The Probelm With Capitalism

[DTRV]

The problem with capitalism lies in the fact that owners determine the salary of workers as well as themselves. Are owners inherently the most valuable members of businesses? This is a question that is posed to everyone who is reading this thread. I ask you to seriously ponder this question because this question could ultimately answer whether capitalism can be reformed or should be replaced by another economic system.

[Hugh_Lebowski]

1. I would say that how well an owner accurately makes that sort of assessment determines whether their

particular business survives.

And I suppose if ALL of them make terrible judgements in this regard, every business would fail, thus undermining capitalism, but I don't see that happening.

[Silent3]

2. Capitalism isn't really a system

It's more a description of the economic dynamics which occur under some pretty basic conditions. When you start thinking about capitalism that way, "replacing" it makes less sense, or at least doesn't mean what you might think it means.

[PETRUS]

30. That's a peculiar statement.

Perhaps with clarification it would make some sense to me, but I can't think of a way to interpret it that doesn't render it either false, or meaningless.

I'll give you some thoughts so you have something to go on if you do want to discuss it.

Formal human civilizations date back maybe 5,000 years. In the grand scheme of things, capitalism is fairly new - around 500 years old, give or take. At the time it got its start (in England), most of the world's people (and most people living in England) lived lives of self-sufficiency. People had access to land and natural resources and mostly provided for themselves. Part of what was done to create the "basic conditions" for capitalism was mass dispossession. There wasn't a sufficiently large and willing labor force - not even close. People had to be cut off from the land and resources they had been accustomed to using. (This was a violent process, both within England and in the context of colonization. The English were meticulous record-keepers and prolific writers, so there's plenty of original source material describing this in conscious detail.) The imposition and administration of a private property regime (particularly with respect to land) and the creation or nationally/internationally integrated markets - both things capitalism requires - necessitated a strong government with extensive reach (and bureaucratic competence) and the muscle to enforce compliance. So, sure, if these (and some other) "basic conditions" exist, we have capitalism. It was, however, a deliberate process involving significant coercion. That is true of any formal economy (how often do people come to a unanimous decision on anything?). If people were forced to follow a different set of rules, we'd have something else - and there plenty of historical examples of various "something elses." That's why I say one way I read your comment renders it meaningless. It's also my impression that very few people have any knowledge of the history and specificity of capitalism, which is why I say another way to read your comment renders it false.

Care to share your thoughts?

[Silent3]

34. You're listing a lot of acts of aggression and greed

No matter how much you associate those things with capitalism, they aren't capitalism. They can certainly help greedy capitalists get rich, but they aren't in and of themselves capitalism. Aggression and greed have a long and colorful history from thousands of years before Adam Smith was born.

Here are the basic conditions I'm talking about:

1) A relatively broad concept of personal property. This exists in many cultures, particular anything agrarian or industrial. Less so in hunter-gatherer societies perhaps, but even those societies aren't always completely devoid of the idea.

If you started telling people it was illegal to own personal property, I think you'd find yourself very unpopular. Even ruling out certain categories of personal property like land and buildings and machines and tools would be highly unpopular.

2) A willingness and ability among the population to trade property or labor for other property or labor.

Again, try to put significant restrictions on who can buy what from whom, who can work for or hire another person, and you'll have an unpopular outcome that would require oppressive means to enforce.

Simply combine the conditions where both 1 and 2 exist, et voilà, you have markets and you have the means of production.

Capitalism of some form simply happens given these circumstances. The supercharging of capitalism takes a bit more work, like creating monetary policy, banking systems, stock markets, the concept of incorporation, etc.

What annoys me about the way so many people talk about capitalism is they talk about it not only as a system, but as an imposed system, as if a bunch of mustache-twirling fiends gathered together in smoke-filled rooms to create and impose capitalism on everyone else.

I see capitalism much more as a natural outcome of common conditions. Given those conditions, capitalism is simply what happens unless you specifically and consciously create rules that severely limit what people can own and what people can do.

This said, I am certainly in favor of many laws to curb the excesses of capitalism, but there's a whole lot that can be done to curb those excesses which is popular and fair and not gratuitously intrusive, like environmental regulation, workplace safety standards, minimum wage, etc.

[PETRUS]

35. ...

