Global capitalism is failing

[Rambuchan]

@@Ram

Then why include such wordings as "inflating your ego?" See, that's my problem, because that is charging, and that charges me with an act of ego inflation. That is NOT what I'm after here.


Also, I work for my own benefit. But I do try to help enforce our American laws. If a better paying job came long, with better benefits and conditions, I'd be gone in a heartbeat.

OK OK. Sorry about that one. Now how about the points above?

 

[JerichoHill]

@@Ram

I profess ignorance when it comes to history not related to economics. However, I did make note that colonialism was rampant in 1913. However, looking at the history of Africa after countries achieved independence, I notice that a great many of them went to a marxist/socialist state that was supported by USSR/China, and that many countries saw these as the models to use (command economy). Often, African countries borrowed from other countries, tried to grow their economy, and they pay off. This export-oriented economy faltered during the 73 energy crises, and the collapse of the soviet union meant that a large funding source of aid collapsed.

So it would appear that socialism was a cause of the african problem, interesting no?


Then there was the "Washington Consensus" and IMF restructuring plans. Those plans have not met with success, and they relied on liberalistic/capitalistic models

Average growth rate increased during this period .5% (2.3 to 2.8). Some countries were benefitted (coastals) while others saw their growth rates plummet (interiors)

Part of the problem could be attributed to the fact that the plans called for African countries to open their markets, but the countries of the world did not open theirs to african foodstuffs, leaving them without an export option. Other possible faults are 1) that liberalization was not fully implemented 2) government institutions were largely corrupt and inefficient) 3) capitalistic reforms without democractic reforms were doomed to fail

It appears from my (admittedly brief) perusal of some economic reports on Africa that I DL'ed during lunch show that the aid problem explains the most.

But it appears that capitalism cannot be wholly to blame for the problem of Africa since most African countries (since their independence) attempted socialism.

 

[happy_Alex]

@@Alex

There are two problems with this. Firstly this statement assumes that the initial comparison was made country by country and then added together.
--huh? I'm lost here

Secondly, are assuming that all these factors which affect production (culture, government etc) are not profoundly influenced by the most powerful countries and organisations on the planet? A look at the role of the US in maintaining dictatorships in the last century should disabuse you of that notion. Youi seriously believe that Global organisations, some more wealthy and powerfull than countries themselves, do not interfere politcally and socially in countries, to create conditions which are favourable to their profit making?
--Okay, please do not put words or thoughts into my mouth. I really dislike it when one assumes that they know what I think. Yes, global organizations attempt to manipulate their environs to be favorable to them. So do coutnries. Though I fail to see global corporations being more powerful than most countries (excluding the terribly run and dirt poor countries).

There is a diference in democratic socialism and communism, so comparisons to comunism are entirely futile. For one, socialists believe that markets and organisations must be run in the interests of the people, and without representation, such societies cannot be called socialist.
--Is not socialism defined as "Socialism is a political philosophy advocating an economic system in which the means of production are owned and controlled collectively." I fail to see how people can better infer all available information than the market mechanism. Theoretically, this is an impossibility. Perhaps if the market mechanism was so horribly warped that a socialist style government would allocate resources in a manner that was more like how a properly functioning market would work, that would be a case for socialism to a degree, but I contend that the market mechanism is not warped enough to consider that option.

Many succesful socialist concepts have been successfull enough to have become axioms, for example the concept that democratic government should act in the interests of the majority of the franchise and not a wealthy elite. The mixed economy is and effect of socialism (as opposed to market laissez faire 19th century economies).
--In the other thread, I would like to note that I agree that laissez faire (without regulation of some form) tends to produce market abuses. The question though, is how much. At some point, regulation will choke the life out of a capitalistic system (and in my opinion, make it function like a socialist system would).

--There is research that has been done for psychology journals about experimenting with purely capitalistic vs. purely socialistic systems on a small scale. The evidence from these experiments is that socialistic systems tend to devolve into inefficiency faster the more agents there are in the system. Capitalism (with its market mechanism) tends to do better the more agents there are in the system. In a curiously interesting finding in one experiment, the university team noted that "trustworthy" agents (peers considered them trustworthy) acted in a pseudo-regulatory fashion within the capitalist experiment.

Mate, I did not put words in your mouth, you clearly implied that inequalities were caused by local issues, If you want to back-pedal don't blame me.

I take your point RE wikipedia quote concerning ownership of the means of production. So what? If ownership of the means of production lead to an equitable distribution of wealth and an ecologically sustainable use of resources, is growth important?

But it also goes on to say that the defining feature of socialism is a disribution of wealth that benefits society as a whole, and a commitment to social equality and socialism can encompass a mixed economy.

