Capitalism Is Perfect Or Not?

[4588686]

Arfink,

I do hope you read what Hasan shared. Start with the below and read the rest of the piece from there:

[...] Burczak's treatment is highly sophisticated, but I am afraid I am not persuaded. The absolutely central and bottom-line problem is that an economy consisting of worker-owned and democratically controlled firms would impose a significant static efficiency loss on the economy and would severely retard scientific and entrepreneurial innovate. [...]

I also ran across this pdf below, which seems a reasonable piece:

http://mises.org/journals/scholar/Distrib6.pdf

[...] For distributivism was, and is in its newer manifestations, more a movement in ethics than in economics per se. Its most famous early exponents, Hillaire Belloc and G.K. Chesterton, were capacious thinkers for whom economic ideas and experience of economic systems were not foreign -- yet these men too were not economists. [...]

When reading your comment that was what stood out to me. There doesn't seem to be any economics underlying distributivism (or the goals stated in your comment), it doesn't seem so much an economic theory or system, as it is an ideology, if I may use that term.

I get the impression that faced with socialism on one side and industrialism on the other, Chester-belloc tried to picture an alternative ending in mind. They did so and called it distributivism, then they worked backwards, figuring out what rules and requirements would be required to arrive at their desired end.

So to me this isn't an economics question. Economically it would be a calamity. If that's not obvious to you it's because, as you mentioned, you aren't an economics guy, so you'll have to be patient in arriving at the same conclusion, but you have both Hasan and I saying similar things, so you have to wonder where you'd get support.

So since this is more an ideology imposing a system, to me it is more a political question... It's scary to me really, how orwellian Belloc, who I enjoy, begins to sound (source here):

“Three provisos must be kept clearly in mind before we approach the problem and attempt its practical solution.

“The first proviso is that in the restoration of property we are not attempting, and could never reach, a mechanical perfection. We are only attempting to change the general tone of society and restore property as a commonly present, not a universal, institution.

“The second proviso is that we cannot even begin such a reform unless there is a favorable state of mind present in society, a desire to own property, sufficient to support and maintain the movement and to nourish institutions which will make it permanent.

“The third proviso is that in this attempt to restore Economic Freedom, the powers of the State must be invoked”17.

So to paraphrase "in order to restore property rights, we first must over-ride them." (Personally, I'd rather skip the second portion and just respect property rights.) This is what scares me so much with these sorts of top-down ideologies is that ultimately you'd hand over incredible power to the state to implement the ideas, because no group would ever arrive at them on their own. This is power which would likely never be relinquished. Power which would likely be abused beginning on day one. (Read Hayek's "Road to Serfdom" for an overview on that - for though distributism has different ends than marxism, the necessary means have much in common.)

I may have misunderstood distributivism or simplified some of it's arguments - and if I did I apologize - but to it's proponents I would encourage a different approach. Don't start with some sort of utopian end in mind and work backwards. That never ends well. Take the world as it was, is, and will be. Then add your values on top of that as a framework.

For example, "making everyone a property owner" and "eliminating companies" sounds great, but it would be hard to get from here to there without totalitarianism, and the ending would likely disappoint.

Instead of taking property as an end, take it as a means to arrive at freedom, which for some is an end and for others, like Catholics is just a means itself. That's one of the reasons I don't like the term "capitalism." I've never referred to myself that way ever. What I support is a free-market, for almost the same reasons Belloc supported distributivism.

I would add that I am highly ideologically sympathetic to democratic expansion to the private sector. I am not sure that I would agree with Gintis that democracy in the workplace is merely an instrumental value. However his critique of workplace democracy is fairly devastating. He has some more thorough critiques out there that was just the first one I could find. I'm still hopeful that some model could be found. And I think that decentralizing and weakening state and corporate power may help some different institutional structures evolve. But that's just a hope and right now it's not a feasible goal.

[CrossCuT]

*sigh* - I will repeat myself this last time. 

 

~90% of student loans come from department of education.  It is a branch of the federal government.  By definition, everything it does is driven by laws or regulations, period.  Therefore student loans are regulated.  The DoE explains that on various sites, see here.

 

I have shown you that regulations of student loans exist.  I have shown you that nearly the entire student loan market has been and is nationalized.  I cannot give you more detail than that at this time.  Generally you need to hire a professional to help navigate through federal regulations.  I am not one of those people.

So by your definition, "comes from gov" = "regulation". Lets go with that

The problem is that the regulations are garbage. Its not like every regulation is the same, therefore all regulations are bad or good.

 

http://balkin.blogspot.com/2013/07/income-based-debt-forgiveness-least.html

 

As I said, "Regulations/Regulate" have a recognized meaning in the context of government which is more specific than the above.  It doesn't surprise me that you don't know that.

So youre saying words dont mean what they actually mean?

 

Monetary expansion doesn't affect prices? 

Does that mean youre blaming the rise in tuition prices solely on monetary expansion?

 

Sounds like rambling.

 

Poor production levels are a reality. I'm not reducing people to profit machines, I'm making a statement about how the world works. It works this way in hunter/gatherer societies, too. Scarcity is an unavoidable reality, and it drives our decisions. If there weren't such a thing as poor producers, there would be no such thing as charitable donation. 

