Support the Arctic Sea Ice Forum and Blog

Author Topic: If not Capitalism... then What? And, How?  (Read 91536 times)

zizek

  • ASIF Citizen
  • Posts: 401
    • View Profile
  • Liked: 33
  • Likes Given: 10
Re: If not Capitalism... then What? And, How?
« Reply #300 on: May 14, 2018, 12:11:18 AM »
"Capitalism does not require growth to persist."

I do not see a refutation of Smith's arguments here. But more empirically, can anyone point to an existing capitalist economy that does not grow ? Is there even a single example of such a beast ?

sidd

Blindingly obvious examples.  Plenty.  Japan's "lost decade" for one.  A decade of near-zero GDP growth, with minimal inflation, nearly full employment, and high standard of living.

The example of the US Great Depression is illustrative as well.  Strongly negative GDP growth.  While suffering was immense, the basic institutions of capitalism didn't change, and weren't threatened.

Capitalism simply doesn't require economic growth to persist.  That's no theory, it's empirical fact.

PS:  Another blindingly obvious example, Somalia.  Failed government, massive civil disturbance, famines, civil war.  And still, banking goes on:
http://www.centralbank.gov.so/banks.html

These are all examples that do not support your argument.  In every single scenario there were adjustments made in order to further replicate the capitalist economy. If no adjustments were made, than a catastrophic failure would occur as conditions deteriorate (revolution).

Just because a black market exists within a communist state, doesn't immediately mean that communism fails. But if that black market persists and grows, than it will destroy the communist state.


And I'm not sure what you're getting with somalia? Just because there's growth doesn't mean that the resources are allocated in the best way possible.  You can get rich anywhere. This is capitalism 101

SteveMDFP

  • ASIF Upper Class
  • Posts: 1228
    • View Profile
  • Liked: 104
  • Likes Given: 11
Re: If not Capitalism... then What? And, How?
« Reply #301 on: May 14, 2018, 12:19:53 AM »


These are all examples that do not support your argument.  In every single scenario there were adjustments made in order to further replicate the capitalist economy. If no adjustments were made, than a catastrophic failure would occur as conditions deteriorate (revolution).

Just because a black market exists within a communist state, doesn't immediately mean that communism fails. But if that black market persists and grows, than it will destroy the communist state.


And I'm not sure what you're getting with somalia? Just because there's growth doesn't mean that the resources are allocated in the best way possible.  You can get rich anywhere. This is capitalism 101

In every single case, adjustments were made, yes.  But capitalism is always making adjustments to changing circumstances.  This is capitalism's great strength.  No other economic system is as nimble in making adjustments.

The assertion at hand is whether economic growth is necessary for capitalism to persist.  These examples I've included are specific examples of persistence of capitalism in the face of zero growth, negative growth, and severe social disorder.  Growth is not necessary for capitalism to persist.  It's an empirical fact.

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #302 on: May 14, 2018, 12:20:47 AM »
1) I still do not see a counterargument to Smith: that competetive markets drive growth

2)in the case Mr. Wallace suggested of  a market in hunting tools for a share of the surplus (the kill); let me refine that a little:

if the owners of the tools do the hunting, then you have worker ownership of the means of production.

If the owner of the tool (the capitalist) does not hunt, and merely pays the worker (the hunter) a fixed amount of money (meat) per unit time for his labor, regardless of the size of the kill. Then the capitalist takes the risk and the profit. But again this is a monopoly. For a competitive market, let us say you have n capitalists and m hunters and a competitive market. Then Smith's argument would say that the economy will grow. For the moment let us assume the meat does not spoil, and can be accumulated  by the capitalists indefinitely.

3) But the larger danger i see, as i stated before,  is regulatory capture. What is to prevent the state from becoming a tool of capitalists through the market in legislators ? As we see all the way from  Santa Clara County v. Southern Pacific Railroad Co. to Citizen's United, that is exactly what has happened.

sidd

zizek

  • ASIF Citizen
  • Posts: 401
    • View Profile
  • Liked: 33
  • Likes Given: 10
Re: If not Capitalism... then What? And, How?
« Reply #303 on: May 14, 2018, 12:23:39 AM »
Thanks for the Japan example, but i note it is grew before and after, so all that example proves is that periods of stasis are possible. I was asking for an example of a capitalist economy static in size from beginning to end of it's tenure.

Japan never really exited its lost decade.  A percent or so of GDP growth is nothing to point at as vindication. 

A decade and more of negligible growth, with zero evidence of strain on capitalistic structures of the economy, and you insist on more proof that zero growth is feasible in capitalism?  I think you're straining credulity.