How do you feel about a definition of communism as 'state run capitalism'?

 

[JerichoHill]

Mate, I did not put words in your mouth, you clearly implied that inequalities were caused by local issues, If you want to back-pedal don't blame me.
--I didn't back-pedal. Trust me on that. I said they could be caused by local issues. I was raising a point about "relative-ness". Not that everything was caused by local issues. Big Diff.

I take your point RE wikipedia quote concerning ownership of the means of production. So what? If ownership of the means of production lead to an equitable distribution of wealth and an ecologically sustainable use of resources, is growth important?
--Is economic growth important? Of course it is! Growth only occurs due to innovation, so is the innovation of new technologies and processes good? I sure hope so!

But it also goes on to say that the defining feature of socialism is a disribution of wealth that benefits society as a whole, and a commitment to social equality and socialism can encompass a mixed economy.
--Correct, but socialism is public ownership of formerly private assets. Public ownership destroys the incentives inherent in private property rights, which tend to lead to higher rates of innovation and higher rates of return on investments in countries with stronger private property rights than those that do not.


How do you feel about a definition of communism as 'state run capitalism'?
--I would say that its a poor definition. Capitalism implies no over-arching central authority figure aside from the market (regulators would be considered ancillary)

 

[Rambuchan]

@@Ram

I profess ignorance when it comes to history not related to economics. However, I did make note that colonialism was rampant in 1913. However, looking at the history of Africa after countries achieved independence, I notice that a great many of them went to a marxist/socialist state that was supported by USSR/China, and that many countries saw these as the models to use (command economy). Often, African countries borrowed from other countries, tried to grow their economy, and they pay off. This export-oriented economy faltered during the 73 energy crises, and the collapse of the soviet union meant that a large funding source of aid collapsed.

So it would appear that socialism was a cause of the african problem, interesting no?

Then there was the "Washington Consensus" and IMF restructuring plans. Those plans have not met with success, and they relied on liberalistic/capitalistic models

Average growth rate increased during this period .5% (2.3 to 2.8). Some countries were benefitted (coastals) while others saw their growth rates plummet (interiors)

Part of the problem could be attributed to the fact that the plans called for African countries to open their markets, but the countries of the world did not open theirs to african foodstuffs, leaving them without an export option. Other possible faults are 1) that liberalization was not fully implemented 2) government institutions were largely corrupt and inefficient) 3) capitalistic reforms without democractic reforms were doomed to fail

It appears from my (admittedly brief) perusal of some economic reports on Africa that I DL'ed during lunch show that the aid problem explains the most.

But it appears that capitalism cannot be wholly to blame for the problem of Africa since most African countries (since their independence) attempted socialism.

You need not confess ignorance here. This is an internet message board, we don't look for qualifications, just merit worthy posts.

Now, I don't think your conclusion is all that true to the sentences preceeding it. I would say, from what you've posted yourself, that it was the following that caused Africa's problems:

~ a: The collapse of the USSR and the loss of said funding
~ b: The 73 energy crisis, with its cartel activities and knock-ons around the world.
~ c: The failure of IMF plans, even though "they relied on liberalistic/capitalistic models."
~ d: "The plans called for African countries to open their markets, but the countries of the world did not open theirs to african foodstuffs, leaving them without an export option." You hit the nail on the head, see more on this below.
~ e & f: I'll give you the corruption and democracy points for sure.

And you say that Socialism, not Capitalism, caused the problems?!


Then there's also the following to consider:

~ g: The fact that these economies were already export-orientated. Problem was, they were oriented to export commodities that were:- i: Owned, processed and distributed by 1st world corporations, with little or no wealth effect for the locals who neither held management positions nor owned any shares. - ii: Typically non-nutritious ie. things like tin, copper etc. Read here: African nations didn't have the infrastructure or crop distribution to feed themselves because their economies had been converted into export-orientated economies that would reap maximum benefit for the 1st world colonisers.- iii: Bound to lose out against those of heavily subsidised producers in the 1st world.
~ h: The fact that those countries were pumped full of arms in a Cold War game of puppet leaders. Read here: Civil war and genocide.
~ i: The fact their national borders were filled with ethnically divided communities pitted against each other in quite incompatible ways. Read here: Civil war and genocide, again.
~ j: The fact that they were saddled with unpayable debt, unpayable owing to all the above. Read here: Didn't I tell you about those bankers in an earlier post?
~ k: The fact that the little existing wealth and means to furthing it that remained in the country was left in the hands of a minority. Often a hated minority that had been artificially installed to suit the previous owner's interests. Read again: Civil War & Genocide.

