Why Do People Criticize Capitalism?

[loseyourname]

I think you're probably referring to Aquamarine. That guy must have posted a thousand links to statistics showing the good effects of capitalism in his time.

 

[vanesch]

I'm a supporter of capitalism, and I will freely admit this. The caveats I will insert are two:
1) A strong state is required to carry out these wars, colonization, and rape of resources/peoples. Capitalism, being an economic system, says nothing about what kind of state structures we should have, other than that they should be minimally involved in market regulation/business transactions. If we hold also to the small government model, with a non-expansionist, solely defensive military, that I support, we would not see this.

The problem I see with wanting to have 1) an ideal economic system and 2) an unrelated political system is that these are often not compatible. A democracy for instance is never compatible with an ideal economic system, because if people VOTE to change that ideal system (for better or for worse) you cannot avoid that.
You cannot have an ideal communist democracy, but you cannot have an ideal capitalist democracy either. Any ideal economic system requires an absolute dictatorship of a dictator devoted to the cause of the ideal system.

 

[vanesch]

I think you're probably referring to Aquamarine. That guy must have posted a thousand links to statistics showing the good effects of capitalism in his time.

Yes, that was him.

 

[vanesch]

No. Would you?

I find this strange, Russ. Wouldn't you support a system that works ?
Where "works" means: does what you want of a system (in my case, which I think is pretty universal, it means that it brings reasonable happiness to most).
I'm against a system when I'm convinced that it will NOT work (that it will NOT do what I expect of a good system to do) - and I can find that as the only justification of "being against something". I would think that any other reason for being "against a system" is only prejudice, no ?

For instance, I'm also against communism, but that's because I'm convinced (I can be wrong) that it will always lead to what it has led before, USSR-like systems. It is not because a-priori, communism is a dirty word. If it could be shown (not just in theory, but by empirical evidence too) that it would bring happiness to people, then why on Earth would I be against it ? And why would you ?

 

[Smurf]

if we're going to say that we want to stick to one specific system for ever and ever then we have to prove 1 of 2 things:
1. That any system advocated is beyond betterment. That it is ideal. That it can not be improved upon.
OR
2. That that specific system advocated is favorable "enough", and that continued change is redundant. But then you must also make an argument why that system is enough, but the current is not -> otherwise why change in the first place.

I don't think the goal is ever to achieve anything specific, but rather a constant betterment of conditions. I'm fairly confident that, if we lived in the system LYN advocats, he'd have different things to say to further improve the system.

 

[vanesch]

I don't think the goal is ever to achieve anything specific, but rather a constant betterment of conditions. I'm fairly confident that, if we lived in the system LYN advocats, he'd have different things to say to further improve the system.

I don't know what happened to you, Smurf. Our positions are awfully close

 

[Smurf]

I don't know what happened to you, Smurf. Our positions are awfully close

All of humanity's positions are awfully close, Vanesch. We differ only in the details.

 

[Astronuc]

Regarding the level of corruption in Capitalism - specifically the US in recent times - I found the following item from TD Waterhouse (on Yahoo) interesting.

What percentage of the estimated 1,300 executives that have recently been charged with fraud have pleaded guilty or been convicted of a crime?

Even though former HealthSouth (HLSH.PK) CEO Richard Scrushy was recently acquitted of 36 counts of fraud, prosecutors have a pretty good track record when it comes to gaining convictions against business executives


According to a Justice Department spokesperson, over 693 executives have recently been convicted of fraud or plead guilty including high ranking officials at Tyco, WorldCom and Adelphia.

Even though the government is batting over .500, prosecuting white collar crime poses some unique obstacles according to legal experts:

Criminal Intent: In order to obtain a fraud conviction, the prosecution must show that the executive acted with criminal intent beyond reasonable doubt, a very high legal standard. If an executive is found to have acted out of incompetence or ignorance it doesn’t necessarily mean he will be found guilty.

Community Involvement: Most executives are active in their communities, donating to local charities and spearheading other philanthropic efforts, making it more difficult to find a jury of their peers that will believe they acted criminally.

High-Priced Defense Attorneys: Whether they are innocent or guilty, most executives can afford to spend a lot of money on expensive attorneys ready to counteract whatever the prosecution throws at them.