GDP is a horrible measurement to define growth.  Japan's firms still were maximizing their profits during the stagnation. But wages were decreased.  If the Japanese firms simply stopped growing they would no longer be competitive. 

A real stagnation that you are trying to describe would require all the bourgeois to come together and have a nice discussion. They would negotiate how they would not compete with each other, whilst maintaining their wealth.  Also known as an oligarchy. 

Neven

  • Administrator
  • ASIF Royalty
  • *****
  • Posts: 6756
    • View Profile
    • Arctic Sea Ice Blog
  • Liked: 430
  • Likes Given: 289
Re: If not Capitalism... then What? And, How?
« Reply #304 on: May 14, 2018, 12:28:00 AM »
A real stagnation that you are trying to describe would require all the bourgeois to come together and have a nice discussion. They would negotiate how they would not compete with each other, whilst maintaining their wealth.  Also known as an oligarchy.

They would still want that wealth to grow, and usurp institutions to make it so.

Growth is not necessary for capitalism to persist.  It's an empirical fact.

The examples you have cited, only show that capitalism can do without growth temporarily.

Capitalism might work, if wealth wouldn't concentrate, and growth get defined in different ways (not as it currently is, with GDP).

Other question: Does capitalism go beyond growth by itself, or does it take enlightened policies?
Il faut comparer, comparer, comparer, et cultiver notre jardin

zizek

  • ASIF Citizen
  • Posts: 401
    • View Profile
  • Liked: 33
  • Likes Given: 10
Re: If not Capitalism... then What? And, How?
« Reply #305 on: May 14, 2018, 12:30:23 AM »


These are all examples that do not support your argument.  In every single scenario there were adjustments made in order to further replicate the capitalist economy. If no adjustments were made, than a catastrophic failure would occur as conditions deteriorate (revolution).

Just because a black market exists within a communist state, doesn't immediately mean that communism fails. But if that black market persists and grows, than it will destroy the communist state.


And I'm not sure what you're getting with somalia? Just because there's growth doesn't mean that the resources are allocated in the best way possible.  You can get rich anywhere. This is capitalism 101

In every single case, adjustments were made, yes.  But capitalism is always making adjustments to changing circumstances.  This is capitalism's great strength.  No other economic system is as nimble in making adjustments.

The assertion at hand is whether economic growth is necessary for capitalism to persist.  These examples I've included are specific examples of persistence of capitalism in the face of zero growth, negative growth, and severe social disorder.  Growth is not necessary for capitalism to persist.  It's an empirical fact.

How can you be this dense. your argument is the equivalent of saying an engine doesn't need oil because it can run without it for short periods of time.  And in the case of somalia, it doesn't need oil because an engine that's not running is still an engine.

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #306 on: May 14, 2018, 12:33:29 AM »
Quote
2)in the case Mr. Wallace suggested of  a market in hunting tools for a share of the surplus (the kill); let me refine that a little:

if the owners of the tools do the hunting, then you have worker ownership of the means of production.

If the owner of the tool (the capitalist) does not hunt, and merely pays the worker (the hunter) a fixed amount of money (meat) per unit time for his labor, regardless of the size of the kill. Then the capitalist takes the risk and the profit. But again this is a monopoly. For a competitive market, let us say you have n capitalists and m hunters and a competitive market. Then Smith's argument would say that the economy will grow. For the moment let us assume the meat does not spoil, and can be accumulated  by the capitalists indefinitely.

Ogg and Dugg can eat only so much meat.  Why would the economy grow? 

There's no value in piles of meat that no one is ever going to eat, even if it never spoils.

SteveMDFP

  • ASIF Upper Class
  • Posts: 1228
    • View Profile
  • Liked: 104
  • Likes Given: 11
Re: If not Capitalism... then What? And, How?
« Reply #307 on: May 14, 2018, 12:34:11 AM »
1) I still do not see a counterargument to Smith: that competetive markets drive growth

Of course competitive markets tend to drive growth.  That's completely different from saying that growth is necessary for competitive markets to persist.

Capitalist theory says that all actors seek to maximize wealth and income.  When an economy *can* grow, everyone acting within the system to maximize income and wealth has a tendency to create more overall income and wealth.  With caveats, of course.  Theft increases my wealth while adding nothing to total wealth, as an example.

The point here is that in capitalist systems, everyone continues to act to maximize their own wealth and income *regardless* of trends in total wealth and income.
Bankers, borrowers, landowners, corporate CEOs continue to make exactly the same *types* of actions whether total wealth or income is stagnant, increasing, decreasing, or in social disarray.
Recessions lead to alterations in risk-taking.  Social disorder leads to risk minimization strategies.  Still, everyone continues to maximize their own wealth and income.

Even if *everyone* experiences decreases in wealth and income, they *still* continue to make the same kinds of decisions, using persistent institutions and structures.