And you say that Socialism caused the problems?


Actually, Socialism picked up many of these countries from quite pitiful states. Rwanda, Zambia, Tanzania and so many other sub-Saharan economies saw leaps forward between independence and the Cold War really setting in. They began turning their economies back over to ones that were designed to feed the people that lived there, rather than shipping out metals and precious stones that benefited someone else. They were doing this. The points both you and I listed above then started taking their effect and they began descending into the condition we see many in today. I believe you have access to these figures. If you care to check them up over the time period, you'll see it all in black and white.

Question is:

What did Global Capitalism do for them during this time?

For that matter: What's it doing now?

 

[happy_Alex]

--I didn't back-pedal. Trust me on that. I said they could be caused by local issues. I was raising a point about "relative-ness". Not that everything was caused by local issues. Big Diff.

I buy a pair of trainers made by a company for £50 pounds in the UK. They are made in a subcontracted sweatshop in the far east by workers (possibly kids, revealed in a recent undercover documentary) getting paid a dollar a day. Less expenses, huge profits go to the organisation and shareholders.

Is this an unrealistic example of global exploitation?

--Is economic growth important? Of course it is! Growth only occurs due to innovation, so is the innovation of new technologies and processes good? I sure hope so!

So what? You have said yourself somewhere in another thread that you dont like the way capitalism produces lots of unnecessary products.

Such produce is wasteful and has an environmental cost. (take built in obsolescence, for example). Innovation can take place without capitalism, look at NASA.

--Correct, but socialism is public ownership of formerly private assets. Public ownership destroys the incentives inherent in private property rights, which tend to lead to higher rates of innovation and higher rates of return on investments in countries with stronger private property rights than those that do not.

What, the state does not build and run schools , hospitals, universities infrastructure or other public projects?

How do you feel about a definition of communism as 'state run capitalism'?
--I would say that its a poor definition. Capitalism implies no over-arching central authority figure aside from the market (regulators would be considered ancillary)

Ok

 

[happy_Alex]

@Ram

Excellent post, well articulated and informative.

 

[Figaro]

I profess ignorance when it comes to history not related to economics. However, I did make note that colonialism was rampant in 1913. However, looking at the history of Africa after countries achieved independence, I notice that a great many of them went to a marxist/socialist state that was supported by USSR/China, and that many countries saw these as the models to use (command economy). Often, African countries borrowed from other countries, tried to grow their economy, and they pay off. This export-oriented economy faltered during the 73 energy crises, and the collapse of the soviet union meant that a large funding source of aid collapsed.

This is an interesting one, sounds quite probable to me. Socialism doesn't work where there is no wealth at all. Marx believed that a nation had to go through a Capitalist phase first, before it could properly embrace Communism... Socialism won't work where there's no wealth to distribute!

It is a common mistake of Capitalists to say "Look at the USSR, that sucked, proving socialism sucks." - however, things did not develop in the USSR how Marx had envisioned. At the time of the Russian Revolution, the country was in fact pretty much a Feudalist state, not a Capitalist one. Marx's intention was for the revolution to take place in a western, developed, capitalist *rich* country, not in a poor one.

If you like....

1. First a country is Feudalist. With the exception of a minute ruling class, everyone is poor.

2. Then it progresses to Capitalism, where most people enjoy a fairly decent standard of living but there is a sizeable minority who do not.

3. Which is when you need to move over to Socialism, to ensure that everyone enjoys a high standard of living.

If you go straight from step 1 to step 3, as happened in Russia and most of the new independent nations after colonialism, all you get is everyone poor, so nothing really changes. Capitalism is needed as a middle stage to develop a country, before it can switch over to socialism. If you stay Capitalist however then all that happens is the rich get richer, the poor get poorer, etc. etc. etc.

 

[JerichoHill]

@@ Ram.

The influx of USSR subsidies for the adoption of the socialist model was one of the problems I mentioned. I fail to see how this is missed. The countries, when they became independent, adopted socialist style government. When that failed, and the restructuring of the IMF and other more capitalistic/liberalistic, stepped in, and while it increased the growth rate, did not succeed in the way in which it was thought it would

So I'm not understanding the logic here.

Colonialism (unrelated to capitalism) then independence, whereby Africa essentially adopted a socialist form of government. When that didn't work, the lib-cap remedies of the IMF et. al. did something, but not enough, likely because they didnt focus on building of democractic institutions which were necessary(its boneheaded to reform the economy without reforming the governmental institutions to support it).

Today, barriers to free trade (anti-capitalistic) continue to harm Africa.

So, that's how I read what I read. Can you provide evidence which backs up that the socialist style government improved conditions (better than adopting another system would have) post-independence and pre-CW collapse?