Complicated Charges: Most fraud cases center around complex accounting issues which can be dense, confusing and potentially boring to the average juror.

Certainly the percentages would be lower if one considers 5000 executives or 10,000, but that sill would hardly be low level. At 693 convictions, that is still about 6.9% of 10,000 - not what I would consider low level. And there are several cases of which I know that are small enough not to be on the radar screen of regulators or justice department - and one case involves a significant loss of my investment.

Also, see - Executive misbehavior must end now

and the problem seem widespread in many institutions

http://www.bus.umich.edu/FacultyResearch/Research/research-8-04/self-regulation_070104.htm

http://www.dce.harvard.edu/pubs/css_news/2005/greyser.html

And beyond the corruption is the issue of executive pay -

EXECUTIVE PAY; My Big Fat C.E.O. Paycheck
By CLAUDIA H. DEUTSCH (NYT)
Published: April 3, 2005

THE spectacle of once-respected corporate titans doing perp walks -- Martha Stewart, Bernard J. Ebbers, Richard M. Scrushy, the list seems endless -- has pretty well tarnished the title of chief executive. But it has done little, it seems, to scratch the gilt from the corner office.
In fact, the boss enjoyed a hefty raise last year. The chief executives at 179 large companies that had filed proxies by last Tuesday -- and had not changed leaders since last year -- were paid about $9.84 million, on average, up 12 percent from 2003, according to Pearl Meyer & Partners, the compensation consultants.
. . . .
In the 1990's, companies tried stock options, figuring that they would be the best way to tie the executives' fortunes to those of shareholders. Instead, they prompted some managers to time decisions to pump up the stock just when their options vested. Bonuses and options at Tyco and Enron, for example, did little to prevent widespread accounting frauds at either company.

The secret to linking pay to performance remains elusive. Net income at Eli Lilly fell 29 percent and its return to shareholders dropped 17 percent last year, but its chief executive, Sidney Taurel, saw his pay go up 41 percent, to $12.5 million.

Similarly, Sanmina-SCI, the electronics contract manufacturer, has lost money in each of the last three years, and its shareholders' total return fell 27 percent last year, but the pay of its chief executive, Jure Sola, jumped to $15 million from $1.2 million in 2003.

SOME paychecks remained robust even if at first blush they looked reduced. Net income at Merck fell 15 percent last year, and total shareholder return dropped 28 percent. The summary compensation tables in the proxy show the pay of the chief executive, Raymond V. Gilmartin, dropping 39 percent, to $5.9 million from $9.6 million.

But Mr. Gilmartin may find it easy to recoup the perceived loss. He got far fewer options last year, but he is participating in a new long-term performance plan that will give him $2.7 million worth of shares next year if he meets earnings targets -- and double that amount if he exceeds them by a set amount. He gets the shares even if the stock price does not rise by a dime. And the payments won't show up until the 2007 proxy.

Conversely, Apple Computer had a stellar 2004, yet Steven P. Jobs, its chief executive, was paid exactly $1 for his efforts. Why? Apple paid him in advance -- in 2003, it gave him $75 million worth of stock.
. . . .

more at NYTimes

And there are hundreds of other examples in Forbes, Wall Street Journal and other relatively conservative publications.

 

[Curious6]

The issue at stake here is: in practice, which economic system has been most successful at delivering an outcome which we could label as 'successful'? The irrefutable answer is: capitalism.

 

[Zlex]

The source of this conflict is very clear isn't it?

IMO, Sowell has it right. The differences boil down to an irreconcileable conflict of vision of what constitutes justice.

One camp believes that justice is primarily determoined by outcomes, one believes that justice is primarily determined by process.

One camp believes that the only just processes are those that result in equal/fair outcomes, and one camp beleives that the only just outcomes are those that result from equal/fair process.


Both camps evaluate every issue du jour throught the filter of their view of justice, fight passionately for that view, and can't believe that the other camp is so 'unjust.'

Because...these views of justice are lockstep and mutually irreconcileable.


In a universe where nothing is uniform and equal, including capabilities, work ethic, and propensity to shoot oneself in the foot, the only way to achieve 'equal' outcomes is to jerryrig process, and apply unequal and thus unfair process to individuals. Ideally, this enables the weak, but in practice, it also rewards the criminally inept and lazy, as well.