 

In the end, it is the consumer who is heartless. If consumers were not tempted by lower prices, wages could rise. I assume you make all your purchases when goods are at their most expensive.

 

Typical response: thats how the world works. Well, it works that way because we made it that way. All we have to do is decide to make it another way. There is no inevitable outcome.

[havok579257]

It's "not right" to not get a "retirement" after 19 years?  Where does the retirement money come from?  It doesn't grow on trees. Consumers would have to pay more to cover those increased costs, so poor people who shop at Wal-Mart would essentially receive a pay cut in the form of less purchasing power.

 

It's not right that someone is so short-sighted and so unambitious that they don't think about doing something bigger and better than working on a loading dock at Wal-Wart.

 

She showed no "loyalty" except to her need for a job.  She would have quit if someone offered her something better.  The loyalty on both sides is an agreement to exchange labor for dollars.  It's not a marriage for life.

 

now workers should not have retirement, huh?  cuts into profits to much for you huh?

 

so now the woman who workers as a docker loader at walmart is short sighted?  Is she lazy to?  How about worthless?  Do you even know that persons situation?

 

Again you know her situation?  You know she would have left for a better paying job?  You know they didn't ask her to stay and they promised her raises and the what not and then went back on their word.  Opps, sorry, I forgot big business are completely altruistic and near saint like and all their workers are lazy,money mooching, unambitious people who have no loyaltly at all(something you said that all they need to move up in the world.  show you can be loyal and trusted to your employer and then they will make you a manager) and don't deserve anything if it cuts into any profit because profit first, profit 2nd and people 10th.

Edited March 17, 2014 by havok579257

[Pliny]

Profits go to people.  Little old ladies receive profits in the form of dividends.

 

Profits are important to everyone.  If there are no profits, the business is failing and soon will be out of business.

 

I don't know her situation except that she foolishly stayed in the same low-paying job for 19 years.   Unless she liked and wanted that job, of course. It's her choice.  But during that time she could have bettered herself and made herself more employable or could have started her own business.

 

Nobody owes anybody any loyalty.  The company should be free to fire their employees and the worker should be free to fire his employer and work for someone else.

 

I'll be shopping at Wal-Mart this evening and I am grateful to have access to most things I need, at the best prices most of the time, 24 hours per day.  The people who work there have agreed to work there and I have agreed to purchase many things there.  We're all exercising our rights to trade.  Yet there are "do-gooders" who would strive to restrict our freedoms for the sake of "fairness."

 

 

 

 

[Pliny]

now workers should not have retirement, huh?  cuts into profits to much for you huh?

 

 

How about everyone gets $100k per year, a free house with a swimming pool, and full retirement pay beginning at age 40?

 

If you think you can wave a magic wand and have high salaries and benefits by decree, why not go big?

[Winchester]

 

 

Does that mean youre blaming the rise in tuition prices solely on monetary expansion?

 

Sounds like rambling.

 

 

Typical response: thats how the world works. Well, it works that way because we made it that way. All we have to do is decide to make it another way. There is no inevitable outcome.

 

Are you disagreeing with the law of marginal utility?

[CrossCuT]

Are you disagreeing with the law of marginal utility?

 

Do you mean the law of diminishing marginal utility?

[Winchester]

Do you mean the law of diminishing marginal utility?

Is that a yes or a no?

[4588686]

How about everyone gets $100k per year, a free house with a swimming pool, and full retirement pay beginning at age 40?

If you think you can wave a magic wand and have high salaries and benefits by decree, why not go big?

I have already pointed out why this is a bad argument

[CrossCuT]

Is that a yes or a no?

 

I dont think it is a question of whether or not someone believes in it. 

 

If you are referring to the law of diminishing marginal utility, it is true in some cases and not true in others. The entire study of economics has been corrupted so even people who think they understand the "Laws" of economics, have been fed bullshit to perpetuate the lie. I know it sounds like a conspiracy theory, but its the truth. Thats why you can get "economists" who have graduated from well know institutions say things that don't make any sense and really believe it.

[Winchester]

I dont think it is a question of whether or not someone believes in it. 

 

If you are referring to the law of diminishing marginal utility, it is true in some cases and not true in others. The entire study of economics has been corrupted so even people who think they understand the "Laws" of economics, have been fed the essence of cow to perpetuate the lie. I know it sounds like a conspiracy theory, but its the truth. Thats why you can get "economists" who have graduated from well know institutions say things that don't make any sense and really believe it.

 

So in which cases is it not true? You've apparently made quite a study of the matter.

[CrossCuT]

So in which cases is it not true? You've apparently made quite a study of the matter.

 

Why does it matter?

The law of diminishing utility is not whats causing tuition prices to rise... it can't even be applied.

[NotreDame]

Why does it matter?

The law of diminishing utility is not whats causing tuition prices to rise... it can't even be applied.

 

Totally correct... it's all the evil corporations running universities and giving out student loans that are causing tuition to go up. 

 

[NotreDame]

I have already pointed out why this is a bad argument

yeah, but you probably kneel during the consecration too...

 

[Winchester]

Why does it matter?

The law of diminishing utility is not whats causing tuition prices to rise... it can't even be applied.

 

It applies to the value of money per unit. It is applicable because of credit expansion.