The acts I've described barely scratch the surface. I don't know how much has been written on the topic, but I've read several books on the history and development of capitalism and others on economic history in broader terms* and I can tell you that my assertions aren't even remotely controversial. Nearly everything - if not literally everything - we would recognize as a city state, nation, or empire involves an extractive hierarchy held together by some ideology and the raw exercise of power. My point isn't that this manifestation of "aggression and greed" is what sets capitalism apart, it's just the opposite. My point is that capitalism is no different in that regard, that is to say it's an imposed system, just like any number of others. It is however, different in its modalities (and consequences), which is why it's discussed at all as its own thing.

Property is a great place to start when talking about what you call basic conditions. People have come up with any number of wildly different ideas about property in different places and at different times. There is all kinds of scholarship in history and anthropology* that discuss ideas and arrangements about property that depart substantially from the institutions we live with today. I don't doubt that some concept of personal property is universal, but the (relatively) modern institution of private property is not. There are original writings from the time in question - arguments over property laws, the laws themselves, specific accounts describing enclosure and putting down resistance, etc. - that one can consult to get an outline of the process as the market system took shape and expanded. The claim I'm making here, that capitalism necessitated a change in property relations and that bringing those changes about required force, is not debatable.

Examining labor and the movement of goods is another reasonable way to see how capitalism is different from what it replaced. People have traded goods all over the world for a very long time, and if people hadn't been working for a living in some sense of the term, we wouldn't be here today. We've even had specialists - artisans, chefs, priests, healers, whatever - for a long time in all kinds of societies. In spite of all that, capitalism didn't come about until late in the game, and it happened in one place and expanded from there. It came about because of a very unique set of conditions (which existed in England, but not France or Spain or India or what has since become the U.S.) that represented a break from tradition and didn't appear until a mere few hundred years ago. Exactly what those conditions were and how they were different is a book length subject*, but I already hinted at one huge component - cutting people off from land and natural resources. People who rarely engaged in market activity and never required it for survival were made dependent on "the market." And markets were nationally (and then internationally) integrated, whereas before trade primarily took place in what is called "spot markets." Some of the history I've read doesn't even use the word "capitalism," it uses the term "market system." In some sense, the story of capitalism is the story of the expansion of market logic both in geographical and conceptual terms. It's worth noting that this expansion always meant war and/or rebellion, which doesn't seem consistent with the idea of something arising "naturally."

You close with some comments about policies you favor, which is fine, but I want to be clear that my comments here aren't an exercise in passing judgement, just clearing up some facts about economic history.


*In case you're interested, here are a few of the books I've read that contain information relevant to this discussion:

Empire of Cotton: A Global History -Beckert
Economics in Perspective: A Critical History -Galbraith
Debt: The First 5,000 Years -Graeber
The Many-Headed Hydra: Sailors, Slaves, Commoners, and the Hidden History of the Revolutionary Atlantic -Linebaugh & Rediker
The Origin of Capitalism: A Longer View -Meiksins Wood
The Great Transformation: The Political and Economic Origins of Our Time - Polanyi
Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed -Scott

[Silent3]

36. I am not unfamilar with the historical perspective you're talking about...

...although I'm sure I haven't studied all the same things in all the same detail you have.

Some of the history I've read doesn't even use the word "capitalism,"

There's probably a good reason for that.

The claim I'm making here, that capitalism necessitated a change in property relations and that bringing those changes about required force, is not debatable.

The way you're using the word "capitalism" is debatable. I simply do not agree with talking about capitalism as if it were some external force or project or campaign that, in and of itself, necessitates anything. No one has been sitting around saying, "Well, we've almost reached capitalism, but let's grab this land over here, and change these laws over there, and exploit the shit out of this other group of people, and we'll be closer to our goal of capitalism".

People put down resistance movements because the resistance gets in the way of what they want to do and what they want to have. There have always been people who've wanted more power, more glory, more wealth, and they often have done terrible things to get what they want. But they do these things mostly (perhaps there are a few oddballs aside) in service of their own self-interest, not in service of some abstract of "capitalism" which they are trying to create or establish or impose or serve by doing these things.

[PETRUS]

40. I agree wholeheartedly with your final paragraph.

It's not at odds with the point I'm trying to make. I'm less clear on what you're saying in your penultimate paragraph, although part of what I think you're suggesting I also agree with - specifically, that when capitalism (or the market system, or whatever one chooses to call it) was getting started people probably didn't know where things were heading, they were just doing what they wanted to do.

