Market capitalism: unsustainable. Do you agree?

[Mushy-pea]

Hi everyone. Now, I`m sure that by now most of you are pretty tired of hearing the world`s politicians blaming everyone they can think of for the financial crisis, but....bear with me. My argument is that capitalism (in it`s current form) is unsustainable in the long term because it requires perpetual economic growth to remain stable. I believe that even if the current crisis had not occured, there would eventually be a greater crisis: saturation.

We would reach the point where everyone in the world had five cars, ten televisions, six computers etc. A point where the consumer could not consume any faster and economic growth became impossible. I think we should just bite the bullet and go communist now. Sure, it might feel harder in the short term, but I think we would reap the benefits eventually. What do people think?

P.S.: The above opinion is one I held before the recent economic downturn. This post is not simply an attempt to provoke reactions for the fun of it.

Steven.

[Salem]

> I think we should just bite the bullet and go communist now.
Can you point to a successful implementation of this idea which doesn't leave everyone blind, crippled and broke, but hey, we're all equal now (apart from the cushioned politico's).

> is unsustainable in the long term because it requires perpetual economic growth to remain stable
How so?
Things which oscillate can remain stable as well - otherwise known as "boom" and "bust".

[Ancient Dragon]

>>Sure, it might feel harder in the short term, but I think we would reap the benefits eventually

And just what are the benefits of communism? I haven't seen any around the world, such as in China and Cuba. All I see in communist countries is grief, sorrow, and enslaved citizens. Granted that China seems to be turning more to capitalism every year, afterall they practically own the USA now.

[jephthah]

>> Market capitalism: unsustainable. Do you agree?

Fallacy of the False Dilemma.

presumes a universally agreed-upon definition of "market capitalism" which is so tight in scope that it can be reduced to an either/or premise.

you failed. step down, kiddo.

[sneekula]

Market capitalism is sustainable. Everybody getting rich is not!

[RobRob666]

Nothing that is based on interventionism into individuals’ lives is sustainable. Thus, neither communism nor “market... capitalism (in [its] current form)” are sustainable. The only system that is sustainable is one where individuals run their own lives.

I should add that, while most people realize that communism is (government) interventionism to the hilt, many people do not recognize that capitalism is also so. While the latter is declared by many to include (some) freedom, it actually has less and less freedom over time, as more laws and regulations are put into place by government supported by complicit citizen voters.

To explain further: For a system to be sustainable, it must have “working” checks and balances such that “bad” human decisions meet with difficulties. When individuals running their own lives have such difficulties, they are in a position to change and redirect; it is because they will personally benefit by better decisions that they have incentives to improve their decisions.

But when monopolies are partially or mostly in charge (as is true with communisms, socialisms, capitalisms, and democracies), such difficulties from bad decisions are not directly affecting the people who are running things. The politicians and voters can continue to perpetuate bad practices, and make even more bad decisions, because they are affecting other people’s lives (and only negligibly affecting their own).

[Ancient Dragon]

>>The only system that is sustainable is one where individuals run their own lives.

Well, that's not entirely true. People can't just go around doing anything they dam well please. I can't go out and rape every woman I see on the street. There has to be some limits on human activity.

>>it is because they will personally benefit by better decisions that they have incentives to improve their decisions.
Theoritically yes. but that doesn't work in the real world. Drug problems are getting worse in this country (USA), not better.

[RobRob666]

The only system that is sustainable is one where individuals run their own lives.

Well, that's not entirely true. People can't just go around doing anything they dam well please. I can't go out and rape every woman I see on the street. There has to be some limits on human activity.

If you rape a woman, it is (by definition) against her will; you have intervened in her life, preventing her from running her life. Therefore, that is contrary to my “only system that is sustainable”. My original claim stands.

... it is because they will personally benefit by better decisions that they have incentives to improve their decisions.

Theoritically yes. but that doesn't work in the real world.

