in my sig but that sounds about right.

[Vocabulous]

Capitalism? More like CRAPitalism, amirite

[Vlerchan]

But instead of the complete government control that some of the more authoritarian socialists support, I think workers and the American voterbase as a whole should have a much bigger say in what goes on.
In regards to what would the American voter base have a say in?

I'm not sure if that makes me a democratic socialist like it says in my sig but that sounds about right.
If you don't have ambitions to eventually eliminate private property then you're not a socialist - democratic or otherwise. Or that's the historicaly-correct definition of the term. What is and is not a socialist or what is or is not socialism tends to differ depending on who you ask.

You're a social democrat.

---

I'll also admit to being somewhat surprised that more people aren't jumping in to tell me how great capitalism is.

[Gamma Male]

In regards to what would the American voter base have a say in?
Yes.

If you don't have ambitions to eventually eliminate private property then you're not a socialist - democratic or otherwise. Or that's the historicaly-correct definition of the term. What is and is not a socialist or what is or is not socialism tends to differ depending on who you ask.

You're a social democrat.
Huh. Well I definitely don't want to eliminate private property. Guess I should change my sig. Thanks.

[Vlerchan]

Yes.
I think you misread my question.

I'm asking what the American voting base would have a say in when it comes to the functioning of nationalised firms.

Well I definitely don't want to eliminate private property.
Why not?

[Gamma Male]

I think you misread my question.

I'm asking what the American voting base would have a say in when it comes to the functioning of nationalised firms.
Oh. Hhmm. Maybe not the voterbase as a whole, more like the employees and workers. Similar to the way unions function, except give them more official power.


Why not?

Because I believe individuals should have control over their own possessions and be able to use their property as they wish without interference from the government and/or local community. Except in cases where somebody is causing harm or a public nuisance or damaging the environment of course.

[Vlerchan]

Maybe not the voterbase as a whole, more like the employees and workers.
I don't see a problem with this.

Because I believe individuals should have control over their own possessions and be able to use their property as they wish without interference from the government and/or local community.
I'll start by making the distinction between 'private property' and 'personal property' (http://en.wikipedia.org/wiki/Personal_property#Personal_versus_private_property): 'private property' is an object of which someone has a legal right to ownership of whilst 'personal property' an an object of which someone is in regular use or occupancy of. I find a better way to make a distinction between them is to equate 'private property' with (economic) capital - i.e., wealth producing wealth - and 'personal property' with (economic) non-capital - wealth not producing wealth. It's an important distinction: I might have an issue with you claiming control over my workplace but I don't have an issue with you claiming control over your toothbrush.

If you can wrap your head around that then we can continue: Is there a logical basis to private property rights to exist? If so: what is it?

Except in cases where somebody is causing harm or a public nuisance or damaging the environment of course.
I guess you don't agree with taxation then? That's an obvious infringement on private property rights.

... a public nuisance ...
You have also opened yourself up here to the local community infringing on someone's private property rights because enough of the local community feel like infringing on someone's private property rights.

[Gamma Male]

I don't see a problem with this.


I'll start by making the distinction between 'private property' and 'personal property' (http://en.wikipedia.org/wiki/Personal_property#Personal_versus_private_property): 'private property' is an object of which someone has a legal right to ownership of whilst 'personal property' an an object of which someone is in regular use or occupancy of. I find a better way to make a distinction between them is to equate 'private property' with (economic) capital - i.e., wealth producing wealth - and 'personal property' with (economic) non-capital - wealth not producing wealth. It's an important distinction: I might have an issue with you claiming control over my workplace but I don't have an issue with you claiming control over your toothbrush. If you can wrap your head around that then we can continue: Is there a logical basis to private property rights to exist? If so: what is it?

As opposed to what exactly? Full government ownership of all nonpersonal property?
I guess you don't agree with taxation then? That's an obvious infringement on private property rights.
Of course I agree with taxation.

You have also opened yourself up here to the local community infringing on someone's private property rights because enough of the local community feel like infringing on someone's private property rights.
Sorry, I should've used more clear terminology. Only when someone is using their property in a way that objectively and clearly obstructs and/or harms another's person or property should the government be able to intervene. So, if somebody is blasting music at 150 decibals that's not okay because it causes sleep loss, and obstructs the daily routines of others. And if someone sets a giant Styrofoamwall to spring up in their front yard whenever a car drives that isn't okay because it poses a direct risk to public safety of others by startling the drivers and making them risk losing control.

Now on the other hand if somebody decides to paint their entire house fluorescent pink that's fine, because it doesn't pose a safety hazard and doesn't obstruct the routines or lives of other people in any real way.

[Vlerchan]

As opposed to what exactly?
Beyond the point.

I'm just wondering why you are so insistent on individuals holding private property rights.