What I'm disputing is your opinion that capitalism is "a natural outcome of common conditions." All the evidence points to the contrary. To help explain my point, let me back up and talk about the historical record on a completely different topic. Humans everywhere use spoken language. Written language isn't entirely universal, but it did appear independently at multiple times and locations. However, the archaeological record (so far) indicates that alphabetical writing was invented in one place, one time, and spread from there. Now alphabetical writing is used by many people all over the world. The market system is similar. Cultures everywhere have concepts about property. Property relations that are essentially feudal or communal (often those two concepts coexist and overlap) developed in many different places at many different times, so one could argue that those kinds of arrangements do fit the bill of "a natural outcome of common conditions." Private property (as we understand it) and markets as a central organizing principle developed in one place just a few hundred years ago. The "common conditions" that you think inevitably lead to capitalism existed for thousands of years all over the world. But capitalism didn't pop up multiple times independently, and there would have to be some evidence that it did to give serious consideration to your idea. In some sense, all of history is inevitable - what happened, happened, and nobody can change the past - and we did get capitalism eventually. But it is a system imposed by the exercise of state power, and is unusual if one considers the full measure of human history.

Anyway, interesting discussion. I don't know if you want to carry on, but there are all kinds of segues and subtopics we could explore if you care to.

[Silent3]

54. I guess a bunch of words need qualification

First of all, talking about "natural" here might seem odd if you contrast that to "artificial". By "natural" in this case, I mean tending to arise spontaneously and organically from given conditions, without the need to organize or force a particular outcome.

"System" can be an ambivalent word too, and I certainly go with the common language usage at times myself too, refering to capitalism as a "system". But the word "system" often has connotations of intent and design, of deliberate and organized institutionalization, that I don't think these are truly applicable to capitalism, which I see as more of a dynamic than a system.

I'll definitely agree with you that the idea of property rights has changed over time, but that change has mostly been a liberalization and democratization of the concept. In a feudal society, for example, land was owned by lords and kings, it wasn't often the kind of many commoners could hold as a personal possession. Capitalism has grown as the number of people who could own land and buildings and enterprises has grown.

As for "capitalism didn't pop up multiple times independently"... certainly market systems have, and I'd even venture to say there has been a bit of low-powered capitalism going back thousands of years, with merchants and artisans and craftsman. To the extent that these people could own the tools of their trade, hire apprentices, and sell their wares and services at market value, I'd say that counts as a certain level of capitalist dynamic, limited from growing greatly in scale mostly by low technology and pushy monarchs.

[PETRUS]

55. Thanks for continuing the conversation.

If you hadn't guessed, I'm a bit of a nerd for economic history and theory (which is why I've done so much reading in that area) and I have a hard time finding anybody who wants to talk about it.

I had the same thought about qualification of terms, and I thought about dealing with that in my last post (but didn't, obviously). "Natural" and "unnatural" are terms that carry moral undertones. The distinction I'd make does involve moral reasoning, but I think it's a little more clear cut: consent vs. coercion. In my opinion, outcomes reached through agreement/compromise have more legitimacy than outcomes reached through force/violence. Perhaps you agree or perhaps you don't, but at least you know where I stand.

Property is an intellectual construct. What can and can't be owned, what it means to own something, and who owns what can only be determined by consent or coercion or some combination of the two. It's hard to know exactly what humans thought or how they behaved 50,000 years ago, but the consensus is that property was determined by use/possession/occupancy. That's where you live? Ok, in some sense it's "yours." That's the field you till? Ditto. Those are the tools you use? Same. Etc. Since humans are social creatures and groups working together can accomplish more than people working alone, a great deal of property was considered communal, i.e., the forest where you and your fellow tribesmen and women hunt and gather "belongs" to the whole community. We can see echoes of this in the indigenous populations colonists conquered, and the few remaining "stateless" people holed up in places like the Amazon. So that's what kind of ideas about property appear to come about "organically."