It works in the real world. What does not work in the real world is interventionism in other people’s lives -- as witnessed time and time again of people presuming to know better how someone else should live.

Drug problems are getting worse in this country (USA), not better.

Good example! The so-called War on Drugs -- serious interventionism in US people’s lives and other countries’ affairs and their people’s lives -- is fully to blame for the drug problem getting worse. If governments and their supporters would quit interfering then individuals could actually get the help they need in that area, but now most hide in secrecy getting no help. Also, it is only due to the “War on Drugs” that a huge, worldwide black market in drugs has been going strong for decades. The “War on Drugs” was a political brainchild of capitalist politicians and their cronies wanting another excuse to seize power over other people.

I would invite readers to consider any “problem” that any government or other interventionists have claimed they were going to solve, then study the history of that “problem” and see how things got worse, not better. It is a principle as universally applicable as gravity. But it really does take study; it's not something that can usually be understood intuitively.

[Aia]

Ancient Dragon >People can't just go around doing anything they dam well please. I can't go out and rape every woman I see on the street. There has to be some limits on human activity.

Yes, people can go around doing what they dam well please. As long as it doesn't infringe in the freedom of any other, it would be ethical and morally proper, and when it does infringe it would be unethical and immoral.

It is not the Law, enforcement services, nor government what force me to be civil, ethical and good citizen. In fact, regardless of fear of punishment, if the majority would decide to be immoral and unruly by virtues, no law enforcement would be able to stop it.

Question: Would you be a rapist of "every woman that you see in the streets" if there were not laws against it?

By the way, the composition of that comment of yours it is a touch low. Think about it.

[Ancient Dragon]

>>Yes, people can go around doing what they dam well please. As long as it doesn't infringe in the freedom of any other

The rapist comment was meant to be a bit extreme, and of course I quite agree with you. your freedom stops where my nose begins. And that was the whole point of my comment.

And I also agree that a lot of the problems politicians try to solve either do absolutely nothing or just make it worse. Take the Great Society of LBJ. After 50 years it has done virtually nothing except create generation after generation of people addicted to social welfare programs. And the War On Drugs is also a disaster.

But that doesn't mean that Capitalism itself is bound to fail. Capitalism is an economic and social system, not a political one. The USA is not even a Democracy -- its a Federal system. Therefore the USA is a Federal political system which operates in a socialistic/capitalistic society. We are neither pure capitalist nor a pure socialist, but some combination of the two.

[RobRob666]

I particularly liked the following from Aia:

Yes, people can go around doing what they dam well please. As long as it doesn't infringe in the freedom of any other, it would be ethical and morally proper, and when it does infringe it would be unethical and immoral.

It is not the Law, enforcement services, nor government what force me to be civil, ethical and good citizen. In fact, regardless of fear of punishment, if the majority would decide to be immoral and unruly by virtues, no law enforcement would be able to stop it.

And, Ancient Dragon is good to add this: “your freedom stops where my nose begins.” But, one who actually supports a social system of freedom would not support capitalism. Capitalism inherently includes a (huge, and getting huger) monopoly of force -- force that aggresses upon individuals and their freedom. Capitalism pretends to be about freedom, but it is not.

As I’ve said, that’s why capitalism is not sustainable. Take the current recession. The economic bubble that finally ended up bursting was caused, literally, by capitalistic methodologies. A system of freedom would not include within it government-sponsored enterprises (e.g., Fannie Mae, Freddie Mac) set up to (among other things) force housing and other loans to be given to people who can’t afford them. Now, millions of people are in much worse shape than if the monopoly wouldn't have "helped" before. An environment of freedom would not include massive bail-outs and government buy-ups of an arbitrary list of companies -- using other people's money, of course.

Capitalism (as communism) is just another system of interventionist redistribution of the wealth.