But in that same universe, the only way to permit 'equal' process is to live with the resulting massive inequalities of outcome, and the inevitable hopelessness and crime that results from same.

Should either camp ever drop the rope and excusively have its way, life would be awful, and our world would be terribly out of balance. So, the livable solution is an interminable tug of war between two competing camps view of justice, and the net result is some ever changing imperfect compromise between two irreconcileable views of justice.


We have to remeber when we are tugging at each other that both sides are doing their job to make life bearable.

Plus, and this is my other firm belief, we atavistically thrive on the tugging, and would just plain make up **** to be in conflict over if we otherwise had nothing much of substance to angst over. (See parents in stands of any Little League game...)


The world is a compromise. We don't put lead weights on the really good ballerinas, yet, but we do put extra weight on thoroughbred horses with light jockeys. We do more than toy with "from each according to his ability, to each according to his need," but at least give lip service to weeding out overt criminal abuse, if not laziness.

Did I happen to mention that gradients drive everything? Even, gradients of views of justice...

 

[loseyourname]

The problem I see with wanting to have 1) an ideal economic system and 2) an unrelated political system is that these are often not compatible. A democracy for instance is never compatible with an ideal economic system, because if people VOTE to change that ideal system (for better or for worse) you cannot avoid that.

You cannot have an ideal communist democracy, but you cannot have an ideal capitalist democracy either. Any ideal economic system requires an absolute dictatorship of a dictator devoted to the cause of the ideal system.

I never said I wanted an ideal economic system. I just said that I'd prefer to have a really weak state, as strong states seem to me to be the true cause of expansionism (as evidenced by all of the non-capitalist states throughout history that nonetheless expanded and exploited peripheral regions).

I would like to point out, though, that in a true libertarian society, you could easily approach something resembling "pure" capitalism, so long as you had a minimal judicial structure capable of enforcing contracts and preventing collusion.

 

[Smurf]

The issue at stake here is: in practice, which economic system has been most successful at delivering an outcome which we could label as 'successful'? The irrefutable answer is: capitalism.

Assuming that's true (which is not necessarily) you still have to show that Capitalism is not only more successful than past systems, but will remain more successful than other proposed systems yet to be tried (or yet to be tried on large scales).

 

[vanesch]

The issue at stake here is: in practice, which economic system has been most successful at delivering an outcome which we could label as 'successful'? The irrefutable answer is: capitalism.

I would say, a mix with a good dose of capitalism, but with other ingredients too. And, as I tried to point out with my droids example, the dose of capitalism will have to diminish when the value of work will drop to essentially 0 if we want "reasonable happiness for most".

 

[russ_watters]

Yes. If I thought it would work I see no reason not to. Why wouldn't you?

Perhaps our definitions of "working" are different, but the reason I wouldn't support socialism is that it goes against the concept fo freedom and (see Ivan's thread), freedom is the most important political principle to me. Yes, even if unemployment were zero and poverty were zero, that still would not be good enough if I didn't have the freedom to choose things like where to work and what to do with th emoney I earned.

Freedom is a double-edged sword and not everyone is up to the challenge: the same freedom that allows me to choose to be an engineer allows someone else to choose to drop out of high school and work at a McDonalds'.

 

[Skyhunter]

The issue at stake here is: in practice, which economic system has been most successful at delivering an outcome which we could label as 'successful'? The irrefutable answer is: capitalism.

I would not label it as "successful". I would agree that profit motive and private ownership of capital has been an excellent motivator, I would not agree that the results have been universally beneficial. We are at a point in history where old institutions no longer fit.

It is time to evolve our institutions because they are becoming more harmful then benevolent.

 

[russ_watters]

...you still have to show that Capitalism is not only more successful than past systems...

The global poverty rate has fallen by half in the past 20 years due to the expansion of capitalism and is the lowest it's ever been. In strictly economic terms, that makes capitalism the most successful economic system the world has ever seen.

...but will remain more successful than other proposed systems yet to be tried (or yet to be tried on large scales).

