Why do you think capitalism will fail?

[a space oddity]

My bet would be monopolism due to big corporations that are capable of surviving the narrowest profit margins. Moreover, to me it seems the stuff that's available in shops looks more alike than ever, convection is the norm and servicing minorities is not profitable enough.

I am really surprised by this, I hoped globalisation would lead to differentiation but this seems not to be the case. When I'm in a big foreign city and want to bring home something special it's hard to find because most of the stuff is available at home too.

 

[Shadylookin]

I'd say when humanity is destroy is when capitalism will fail.

My (current) bet.



Not this particular self-checkout machine, mind you, or even the concept of self-checkout machines, but rather what they represent: an ever decreasing need for unskilled labor.

Throughout history, we've always needed a lot of humans doing fairly mundane stuff to support those who were doing really cool stuff. Whether they were working the fields or manning the assembly line, we needed people doing stuff.

That equation is changing. It's been changing for a long time, of course, but we've always managed to move the mass of humanity higher up the ladder. But I think that option has about played itself out.

Automation is just getting faster and faster and easier and easier. Very soon (if we're not there already) we'll be getting to the point where the machines can change faster than the mass of humanity can be re-educated. Frankly, the only thing keeping machines from doing a whole lot of stuff is that we haven't figured out a cheap, reliable way to make a machine 'see' yet. But that's just a technical problem, and sooner or later we'll find a technical solution. Once we do, a whole lot of jobs that have remained safe from automation are going to go the way of the dodo. And it will happen fast. Much faster than people can adapt.

I'm not convinced that we will make ourselves obsolete, as some futurists have suggested. I still think we're always going to need smart people doing stuff. But I do think there will come a time when we only need a fraction of the population doing stuff. And I don't see how capitalism can survive that.

someones got to make the automatic machines.

 

[The Last Conformist]

someones got to make the automatic machines.

von Neumann probes.

 

[crystal]

Not this particular self-checkout machine, mind you, or even the concept of self-checkout machines, but rather what they represent: an ever decreasing need for unskilled labor.

[snip]

Good post, but there's something you didn't mention: people can be enhanced too. What if someone designs a brain implant or some kind of a drug which improves the learning capabilities of people? At least up to today people have been "enhanced" with superior education, but in future it might be something different.

I'm not convinced that we will make ourselves obsolete, as some futurists have suggested. I still think we're always going to need smart people doing stuff. But I do think there will come a time when we only need a fraction of the population doing stuff. And I don't see how capitalism can survive that.

Nah, the laws of supply and demand will solve all the problems.

 

[Little Raven]

How do you go from a income differential to capitalism collapse? I can see how capitalism may need some change (like we may need to do away with universal healthcare, social security as we know it etc. etc.). But the basic tenets of capitalism and free market need not be abandoned.

Income differential is perfectly fine. Massive income differential becomes a serious problem. Capitalism (and democracy) really needs a middle class to keep it stable. Divide everyone up into very poor and very rich, and a host of things stop working. The poor start going after what the rich have by any means available. (including the vote) The rich are forced to protect themselves by any means necessary. (including neutralizing the vote)

Capitalism works by offering people a good lifestyle in return for productivity. But when the income gulf becomes massive, that promise becomes empty, and people stop being productive.

 

[Little Raven]

Good post, but there's something you didn't mention: people can be enhanced too. What if someone designs a brain implant or some kind of a drug which improves the learning capabilities of people? At least up to today people have been "enhanced" with superior education, but in future it might be something different.

Now that, I grant, is a way out. If we can simply put a chip into someone's brain and have an instant lawyer, then my argument becomes moot.

Though that would seem to raise it's own issues.

 

[betazed]

Divide everyone up into very poor and very rich, and a host of things stop working. The poor start going after what the rich have by any means available. (including the vote) The rich are forced to protect themselves by any means necessary. (including neutralizing the vote)

I see where you are coming from but I am still skeptical. I will say why.

You are making two assumptions here. First, you are assuming that a large number of people are not bright enough to adapt fast. Say, I grant that. Then you go on to say that, they are bright enough to understand the problem and go after the basis/champions of capitalism using the vote. Are we sure about this part?

take current US demographics. The most vocal supporters of the Republicans are the poorest of peoples inspite of the fact that actual republican policies hurt them. This is because they give priority to some other non-economical thing which is completely intangible. Hence, they are not really smart enough to understand the source of their poverty and vote accordingly. Hence, the system is stable. They are happy to be exploited and there is a system that exploits them. Status quo. I do not see why this cannot continue indefinitely.

 

[Babbler]

I don't see capitalism or even civilization failling, since they came about very gradually, and would fade out into something else.

 

[luiz]

Why can't the majority of the population enhance their intellectual skills?