But what happened to our thread starter, Mushy-pea? Many of us have addressed your question. Wouldn’t you like to come back into the discussion? :icon_smile:

[Aia]

I am glad some of you guys have it all figured out. I am glad you think capitalism is not sustainable. I encourage you to keep strong in those thoughts. Meanwhile I will try to make as much money as I can and give the government as little as it deserves.

[Mushy-pea]

But what happened to our thread starter, Mushy-pea? Many of us have addressed your question. Wouldn’t you like to come back into the discussion? :icon_smile:

I`ve been a bit busy recently, adding value to goods and services in Japan. However, I will address a few points. On the question of what is defined as market capitalism (raised by jephthah), I was refering to a market on which capital instruments are traded. By this I mean equities (shares in companies) and bonds (tradable packets of debt).

The problem I see is basically that the individuals and institutions that invest money in these markets want to get a positive return on it (i.e. their money back later plus interest / appreciation). Imagine an investment firm has a large and diverse portfolio of stocks called "A". Suppose that the market value of "A" (plus accrued dividend and interest payments) increases over a substancial period of time, lets says three years. The probability is high that the average GDP of the countries where the stock is floated will have increased.

The more diverse the portfolio (i.e. the more companies it`s investments include), the more chance this is true. The converse of this is that if the average GDP in question remains stable or decreases, there is a high chance that "A" will lose money or gain nothing. Of course, "A" can make a profit for it`s investors even with zero market value growth through dividends and interest payments. However, the way the markets have often behaved in the past is periods of steady growth followed by occasional rapid declines.

When investors start to doubt the assumption of economic growth, their incentive to hold onto stocks (and thereby support the market system) shrinks. This is why I think such systems are unsustainable in the long term.

Steven.

[Ancient Dragon]

An environment of freedom would not include massive bail-outs and government buy-ups of an arbitrary list of companies -- using other people's money, of course.

I agree, but that is socialism, not capitalism. We (USA) are apparently in the process of becoming an even bigger socialist country then we already are. Only time till tell if our government eventually re-privatizes the companies it is now buying. The government bought 62% of GMC and has said it will eventually sell those shares -- I won't hold my breath for that day.

[Salem]

For me, the basic problem is one of size.

Ordinarily, in a properly functioning Capitalist system, failing companies would be allowed to fail.
This either solves the oversupply problem (so that the remaining companies in the same market will survive), or it creates a gap in the market where new entrepreneurs can step in and make a go of it themselves.

1000's of small and medium sized companies are going through this natural process, but there's no government piling up debt for the next couple of generations' on some foolish gamble.

If government wants to regulate, then it should consider the following statement.
"If this company were to fail, would we (the govt, and hence the people) be under any imperative to step in and bail them out?"
If the answer is anything other than a categorical "NO!", then the company is, BY DEFINITION, too big.

That means properly keeping a watch on mergers, and forced divestment if it simply grows too big.

I'm sure some hardened nuts will whine of about "the economies of scale", which is all very nice when things are going well. But when it all goes wrong, we're all footing the bill by a hell of a lot more cash than any illusion of savings before then.

Besides, these monstrously large companies are practical monopolies, so they only really benefit the directors and shareholders. Anything you would have saved as a customer is swallowed by price fixing.

Proper competition between say 4 roughly equal sized companies ensure value for money and customer service for all the customers AND maximise the return for investors. Also, what should be painfully obvious is that the market itself does NOT collapse if one (or even two) of the major players fold. Nor is the taxpayer left footing the bill for the rescue attempt.

Ask yourself, what kind of car can GM possibly produce that justifies it's vast size, that a number of smaller companies couldn't manage to do? I'm pretty sure that "price" and "quality" are not in the reasons you could list.

Here's another non-argument.
Ah says Joe, "but very large companies are needed to tackle the really large problems".
So what? The English Channel Tunnel project was far larger than any single bank or builder could ever have touched, but it got built non the less.
They form a consortium with a clear mission statement, and then go their own separate ways when the job is done.

