The Capitalism Thread

[Hobbit]

Ok, so loosecannon has been telling me in the lumber thread about how evil capitalism is and how he (she?) can prove that capitalism is a deeply flawed system that does nothing but harm, so I'm calling him out. I don't want a large string of opinion or anecdotes, either. I want links. I want reputable sources. I want people with econ degrees. I'd also like you to show me one non-capitalistic society that has a better standard of living for the average poor person than the United States of America.

I'll start off:

Capitalism is an economic principle. Economics is the study of how limited resources are used to satisfy unlimited wants. The two main components of how to do this are production and consumption, also known as supply and demand. The ultimate goal of any economic system is to change supply and demand to a level where all production is consumed, with none left wanting. To this end, there are two basic systems.

Socialism: Socialism is based on the power of the state. Under socialism, production and consumption are both controlled by force of law. Individuals must produce certain resources at a certain level to avoid penalization by law. Once the resources are produced, the state determines their distribution based on percieved need. Consumption, in this way, is also controlled by force of law. To consume more than what is assigned by the state also bring penalization under the law.

Capitalism: Capitalism is based on the powr of the individual. Under capitalism, production and consumption are both controlled by individuals. Each individual produces whatever he/she wants to, then barters that production with others for needed commodities (money is just a very simple barter system that introduces a universal trade medium). Production is increased because greater productions means that the producers will have more goods to barter, and thus, more commodities once barter is complete. Consumption is curtailed by the fact that something must be given up to gain access to those resources one wishes to consume.

Pros and Cons (these can be found in most economic textbooks. I will provide links to any pro or con contested by anyone).

Socialism pros:
100% employment: With everyone assigned a job by the state, no person is unemployed.
Few homeless: With everyone granted resources by the state based on need, anybody without food or shelter is without purely by choice, unless the state has expelled that person from the system.

Socialism cons:
Increased government control: Not all may consider this a con, but socialism grants control of almost everything in the country to the state, putting all citizens at the ultimate mercy of what is typically a bureaucratic monolith.
Decrease in quality: Knowing that their allotment of resources will remain constant, only the morally righteous will even attempt to create quality work.
Constant shortages: With no immediate incentive to produce surplus and no penalty for drawing your full allotment of resources, whether you need it or not, socialism causes mass shortages as seen in the Soviet economic system and in states with socialized health care.
Constantly low living conditions: In socialist societies, all individuals not priviledged by the state live in modest conditions, and have no way to better their station other than to endear themselves to those in power in the government.

Capitalism pros:
Individual power: With both production and consumption being controlled by individuals, a great deal of power is given to the individual, rather than the state.
Increase in quality and innovation: Since capitalistic producers must convince others to consume their products, capitalistic producers must constantly improve their products to keep up with their competitors or their businesses will lose money to those who have better ideas.
Self-Imposed triage: Since evey acquisition of resources requires the expenditure of other resources, consumers in a capitalistic society will rarely take more of something than they are capable of using. High prices during shortages means only those who need the resource bad enough to pay the higher price will get them.
Constant opportunity for improvement: Those who increase their production or the value of their production may constantly raise their standard of living. No person living in poverty is doomed by the state to stay there.

Capitalism cons:
Slipping through cracks: With individual production required to gain resources, individuals who do not produce, are only granted resources by the kindness of strangers. An unfortunate few end up homeless and starving, though in a capitalistic society, this is almost exclusively due to the decisions of those people. Only the presense of voluntary charity can alleviate this and maintain capitalism.
When competition goes too far: Some companies will resort to illegal means to increase production. Only through intervention of the state or escalation by other companies can curtail this.

Given those, I would prefer capitalism. If there's another system that is vastly different from these two, feel free to chime in.

[loosecannon]

Ok, so loosecannon has been telling me in the lumber thread about how evil capitalism is and how he (she?) can prove that capitalism is a deeply flawed system that does nothing but harm, so I'm calling him out.

begining with the begining I didn't say Capitalism was evil. I said Capitalism was designed by banking and the burgoise to reduce common wages to the lowest possible level and to allow the elite to avoid working while they exist by virtue of their capital working for them.