At some point (5,000 years ago?) people began to form governments, which was a process involving armed men expropriating people less capable of violence. (For a really fascinating look at that, I highly recommend "Against the Grain," by James C. Scott - yes, it's a university press title, but it reads like popular nonfiction.) That's when we first start to see evidence that some people no longer "owned" the land they lived on or the resources they used to provide for themselves. In addition to the fact that the historical record makes it clear that capitalism was imposed, top down, by people with armies at their disposal, this thought exercise indicates that it had to happen that way as a matter of logical necessity. Almost nobody is going to agree to a situation where someone else owns the land they live on and the things they use to provide for themselves (and therefore owe this other owner rent/taxes/tribute/profit/whatever) unless they are threatened. Obviously, capitalism followed feudalism, so it began from a situation where property was distributed in large part because of the activities of armed men. At the time, there were still significant tracts of land that were, by custom and tradition, considered "the commons." I've read letters from the time period in question written by men complaining that nobody will work for them because people could live better by availing themselves of the commons and that something needed to be done about it. Hence, privatization and enclosure - there's some hard evidence of "engineering" for you.

Regarding your final thoughts, I simply have to correct you. I've discovered that a lot of people don't realize how specific capitalism is. You'll find another post from me elsewhere on this thread outlining one anthropologist's idea that there are a very limited number (three) of economic modalities. So yes, there was exchange (and markets) long before capitalism but there really wasn't a market system anywhere. As one historian put it, markets existed as opportunities but not as a necessity. There were spot markets, but not integrated markets (which are required to produce the kind of competition and price signaling that capitalism requires to function). It wasn't until the market system was imposed that people had to participate, or be outlaws, or die.

Thanks again!

[Brainfodder]

3. Big Corps with stocks are hogtied to making a profit for the stockholders and taking from the...

....actual workers to do just that, the norm?

Or have times changed?

[slightlv]

19. but it didn't use to be this way

Big corp used to have obligations to the Shareholders, not the stockholders. Shareholders included workers, investors, and the community around it. We're used to being told about obligations to stockholders, but remember, it doesn't have to be this way... and it wasn't prior to this.

Big Corp could be pressed to pay livable wages, give back a certain amount to the community, as well as to investors; they all had to shared the profits. The one thing that WAS really different was the amount of difference between the highest paid worker and the lowest paid "official." The difference was much, much, much less than it was today -- and these fatcats did just fine back then.

Big Corp also had rules and regulations it had to follow. I'm not totally against capitalism; I'm against the laisses faire capitalism we have today. Reagan started stripping regs they had to follow; what WE all understood was it meant WE would pay more for any service or product Big Corp workers produced, while, with inflation under Reagan, we had to accept lower wages to stay employed, while paying more for everything else. And the air and water would get worse around us. Did you know even Nixon tried to get Healthcare revamped? His most notable, to me, was trying to institute an HMO - where when you go in, no money out of pocket would be demanded, and no bills to follow. I remember this 'cause to me it made sense, and was modeled on the medical service of the military at that time. Now, they've even outsourced the military health care!

This is why you'll see that regular workers have not advanced in salary, vis a vis, then and now. Reagan was the beginning of Ayn Randian libertarianism -- i.e., "every man for himself" and "all of it for me." Horribly, those pulling the strings and policies behind the scenes for Reagan are still around today. IMO, THESE guys are the "deep state" everyone should be concerned about -- Cheney, Feith, Greenspan (altho he did have a somewhat "come to Jesus" moment), as well as ALEC, Heritage, and the other Dark Money groups.

[smirkymonkey]

22. Thanks for your thoughtful post.

And welcome to DU!

[Brainfodder]

25. I am well aware, that is why I am furious.

Corruption for corporate needs over the people at large, that's bad.

Child of the steel biz bust era unfortunately.

[cachukis]

4. Capitalism relies on inventiveness to solve a problem.

Watched locals in Madagascar clear a road of debris after a cyclone and put a branch across to stop traffic to collect a toll to pay for their work. Rudimentary. That same perspective becomes complicated by the power of management. See THE PRINCE. Machiavelli captures most of it.

[comradebillyboy]

5. What other economic system functions as well?

All the prosperous democratic states have strong market economies.

[I_UndergroundPanther]

6. It can't be reformed

It carries the seeds of its own destruction inside it. And it creates a fertile ground for ogliarchy and fascism.

Capitalism is a very destructive zero sum bullshit game. Inequality will always find a home in capitalism.

[cachukis]

8. It has to be reformed for it to continue. Adam Smith's analysis

was that humanity was built by a sense of propriety. My mother demanded we live that. We can demand it of others as well.

[Sapient Donkey]

26. I never managed to finish reading The Wealth of Nations

but I have made a few attempts in the past. It's been awhile so I cannot recall the specifics, but I remember thinking how I'm pretty sure of so-called conservative capitalists read some of what he wrote, they would have called him a communist or something. I should go through that and take notes this time.