In the Ancient times only a small elite was able to read, and most probably thought that the masses were just too dumb/lazy to learn how to read. Yet nowadays even beggars can read(or most of them). Just because today the majority does not seem suited to jobs like law or medicine doesn't mean they are actually incapable. The knowledge level of the average man is also increasing, and he can perform increasingly sophisticated jobs. So I don't see the majority just becoming obsolete.

As for the original question: Capitalism requires a relatively peaceful world to function properly; take that away and it ceases to work. We have no guarantees that the world will remain forever in the relative peace we experience now.

As for the other crisis mentioned(supply shortage, economic depression, etc), Capitalism deals better with them then any other system, so I don't see it beign replaced in those cases.

 

[Little Raven]

Hence, the system is stable. They are happy to be exploited and there is a system that exploits them. Status quo. I do not see why this cannot continue indefinitely.

That can continue indefinately. But that's not what we're talking about in my scenario.

When/if automation displaces this mass of people, they are no longer being exploited. They are simply discarded. That's a very different thing. What does someone who has no job and no prospects for a job do in a capitalist society? Even if they all take the high road and set about educating themselves...who is going to pay for that?

 

[Little Raven]

I don't see capitalism or even civilization failling, since they came about very gradually, and would fade out into something else.

Capitalism has failed in the US before, rather suddenly too. And history is replete with failed civilizations.

Building up is gradual. Falling down tends to be quick.

 

[betazed]

When/if automation displaces this mass of people, they are no longer being exploited. They are simply discarded. That's a very different thing. What does someone who has no job and no prospects for a job do in a capitalist society? Even if they all take the high road and set about educating themselves...who is going to pay for that?

discarded over here will mean basically they will be unemployed, right? Well, Europe has about 12% unemployment. India close to 26%. that is 1 out of 4 people. Phillipines has unemployment of 40% (at least that was it about a year ago). Capitalism survived.

Do you mean that automation will create more than 40% unemployment?

 

[The Last Conformist]

Capitalism has failed in the US before, rather suddenly too.

I take it you're refering to things like the Great Depression?

I'd call that an exceedingly boring form of failure. When asked "Why do you think capitalism will fail?", the kind of failure I think of isn't depression, but one that sweeps the capitalistic system away. I suppose a communistic revolution would be the archetypical example.

 

[crystal]

I'd call that an exceedingly boring form of failure. When asked "Why do you think capitalism will fail?", the kind of failure I think of isn't depression, but one that sweeps the capitalistic system away. I suppose a communistic revolution would be the archetypical example.

Luckily communist nations are so eco-friendly that they automatically dissolve after 80 years or so.

 

[Little Raven]

I'd call that an exceedingly boring form of failure. When asked "Why do you think capitalism will fail?", the kind of failure I think of isn't depression, but one that sweeps the capitalistic system away. I suppose a communistic revolution would be the archetypical example.

Talk to someone who lived through it. (there are still a few left, but you'd better hurry) They didn't seem to find it so blasé.

And the Great Depression did sweep the old away, in a very dramatic fashion. Capitalism in the US before and after that event were two very different things.

 

[The Last Conformist]

Talk to someone who lived through it. (there are still a few left, but you'd better hurry) They didn't seem to find it so blasé.

I'm sure those who lived thru the Club War found it anything but boring. Doesn't mean it changed anything much.

And the Great Depression did sweep the old away, in a very dramatic fashion. Capitalism in the US before and after that event were two very different things.

I see your point, but it still isn't the kind of radical change the thread title makes me think of.

The fact we call the post-Great Depression system "capitalism" suggests people generally think/thought like me.

 

[Little Raven]

I see your point, but it still isn't the kind of radical change the thread title makes me think of.

Heh. I see where your initial confusion came from then. I was looking for probable causes of capitalism failing, not disappearing. Systems fail all the time. Generally they rise up again in some fashion. Looking for examples of economic systems outright self-destructing-never-to-return would be an interesting exercise, but I doubt you'd find too many.

 

[betazed]

@LR: I just thought of another argument why capitalism will not fail via automation. It would not be too erroneous to think that there is an in-built safe-guard in capitalism to fail because of automation.

As automation increases labor becomes cheaper, right? If it gets to the point where unemployment is very high, then disposable income is also low right? that means industry has to cut back on production/production cost owing to less demand. That means fixed cost factor of production like automation is the first to go and cheap variable cost factor production should be in (especially since labor is cheaper). This means industry should favor manual labor to automated labor even if manual labor may be expensive in the long run. Hence, employment goes up. Hence disposable income goes up.

Granted, that above is an idealized scenario. But the point remains that at least there is some feedback control built into the free market to equalize the vagaries of automation.

 

[The Last Conformist]

That's why I said I don't think that economic systems are particularly prone to fail.

 

[A'AbarachAmadan]

Two scenarios: Gov't undertaxation which leads to outrageous gov't debts which collapses the country's economy or gov't ability to function...or...excessive socialism such as a small work force being overtaxed to support a large retired population.