Back to the fantasy, Smurf? No one can predict the future, not even you. All we can be sure of is that capitalism is better today and will still be better tomorrow (I mean that literally, not the figurative "tomorrow"). As you said, it requires evolution (you said social, but I don't see how such a radical change can happen without genetic changes) and not only is evolution not predictable, your ideas go against how evolution has worked since the beginning of biology. Evolution is based on competition - now perhaps with our intelligence, humans can change that, but I wouldn't bet on it. What will be better 1000 years from now is anyone's guess and what makes me sad (as I said before) is that you're betting so much for a benefit you'll certainly never see, can't know will ever happen, and even worse, writes off the next trillion people who will live on this planet. If, instead, you put your effort into improving the system we have (a system we already know works, even if not perfectly), you'd be able to help people immediately. Instead you are pursuing a system that isn't even theoretically possible (your theory is based on a premise that you readily amit is false). It's like warp drive: it looks great on Star Trek, but everything we know about physics says it'll never work. But yeah, I know - that won't stop people from starting threads in the Relativity forum about it. And just like the crackpottery we see in the physics parts of the forum, pursuit of this idea can be destructive both to you personally and to those who you are able to convince it has merrit.

 

[vanesch]

Perhaps our definitions of "working" are different, but the reason I wouldn't support socialism is that it goes against the concept fo freedom and (see Ivan's thread), freedom is the most important political principle to me. Yes, even if unemployment were zero and poverty were zero, that still would not be good enough if I didn't have the freedom to choose things like where to work and what to do with th emoney I earned.
Freedom is a double-edged sword and not everyone is up to the challenge: the same freedom that allows me to choose to be an engineer allows someone else to choose to drop out of high school and work at a McDonalds'.

Ok, that's because the ultimate goal of a "working" system seems to be different: I take it as "reasonable happiness for most", while you seem to take it as your personal freedom, even if that means that you are unhappy and that others are unhappy. I'm pretty sure that you didn't mean that, and that,
in the end, you see only your freedom as a MEANS to be happy.
Before, I gave the (admitted, silly) example of a dictator who IMPOSES you to do exactly those things you like. You have 0 freedom, but you do all day what you like, because the dictator knows what you like to do and obliges you to do that. I wouldn't mind living in such a system, even if there was 0 "freedom".
Mind you, the ultimate goal of happiness for most is that you are happy too, so that you should be able to do the things you like! So it WOULD include this. So the question was: if communism DID MAKE YOU HAPPY (eg, was a "working system"), would you be against it ?
As I also said, I don't think that real-world communism does this. But I think it would be an error to conclude A PRIORI that you don't want it because you think you will be less free.
My attitude wrt capitalism is exactly the opposite: when I look at it "on paper" I find it an ugly system, driven by egoism, greed and agressivity (called competition), instead of altruism and cooperation. However, I have to admit that, empirically, a good dose of capitalism DOES seem to work well, so I accept that.

 

[Curious6]

The reason capitalism is so successful is because it is the only system which is 'natural'. It is inherently based on natural actions of humans as social beings interacting with each other by means of trade, buying and selling goods or services without the external interactions of some higher body or institution regulating or interfering with the process. That is the reason why it has by far outcompeted other alternative economic systems.

My reasoning is based on economic principles and I can explain from a theoretical perspective capitalism why I believe capitalism is the most desirable system. The First Theorem of Welfare Economics stipulates that assuming no market power and the existence of a market for each good, market forces (i.e. demand and supply) will lead to an economically efficient outcome (Pareto efficiency). This is very similar to Smith's concept of the 'invisible hand', whereby the actions of self-interested individuals leads to the good of the community. Therefore, if you let people trade freely the scarce resources of the world will be distributed efficiently, a condition which most of us would agree is of utter importance.

This said, a government is warranted because of a number of reasons (some relating to caveats in the First Theorem). To start with, apart from efficiency, fairness of resource distribution is an issue (as many would also agree). Governments can therefore help to allocate some important resources on a basis which stresses equity rather than efficiency. However, this does not imply it should interfere with the market mechanisms. The Second Theorem of Welfare Economics states that an efficient allocation of resources can be attained by making suitable endowments and then letting people trade freely. Another reason the economic action of a government is occasionally justified is that in some cases the two assumptions mentioned for the First Theorem are not valid (as is the case with externalities).

This is all pure economics. As a social science, it provides us with an objective model to judge which conditions lead to a desirable allocation of resources. I don't see why the basis of this framework would change and thereby make alternative economic systems more attractive as some suggest.