I find it weird how so many non-wealthy people on the right are so hard headed with a twisted belief that greedy behavior by the wealthy is somehow good for the regular folk. Even if we take government out the equation by focusing on letting the free market do its thing, such as when Walmart employees were protesting for Walmart to raise wages (not asking for a higher government mandated minimum wage, but asking Walmart to) Many on the right were chastising these Walmart employees, calling them lazy or ungrateful, etc.. This was before Walmart made any wage increases, so people were making even lower wages than they are now. I couldn't understand why they would be against people having the value of their labor increase along with the inflation and cost of living increases. Another thing was the criticism from the right of that business owner in Seattle who said he was going to raise his company's minimum wage to $75k/yr or something. The amount of backlash that a private company got for increasing their wages made no sense. Why would they want that to fail?

Oh and then there is this: https://thefederalist.com/2021/06/10/my-chipotle-bowl-just-got-more-expensive-and-its-the-federal-governments-fault/

That twisted mindset leads to a lot of our problems, I think.

I'm ranting. Sorry.

[cachukis]

28. Appreciate the insight. Didn't finish it either.

Got it on Libby, library download, and plan to finish. It is a deep psychological approach to human nature and business/economics. I think business titans get caught up in the competition of kill or be killed and become addicted to the battle. They are, in essence, some of the lab rats of social science. Carnegie, in his declining years, wanted to be remembered for his philanthropy rather than the amount of dead and maimed workers in his factories. But he chose a select few to appreciate his generosity. Trying to stop the Rockefellers, is like trying to stop ourselves from binging on, fill in the blank. There are not enough therapists on the planet to guide people to sound mental approaches to empathy. Still, worth a stab at getting some. As a parent and a former teacher, I'm confident that some of my verbosity sunk in.

[cachukis]

29. By the way, have you read Sapience by Harari?

[RegularJam]

7. It's about power in ownership.

It’s proven that capitalism can thrive when workers can collectively bargain in an efficient manner.

Government bodies in the US don’t seem to be willing to set acceptable minimum standards. So power for workers isn’t going to come from there. It’s collective bargaining or employees are shareholders. The latter won’t happen by law.

[slightlv]

20. I agree

And I don't think we'll ever really change anything until one little sentence is recognized:

Workers are the most important part of labor.

The fat cats always talk about the nobility of labor -- never having experienced it a day in their lives. One of THE most unfair items, IME, is the fact labor is taxed. ALL labor should be free of taxation (such as state and fed income tax). Profits derived from ANY other structure should be taxed because there was no labor to achieve it. It's only pushing money around digitally.

[Mysterian]

9. The real problem with (under-regulated) capitalism is inevitable concentration of wealth

into fewer and fewer people, which will always result in failure of democracy and revolution.

People should be allowed to get rich but there should be no billionaires.

[MineralMan]

10. Owners? Who are the owners?

Today's capitalism cannot be separated from corporations. The stockholders are the owners. Even small businesses are mostly corporations.

Capitalism is not what it was during the times of Marx and Lenin.

So, you're really asking the wrong question.

[Happy Hoosier]

11. The question isn't really about Capitalism per se.

nd it never had been. The question is how do we manage economic affairs in a way spurs innovation but ensures basic living standards for everyone. I don’t really care that there are rich people, even really, really rich people so long as we ensure that everyone has access to shelter, food, clothing, education, and healthcare.

[Hoyt]

12. Truthfully, customers and the stock market determine what owners make

in most companies. Small companies— while not traded on large stock markets — do have value.

The smartest owners help employees invest in the company. Skilled employees leave company all the time when they can do better elsewhere. If that ever changes, we have a serious problem.

Are there problems with capitalism, you bet. And in normal times government tries to rectify the problems.

But, if you have a better idea, I’ll listen.

[cachukis]

13. Perhaps it's consumer wisdom versus moneymaker wile.

Watched a few students chastised over their expensive shoes when they only had graying long tees to wear. They wanted to feel good in their small fortune. Humanity is exposed in that reception. Everyone deserves a good day.

[ymetca]

14. I've always thought

that the fatal flaw of Capitalism is that it is based on an unscientific premise of "profit", or the difference between what something "costs" (a dubious value in itself) and what "added value" enables such "profit". Marx saw this as a class problem, but it's more fundamentally flawed that that.