Can capitalism be blamed if capitalism is not the full remedy that was offered? A half of something can do more to harm than if nothing was offered, but a full of something could have helped?

 

[Atropos]

This is exactly why I told Atropos that Ricardo was irrelevant, because you guys are all posting from within the capitalist mindset and stable of arguments. You're using their language itself. This language means one thing for the developing world - poverty - for that is relative to our ever increasing, disporportionate wealth.

You told me he was irrelevant. You backed it up by saying that he did not address multilateral trade relations. I produced sources showing that later economists had expanded Ricardo's reasoning to cover multilateral relations and, therefore, that it is reasonable to believe that his theories apply to relations between the third and first world today. I further showed that there is reason to believe that global inequality is decreasing, not increasing. There is not merely reason to believe that the third world is getting richer: it is a proven point. They are still, by and large, dirt poor, but they started from a low base.

You did not respond to these points in the earlier thread. Would you care to do so now?

Until you do so, I will continue to believe these "academic" theories, because they work. Slowly, but they work - when not foiled by highly un-capitalist First World export subsidies.

 

[Atropos]

And a substantial part of this imperialism is capitalist imperialism. I think anybody who ever opened a history book can easily convince themselves about that imperialism has been and is important component of modern capitalism. If one denies this, very well, stay in the bubble.
But don't expect to be taken seriously in these matters.

There are endless arguments as to the original support groups of late nineteenth-century imperialism. Suffice it to say that the political architects of laissez-faire economics in Britain, Bright and Cobden, were strongly opposed to extension of the empire. Indeed, like many nineteenth-century liberals, Cobden believed that there would be no reason for war in a world where all countries had adopted free trade.

At no point in the nineteenth century did the Empire account for a majority of British trade or investment. In fact, compared to trade with the US, Europe or South America, British capitalist interests in the Empire were quite insignificant. None of these facts are seriously disputed by any major historian, and believe me, there are some pretty left-wing historians in the field of the history of imperialism.

If you want to deny the evidence, fine. Stay in the bubble.

But don't expect to be taken seriously in these matters.

 

[Richard Cribb]

There are endless arguments as to the original support groups of late nineteenth-century imperialism. Suffice it to say that the political architects of laissez-faire economics in Britain, Bright and Cobden, were strongly opposed to extension of the empire. Indeed, like many nineteenth-century liberals, Cobden believed that there would be no reason for war in a world where all countries had adopted free trade.

Again, thanks for sharing, even if it is not entirely new.
But apart from that, irrelevant. The Empire was extended.
By a capitalist state. With the support and on the behalf of capitalists.Also see below.

At no point in the nineteenth century did the Empire account for a majority of British trade or investment. In fact, compared to trade with the US, Europe or South America, British capitalist interests in the Empire were quite insignificant. None of these facts are seriously disputed by any major historian, and believe me, there are some pretty left-wing historians in the field of the history of imperialism.

Do you happen to know about Cecil Rhodes? Can you say cheap labor, limited competition, and abundant raw materials? Are you trying to tell me that for instance British control over South Africa was "quite insignificant"?
Or to get a bit un-British, what is the connection between Leopold II of Belgium and rubber?
Furthermore, are you trying to tell me that "pretty left-wing historians" do not connect the dots between capitalism and imperialism? I would appreciate that you didn't.
This is not a question of where "capitalist interesting were significant or not". It is true that capital investments in Africa were relatively small, But it is also true that, in an era of imperial rivalry, control of the continent was of strategic importance. And more to the point, it is true that this imperialism and colonialism, spurred by greed and the demands of a parasitical system, had dismal effect for the societies and people living there.
Just to clear this up. This is not the von Mises Instititute 101 course of the holy free trade, it is about capitalism in the real world. And capitalists do not love free trade except when they are in a very dominating positions.
South America, by the way, is also interesting when studying this, also considering its recent and contemporary problems.

If you want to deny the evidence, fine. Stay in the bubble.

But don't expect to be taken seriously in these matters.