Capitalism does not require growth to persist.  It's an empirical fact.

Iceismylife

  • ASIF Citizen
  • Posts: 281
    • View Profile
  • Liked: 1
  • Likes Given: 1
Re: If not Capitalism... then What? And, How?
« Reply #308 on: May 14, 2018, 12:50:47 AM »
regulatory capture
Don't worry regulatory capture isn't real. It is just a conspiracy.

And we all know conspiracy theories aren't real.  So regulatory capture isn't real.  The top isn't conspiring against the bottom.  Not hat is just nuts, they would never do that.

Grubbegrabben

  • ASIF Lurker
  • Posts: 20
    • View Profile
  • Liked: 2
  • Likes Given: 8
Re: If not Capitalism... then What? And, How?
« Reply #309 on: May 14, 2018, 12:55:35 AM »
I'm not trying to hijack the discussion but growth as in increased value of goods and services produced in an economy is sometimes seen as something utterly evil and destructive. "We have only one planet, eternal growth cannot exist" etc etc. This assumes that all growth is enabled by increased consumption of energy and raw materials. Does this have to be true?

My youngest kid has embraced the digital revolution. His toys are mostly virtual (stuff bought in computer games such as "pokemon go"). This market has grown tremendeously. And creating these billions of new dollars of growth, I assume, consume but a fraction of the raw materials compared to if it had been new physical items. On top of that, zero hazardous waste once the "product" is discarded.

Just wanted to add my 5c. Proceed with the capitalism vs growth topic, it's interesting :)

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #310 on: May 14, 2018, 01:07:13 AM »
I should point out that i have elided over three different aspects of money, at which the meat economy analogy is terrible. Those are storage of value, unit of account and medium of exchange. We need a more sophisticated economy than one with just meat. Even hunter gatherer societies had more than that.

The assertion that competitive markets can persist without growth does not address the fact that actually existing capitalist economies do grow. In the case of Japan, in the period 1956 to 2006 real GDP growth rate dipped below zero only twice. I attach a graf. Current real GDP growth rates around 1.5% over the last 5 years. So it is growing, albeit slowly. (I shall not take up the example of Somalia. Somalia ?! )

I lean toward Smith's argument that actually existing forms of western capitalism do exhibit growth driven by competitive markets.

sidd
« Last Edit: May 14, 2018, 01:15:43 AM by sidd »

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #311 on: May 14, 2018, 01:19:45 AM »
"zero hazardous waste"

Mmmm. What about digital pollution ? Those virtual products harvest your child's personal information and traffic in it. Your child is leaving a trail of dangerous digital detritus which can be and is recycled into an addictive drug to hook his attention.

Free market forever !

sidd

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #312 on: May 14, 2018, 01:31:42 AM »
Quote
The assertion that competitive markets can persist without growth does not address the fact that actually existing capitalist economies do grow.

Is growth required in a capitalist economy or is capitalism so strong that it almost always leads to growth?

Might growth be an outcome of people wanting more and not a result of the economic system in play?


zizek

  • ASIF Citizen
  • Posts: 401
    • View Profile
  • Liked: 33
  • Likes Given: 10
Re: If not Capitalism... then What? And, How?
« Reply #313 on: May 14, 2018, 01:58:29 AM »
Other than every single economist and critic claiming that growth is a fundamental principle to a healthy capitalist economy. We have demonstrated in this thread, ironically it was Steve providing this evidence, that a stagnating economy worsens societal conditions. Stagnation leads to recessions and depressions and requires corrections to stimulate growth otherwise a catastrophic collapse may occur.

This is not a controversial opinion. This reflects reality. This reflects 300 years different capitalist economies from all of the world. 

Why is it so hard to accept such a well understood concept.

zizek

  • ASIF Citizen
  • Posts: 401
    • View Profile
  • Liked: 33
  • Likes Given: 10
Re: If not Capitalism... then What? And, How?
« Reply #314 on: May 14, 2018, 02:10:21 AM »
ya'll probably express frustration towards the tactics used by climate change denialists. But here you are, completely ignoring every single piece of evidence that suggest capitalism requires constant growth. This is denialism. And ya'll have a pretty nasty case of it.

And Steve, you know how climate change deniers will try to use the very small period of time of global cooling to prove that climate change isn't real? Think about what you're doing in this thread. 

SteveMDFP

  • ASIF Upper Class
  • Posts: 1228
    • View Profile
  • Liked: 104
  • Likes Given: 11
Re: If not Capitalism... then What? And, How?
« Reply #315 on: May 14, 2018, 02:22:45 AM »
ya'll probably express frustration towards the tactics used by climate change denialists. But here you are, completely ignoring every single piece of evidence that suggest capitalism requires constant growth. This is denialism. And ya'll have a pretty nasty case of it.