There is no such thing as "profit" in Nature. So the ideology of profit is inherently inefficient, in terms of --what? "lessening entropic effect"? I think this is where, whenever we start talking about "The Economy," everything goes off the rails. There is not enough money on planet Earth to "solve" all these problems, because the ideology of "profit" prevents any meaningful action to adequately address our global resources dilemma.

[MineralMan]

16. Humans have needs that must be met, or we die.

So, I have these fish I caught. What do you have to exchange for one fish?

Well, sir, I have these five pieces of fruit I picked in the woods. I will trade one for a fish.

I cannot accept just one piece of fruit, as I have been all day catching these fish. You may have a fish for two pieces of fruit.

Agreed, Sir angler.

Commerce.

[ymetca]

18. Agreed!

But that's a long, long, long way from a problem like global warming caused by human "economic activity".

Now, let's talk crypto-currency! (oh, God, please no!) lol

[PETRUS]

31. That's a non-sequitur.

You've described trade, which predates capitalism by thousands of years, and takes place in all kinds of contexts (not just capitalism).

[Zeitghost]

33. Not really

The barter situation described was indeed capitalism, the means of production as described were not owned and controlled by a central state or authority. It's a rudimentary form without currency, but the general form is still there.

The alternative would be an economy where centrally owned boats made by workers assigned to boat building were operated by workers assigned to fish and centrally owned orchards were tended by workers assigned to farm and where fish and fruit were collected and distributed equally to everyone.

[MineralMan]

38. No such centrally controlled system has ever succeeded for long.

It has been tried, but cannot compete successfully with capitalistic systems. Supply chains for goods, from raw materials to finished product are simply too long to be managed centrally. In a global economy, it's even worse. Without a profit motivation, nothing complex can be done successfully. I mentioned cellphones in the reply just above in this sub-thread. They're just one example.

[MineralMan]

37. No, I described commerce. The exchange of something valuable for

something else. That is how it began. It's much more complicated today, of course, but the principle is the same. You have something to offer, and someone needs (or desires) that something. Today, you need a cell phone. You can't barter for that, though, and it's not something that can be made by a single craftsman.

The supply chain for the goods we all need or want is very, very long indeed. Commerce is required, and capitalism is the only successful way to make that happen, frankly. That cellphone requires manufacturing through assembly of components that come from dozens if not hundreds of sources. Such a thing is impossible without capitalism, frankly, in some form or another.

No truly socialist society has ever succeeded in modern times. None. Things are just too complex for it to succeed.

So, no, my reply was not a non-sequitur. It is the foundation of all commerce.

[PETRUS]

41. Huh?

We're not debating the merits of one system vs. possible alternatives, this is a simple matter of definition. You described an exchange, which is a type of transaction that occurs within capitalism, but is not exclusive to capitalism. One would have to have a very limited understanding of economics, history, and anthropology to think otherwise. You seem like a pretty sharp guy, so I'm surprised to see you persist in your folly.

[MineralMan]

43. All economic systems function on an exchange basis for transactions.

When I think about complicated systems, I always backtrack to the fundamental structure of the system.

Every economic transaction involves exchanging one thing for another, whether the thing is a physical object or a concept. With many products, as in my cell phone example, thousands of transactions take place before the final one. Complexity makes a simple economic exchange impossible. I have no contact with the lithium mine worker who supplies ore to the refinery. He works for some corporation. At every step in the process of making a cell phone, transactions take place. It's too complicated to follow, frankly So, corporations exist. I don't even deal with Samsung, the corporation that made my cell phone. I got it from my cell service provider, Verison. I have zero connection to anyone in the long process that created the product I use.

Actually, I'm not debating with you at all. You seem confused about that. And then, you end with a personal insult.

I'm not interested. Sorry.

[PETRUS]

44. I don't require your interest.

And it appears as though you agree with me after all (stating "All economic systems function on an exchange basis for transactions," which isn't entirely accurate, but close enough to the truth). Weird.

[MineralMan]

45. That's good.

I am a reductionist at heart. When I look at complex systems, I consider the fundamental elements of that system. In all economic systems, the individual exchange between two people is the starting point. Everything derives from that. The more complex the thing being exchanged is, the more transactions that take place. However, the person working in the lithium mine is as crucial to the manufacture of a cell phone as is the CEO of Samsung. He is paid far, far less, though. He digs in the dirt, essentially.