I am starting to be a bit on the short end of patience when people just think that it is a masterpiece of rhetorics to use my very words against me. Especially when they try to appear tall and handsome without much justification. Is a bit of imagination that much to ask for?
And for that matter I don't mind not being taken "seriously" by certain people, since that would imply that I somehow must have expressed myself very badly.
EDIT: When I said I was finished with this thread I meant it, beating a dead horse is no fun for that long. So here is a great opportunity for a "victory" on points, lads.
Only as a pre-emptive measure:
- Capitalism is not the cause of everything evil in the world and was in its time a progressive system. But that starts to be a long time ago. It is due for revision and eventually to be phased out.
- Imperialism is older than capitalism, but that doesn't mean that capitalism is not imperialistic.
- The historical development of capitalism is interesting but a bit off-topic. Personally I would recommend Braudel's work, but Wallerstein is also good. The importance of the feudalist state as a protector for the growth of the capitalist class and the subsequent necessity of a strong state for the continued protection of said classes privileges is something that no wonderful tales of laissez-faire should be allowed to explain away.
I can also refer to Business Organization and the Myth of the Market Economy by William Lazonick.
I wish everybody a nice day.

 

[Rambuchan]

You told me he was irrelevant. You backed it up by saying that he did not address multilateral trade relations. I produced sources showing that later economists had expanded Ricardo's reasoning to cover multilateral relations and, therefore, that it is reasonable to believe that his theories apply to relations between the third and first world today. I further showed that there is reason to believe that global inequality is decreasing, not increasing. There is not merely reason to believe that the third world is getting richer: it is a proven point. They are still, by and large, dirt poor, but they started from a low base.

You did not respond to these points in the earlier thread. Would you care to do so now?

Yes, well I’m sorry not to have responded to you then. Sometimes real life carries you away and you lose track of a thread.

It may hearten you to know that I did read some of those articles shortly after you posted the link. They helped while away some boring train journeys. However, they did not produce the promised goods that I expected. If anything, they reinforced what I was on about – that:

a) This “reason to believe inequality is decreasing” is merely a smokescreen, veiling the actual horrors of the situation as posted in the OP and carried in the top line of my sig.

Sure there’s benefit to the third world but it’s coming from a model that is not designed to bridge this chasm in human life experience effectively, it’s not designed to reduce the inequality in a hurry. That’s partly why we’ve got the chasm in the first place, because these solutions assume the maintenance of a corporate and political elite (which are quite interchangeable groups). I find talk of third world countries such as: “They are still, by and large, dirt poor, but they started from a low base” a little lazy. Because you’re content with the fact they are making little gains from an extremely deep trough, one created by those elite groups (whilst also maintaining unacceptable mortality, literacy, healthcare and employment rates).

I quote the World Bank on the issue:

Despite these heartening prospects, there is no room for complacency.

The percent of the population in developing economies living at or below $2 a day is projected to remain disturbingly high.

Moreover, notwithstanding that inroads have been made recently, the incidence of extreme poverty in Sub-Saharan Africa in 2002 was actually higher than in 1990.

While current projections suggest 8 percent of the sub-continent's population will be lifted above the extreme poverty line by 2015, some 38 percent of Africans will still be living in extreme poverty. Worse, the absolute number of Africans living at or below the $1 a day level is projected to increase. And, because per capita incomes elsewhere are projected to grow faster, the continent will continue to fall farther behind the rest of the world – unless steps are taken to further improve economic growth in Africa.

World Bank

The Ricardo fetish also works really nicely for showing how Asian economies are bearing tiger claws. But the same theory works to the benefit of only some, only a few third world countries, whilst bypassing so many others – like African ones.

See the World Bank on this again.

b) Ricardo’s Comparative Advantage theory and those that extended it spent very little time addressing the individual’s needs, particularly the needs of the workers who make up the greatest proportion of the companies.

Virtually all the articles I read continued down the path of looking at countries interacting with other countries through trade, not individuals at the bottom of the pile. National GDP preferred to PPP or Per Capita. They all presupposed the maintence of that elite group, expecting some glorified trickle down effect which is, as I've said already, a main part of the problem in the first place. Those that did break those countries down into the companies looked at how the 1st world corporations dictated the terms of employment, but more tellingly, dictated the terms of trade agreements. I’ll focus on one article in particular. “Who Makes The Rules of Globalisation?” Let’s look at the abstract to save posting masses of material:

In this paper I argue that profit-maximizing firms, even though they contribute to social welfare when they compete in the market, may not do so when they influence the political process. In particular, I suggest, through several examples from both the real world and from economic theory, that corporations have played a significant role in the formulation of the rules of the international trading system. They did this in the formation of the WTO, where they were responsible for the expansion to cover both intellectual property and services. And they do this in preferential trading arrangements such as the NAFTA, where they inserted the notorious Chapter 11 and specified rules of origin for automotive products.

This is exactly what people like me are banging on about. The terms of engagement and the debate surrounding them are staged and animated by a commercial and political ruling elite, who drop figures now and then to say: “Hey, here’s the benefit we’re bringing” – and then they fly off in their private jet to fix another trade deal.