And Steve, you know how climate change deniers will try to use the very small period of time of global cooling to prove that climate change isn't real? Think about what you're doing in this thread.

Sigh.  I'm not a defender of capitalism.  But it should be understood.  As I've shown, growth is not required for capitalism to persist.  The tenacious persistence of capitalism is not necessarily a good thing.

Sidd is correct if he's saying that capitalism,  in a relentless pursuit of growth, exhausts available resources and tends to harm the ecosystem, including the climate.  Capitalism does not present a solution to the threats to the existence of civilization, it's part of the problem.

Properly constraining capitalism is, I think, the essential challenge.  As corporate power has come to exceed most national government powers, this is a massive challenge.  Global, trans-national treaties to constrain corporate behavior are essential, but increasingly unlikely to be enacted.  A global carbon tax would be a great start.  Maybe that will happen, but I'm not optimistic.

I just think we shouldn't underestimate the tenacity and staying power of capitalism.  It's a fearsome, powerful beast.

oren

  • ASIF Governor
  • Posts: 3710
    • View Profile
  • Liked: 497
  • Likes Given: 1017
Re: If not Capitalism... then What? And, How?
« Reply #316 on: May 14, 2018, 04:30:56 AM »
Other than every single economist and critic claiming that growth is a fundamental principle to a healthy capitalist economy. We have demonstrated in this thread, ironically it was Steve providing this evidence, that a stagnating economy worsens societal conditions. Stagnation leads to recessions and depressions and requires corrections to stimulate growth otherwise a catastrophic collapse may occur.

This is not a controversial opinion. This reflects reality. This reflects 300 years different capitalist economies from all of the world. 

Why is it so hard to accept such a well understood concept.
No. Capitalism doesn't require growth. Politicians and the current debt-based economic system require growth. Healthy capitalism does not require inflation either, despite what central bankers might tell you. Capitalism requires rewarding individual initiative, and allowing competition, while avoiding monopolies. It can be improved by limiting or slowing personal accumulation beyond a certain point, and by limiting the ability to pass accumulation to next generations.
All current and recent past economies are growth economies, whether their Stalin's, Roosevelt's, capitalism or socialism. Part of this is that not a single one of these economies has priced all the externalities of growth - pollution, climate change, resource depletion, lack of preservation of nature etc. For example, a carbon fee and dividend scheme cold go a long way towards straightening capitalism, and increasing equality.

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #317 on: May 14, 2018, 04:38:08 AM »
Quote
Other than every single economist and critic claiming that growth is a fundamental principle to a healthy capitalist economy. We have demonstrated in this thread, ironically it was Steve providing this evidence, that a stagnating economy worsens societal conditions. Stagnation leads to recessions and depressions and requires corrections to stimulate growth otherwise a catastrophic collapse may occur.

This is not a controversial opinion. This reflects reality.


Quote
Other than every single economist and critic claiming that growth is a fundamental principle to a healthy socialist economy. We have demonstrated in this thread, ironically it was Steve providing this evidence, that a stagnating economy worsens societal conditions. Stagnation leads to recessions and depressions and requires corrections to stimulate growth otherwise a catastrophic collapse may occur.

This is not a controversial opinion. This reflects reality.

Growth is not unique to capitalism.  A shrinking economy harms both capitalistic and socialistic systems.


Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #318 on: May 14, 2018, 04:40:50 AM »
Quote
Capitalism requires rewarding individual initiative, and allowing competition, while avoiding monopolies.

Capitalism does not require avoiding monopolies.  Monopolies are a dangerous condition which can be created by poorly regulated capitalism.

At least dangerous to those who aren't part of the monopoly.

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #319 on: May 14, 2018, 05:12:42 AM »
I have mentioned this book before, "Debt: The first 5000 years" by David Graeber. It is a good companion to Piketty, and as well sourced for history. I recommend it, even you you do not agree, the book will make you think.

sidd

TerryM

  • ASIF Governor
  • Posts: 4268
    • View Profile
  • Liked: 60
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #320 on: May 14, 2018, 05:17:24 AM »
Bob
In your example, could we consider the growth of the antelope's family to be necessary to sustain the capitalist transaction? ;)
Terry

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #321 on: May 14, 2018, 05:26:34 AM »
" the growth of the antelope's family "

That is an interesting point, and addressed by the concept of ecosystem service. At present ecosystem service is not priced, rather it is an externality. Just as in the USA the cost of pollution by C02 (or for that matter, a great many other things) is not priced, are externalities. Thus worldwide we are consuming 30 or 40% od net primary productivity (all photosynthesis) for very low prices, while the total burden on the ecosystem is much larger than we pay in money. And we are spewing vast volumes of pollution for the ecosystem to clean up, again an externality.