 

[russ_watters]

Ok, that's because the ultimate goal of a "working" system seems to be different: I take it as "reasonable happiness for most", while you seem to take it as your personal freedom, even if that means that you are unhappy and that others are unhappy. I'm pretty sure that you didn't mean that...

You are correct - I don't mean that. What you are missing is that I believe happiness itself is a choice and that means freedom itself brings happiness. As I said in pattylou's poll thread, a person can be happy as a janitor if they are learning to be a surgeon online and know that they can choose to improve their situation. The reason people risk their lives floating here from Cuba on innertubes is because of the freedom to improve their situation that they can get here.

So in the end, my goal is the same as yours: happiness for the most people possible. It's just that we have different ideas on the most effective way to attain it.

Before, I gave the (admitted, silly) example of a dictator who IMPOSES you to do exactly those things you like. You have 0 freedom, but you do all day what you like, because the dictator knows what you like to do and obliges you to do that. I wouldn't mind living in such a system, even if there was 0 "freedom".

I suspect you would be utterly miserable, even if the dictator always knew exactly what you wanted to do, but whatever. Again, imo happiness cannot be imposed, it can only come from within. And yeah, it is a little silly, but don't sweat it: that is what would be required for such a system to have any chance of success. That's why it's just plain silly to think that a system where choices are removed would be able to function.

So the question was: if communism DID MAKE YOU HAPPY (eg, was a "working system"), would you be against it ?

1=0: since I believe that freedom is required for happiness, it is impossible for me to answer a question that assumes it isn't. It is a self-contradictory question, then, and the answer can therefore be whatever you want. It's like the "what if we could travel faster than light" questions in the Relativity Forum. What would we see? We'd see the universe disappear in a puff of logic.

My attitude wrt capitalism is exactly the opposite: when I look at it "on paper" I find it an ugly system, driven by egoism, greed and agressivity (called competition), instead of altruism and cooperation. However, I have to admit that, empirically, a good dose of capitalism DOES seem to work well, so I accept that.

That is one of the true ironies of this issue and it may, in fact, be the entire problem here. How could a system based on greed possibly result in prosperity for all? Many people simply refuse to look past the strangeness of the theory (QM, anyone?) and flat-out refuse to accept the fact that it works.

And that's why I consider such ideas as communism and anarchism to be political crackpottery. They are based on an a priori assumption that the world is one way and build on that assumption with logic alone, ignoring empirical evidence that the starting assumption is flawed.

Smurf - you, at least, have admited your starting assumption is flawed (it does not fit the reality of the way humans currently work), and because of that, I simply can't understand why you can't see that hoping for the universe to change in your favor is simply wishful thinking and fantasy.

 

[Anttech]

How could a system based on greed possibly result in prosperity for all

It doesnt... Thats flat out not true, as you have already admitted one of the problems with capitalism is that there is an increase in the amount of people below the poverty line, so "prosperity for all" is not true... Capitalism only works when you have an unequal society...

 

[Anttech]

By the way, why do you seem to equate Personal freedom to capitalism? I mean are you trying to say you are more free in the States than in France?

I don't think there should be this connection made between personal freedom and capitalism, in a socalist state with free markets like in many countrys in Europe, the people are just as free as you...

They are free to move around
They are free to speak what they want
They are free to protest
They are free to set up there own buisness
They are free to do what ever they want within the Laws of that country, just like in the States

 

[pi-r8]

By the way, why do you seem to equate Personal freedom to capitalism? I mean are you trying to say you are more free in the States than in France?

average taxation in US- 30%
average taxation in france- 48.3%
(source = http://www.nationmaster.com/red/graph-T/tax_tot_tax_wed_sin_wor&ob=ws )

therefore, in the US, you have the freedom to choose what to do with about 70% of your money, compared to about 50% you get in France.

US = 7/5 as much freedom as France

 

[Art]

average taxation in US- 30%
average taxation in france- 48.3%
(source = http://www.nationmaster.com/red/graph-T/tax_tot_tax_wed_sin_wor&ob=ws )
therefore, in the US, you have the freedom to choose what to do with about 70% of your money, compared to about 50% you get in France.
US = 7/5 as much freedom as France

So you believe freedom is measured in $$$? No wonder the US is becoming an international pariah if your view is prevalent.