I've chosen this article because it is one of the few you linked to that takes into account the political realities, that doesn’t write as if in some bubble, devoid of political pressures. It recognises that the groups holding the reins of power have their borders blurred. And that's why I accuse so many of these papers as being quite "academic".

All of this is quite consistent with economic theory, including the literature on the political economy of trade policy. I also use a simple duopoly model to illustrate a domestic firm’s interest in setting rules of origin. The corporate influence on rules need not be bad, but there is no reason why it should be good either, as these examples illustrate.

Two parts to look at here. Firstly, ‘a firm’s interest in setting rules of origin’. Again, this interest originates from a house firmly committed to the perpetuation of that first world elite. But more significantly is the last part, his weighing up. Bit of a case of fence sitting isn’t it? That’s those blurred borders between the political and commercial elites at work. And that’s why I don’t pay so much deference to Ricardo’s work and many that continue it (in a vacuum, with all those presuppositions attached).

Until you do so, I will continue to believe these "academic" theories, because they work. Slowly, but they work - when not foiled by highly un-capitalist First World export subsidies.

I’ve said why they are largely academic. You’ve still not persuaded me otherwise. How about something that doesn't want to carry along a major cause of the problem?

You have however confirmed my belief that political meddling has muddied the proper workings of some theories. That’s for sure. Capitalism is not entirely to blame for the situation today.

And it’s important to make that distinction. Many of the failings of globalisation under capitalism are due to the meddlings of political parties. Problem is...........those political parties are quite often the commercial parties that have been set up into these situations of power by the capitalist system.

 

[Rambuchan]

Socialism doesn't work where there is no wealth at all. Marx believed that a nation had to go through a Capitalist phase first, before it could properly embrace Communism... Socialism won't work where there's no wealth to distribute!

It is a common mistake of Capitalists to say "Look at the USSR, that sucked, proving socialism sucks." - however, things did not develop in the USSR how Marx had envisioned. At the time of the Russian Revolution, the country was in fact pretty much a Feudalist state, not a Capitalist one. Marx's intention was for the revolution to take place in a western, developed, capitalist *rich* country, not in a poor one.

A very good point and a strong reason as to why so much failed.

 

[Atropos]

Again, thanks for sharing, even if it is not entirely new.
But apart from that, irrelevant. The Empire was extended.
By a capitalist state. With the support and on the behalf of capitalists.Also see below.

It was extended by a state still governed largely by the aristocracy (ever heard of the "Hotel Cecil?"), with the support of some capitalists, against the opposition and interests of others. The German intervention in Morocco is a fascinating non-British case study: one company wanted intervention, the rest were happy with the status quo, but the company which wanted the intervention had the political connections.

Do you happen to know about Cecil Rhodes? Can you say cheap labor, limited competition, and abundant raw materials? Are you trying to tell me that for instance British control over South Africa was "quite insignificant"?
Or to get a bit un-British, what is the connection between Leopold II of Belgium and rubber?

Interesting you need to cite a monarch and an aristocrat (who ruled the Congo as a personal fiefdom) for a non-British example of "capitalist" imperialism. Leopold's rubber plantations were so successful that the Belgian government seized the Congo as payment of his truly US-scale debts.

Cecil Rhodes...interesting guy. Are you aware that the cabinet which permitted his actions was pretty much entirely aristocratic?

This is not a question of where "capitalist interesting were significant or not". It is true that capital investments in Africa were relatively small, But it is also true that, in an era of imperial rivalry, control of the continent was of strategic importance.

Of strategic significance...not of economic significance, at least not compared to areas where England never sought to establish an empire in this period (South America). The strategic significance, by the way, was pretty much confined to prestige, apart perhaps from Suez and the Cape.

And more to the point, it is true that this imperialism and colonialism, spurred by greed and the demands of a parasitical system, had dismal effect for the societies and people living there.

You have in no sense made the economic case for stating that capitalism is parasitic.

The effects of imperialism were often (not always) dismal. But they were not dismal because of capitalism.

Even if one accepts that there were capitalist elements in imperialism (and as I said, some capitalists did support imperialism), it does not follow that all capitalism is imperialist.

Just to clear this up. This is not the von Mises Instititute 101 course of the holy free trade, it is about capitalism in the real world. And capitalists do not love free trade except when they are in a very dominating positions.

This is why Belgium needs its massive tariff barriers with Germany.

But, in any event, I'm not arguing that the Bill Gateses of the world deserve a decisive role in policy formulation. I am arguing that free trade is ultimately good for everyone.

I am starting to be a bit on the short end of patience when people just think that it is a masterpiece of rhetorics to use my very words against me. Especially when they try to appear tall and handsome without much justification. Is a bit of imagination that much to ask for?