Eventually Nature does clean up. But that cleanup might result in us being gone. Nature is a mother, and she kills her children with glorious abandon, most species are dead.

Daly addresses some of these concepts i think.

sidd


sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #322 on: May 14, 2018, 05:33:25 AM »
"There's no value in piles of meat that no one is ever going to eat, even if it never spoils."

it lets you price your competition out of the market.

I agree with the spirit tho, and so, apparently do bill gates and warren buffet. Don;t they plan to give most of their meat away ?

sidd

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #323 on: May 14, 2018, 05:47:02 AM »
Let me take our toy economy a step further. We keep our no spoiling meat assumption, and add another item to the market: hunting tools, say spears. So now you have n1 capitalists owning the means of production of the spears, and selling the products to the n2 capitalists who rent them out. Both these recruit out of a labour pool of m workers. (I shall assume for now the workers wages are priced such that they cannot accumulate enuf meat to buy spears, as for example today for a majority of the wage labour pool in the  USA, who would be wiped out by a 1000US$ expense, not to mention medical emergency.)

Then Smith predicts that competition among capitalists will drive the most inefficient out of business as spears are produced more efficiently and meat is killed more efficiently (and accumulated by capitalists) for the same wage labour costs. A corollary i think is that both n1 and n2 will decrease, as random differences in capital amplify, since the ones with more capital can price their competitors out of business.

Now consider distortions (as the economists so coyly put it) in the market. All n1 and all n2 capitalists can get together and form cartels to set wages. So the hunters appoint a policeman to oversee the capitalists and make sure this does not happen. Call the policeman the government. But if the policeman is paid in meat (Citizens United) then the capitalists will immediately subvert him to their own ends. (USA as it exists today)

Eventually, of course the hunters count heads and figger that m >> n1+n2 and cut the throats of the n1+n2 and take all the meat.

sidd
« Last Edit: May 14, 2018, 05:53:51 AM by sidd »

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #324 on: May 14, 2018, 06:04:58 AM »
Bob
In your example, could we consider the growth of the antelope's family to be necessary to sustain the capitalist transaction? ;)
Terry

No, there are other beasties to eat....

As long as our guys don't eat faster than beasties reproduce all is fine.  Either capitalism or socialism could crash by consuming at a non-sustainable rate.

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #325 on: May 14, 2018, 06:11:04 AM »
Quote
Eventually, of course the hunters count heads and figger that m >> n1+n2 and cut the throats of the n1+n2 and take all the meat.

Or with a bit of forethought everyone could have gotten together and set up some regs to keep the greedy from messing things up.

--

To get back to the meat of the discussion, capitalism is likely to not work sometime in the future when labor and problem solving have no value.  Unless ownership becomes communal then a few people will have everything and the rest will perish.

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #326 on: May 14, 2018, 06:51:51 AM »
"and the rest will perish"

or the rest will revolt.

sidd

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #327 on: May 14, 2018, 07:10:23 AM »
"and the rest will perish"

or the rest will revolt.

sidd

Revolt and do what?  I'm out of ideas other than socialism for "then".

SteveMDFP

  • ASIF Upper Class
  • Posts: 1228
    • View Profile
  • Liked: 104
  • Likes Given: 11
Re: If not Capitalism... then What? And, How?
« Reply #328 on: May 14, 2018, 07:16:43 AM »
How to replace capitalism?  Maybe it will require an alien invasion (space alien, not immigrants):

Aliens preparing for War? Alien battle tank spotted on the surface of the Moon, Watch Video
https://tecake.in/aliens-preparing-war-alien-tank-spotted-surface-moon-watch-video


sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #329 on: May 14, 2018, 07:18:20 AM »
" I'm out of ideas other than socialism for "then". "

Yes, what to do after the glorious revolution. You may be out of ideas, but i am sure there are many who are not ... and some of those ideas usually turn out to involve a lot of blood.

sidd

Neven

  • Administrator
  • ASIF Royalty
  • *****
  • Posts: 6756
    • View Profile
    • Arctic Sea Ice Blog
  • Liked: 430
  • Likes Given: 289
Re: If not Capitalism... then What? And, How?
« Reply #330 on: May 14, 2018, 07:36:16 AM »
Or with a bit of forethought everyone could have gotten together and set up some regs to keep the greedy from messing things up.