 

[Smurf]

So you believe freedom is measured in $$$? No wonder the US is becoming an international pariah if your view is prevalent.

The America definition of freedom seems to be, firstly, focused on economic freedom, and secondly, idologued as an opposition to the state.

This differentiates from European concepts of Freedom in that in Europe, firstly, civil freedom is seen as most important, and secondly, it's seen as being protected by the state rather than opposed.

That's my interpretation at least. These differences can lead to some really interesting opinions.

 

[Smurf]

Smurf - you, at least, have admited your starting assumption is flawed (it does not fit the reality of the way humans currently work), and because of that, I simply can't understand why you can't see that hoping for the universe to change in your favor is simply wishful thinking and fantasy.

That's not true, or rather a misunderstanding. I should have explained more fully, but I really don't see any point.

 

[chaos_5]

Based on what I have read in other threads, I have only one thought to share. Don’t bother wasting good argument on fools who will never listen.

 

[Smurf]

Based on what I have read in other threads, I have only one thought to share. Don’t bother wasting good argument on fools who will never listen.

And seeing as this is your first post, I can assume that you've read the entire archive in the past year or so?

 

[chaos_5]

And seeing as this is your first post, I can assume that you've read the entire archive in the past year or so?

I don’t need to read a years worth of mindless dribble from a bunch of leftwing socialists to know that there is no point in arguing with them about capitalism..

 

[Skyhunter]

average taxation in US- 30%
average taxation in france- 48.3%
(source = http://www.nationmaster.com/red/graph-T/tax_tot_tax_wed_sin_wor&ob=ws )
therefore, in the US, you have the freedom to choose what to do with about 70% of your money, compared to about 50% you get in France.
US = 7/5 as much freedom as France

average taxation in Mexico- 15.6%

So according to the logic used to support your argument the Mexicans have twice the freedom of Americans, yet they still keep coming across the border in droves.

 

[Smurf]

I don’t need to read a years worth of mindless dribble from a bunch of leftwing socialists to know that there is no point in arguing with them about capitalism..

Okay, you're new so I'll let you off this time, but from now on, I'm an "anarchist" not a "socialist". In fact there's only one socialist on this forum, and she's not posting recently.

P.S. If you dislike us so much, why join just to make that one post? I think someone needs a hug.

 

[Jimmy Snyder]

US = 7/5 as much freedom as France

This reminds me of a saying about the Statue of Liberty, a gift from the French who have too little liberty to the Americans who have too much.
For the record, I don't think we have too much, I just like the saying.

 

[Smurf]

This reminds me of a saying about the Statue of Liberty, a gift from the French who have too little liberty to the Americans who have too much.
For the record, I don't think we have too much, I just like the saying.

that's great, I'm going to remember that.

 

[chaos_5]

Just the facts mam'

P.S. If you dislike us so much, why join just to make that one post? I think someone needs a hug.

I didn’t join to make just one post. In fact is, I joined because I like math and physics, and the like. I was checking out the site (very cool I think) and happened upon this thread, which ended up being the first post.
I would like to take this opportunity to at least mention that I don’t dislike you all, but chances are we will mostly disagree on politics. It didn’t take long to figure out that left leaning ideals dominate the political threads here. The truth be told, I'm sick of politics (ergo my initial comment). It’s always the same predictable party mantras going back and forth. From forum to forum, thread to thread.

Anyway, have a nice day!

 

[Smurf]

I would like to take this opportunity to at least mention that I don’t dislike you all,

Wait for it, it hasn't hit you yet.

but chances are we will mostly disagree on politics.

Chances are you'll mostly be on the wrong side too.

It didn’t take long to figure out that left leaning ideals dominate the political threads here.

That's a matter of perspective, and I think it shows how indoctrinated you are that you actually think of it as an absolute.

The truth be told, I'm sick of politics (ergo my initial comment). It’s always the same predictable party mantras going back and forth. From forum to forum, thread to thread.

What a sheltered life you've lived. I pity you.

 

[chaos_5]

I pity you.

I feel so wholly enriched now, with the knowledge that your pity will be with me. Like a shining star to guide me in the darkest of nights.