loseyourname said:Rational self-interest just means that a person actually knows what she wants. The only people excluded here would be people with severe mental illnesses and children. They are excluded from the capitalist model, but anyone else can be fit in, even if you find their behavior "irrational." Smith does not use the term the same way you do.
master_coda said:I think rational self-interest requires not just that a person knows what they want, but that they act rationally to acquire what they want.
loseyourname said:Smith never stipulates that individuals behave in a logical manner, only that they act in a way that they believe will lead to the acquisition of that which they desire. In this way, the whole ball of wax of human behavior is subject to market forces, regardless of how sensible the behavior. This really is the genius of capitalism. It is the only system that encourages liberty, that encourages humans to just be human. Every other system requires the subjugation of the individual to some extent, or at least that humans behave in a manner that is not necessarily natural to them.
master_coda said:Market forces operate under the assumption that people will act in their own best interests. If people don't act rationally to serve their interests then this can sabotage the efficiency of the marketplace.
master_coda said:Market forces operate under the assumption that people will act in their own best interests. If people don't act rationally to serve their interests then this can sabotage the efficiency of the marketplace.
loseyourname said:Aberrations aren't of concern. As long as all but a statistically insignificant number of humans are behaving in such a manner so as to acquire that which they believe they desire, the system works.
master_coda said:This isn't true; introducing minor aberrations into the assumptions required by a free market can produce very different outcomes. Which is one of the reasons the system doesn't always work. Dismissing irrational people as a minor aberration that can't affect the economy is nothing more than wishful thinking.
The Israeli Kibutzs' are an example I think of something very close to pure communism. Communism is basically too extreme to work on a large scale indefinitely, but the socialist derivatives appeal to the populist Federalism in the US, and that's kind of what government is all about -- representing broad interests such as public health, safety & defence. And crushing Nazi skulls.wasteofo2 said:Though it is interesting to note, Marxist Communism has never actually been tried. In his theory, full industrialization would have taken place, and Capitalism would have set up the infrastructure already. Only once Capitalism had been sucessful would Communism take over, as Communism couldn't build the same infrastructure etc. that capitalism could. Though I guess he thought Communism could keep improving it, you just needed Capitalism for that first huge step getting your country industrialized. You'd need a country like Japan or America, which already was a sucessful Capitalist country, to really try Communism the way Marx wanted it. Though it would have just degraded into a particularly powerful dictatorship anyway.