Exactly, and this brings us to the core theme of this very interesting discussion: Imagine that humanity succeeds in doing this - ie prevent the greedy from messing up - can that which remains, still be called capitalism, or would it be something else entirely?
Il faut comparer, comparer, comparer, et cultiver notre jardin

sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #331 on: May 14, 2018, 07:41:06 AM »
The argument that regulation is the answer to unbridled capitalism depends on the absence of a market in regulators. After all, if capitalist can buy and sell the regulators who are supposed to regulate them ...

Capitalism is great at creating markets. In fact, so great, that supressing the open market in regulators inevitably leads to a black market in regulators.

a capitalist, of course,  might argue it is better to have an open market than a black market in regulators ... and look, the Supremes agree with them in Citizens United.

and a bureaucrat might say, I know, let's have regulators for the regulators. and markets in the regulators of the regulators, which of course needs regulators for the market in regulators of the regulators and ...

and the anarchist in me sez, burn it all down.

sidd




sidd

  • ASIF Governor
  • Posts: 4543
    • View Profile
  • Liked: 158
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #332 on: May 14, 2018, 07:49:50 AM »
"Might growth be an outcome of people wanting more "

"These are the four that are never content: that have never been filled since the dew began-
Jacala's mouth, and the glut of the kite, and the hands of the ape, and the eyes of Man."

Kipling

sidd

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #333 on: May 14, 2018, 08:08:12 AM »
The argument that regulation is the answer to unbridled capitalism depends on the absence of a market in regulators. After all, if capitalist can buy and sell the regulators who are supposed to regulate them ...

Capitalism is great at creating markets. In fact, so great, that supressing the open market in regulators inevitably leads to a black market in regulators.

a capitalist, of course,  might argue it is better to have an open market than a black market in regulators ... and look, the Supremes agree with them in Citizens United.

and a bureaucrat might say, I know, let's have regulators for the regulators. and markets in the regulators of the regulators, which of course needs regulators for the market in regulators of the regulators and ...

and the anarchist in me sez, burn it all down.

sidd

If we fail to regulate capitalism and a monopoly starts to starve out the majority of the population then the common solution is revolt. 

I don't see that happening.  I see democracies becoming stronger over time.  If we have an understanding of where we need to go then over the several decades it will take to get from here to a "robots do all the work" world we can adapt as we go along.

A universal guaranteed income seems to me to be the best route from here to there.  As more and more people are forced to rely on that source of income they will vote themselves a reasonable standard of living.  And at some point is make no sense to have individuals own the "means".  Just buy them out (with tax money we collect from them ;o) and own the means in common.

Unlike  how to get off fossil fuels, I don't have a firm idea of what the future world of 'no work' might look like.  How it might function.  I'm just playing with ideas and wondering.  And I think it's something that many of should be thinking about because we need good ideas before we're forced into doing something and don't have a plan.

ivica

  • ASIF Middle Class
  • Posts: 916
  • Kelele
    • View Profile
  • Liked: 15
  • Likes Given: 0

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #335 on: May 14, 2018, 04:24:45 PM »
I see no good option other than governments owning the 'means'. 

Perhaps very heavy taxes on the owners of the 'means' and using the tax money to create a universal basic income.

This is not something that could be done overnight, nor would it be needed overnight.  A gradual process that might play out over a few decades as we have larger and large amounts of unneeded labor.

70% of the U.S. economy is fueled by consumer spending. A universal income will result in more consumer spending and a rapidly expanding economy....more growth. Corporate profits will rise due to increased demand for goods and both will spur capital investment which will further growth. With such strong growth, we will have accomplished what every capitalistic country seeks to accomplish, rapidly rising wealth and prosperity for all.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #336 on: May 14, 2018, 04:30:40 PM »
Quote
I was asking for an example of a capitalist economy static in size from beginning to end of it's tenure.

What would it matter if you found one or not?  If a capitalist economy fails was it not capitalistic?

What if a socialist economy grows?  Does that make it capitalistic?

I think capitalism and growth get confounded because capitalistic systems are so powerful and generally create growth whereas socialistic systems stagnate due to the lack of individual incentives.

The distinction between socialism and capitalism is not as powerful as the ideologues would have us believe. They are both growth systems with the predominant difference being how the pie is divided.

Socialism is nothing more than an institutional response to the deleterious effects of unfettered capitalism.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #337 on: May 14, 2018, 04:44:15 PM »
Quote
Since the 1970s, say fifty years ago, wages and benefits have stagnated for the working classes as opposed to the rentiers in the USA.

This is a problem that needs to be addressed.  The new tax legislation has made the problem even worse.  The downslide of the middle class started with Reagan and his "trickle down on you" economics.  It's something that we have to reverse.