Uh...look at your original post. I wouldn't describe it as a masterpiece of rhetoric, exactly.

And for that matter I don't mind not being taken "seriously" by certain people, since that would imply that I somehow must have expressed myself very badly.

I'm glad that we have one sentiment in common.

Only as a pre-emptive measure:
- Capitalism is not the cause of everything evil in the world and was in its time a progressive system. But that starts to be a long time ago. It is due for revision and eventually to be phased out.
- Imperialism is older than capitalism, but that doesn't mean that capitalism is not imperialistic.

You have not proved these points.

- The historical development of capitalism is interesting but a bit off-topic. Personally I would recommend Braudel's work, but Wallerstein is also good. The importance of the feudalist state as a protector for the growth of the capitalist class and the subsequent necessity of a strong state for the continued protection of said classes privileges is something that no wonderful tales of laissez-faire should be allowed to explain away.
I can also refer to Business Organization and the Myth of the Market Economy by William Lazonick.

You are, I assume, aware that Braudel's area of specialisation was the Renaissance, not the late nineteenth century, and that he assigned primary agency to topographic factors, not economic ones?

I wish everybody a nice day.

Same to you.

 

[Atropos]

Yes, well I’m sorry not to have responded to you then. Sometimes real life carries you away and you lose track of a thread.

No problem.

It may hearten you to know that I did read some of those articles shortly after you posted the link. They helped while away some boring train journeys. However, they did not produce the promised goods that I expected. If anything, they reinforced what I was on about – that:

a) This “reason to believe inequality is decreasing” is merely a smokescreen, veiling the actual horrors of the situation as posted in the OP and carried in the top line of my sig.

No one would contend that the situation is good. I would merely suggest

1. That the situation of the poor is slowly improving, although it still stinks;

2. That the best way to continue improving their situation is capitalism.

Sure there’s benefit to the third world but it’s coming from a model that is not designed to bridge this chasm in human life experience effectively, it’s not designed to reduce the inequality in a hurry.

That is not its primary purpose, no. Its primary purpose is to produce wealth. The evidence suggests that it ultimately produces wealth for everyone, albeit in unequal amounts.

That’s partly why we’ve got the chasm in the first place, because these solutions assume the maintenance of a corporate and political elite (which are quite interchangeable groups).

Not entirely interchangeable. Bush was a FAILED businessman, remember. And, in any event, free trade does not assume the maintenance of an elite. Socialism does, because it requires someone to run the system.

I find talk of third world countries such as: “They are still, by and large, dirt poor, but they started from a low base” a little lazy. Because you’re content with the fact they are making little gains from an extremely deep trough, one created by those elite groups (whilst also maintaining unacceptable mortality, literacy, healthcare and employment rates).

Believe me, if I ever heard of a convincing method for raising the wealth of the third world more quickly, I'd adopt it like a shot. But I haven't, so I'll stick to the slow method. Something > nothing.

And "these elites" do not create poverty. Perhaps you could expand on this point? They often hire workers at extremely low wages, yes, but again, something > nothing. People don't take those wages for fun. They take them because they are better than the traditional alternative.

Capitalism did not create the poverty of Africa. Africa (by and large) was poor before capitalism.

I quote the World Bank on the issue:The Ricardo fetish also works really nicely for showing how Asian economies are bearing tiger claws. But the same theory works to the benefit of only some, only a few third world countries, whilst bypassing so many others – like African ones.

The track record:

Capitalism: has had spectular effects in a few third world countries (which include most of the actual population of the third world). Examples: England, the US, France...Not just Asia. Or would you describe England in 1750 (with a GDP per capita equal to that of Tanzania today) as "first world" by modern standards?

Socialism: depending on your view, 1. untried or 2. failed everywhere

But, also, Africa has problems of its own: AIDS, corruption, war...They aren't primarily the products of socialism. They aren't primarily the products of capitalism. Botswana had the highest growth rate in the world before the AIDS epidemic struck, thanks to extensive deregulation.

b) Ricardo’s Comparative Advantage theory and those that extended it spent very little time addressing the individual’s needs, particularly the needs of the workers who make up the greatest proportion of the companies.

The whole purpose of comparative advantage is the individual's needs. It shows that specialisation of labour works for everyone, both within and among nations. Ricardo focussed on the latter because Adam Smith had already demonstrated the former.

The terms of engagement and the debate surrounding them are staged and animated by a commercial and political ruling elite, who drop figures now and then to say: “Hey, here’s the benefit we’re bringing” – and then they fly off in their private jet to fix another trade deal.

What "terms of engagement?" This isn't a war. If France is rich, that doesn't make the Congo poorer.

Two parts to look at here. Firstly, ‘a firm’s interest in setting rules of origin’. Again, this interest originates from a house firmly committed to the perpetuation of that first world elite. But more significantly is the last part, his weighing up. Bit of a case of fence sitting isn’t it? That’s those blurred borders between the political and commercial elites at work. And that’s why I don’t pay so much deference to Ricardo’s work and many that continue it (in a vacuum, with all those presuppositions attached).

Ah, the rules of origin debate. Fascinating stuff. And yes, companies have traditionally had way too much influence in insisting that products imported free of duty from countries with which the US has trade deals should have some US content. That is what is known as protectionism by the back door. It doesn't have anything to do with free trade.

(I might add, by the way, that Deardorff's knowledge of trade history is a bit limited. The expropriation clause in NAFTA merely reflected a policy which the US had followed since Taft).

How to prevent stuff like this from happening? Well, you could try tightening lobbying regulations, if you make sure that you do it for trades unions as well (who, by the way, have traditionally played just as large a role in lobbying for idiotic content rules). But I don't think socialism will cure the problem of vested interests. The USSR's trade deals contained surprisingly similar clauses.

I’ve said why they are largely academic. You’ve still not persuaded me otherwise. How about something that doesn't want to carry along a major cause of the problem?

My point is precisely that it is possible for both Gates and M'Bongo to get rich.

And it’s important to make that distinction. Many of the failings of globalisation under capitalism are due to the meddlings of political parties. Problem is...........those political parties are quite often the commercial parties that have been set up into these situations of power by the capitalist system.

To pursue the US example, the Democrats were no better than the Republicans in terms of protectionism. As I said, trades unions also lobby, and tend to lobby for much the same things. Take a look at US steel policy, that disastrous mess, and you'll see what I mean: Employers AND employees in steel-making industries have profited at the expense of employers AND employees in steel-using industries. Not to mention the third world.

I detest, abhor, and spit upon economic nationalism in all its forms, whether it be advocated by Chiquita or by Brezhnev. I just don't think that socialism would remove, or even improve, the problem of vested interests. If its track record is anything to go by, it would make matters even worse.

 

[JerichoHill]

Indeed, the laissez-faire economists that Smith's theories gave birth too were against empire building.

So I think the problem lies not in the capitalistic system, but in man's greed, as that has lead to problems in both capitalistic and socialistic style systems.

Smith hoped, that through free markets and the like, that man's greed could be used to counter-act man's greed, and keep it in check.

I assume we shall never know whether a purely capitalistic system would have the effects Smith hoped for, just as we'll never know the same for a purely socialistic system, because man is too flawed to hold up an ideal for very long without mucking it up.

I cast my lot with a world that becomes more capitalist ove rtime...

 

[classical_hero]

Better IMHO is capitalism with a moderate welfare safety net. Less than Europes but better than USA. NZ and Australia fit this category. Theres probably others.

Great point there. Times have never been better here as a result of this. We have one of the highest rates of economic growth in the World, largely thanks to our close ties to China, the worlds fastest growing Capitalistic nation. That is right I call it capitalistic because in it daily living China is almost becoming capitalistic than Ameica, but there government does want to step in a few times, but they know that if they do try and interfere in the marketplace they will get badly burnt as a result of it. China is the best example of why Capitalism works, because millions of people there are becoming wealthy as a result of being Capitalistic.

 

[Verbose]

Smith hoped, that through free markets and the like, that man's greed could be used to counter-act man's greed, and keep it in check.
[…]
I cast my lot with a world that becomes more capitalist ove rtime...

And the problem is still, I think, that John Maynard Keynes hit the nail whith his retort to the assertions of classical economits that "in the long run" the Invisible Hand would set things right:

"In the long run we're all dead."

And there's the rub. There are political and even existentialist concerns about how we live (or would like to live) that economic theory for a very long time simply tried to treat as non-issues.

Economic theory that when faced with the problem of "People are dying!" simply answers "All will be well in the end" does have a problem. (And has likely crossed into dogma.)

It's not to say that socialism is the answer, just that the expanding intellectual frontier of economy is necessary. (And it is expanding. Succeed and economy as we know it might cease to exist of course, since this was not what it was originally designed for.)

 

[JerichoHill]

Umm, that wasn't my point at all. Way to go, were there any facts in that critique?

Is economic theory just about numbers and dollars? Nope. Not at all. All one needs to do is pick up a coursebook from any decent university here in America to see courses not only in macro/micro, but developmental, urban, regional, planning, financial, social, demographical, religion, marriage/dating/mating, risk, institutional, et al
branches of economics