What it isn't is some beached whale of a monster company flopping around gasping for government money so it can carry on flopping around gasping for money.

[frankh57]

Hi everyone. Now, I`m sure that by now most of you are pretty tired of hearing the world`s politicians blaming everyone they can think of for the financial crisis, but....bear with me. My argument is that capitalism (in it`s current form) is unsustainable in the long term because it requires perpetual economic growth to remain stable. I believe that even if the current crisis had not occured, there would eventually be a greater crisis: saturation.

We would reach the point where everyone in the world had five cars, ten televisions, six computers etc. A point where the consumer could not consume any faster and economic growth became impossible. I think we should just bite the bullet and go communist now. Sure, it might feel harder in the short term, but I think we would reap the benefits eventually. What do people think?

P.S.: The above opinion is one I held before the recent economic downturn. This post is not simply an attempt to provoke reactions for the fun of it.

Steven.

You forget one or maybe two things...Communism is about creating a different elite group---one from some so called proletariat(sp?) Some group always lands on top and communism as practiced by us mere mortals tends to be heavy handed and the true proletariat are repressed in misery (most often). It can't work since the populations tend to be so large as to create great inertia, lack of motivation other than to stay out of trouble, and little desire to excel. Just look at the failed experiment in Russia and the untold millions killed in the great purges.

[Mushy-pea]

You forget one or maybe two things...

Yes, you are quite right. Humans are too greedy and power hungry for such a system to not become corrupt and oppressive. What a shame, hey?

Steven.

[mister p]

RobRob666, People can't just go out and do their own thing, I mean think about it???!!!!!!! We all have to answer to someone in the end. Thats why we have leaders, that answer to a boards of directors

[RobRob666]

RobRob666, People can't just go out and do their own thing, I mean think about it???!!!!!!! We all have to answer to someone in the end. Thats why we have leaders, that answer to a boards of directors

Thank you, mister p, for noticing what I’ve written here. But let’s get it back in its proper context, and see if you don’t agree with me.

While my philosophy allows all people to “do their own thing”, it is only within the context of non-interventionism. Possibly you missed that last part in what I’ve said.

Nothing in my philosophy of freedom disallows leaders or boards of directors. What it disallows is leaders and boards being forced on people against their will.

All of us have our strengths and weaknesses, and in the latter area we want leaders to handle things we cannot do well (or choose not to do, for whatever reason). That’s why we join organizations, get hired as employees for companies, subscribe to expert help networks, buy stock in corporations with good management, etc.

I want all of those things to be done voluntarily. As soon as someone is forced to be led by someone they didn’t choose, it turns into a master/slave relationship, and it is contrary to my philosophy.

[Chaky]

Yes, you are quite right. Humans are too greedy and power hungry for such a system to not become corrupt and oppressive. What a shame, hey?

Steven.

I used to live in communism, so I should know a thing or two about it.

I was once told by one professor that "Communism is just too advanced for human minds".. in a sense that it is the humans that failed.. not communism.

I disagree.
It is a same crap as any other governing system. It all comes to few in power controlling the population. Now, if those few came in power by force, conspiracy, election or heritage doesn't matter. What matters is they have the power over everyone else.

What they DO with that power, that is what sets the differences.

Frankly, I don't know which I hate more. Communism or capitalism... One uses ideals, propaganda and personality cults to drive the masses (read: control behavior), and other is nothing more but pro-fined greed based solely on money.
They both conceder people to be nothing more than workforce. (I do not live to work. I work to live.)
They both patronize common men.

And, to make things worse, both are based on imaginary foundations.

Communism: Ideals are nothing more than codes of behavior, and are in same sphere as religion. That's why communism and religion can't mix.

Capitalism: Based on how much money one has... Do I need to remind everyone that the money is imaginary too? Not more than peace of paper, metal or just plain number? The fact that everybody accepts money, doesn't make it real. And if you work for money.. well.. that's the behavior control Mon-Fri, 8 hours a day.