In the last decade, the lowest quintile of Americans have lived in poverty as defined by the poverty line. In this same decade, the 2nd lowest quintile has fallen into poverty at least once. Meanwhile, the middle quintile has been sliding towards poverty for the past 3 decades. The 2nd highest quintile has tread water. It is only the top 20% of Americans who have seen a rise in their standard of living and most of that has come from the top 5%.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #338 on: May 14, 2018, 05:02:22 PM »
Quote
Is endless growth not a core feature of capitalism?

Capitalism does not require growth.   

A mind boggling comment.

The only goal of the system of capitalism is growth and we are all rational actors within that system.  The lending of capital to any individual or entity is based on the assumption that the lender will receive more in return. The only investments made by corporations are ones that promise a  return on that investment. We spend our lives choosing to invest in companies that have strong prospects for growth and avoid like the plague companies that are shrinking. Capitalism is so dependent on growth that capitalistic nations panic when the growth of their populations stagnate and age as it heralds low growth.

So long as capitalism (and socialist states are capitalist states) remains the primary method of organizing human civilization, we will have growth as our primary raison d'ĂȘtre.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #339 on: May 14, 2018, 05:10:08 PM »
But more empirically, can anyone point to an existing capitalist economy that does not grow ? Is there even a single example of such a beast ?

sidd

Blindingly obvious examples.  Plenty.  Japan's "lost decade" for one.

And your example simply emphasizes the point that the very rationale for capitalism is growth...thus "the lost decade". Japan didn't simply have low inflation, it had deflation, the single most destructive event in the system of capitalism. Fear of a deflationary spiral caused the entire world wide financial system to flood the planet with unprecedented liquidity in 2008 to avoid such a fate, liquidity that remains to this day.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #340 on: May 14, 2018, 05:21:55 PM »
1) I still do not see a counterargument to Smith: that competetive markets drive growth

Of course competitive markets tend to drive growth.  That's completely different from saying that growth is necessary for competitive markets to persist.

Capitalist theory says that all actors seek to maximize wealth and income.  When an economy *can* grow, everyone acting within the system to maximize income and wealth has a tendency to create more overall income and wealth.  With caveats, of course.  Theft increases my wealth while adding nothing to total wealth, as an example.

The point here is that in capitalist systems, everyone continues to act to maximize their own wealth and income *regardless* of trends in total wealth and income.
Bankers, borrowers, landowners, corporate CEOs continue to make exactly the same *types* of actions whether total wealth or income is stagnant, increasing, decreasing, or in social disarray.
Recessions lead to alterations in risk-taking.  Social disorder leads to risk minimization strategies.  Still, everyone continues to maximize their own wealth and income.

Even if *everyone* experiences decreases in wealth and income, they *still* continue to make the same kinds of decisions, using persistent institutions and structures.

Capitalism does not require growth to persist.  It's an empirical fact.

This is simply not true. Borrowing and lending virtually ceases in recessions and depressions. There was a coordinated effort to flood the world markets with liquidity during the great recession, driving interest rates to zero and, in some countries negative real interest rates, and borrowing and lending still collapsed as there was simply no reason to borrow.

Capital accumulation requires growth and borrowing only occurs when returns from the investment are in excess of the cost of capital. Capital is never lent if the prospects of getting the money back with a fair return is not possible.

Stable monetary policy is set so that there is a steady growth in the money supply that is needed to fuel growth and well run countries set precise targets.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #341 on: May 14, 2018, 05:24:51 PM »

How can you be this dense. your argument is the equivalent of saying an engine doesn't need oil because it can run without it for short periods of time.  And in the case of somalia, it doesn't need oil because an engine that's not running is still an engine.

This is simply brilliant.

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #342 on: May 14, 2018, 05:31:03 PM »

Might growth be an outcome of people wanting more and not a result of the economic system in play?

Are you actually suggesting that people, as consumers, producers, borrowers and lenders, are somehow separate from the system of capitalism in which they live and make decisions?

Every single entity (individuals, LLC's, corporations, nation states) within the system of capitalism operates as a rational actor. Each makes decisions to increase its wealth and capital and, collectively, these decisions and choices drive growth and increase the wealth of society as a whole.

Are there examples of individuals or groups of individuals who live in capitalistic societies but are separate from the system? Yes, but these are utopias and, if we all choose such a lifestyle, capitalism ceases to exist. I would like to suggest that if a substantial portion of Americans were suddenly to choose to live in such a way, the oligarchy would quickly recognize the threat, mobilize the power of the state and viciously attack such a movement.
« Last Edit: May 14, 2018, 06:19:05 PM by Shared Humanity »

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #343 on: May 14, 2018, 05:37:25 PM »

No. Capitalism doesn't require growth. Politicians and the current debt-based economic system require growth.

???????????

The accumulation of capital and the resultant borrowing and lending of capital is the very definition of capitalism.