Moving from an agrarian society to an industrial one introduced massive complexity that has become more and more complex over time. There are few simple transactions any longer, since almost everything involves technology today. Yes, I can still grow carrots and take them to a farmer's market and interact with my customer, even using bartering. If I choose to do that, of course. I do not so choose.

How I have made my living is through producing words for publication. That is, frankly, quite equivalent to growing carrots. I deal with one person, some editor at some publication. If my words find acceptance from that person, I get paid. So, I function, economically, on a very simple transactional basis.

However, the process of generating those words and distributing them involves a great deal of technology. I am not involved in any of that, except as a user of it. I simply use tools created by corporations to create what I write. When movable type was invented, technology became the tool that made publishing possible. Before then, individual scribes wrote books by hand. Once books were printed in larger numbers though, an entire system had to be created to manufacture and distribute those books. The writer no longer had any direct economic connection with the reader.

Complexity created capitalism. Capitalism was the most efficient way to execute all of the transactions that lead to the development and manufacture of goods. Such business practices are very costly to operate, so capitalism evolved into its own marketplace, with people investing in corporations who undertook that complex process of manufacturing. Technology cannot be simplified to an extent that allows any other economic system to function properly. We cannot demand simplicity of commerce any longer. Technology has put paid to that forever.

So, I'm not interested in your ill-considered personal attack on my reductionist argument. Within that argument is the entire explanation of why capitalism is the overwhelmingly most capable system for handling the complexity of the modern world. You dismissed me. I shrug at your dismissal.

[PETRUS]

50. Some thoughts.

Reduction can be a useful mental tool; I use it myself. One can't rely on it alone, though - humans and chimpanzees clearly belong in a category together, but are not the same (for example). In the realm of economics, I encountered a reductionist idea somewhere in my reading that stuck with me. (I haven't tried to falsify it.) The idea is that all economic activity follows one or more (in combination) of the following three principles: communism (I provide a good or service because I choose to), exchange (I provide a good or service in return for something), or hierarchy (I provide a good or service because someone has the power to compel me). In this framework, capitalism is primarily a combination of hierarchy and exchange.

Two further things:

It's not accurate to say that capitalism developed because of complexity (I think one could make a good argument for the reverse - that capitalism facilitated the development of complexity). Capitalism arose in the context of agriculture due to changes in property relations, and the integration of markets over a larger expanse of territory (making price signals more meaningful). Industrialization followed a bit later. That's the actual historical record.

I still don't see how the comment to which I originally responded is at all relevant. Trade/exchange is not what produced capitalism, it's not exclusive to capitalism, and it's not what separates capitalism from other systems that predate it or other systems that have been attempted since. Those are facts. If you were wounded by my response that's unfortunate, but it wasn't an attack, it was an expression of bewilderment. What is one supposed to say to someone who insists 2+2=7.3?

[KT2000]

15. In Norway, it is considered

unethical to have huge salaries for executives. Their top rate for executive and management is $161,621 usd. In the US, workers are considered a cost and must be reduced to boost shareholder value. Somehow they have convinced shareholders that increasing pay and bonusses for executives is different.

US capitalism serves greed.

[ShazamIam]

17. Capitalism can only work if it is tightly regulated to protect labor, consumers and the environment

and support national security and national economic interests including the payment of a fair share of the taxes that supports the infrastructure and military that protects their interests around the globe.

Capitalism in the raw dictates, Profits first, then cheapest extraction of resources (including ag) with the cheapest labor possible then sell for the highest profit, this via monopolization of course.

What happened in the U.S. is the capitalists hired legislators that made the changes in the law that removed the, regulations, that controlled their behavior, including a regulation that the owners must have their profit and assets protected and living wage, worker safety, consumer protection can't have precedence over the owner's profit.

Near pure Capitalism that we have seen since 1981 always collapses or is ended via rebellion and chaos.
And like we see now, a total take over of the government so that government will be used to only protect profits and imprison any dissenters and protestors.

[cachukis]

21. Capitalism is the balls of nature. Condoms, meh, birth control

is a power in response, ah, but the cost of children, there is a throttle.

[ShazamIam]

23. So exploiting others is natural. I disagree when the evidence shows that we advance when we

Last edited Thu Jun 17, 2021, 01:21 AM - Edit history (1)

cooperate and work as a group(s).