It's all very moral absolutist.

---

I'm looking for an eventual answer that is something along the lines of:

"I believe it should exist because within the current material conditions it preforms a socially useful or beneficial function".

Full government ownership of all nonpersonal property?
That doesn't need to be the case. I would say that worker-owned and -managed co-operatives are not inconsistent a world lacking private property rights. I'd also consider worker-customer ownership consistent with a world lacking private property rights. I don't believe that full state ownership over the means of production is desirable and in cases where it is desirable I tend - there's exceptions - to prefer it done on the most local basis feasible.

Of course I agree with taxation.
Then you agree with forceful/violent interference with someone's property for no good reason (going by what you listed as good reasons).

Sorry, I should've used more clear terminology.
I'm really only playing Devil's Advocate here if I'm honest.

[phuckphace]

I like the idea of private property because the DON'T TREAD ON ME types can't move land and/or buildings to avoid property tax. you can run but you can't hide (from the tax man).

[rtw1997]

Because capitalism has been the most successful economic system throughout the course of history. Time and time again, socialist and communist economies have failed or are failing now. The concept of wealth redistribution and/or government control over the economy may sound nice in theory, but simply does not work in practice. We all know the history of the 20th century and the downfall of communism, but even today, the countries facing the most dire economic conditions are those like France and Greece that have instituted socialist systems--they are drowning in debt and struggling not to renege on their obligations. If you take the entire EU, it just so happens that two of the more conservatives countries--England and Germany--are also the most economically prosperous. I could go on and on, but in the end capitalism is the only answer, in my opinion.

[Vlerchan]

I'd like to first note that your post doesn't argue for capitalism but rather just argues against socialism.

That's not really the stated point of this thread.

Because capitalism has been the most successful economic system throughout the course of history.
I'm asking why going into the future why we should rely on it.

Outline why you think it is a good system.

Time and time again, socialist and communist economies have failed or are failing now.
You would do well to note that these socialists and communist entities started in bad states - impoverished and unindustrialised - and under bad political regimes - centralised and corrupt. It didn't help that Western Capitalism did its utmost to isolate and split them. I don't think it's fair to point at the early attempts and claim that because they failed then socialism is doomed to failure for the rest of history.

The concept of wealth redistribution and/or government control over the economy may sound nice in theory, but simply does not work in practice.
I'm not sure now whether you are attacking Socialism or Welfare Capatalism now.

You'll have to give reasons why both do not work in practice if you want me to take your point seriously.

We all know the history of the 20th century and the downfall of communism, but even today, the countries facing the most dire economic conditions are those like France and Greece that have instituted socialist systems.
Both countries are run by neoliberals who followed austerity policies - read: deliberately made their economies contract.

Both countries recessions stem from the fallout of the US financial crisis. It is especially bad in Greece's case however because widespread tax evasion meant it was running some very bad deficits. It should also be noted that Greece is one of the most non-socialised states in Europe.

If you take the entire EU, it just so happens that two of the more conservatives countries--England and Germany--are also the most economically prosperous.
In order of growth the top 5 countries by GDP growth in 2013 were: Latvia (4.1%), Romania (3.5%), Iceland (3.3%), Lithuania (3.3%), Malta (2.6%). The UK had a GDP growth rate of 1.7 % and Germany had a GDP growth rate of 0.4%. Social Democratic Sweden had a growth rate of 1.6% and Social Democratic Norway and Denmark both had a growth rates of 0.4% - I'd mark these 3 as the most 'socialist' countries in Europe. [Source] (http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00115)

If you read back you'll also find mine and Korashk exchange which discusses the connection between more 'conservative' free market policies and prosperity - defined by both adjusted and non-adjusted HDI. You'll note that among first-world countries there isn't much of a connection.

I could go on and on, but in the end capitalism is the only answer, in my opinion.
Why?

[phuckphace]

lol what's great about neoliberalism (to neoliberals) is that whenever it fails, they can always redirect blame to "socialism" and welfare states, and a frightening number of suckers buy into it.

just want to point out that UK has a huge welfare state and universal healthcare system, and a significant portion of Germany's labor is organized in trade unions (sounds pretty "communist" to me). I assume this escaped our friend Rob's notice as he was hurriedly filling his basket with those fresh-picked cherries.

p.s. nuke Brussels

[Vlerchan]

... and a significant portion of Germany's labor is organized in trade unions ...
... that have a voice in the running of the companies [with at least 500 employees] by law. (http://en.wikipedia.org/wiki/Co-determination)

[phuckphace]

... that have a voice in the running of the companies [with at least 500 employees] by law. (http://en.wikipedia.org/wiki/Co-determination)

that's p.nifty

no wonder Walmart didn't last in Germany :lol3: