The Promise of Capitalism.

[Greadius]

Originally posted by test_specimen
I just wanted to remark that the discussion is more about ethics than about capitalism or even makroeconomics

Bleh, ethics have no place in my world

Originally posted by test_specimen
But still you cannot just dismiss everything that came before, say Keynes or Friedman just because it is "old" or has been re-thought. A lot of writings were a perfectly good description of the economy at that time. Maybe the wrong steps for change were proposed, but IIRC Marx mostly critizices unbearable working conditions.

Yeah, except the opposition to capitalism hasn't refined their message since Marx, just using it in new terms. Marx was right... when he wrote that, but so was Adam Smith. Economics changes faster than popular mythology can keep up with it... a big part of the reason Mr. Burns is what people think a capitalist or owner is like.

Modern day critcisms are more a matter of refinment and specifications than saying the whole system is wrong and a violent revolution will replace it.

Originally posted by test_specimen
The situations in a lot of third world countries today are similar to this industrialization period.

Well, yeah, they're industrializing. Duh

Originally posted by test_specimen
By threatening to move into another country, they can enforce almost everything and produce for an absolute minimum. This seems like leftist propaganda, but from a capitalist point of view, they would be stupid if they did not do this. I bet you would take your money out of this company if you found out that it does not produce for the minimum.

That is true for the West as well... and why it is NOT leftist propoganda, because leftist propoganda assumes all production takes place well above that minimum and they can afford to pay them Western wages and still keep the factory running.

But that is too simplistic... it assumes all locations and workforces are equally desirable, and giant factories and production fascilities can be moved and their start up costs dismissed. The fact of the matter is a factory needs to produce for 20+ years to be a profitable venture to build, so once they picked a spot it is VERY expensive to move. Likewise, the economics of locations dictate they'll locate somewhere it is cheap to get resources, and get the products to market, which makes places like the Sahara desert undesirable for more than the obvious reasons. Additionally, there is a heavy emphasis on stability of the workforce and the government. Finally, the unskilled workforce is only desirable if they have a limited number of employment oppertunities... as more factories spring up, and more of the 'choice' locations are consumed by business, they will begin to locate closer to one another (they might do that anyway IF there is a strong externality to that location, like natural resources or large, accessible port). Then they will begin to compete amongst themselves for unskilled workers, which dramatically drives up the wage rate.

Originally posted by test_specimen
And during this shift from an agricultural society, living conditions are worsened by capitalism. While it would be desirable to have a fast industrialization this is off course hindered by foreign companies, since this would mean a rise in wages.

That is a myth that I would hope places like Japan & South Korea would have destroyed. The difference was their governments were willing to accept short term limitations and enforce a high savings rate to increase the amount of investment capital (and therefore less mobil) capital stemming from their own countries.

There is a definate, unquestionable wealth influx when a corporation builds in a locale, but harnessing the influx towards long term growth & increased welfare is something Nike can't and won't do.

Originally posted by test_specimen
Those are not the reasons why they produce in 3rd world countries. They do it for profit. Still that does not make them necessarily the bad guys.

Well, duh. Self-interest drives every portion of the transaction. However, the transactions ought to produce beneficial results for both participants compared to no-transaction.

Originally posted by test_specimen
I don't think that education is something that is reduced by a capitalist system. But still I would rather have it financed by government and protected from political and economic influence than purely for the fittest and richest. A totally free market education system would be too one directional towards profitability.

Its the market externality benefits that make general public education desirable. Just like roads.

The main reason is there is no practical way to make the beneficaries shoulder the entire burden of the cost (i.e., the corporation to pay for the educated work force 20 years in advance, knowing who it'll hire from when they start kindergarten).

 

[Greadius]

Originally posted by HuckFinn
Let us assume you are a rich capitalist pig.

2/3 are true.

Originally posted by HuckFinn
Furthermore, let's assume I desire your riches and that my stick is bigger than yours. It is not under your control whether you keep your riches or not.

Is that the porn-star theory of economics?

Originally posted by HuckFinn
I see no difference between the two scenarios... yet you say that govt must enforce something that is not automatically a given in that case, but when it comes to creating other norms that are not there by themselves, you say it's not government responsibility.

There seems to be a strong correllation between government size & intervention and degree of socialism... so I disagree. I think that the mainstay of an anarchistic economic system would be extreme capitalism, and governments role is to lessen the impact. The type of intervention it takes to entirely change the impact dillutes the beneficial effects of capitalism at a disproportionate rate to the social benefits it provides.

Originally posted by HuckFinn
No. In theory, if I were a pure idealist, it would be interesting to demand that everyone be a self-made man/woman...

Interesting, yes, but pointless painful. I depend on government to keep the number of homeless low not only because of my deep sympathy for the disadvantaged, but they're quite unsightly and lower my property values.

Originally posted by HuckFinn
Reasonable = enough to balance the budget, after the parliament has decided what it seeks to accomplish with the money.

Not only vague, but unrealistic. I meant the balanced budget part, but I guess the list of accomplishments is vague too. For example, it doesn't seem to take account of a failure of government to deliver a demanded service at a 'reasonable' price, and doesn't take into account the gap people make between wanting something for free (quality education) and paying for it (ohh! Tax cuts).

Originally posted by HuckFinn
Right-wing propaganda in the US seems to be talking beside the point enough to suggest that the lefties' only goal is to rid people of their money.

I note you're not denying it.

Originally posted by HuckFinn
Over here I vote for people who stand for the maintenance of some fundamental services for the entire population, but otherwise are pretty laissez-faire.

You sound like a Democrat, basically.

I mean, if that is your definition you're not a left-winger in my book, so I'm not sure if you were defending their policies or just trying to make a point about us economic reactionaries.

I tend to take the further right view and naive idealistic ideologue when there are posters around that demand the disassemblement of the rich to gulags and seize property for the redistribution of the poor... in not so many words.

Originally posted by HuckFinn
In an ultra-capitalist system, our parliament representatives could just go home, they would not be needed at all.

Oh, that is a good selling point to the politically dissaffected: "Send all politicans to the unemployment line; vote Libertarian"

 

[Plastic]

Huck, because then it's not charity, it's theft. There's a difference between asking and taking. If people choose not to give away their money then maybe that makes them "selfish". But it is THEIR money to do as they will. I don't expect to go to the door of some rich person and claim that they must give me their money because I am a poor college student. If they want to give me money I would take it, but it's not my money. I don't understand how others can call it selfishness to keep what you work for. How is it less selfish to lay claim to that which you have done nothing to earn?

If the goal of your society is to reward people for demanding money and penalize people for making "poor" people feel poor, then Capitalism is not for you. If the goal of your society is to reward people for producing new and more useful things cheaper and faster, then Capitalism might be for you.

 

[De Lorimier]

Capitalism is allright with me, as long as we don't spit on the people who don't have money. The problem with a lot of people in North America is this idea that poorness (is that a word?) is a fault, a bad character trait. I don't mind rich people but everyone should understand this basic thing: we live in the whealtiest place on earth and we should help each other throught social policy. Of course, there's so many selfish pricks who think that the government is "out to get their money"...

 

[Greadius]

Originally posted by Plastic
Huck, because then it's not charity, it's theft. There's a difference between asking and taking. If people choose not to give away their money then maybe that makes them "selfish".

Ahh... reminds me of the socialist view of a carjacking:

Your car is surounded by a group of victims of capitalism. One of them knocks on the window.
"We've been talking it over and have voted that your vehicle is best used to further the collective benefit of all the people in this neighborhood. Please get out so we can joy ride."

Originally posted by De Lorimier
Capitalism is allright with me, as long as we don't spit on the people who don't have money. The problem with a lot of people in North America is this idea that poorness (is that a word?) is a fault, a bad character trait.

Anymore than people pretending America is rich because of a fluke, or cheating, or any other multitude of excuses that don't say "They do business better than us"

 

[HuckFinn]

Originally posted by Greadius
Is that the porn-star theory of economics?

You didn't answer the argument. The right to protections that make a capitalist order possible is not a given, but decided by the parliament, just as other things, such as social policy, are.

For example, it doesn't seem to take account of a failure of government to deliver a demanded service at a 'reasonable' price

Who says the govt must own anything to provide a service?

What I am after are guarantees of rights, not neccessarily a "socialized implementation". All I care for is for my two pet subjects, health care and education, to actually work for everyone. I do prefer the costs to come from taxes because this evens out the effect and gives everyone a stake at the success of these public systems. The way we buy the services is open to negotiation... what works best shall be the way we do it.

I mean, if that is your definition you're not a left-winger in my book, so I'm not sure if you were defending their policies or just trying to make a point about us economic reactionaries.

Well, in my book, I am pretty far from a proper left-winger (social democrat / even "leftier"), at least over here. In the US I would of course go with the Dems.

I tend to take the further right view and naive idealistic ideologue when there are posters around (...)

Likewise... but the other way around. I like to poke people who seem to believe that disadvantaged people are always just simply getting what they deserve and turn an economic model into an all-encompassing religion without recognizing that it's not automatically "right" and that we're trying to build a society that consists of actual, real people. As I have said from the start, democracy helps in that. Capitalism is not supposed to give any kind of "moral guidelines" and people shouldn't argue that it does.

Plastic... read some law books before spewing propaganda. Are you against democracy?

 

[De Lorimier]

Greadius wrote:
Anymore than people pretending America is rich because of a fluke, or cheating, or any other multitude of excuses that don't say "They do business better than us"

Exactly.
There's people who are poor because they're lazy or other reasons. And there's people who are rich, wealthy, whatever, because they are cunning cheats. We live in a grey zone.

 

[test_specimen]

Originally posted by Greadius
Bleh, ethics have no place in my world

Yeah, except the opposition to capitalism hasn't refined their message since Marx, just using it in new terms. Marx was right... when he wrote that, but so was Adam Smith. Economics changes faster than popular mythology can keep up with it... a big part of the reason Mr. Burns is what people think a capitalist or owner is like.

If the situation is similar, the critizism doesn't have to be changed. You're right about the solution. It has to be different, or at least better thought through a hundred years after the theories were proposed.

Originally posted by Greadius
But that is too simplistic... it assumes all locations and workforces are equally desirable, and giant factories and production fascilities can be moved and their start up costs dismissed. The fact of the matter is a factory needs to produce for 20+ years to be a profitable venture to build, so once they picked a spot it is VERY expensive to move. [....] Then they will begin to compete amongst themselves for unskilled workers, which dramatically drives up the wage rate.

Off course not all locations are equally desirable. But there are enough locations that have similar policies. A lot of enterprises mostly need workforce. This is true for enterprises that work in the FTZ, as someone mentioned before. Examples are clothing industry etc. You're right about government stability, but this does not imply democracy. A stable dictatorship would do. If the conditions won't change there is no need for moving.

But the initial decision where to set up a factory also puts governments under pressure. And a government that is prone to corruption is more likely to throw low wages and hard working conditions in the pot, to profit either from taxes or bribery.

(Bribery is not a question of right or wrong. Some countries just work like this.)

The workforce comes from the movement from country to city (because of industrialization less people are needed in agriculture etc.). So there is only limited competition for workforce since there are a lot of people who have no other possibility.

 

[Greadius]

Originally posted by HuckFinn
You didn't answer the argument. The right to protections that make a capitalist order possible is not a given, but decided by the parliament, just as other things, such as social policy, are.

Oh. There is a difference between pro-active rights and protections.

Originally posted by HuckFinn
Well, in my book, I am pretty far from a proper left-winger (social democrat / even "leftier"), at least over here. In the US I would of course go with the Dems.

Of course

Originally posted by HuckFinn
Capitalism is not supposed to give any kind of "moral guidelines" and people shouldn't argue that it does.

For some people its as close to a moral guideline as it gets

Perhaps the strong reaction is that the usual alternatives violate code of ethics and beliefs implied in the caplitalist system.

Originally posted by De Lorimier
There's people who are poor because they're lazy or other reasons. And there's people who are rich, wealthy, whatever, because they are cunning cheats. We live in a grey zone.

Well, maybe YOU do. I'm rich because I'm a cunning cheat.

Originally posted by test_specimen
Off course not all locations are equally desirable. But there are enough locations that have similar policies. A lot of enterprises mostly need workforce. This is true for enterprises that work in the FTZ, as someone mentioned before. Examples are clothing industry etc. You're right about government stability, but this does not imply democracy. A stable dictatorship would do. If the conditions won't change there is no need for moving.

Which provides the economic stability and influx necessary to create long term growth.

And I disagree that there are ANY business' that don't participate heavily in spatial economics (perhaps the most understudied of the disciplines). Location is everything. For example, the clothes manufacturer... its more profitable to place it either near the cloth source or near the market its sold at (depending on the relative weight of the finished products), or a transaction point, than shipping the raw material to a plant, then shipping it from the plant to the market. Transaction costs are much less stable and flexible. Therefore, they'd pay workers more if the location is good.

But, about FTZ's, they are domestic government policy, not multinational corporations. As you said, there is no shortage of locations (yet), so their willingness to entice corporations to come there is a domestic calculation... its validity is up for dispute from outsiders, but its really not our say.

Originally posted by test_specimen
But the initial decision where to set up a factory also puts governments under pressure. And a government that is prone to corruption is more likely to throw low wages and hard working conditions in the pot, to profit either from taxes or bribery.

To a government (and most people, I assume), bad low wage jobs are preferable to unemployment. Look at the unemployment rates in countries that have FTZs... they're desperate for work, and have a large, young, undereducated population.

You got a better plan... because they're desperate.

Originally posted by test_specimen
Bribery is not a question of right or wrong. Some countries just work like this.

Bribery is only wrong if its done in secret.

Originally posted by test_specimen
The workforce comes from the movement from country to city (because of industrialization less people are needed in agriculture etc.). So there is only limited competition for workforce since there are a lot of people who have no other possibility.

Exactly... I was describing big picture, long term. The early stages of industrialization always suck... why I'm glad my grandparents did it for me

 

[ComradeDavo]

Originally posted by Mojotronica
As I understand it, the ideologue's promise of Capitalism is that (coupled w/ Democracy) it will -- eventually -- allow the developing world to share in the prosperity and freedom that the industrialized world enjoys.

In fact, the ultimate goal of Capitalism is often presented as identical to the ultimate goal of Socialism, but ideologues argue over the possibility of each system working.

Do you think it's possible for Capitalism to bring this about? Or maybe just more possible that under Socialism? Or you could reject the promise of Capitalism as a sales technique -- but that begs the question of why on Earth the developing world would want to sign on?

Keep in mind. 14% of all humans live the way most of the CFC community does -- in the industrialized world. The remaining 86% lives in the developing world. What happens when everyone owns a car, for instance, or when everyone eats a primarily meat-based diet, or when everyone uses a hundred gallons of water everyday, not to mention a small power-plant's worth of electricity?

How is Capitalism going to deliver on the promise?

Capitalism will only lead to the self induced destruction of mankind.

 

[Colonel Kraken]

This discussion is a hoot. I do have a lot I could add to the discussion (I love economics/poli sci and majored in both), but Greadius is doing a fine job. I'd like to help out, Greadius, but I'm having such a great time watching!

 

[De Lorimier]

Greadius wrote:
Well, maybe YOU do. I'm rich because I'm a cunning cheat.

Why aren't I surprise?

 

[Greadius]

Originally posted by ComradeDavo

Capitalism will only lead to the self induced destruction of mankind.

We had been doing so well.

You guys see why I'm so defensive?

Originally posted by Colonel Kraken
This discussion is a hoot. I do have a lot I could add to the discussion (I love economics/poli sci and majored in both), but Greadius is doing a fine job. I'd like to help out, Greadius, but I'm having such a great time watching!

I know how you can help! Tell me you didn't spend 6 months looking for a job when you were done

Originally posted by De Lorimier
Why aren't I surprise?

Honesty is my only virtue

 

[Colonel Kraken]

Originally posted by Greadius
I know how you can help! Tell me you didn't spend 6 months looking for a job when you were done

Too late! I spent a year looking for a job. That's why I decided to join the Air Force and now sell Volkswagens! (Which isn't all bad: free markets, greedy customers, money flowing in and out. You know, that kind of thing.)

Well, I have to admit: I'm looking into getting my masters and becoming an adjunct professor at the local community college.

 

[knowltok2]

Originally posted by Colonel Kraken


Well, I have to admit: I'm looking into getting my masters and becoming an adjunct professor at the local community college.

Best part time job you can get if you ask me. Pays well for the hours and low stress. Also, depending on what you teach, it can become a lot easier after a while. When you have the homework problems memorized, it takes a lot less time to grade papers and provide help.

I've been doing it for about a year now and I love it. Not all peaches and cream, but still pretty damn good.

 

[thestonesfan]

Originally posted by ComradeDavo

Capitalism will only lead to the self induced destruction of mankind.

Seems some folks around here have done a few things that led to a self-induced destruction of brain cells...

 

[thestonesfan]

Here is my question:

Would an unrestrained capitalist system eventually evolve to fill the roles the government currently handles? If so, would we be better off as a society? Or worse?

 

[HuckFinn]

Originally posted by thestonesfan
Here is my question:

Would an unrestrained capitalist system eventually evolve to fill the roles the government currently handles? If so, would we be better off as a society? Or worse?

I think the fact that a system is "unrestrained capitalist" does not yet hold enough information to answer your question.

What are the government roles you want it to fill?

How do you measure the goodness of a society? I don't think mere GDP is a good enough measure.

What kind of people live in your society? If all your people were good, enlightened and perfect, maybe it would be great. Then again, they would probably choose communism because it's quite an ideal society, but demands good, enlightened and perfect citizens. The reason why communism fails is that people tend to go capitalist when given the chance...

 

[Colonel Kraken]

Originally posted by thestonesfan
Here is my question:

Would an unrestrained capitalist system eventually evolve to fill the roles the government currently handles? If so, would we be better off as a society? Or worse?

Actually, this question can be answered in a general way. There are some public services that will never be filled by the private sector because it simply would not be profitable to do so. (There's a technical term for this, but I forget. Greadius would probably know).

National defense is one example. It's been so long since I've studied this that I can't give you a detailed explanation. Basically, most all the things proscribed to the Federal Government in the US Constitution are pretty much it.

What we see government doing now a-days goes far beyond what was originally intended in the Constitution.

 

[Greadius]

Originally posted by Colonel Kraken
Too late! I spent a year looking for a job. That's why I decided to join the Air Force and now sell Volkswagens! (Which isn't all bad: free markets, greedy customers, money flowing in and out. You know, that kind of thing.)

Not what I wanted to hear!

If we were in a socialists system, I wouldn't have to worry about finding a job