I feel as if I've slipped into a rabbit hole with no bottom.

afwhitaker

  • ASIF Lurker
  • Posts: 3
    • View Profile
  • Liked: 0
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #344 on: May 14, 2018, 05:53:41 PM »
I think the definition of Capitalism is "an economic system based upon private ownership of the means of production and their operation for profit".  It does need an accumulation of capital, that is just the way we choose to measure it at this time in history. 

Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #345 on: May 14, 2018, 06:10:40 PM »
Why do we see this unrelenting pressure to globalize, co-opting nations not yet fully integrated into  capitalism and through force of arms when a people cannot be co-opted? It is this need for growth, the search for the highest returns on capital which are generally available in undeveloped nations.

etienne

  • ASIF Middle Class
  • Posts: 648
    • View Profile
    • About energy
  • Liked: 34
  • Likes Given: 0
Re: If not Capitalism... then What? And, How?
« Reply #346 on: May 14, 2018, 06:17:12 PM »
In the company I left a year ago, the CFO had an easy way to explain the need for growth, margin get smaller, people want more salary, so the only way is to get new customers.

There is also that crazy concept of "fair price". If you are in Potosi/Bolivia, the miners work with showels and pickaxes, and in Chile, they work with dumpers, so what's the fair price for ore ? This didn't stop me to buy a Fairphone, but improving the situation doesn't have an easy path. For the people who don't trust fair products, I always say that they should stay with international brands because there they know where the money goes.

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #347 on: May 14, 2018, 06:34:43 PM »
I see no good option other than governments owning the 'means'. 

Perhaps very heavy taxes on the owners of the 'means' and using the tax money to create a universal basic income.

This is not something that could be done overnight, nor would it be needed overnight.  A gradual process that might play out over a few decades as we have larger and large amounts of unneeded labor.

70% of the U.S. economy is fueled by consumer spending. A universal income will result in more consumer spending and a rapidly expanding economy....more growth. Corporate profits will rise due to increased demand for goods and both will spur capital investment which will further growth. With such strong growth, we will have accomplished what every capitalistic country seeks to accomplish, rapidly rising wealth and prosperity for all.

That depends on the size of the income.  If it's set at a minimal existence (no frills) then the impact should be little.  Those now on various social support programs would find their lives little changed in terms of discretionary spending money.  People who receive the income in addition to what they now earn would likely find their taxes rising.

I suspect a program would start low and rise only as the number depending on the income grew and became a more powerful voting group.

Bob Wallace

  • ASIF Governor
  • Posts: 3627
    • View Profile
  • Liked: 42
  • Likes Given: 5
Re: If not Capitalism... then What? And, How?
« Reply #348 on: May 14, 2018, 06:47:53 PM »
The desire for growth is not unique to capitalism.  Socialism also seeks growth in order to improve the conditions of the people living within the system.  That means that we can't use growth as a definer of capitalism.

Is growth required for a capitalistic economy to survive?  Well, if the economy shrinks enough the economy will collapse.  Same holds for socialist economies, which seem to create conditions that bring a higher risk of collapse.

We may not see capitalist economies that are stable over long periods of time but that does not prove that a non-growing, stable state capitalist economy would collapse.  Landlords would simply get the same amount of rent over the years and pay the same for a bunch of carrots at the market.

Capitalism is very good at growing economies so we rarely, if ever, see a stagnant capitalistic economy.  But that does not prove that one would not be possible and does not prove that a growing economy is part of the definition of capitalism.


Shared Humanity

  • ASIF Governor
  • Posts: 3511
    • View Profile
  • Liked: 194
  • Likes Given: 22
Re: If not Capitalism... then What? And, How?
« Reply #349 on: May 14, 2018, 06:54:41 PM »
I see no good option other than governments owning the 'means'. 

Perhaps very heavy taxes on the owners of the 'means' and using the tax money to create a universal basic income.

This is not something that could be done overnight, nor would it be needed overnight.  A gradual process that might play out over a few decades as we have larger and large amounts of unneeded labor.

70% of the U.S. economy is fueled by consumer spending. A universal income will result in more consumer spending and a rapidly expanding economy....more growth. Corporate profits will rise due to increased demand for goods and both will spur capital investment which will further growth. With such strong growth, we will have accomplished what every capitalistic country seeks to accomplish, rapidly rising wealth and prosperity for all.

That depends on the size of the income.  If it's set at a minimal existence (no frills) then the impact should be little.  Those now on various social support programs would find their lives little changed in terms of discretionary spending money.  People who receive the income in addition to what they now earn would likely find their taxes rising.

The savings rate for the bottom 50% of Americans is nearly non existent. Every single dollar of additional income will result in multiple dollars of additional spending as these dollars change hands rapidly.