Do you agree or disagree with any of that?

http://en.wikipedia.org/wiki/Capitalism

Capitalism generally refers to an economic system in which the means of production are mostly privately[1] owned and operated for profit, and in which distribution, production and pricing of goods and services are determined in a largely free market. It is usually considered to involve the right of individuals and groups of individuals acting as "legal persons" or corporations to trade capital goods, labor and money (see finance and credit).

Theories of capitalism first developed in the context of the Industrial Revolution, and, following Karl Marx, were generally used to criticize the concept.

http://en.wikipedia.org/wiki/Labor_p...r_as_commodity

Under capitalism, according to Marx, labour-power becomes a commodity – it is sold and bought on the market. A worker tries to sell his or her labour-power to an employer, in exchange for a wage or salary. If successful (the only alternative being unemployment), this exchange involves submitting to the authority of the capitalist for a specific period of time.

During that time, the worker does actual labour, producing goods and services. The capitalist can then sell these and realize a profit – what Marx called surplus value – since the wages paid to the workers are lower than the value of the goods or services they produce for the capitalist.

Karl Marx is the most influential economist of all time. Which qualifies his ideas as definitive in describing econ on a basic level.

http://en.wikipedia.org/wiki/Wage_slaves

Wage slavery is a term used to refer to a condition in which a person is legally (de jure) voluntarily employed but practically (de facto) a slave. It is used to express disapproval of a condition where a person feels compelled to work in return for payment of a wage. In colloquial terms, this may refer to people that make a cult of work (the extreme case is death from overwork, known also as karoshi), or those who require one to work to be socially acceptable. In terms used by critics of capitalism, wage slavery is the condition where a person must sell his or her labor power, submitting to the authority of an employer merely to subsist.

Wage Slavery can be described as a lack of rights. The only rights you get are the rights you gain on the labor market. If your children cannot make enough money to survive, they starve. Your choices consist of the workhouse prison, or the labor market. The rich receive protection from the government in the form of corporate welfare subsidizing them while the poor and working people have to be subjected to market discipline.

Wage slavery as a concept is a criticism of capitalism, defined as a condition when a capitalist minority of the population controls all of the necessary non-human components of production (capital and land) that other people (workers) use to produce goods. This sort of criticism is generally associated with socialist criticisms of capitalism, but has also been expressed by some proponents of liberalism, like Henry George ([1]), Silvio Gesell and Thomas Paine

http://en.wikipedia.org/wiki/Das_Kapital

the most definitive scholarly dissertation of capitalism ever written

The central motor force of capitalism, according to Marx, was in the exploitation and alienation of labour.

Employers were entitled to appropriate the new output value because of their ownership of the productive capital assets. By producing output as capital for the employers, the workers constantly reproduced the condition of capitalism by their labour.

http://en.wikipedia.org/wiki/Marx%27..._of_alienation

Marx's theory of alienation (Entfremdung in German), as expressed in the writings of young Karl Marx, refers to the separation of things that naturally belong together, or to antagonism between things that are properly in harmony. In the concept's most important use, it refers to the alienation of people from aspects of their "human nature" (Gattungswesen, usually translated as 'species-essence' or 'species-being'). Marx believes that alienation is a systematic result of capitalism

I wasn't able to find a reference to the subsistence level conditions prefered in a capitalist state, but I will given time.....

[MtnBiker]

A worker tries to sell his or her labour-power to an employer, in exchange for a wage or salary. If successful (the only alternative being unemployment)

Why is unemployment the only altrenative?

[loosecannon]

btw, I reject the entire premise your source presents for a number of reasons:

>there is no purely capitalistic system in existence

>socialism exists in part in almost all modern nations, usually to a large degree

>capitalism by definition is free from monopolies

>Most world economies are credit based economies which is a violation of the basic terms of capitalism

>the basic definitions of socialism and capitalism are not as stated in the description you provided

>there are infinite possible systems of econ, society and government that are possible, not just the two presented, in fact at least a hundred combinations of capitalist, credit based, corporatist, socialist states exist today ranging from true democracies to communist states.

>capitalism in any form is only one element of the society in which it exists.

>the defining characteristics of capitalism are the privatized means of production, the commodification of labor, profits claimed by exploiting the value of labor relative to wages in combination with a "monopoly" on the means of production. But inherently free from monopolies of industries disrupting the "free market" aspects of the economy. Additionally basic to capitalism is the inherent definition of two polarized classes; labor class and capital class.

>labor organizing, tarrifs, regulations, monopolies, cartels, nepotism, corporatism, bribery, corruption, organized crime, government assistance and interference, empiricism, nationalism, prejudice, racism all conspire to water down capitalism into other forms that defy any categorizations.

*********
Any discussion of capitalism's merits must therefore be conducted by addressing only the components that are definitive of and unique to capitalism itself.

[loosecannon]

Why is unemployment the only altrenative?

The only alternative to employment?

Because by definition there are two classes, labor and capital.

Labor can only exist as employed or unemployed.

Self employed are generally included in the capitalist class.

(in reality there are a few more classes that Marx defined such as the lumpen proletarians who include criminals street people, gypsies, musicians and poets, but they exist outside of the capitalist equation. There is at least one other class of merchants and folks whose stations in life are intermediary between burgoise capitalists and proletariat labor but I forget what they were called)

[MtnBiker]

So an alternative to employment and unemployment is to be an entrepreneur or capitalist?

Is being self employeed a realistic oppurtunity in the US?

[loosecannon]

So an alternative to employment and unemployment is to be an entrepreneur or capitalist?

Is being self employeed a realistic oppurtunity in the US?

yes for most people.

These are not the only options. These are the options defined within a capitalist system. New options can be invented, like banking. Banking doesn't exist inside the capitalist paradigm. But bankers succesfully invented a system that completely undermined capitalism.

Corporations invented non capitalistic alternatives as well, like monopolies.

There are no limits, you could invent a coop wherein the workers own the means of production (land equipment, intellectual property etc)

Since capitalism is not actually embedded in law there is potential for an unlimited number of posibilities.

[Hobbit]

begining with the begining I didn't say Capitalism was evil. I said Capitalism was designed by banking and the burgoise to reduce common wages to the lowest possible level and to allow the elite to avoid working while they exist by virtue of their capital working for them.

Do you agree or disagree with any of that?

I disagree with all of that. You may not have said "Capitalism is evil," but the following statement pretty much says that.

Capitalism wasn't designed by 'banking and the burgoise,' it is the natural state of human interaction. You have something I want. I have something you want. We trade. That's capitalism. And while capitalism does drive down wages in many cases, it drives down the price of everything. Thus is the nature of competition.

Capitalism generally refers to an economic system in which the means of production are mostly privately[1] owned and operated for profit, and in which distribution, production and pricing of goods and services are determined in a largely free market. It is usually considered to involve the right of individuals and groups of individuals acting as "legal persons" or corporations to trade capital goods, labor and money (see finance and credit).

Pretty much what I said, paraphased into my own words.

Under capitalism, according to Marx, labour-power becomes a commodity – it is sold and bought on the market. A worker tries to sell his or her labour-power to an employer, in exchange for a wage or salary. If successful (the only alternative being unemployment), this exchange involves submitting to the authority of the capitalist for a specific period of time.

During that time, the worker does actual labour, producing goods and services. The capitalist can then sell these and realize a profit – what Marx called surplus value – since the wages paid to the workers are lower than the value of the goods or services they produce for the capitalist.

Labor is as commodity, bought and sold on the free market. Different types of labor have different values, and it is not wrong to turn that labor into a profit. Companies that turn labor into profit have invested millions, if not billions of dollars in equipment that the individual could not acquire himself. If that was not to be turned into a profit, it would either a) never happen, leaving people with no jobs and no goods or b) it would be controlled by the state, which is horrendously inefficient. To buy low and sell high is the nature of the entepreneurial spirit and is what drives the economy onward. The buying of labor and the selling of its fruits is a good thing.

Wage slavery is a term used to refer to a condition in which a person is legally (de jure) voluntarily employed but practically (de facto) a slave. It is used to express disapproval of a condition where a person feels compelled to work in return for payment of a wage. In colloquial terms, this may refer to people that make a cult of work (the extreme case is death from overwork, known also as karoshi), or those who require one to work to be socially acceptable. In terms used by critics of capitalism, wage slavery is the condition where a person must sell his or her labor power, submitting to the authority of an employer merely to subsist.

Wage Slavery can be described as a lack of rights. The only rights you get are the rights you gain on the labor market. If your children cannot make enough money to survive, they starve. Your choices consist of the workhouse prison, or the labor market. The rich receive protection from the government in the form of corporate welfare subsidizing them while the poor and working people have to be subjected to market discipline.

Wage slavery as a concept is a criticism of capitalism, defined as a condition when a capitalist minority of the population controls all of the necessary non-human components of production (capital and land) that other people (workers) use to produce goods. This sort of criticism is generally associated with socialist criticisms of capitalism, but has also been expressed by some proponents of liberalism, like Henry George ([1]), Silvio Gesell and Thomas Paine

Wage slavery is a myth. Nobody is forcing you to work for anyone. You can always pack up your labor and go work for someone else or start your own business. Only in communistic societies, where you are assigned a job, is there wage slavery. I'd also like to know what kind of government welfare you think protects the rich from the forces of the economy. It seems the opposite here in America.

I also reject the use of the word 'exploitation' in the context given. If a company that pays its workers at a rate agreed upon by both parties in exchange for their labor, then uses that labor to produce goods and services which may be sold for a profit is exploitation, then picking an apple to eat it is exploitation of the environment and using a screwdriver to fix some shelves is exploitation of tools.

The crux of Marx's idiotic argument, and that of any modern socialist, is that those who have, have because they are lucky, and in an effort to keep what they have, they ensure that people who don't have are always poor and destitute. The idea that the rich don't work for their money (other than celebrities and heirs) is a ludicrous one. The truth is that the rich are rich because they were willing to do what it took to become rich and the poor are poor because they were not. Anybody who applies himself to any field can make a six figure salary, and anybody with financial responsibility can retire a millionare.

There's also this bit of damning evidence:

http://www.freetheworld.com/

Take a look at the economic freedom report. You'll notice that the most capitalistic societies in the world also have the highest minimum standard of living and the fewest poor. Speaking of which, did you know that the standard of living for the average American living below the poverty line is higher than the standard of living for the average European? If socialism is supposed to raise the standard of living for the poor, then how come the average poor person in America has multiple TVs, a computer, internet access, and a multi-bedroom dwelling while the average European, in a much more socialist country, does not?

[loosecannon]

You have something I want. I have something you want. We trade. That's capitalism.

No it actually isn't that is trade, or barter. Capitalism is a much more complex idea based on CAPITAL being invested in the means of production, employing LABOR to add value and then operating at a PROFIT.

All three of those elements are absent in your simplistic trade.

[loosecannon]

Labor is as commodity, bought and sold on the free market. Different types of labor have different values, and it is not wrong to turn that labor into a profit. Companies that turn labor into profit have invested millions, if not billions of dollars in equipment that the individual could not acquire himself. If that was not to be turned into a profit, it would either a) never happen, leaving people with no jobs and no goods or b) it would be controlled by the state, which is horrendously inefficient. To buy low and sell high is the nature of the entepreneurial spirit and is what drives the economy onward. The buying of labor and the selling of its fruits is a good thing.

It is also entirely not dependent on the buying of labor or of a capitalist class.

For example the workers themselves or a coop of locals could own the means of production and do all of the same without an elite class of capitalists who do not work.

Capitalism is not the process of running a business, it is the top down division of classes in which LABOR is purchased and an elite CAPITAL class privately owns the means of production then exploits the labor of wage earners for it's own profit

[MtnBiker]

Capitalism is not the process of running a business, it is the top down division of classes in which LABOR is purchased and an elite CAPITAL class privately owns the means of production then exploits the labor of wage earners for it's own profit.

Do not labours mutually benifit from wages of employment? If not could they not seek out employment that is beneificial to them or as was pointed out earlier become an entrepreneur to their own benifit.

[loosecannon]

and anybody with financial responsibility can retire a millionare.

False, not enough money on earth for that to happen, in fact the net worth of the earth divided by the number of persons is more like $10,000 each. So in a perfect world everyone could retire with about $30,000 saved.

Wage slavery is a myth. Nobody is forcing you to work for anyone.

That doesn't make wage slavery a myth. Everybody can not say no to employment because the means of production, including food and water are owned by a few.

Free markets are a myth. Capitalism is a myth.

I'd also like to know what kind of government welfare you think protects the rich from the forces of the economy.

OK, how bout bankruptcy protection and government bailouts? Subsidied, tavx incentives? Do those work? How about Government contracts? Privatization of government assets?

I also reject the use of the word 'exploitation' in the context given. If a company that pays its workers at a rate agreed upon by both parties in exchange for their labor, then uses that labor to produce goods and services which may be sold for a profit is exploitation, then picking an apple to eat it is exploitation of the environment

Yes it is if you do not pay the full costs of producing that apple. If you avoid the costs of pesticide pollution, benefits not paid to illegal field workers, and retirements for the few employees who are on the tax rolls then you are not paying the full price of the labor or the real costs of that apple. You are defering those cosats onto somebody else, while you keep the profits. That is the capitalist exploitive tactic in a nutshell. Reap without sowing, receive full benefits while avoiding paying the full price. The diffeence is your profit.

The crux of Marx's idiotic argument, and that of any modern socialist

No Marx wasn't a socialist and you have absolutely no idea what Marx's thesis is. And you sure as hell don't know what the crux is.

[loosecannon]

Do not labours mutually benifit from wages of employment? If not could they not seek out employment that is beneificial to them or as was pointed out earlier become an entrepreneur to their own benifit.

If one person sets themselves up to receive the profits, surplus value of 1000 laborers...

that is not the same thing as 1000 people setting themselves up to divide the profits, surplus value from the exact same business activity

Those two explain the difference from a random business and capitalist enterprise.

Capitalism is business organized explicitly so that it creates a small wealthy class and a large poverty class. Or middle class under the best circumstances.

But the exact same business could exist without capitalism.

[Hobbit]

We can dance around each other all year, but the point is this. Your entire argument is based on the gross fallacy that business owners do not work for their money. It was a fallacy when Marx said it. It's a fallacy now. It will be a fallacy for the rest of time. Business owners work hard for their money. They've earned it, and it's not the government's place to say they didn't and give it to some guy who didn't even have the gumption to get promoted past fry cook at age 55.

[loosecannon]

We can dance around each other all year, but the point is this. Your entire argument is based on the gross fallacy that business owners do not work for their money. It was a fallacy when Marx said it. It's a fallacy now. It will be a fallacy for the rest of time. Business owners work hard for their money. They've earned it, and it's not the government's place to say they didn't and give it to some guy who didn't even have the gumption to get promoted past fry cook at age 55.

No my premise is not at all based on "the gross fallacy that business owners do not work for their money ".

My premise is this: The very definition of capitalism is not a form of business like trading shells for horns or building autos. That is NOT necessarily capitalism.

Capitalism by definition requires a CAPITALIZED class to exploit a LABOR Class and by virtue of that exploitation derive a profit.

Capitalism is a two class economic paradigm. It is designed to fortify the belief that an elite class and a lower, poorer class are the optimum social arrangement.

Capitalism began right at the point when democracies were sprouting and the "rights of kings" were being rejected. The elite royal class invented a new paradigm that espoused the same BS that had been used to justify the rights of kings.

They declared that capitalism, exploitation and a two tier society, was the optimum social arrangement that provided the best living standard for all.

That thesis however is utterly false. Capitalism is designed to create wealth for a very small class of elite and create poverty for the masses.

There are several more fatal flaws in capitalism, but you will never be able to comprehend them until you come to terms with what capitalism is.