But, I really haven't determined your point if it is not that capitalism and enslavement of labor is a natural human trait?


*Edit: explotine to exploiting.

[cachukis]

24. Not saying I am fond of the capitalism within which we live,

but have you not been aware of how the powerful in society use their power. Wages are there as a bribe, if you will, over those circumstantially unable to build their own enterprise. If something happens on this planet, it is a natural course of events. Natural forces change the flow of rivers, so humans have shown the ability to evolve to where we are. Capitalism seems to be more of our religion because our true commonality is financial exchange. Many hands make light work.

[Mosby]

27. Owners are the most valuable members of a business.

They also have the most to lose if the business fails.

You do realize that owners put up their own money for product, rent, payroll, insurance, etc?

[MineralMan]

39. There are very few large enterprises that are individually-owned.

Such enterprises used to exist, but are no longer possible, if they exceed a certain size.

That's the reason for corporations, which spread ownership, and its risks, across a large spectrum of shareholders.

That and limited personal liability. That's why most small businesses are corporations of one form or another.

On a small scale, individual business ownership is practical. On a large scale, it simply is not.

[Zeitghost]

32. Employers do not set wages

The market for labor is set by the same supply and demand forces that control all prices. If you have a skill that others do not which is in high demand, you can demand a high price. If you have a skill many people have and that nobody wants, your options are much more limited. Most of us lie somewhere on the spectrum between those two points. I've walked away from more than one job and turned down many others for a whole variety of reasons. I've also been let go and turned away. It cuts both ways, so make sure you equip yourself with valuable skills to ensure you're on the better side of that spectrum.

[gulliver]

42. Republicanism is the problem with Capitalism

The Republican religion is anathema to healthy capitalism. That's why the economy always flourishes under Democrats. Republicans win back power by promising voodoo trickle down results and infrastructure neglect. Those fail to pay off and Democrats come in to clean up the mess. It's a cycle.

Capitalism flourishes when the competent (Democrats) are running the government.

[peggysue2]

48. This!

Unfettered capitalism is a mess (look at Texas right now with their energy situation, regulation nada). Managed and sensibly regulated capitalism can work and lift people into a middle-class (and higher) standard of living. It may not be perfect but then what is?

Trickle-down theory is a joke. The 1%ers are laughing all the way to the bank. Poppy Bush said it correctly: voodoo economics. It does not work but Republicans keep hawking the same lie year after year. I had to laugh when President Biden flat out said trickle down doesn't work. The GOP was horrified:

Wadda ya mean it doesn't work? It works for us (wink, wink).

And yes, Dems always end up being the cleanup crew after a Republican Administration. You would think their voters would notice that the economy gets better under the Dems.

Mystifying!

[betsuni]

51. Thank you.

[MoonRiver]

46. What would you replace it with?

[MineralMan]

47. That is precisely the question, isn't it?

The answer that is most often given is a throwback to a pre-industrial society. We cannot return to that place at this point.

Perhaps on an individual basis, it is possible, but even the farmer's market grower still depends on technology. He drives his vehicle to the market, where other people drive their vehicles to buy his produce. We no longer live in agrarian villages, where the farm is near the market. The concept seem simple, but it is not simple in reality.

Nothing is simple any longer, really. Capitalism is the essential product of advancing technology.

[MoonRiver]

49. Exactly! And I still await the OP's rebut.

[betsuni]

52. Something about a revolution where the workers rally, speaking truth to power, billionaires are

abolished *poof! gone* and then everything will be nice. Probably.

[TomSlick]

53. As a small business (law firm) owner, I think your premise is incorrect.

I do not set my salary because I don't draw a salary. Instead of a salary, my income is my partner's share of what is left after the firm's costs of doing business, including the wages of the staff. If there is a good year, I make enough to pay the mortgage and buy food. If there is a bad year, I do not. Both have happened. (Fortunately, my wife is a salaried college professor who has been able to carry us through the bad years.)

My staff is guaranteed an hourly wage (so long as I manage to keep the doors open). The only financial risk is borne by my partners and me.

All of that being said, I am curious about with what system you would replace capitalism. If you want to establish a system in which the taxpayers (that's you) would pay me a government lawyer's salary and benefits, I'm all in - my daily anxiety level would decrease significantly. I am sure my clients would love to have their lawyer paid by the taxpayers.

What's the plan?