Capitalism

[chrissy]

What's it about?

I mean, can we live without it? Looks like in ways we need it, but then again, it does create issues.

I don't think I really understand the basics of it. I found a bunch of sites online talking about it, but they are very opinionated. I know you all are too, but at least if you say something here, I can ask more details about it.

How does today's world events slant your views of it? Or does it at all?

I think that is all the questions I have for it... right now. :confused:

[Booyamos]

well in Star Trek they don't use money, so obviously in the future capitalism will be gone, cause you know star trek is real :P

heh

[Butch]

In its most basic sense, capitalism is essentially a system that allows every person to value anything and everything as they desire and to freely make decisions about acquiring, allocating and selling resources and products.

Basically, everyone makes their own calculations of costs and benefits.

Problems (inefficencies) arise, however, when people/organizations do not bear the full cost of their decisions (ie air pollution) . . . it is certainly a cost that negatively affects people, but the benefits personally derived by the people making the decision to pollute far outweigh the costs they personally realize . . . unless a government/organization is in place to enforce a cost upon them.

I'm cutting this short since I'm about to sit down to eat . . . but I couldn't resist replying at least a little bit now . . .

[chrissy]

Originally posted by Kacarp
well in Star Trek they don't use money, so obviously in the future capitalism will be gone, cause you know star trek is real :P

heh

Great! Then I really don't need to know this?? :D

[chrissy]

Originally posted by Butch
In its most basic sense, capitalism is essentially a system that allows every person to value anything and everything as they desire and to freely make decisions about acquiring, allocating and selling resources and products.

Basically, everyone makes their own calculations of costs and benefits.

Problems (inefficencies) arise, however, when people/organizations do not bear the full cost of their decisions (ie air pollution) . . . it is certainly a cost that negatively affects people, but the benefits personally derived by the people making the decision to pollute far outweigh the costs they personally realize . . . unless a government/organization is in place to enforce a cost upon them.

I'm cutting this short since I'm about to sit down to eat . . . but I couldn't resist replying at least a little bit now . . .


So, captialism is good for the individual who is nearsighted. Meaning that while you (the individual) make the money/trades that suit you, there are ripple effects that might hurt others. (industrial revolution?) The more I read, the more I think I am confusing myself. I think I am trying to make this harder than what it really is.

[mojo]

i would say that an answer would depend on what it is that you're trying to understand. are you studying capitalism? or are you studying economic systems? governments? your credit card bill?

[chrissy]

basically, just the pros and cons of capitalism. It is for my contemporary issues in American Business class, but I am trying to be smart and it's frying me tonight.

Another thing about online courses, you can bs your way through, but if you are really trying to do it, self instructing can be an issue.

[mojo]

i gotta do some stuff right now. if whitak doesn't fly in with his cape on and underware outside his clothes for another quality post soon, i'll try to field something.

[Cantacuzene]

Capitalism works for now, but it wont be around forever. Capitalism thrives because people have to work to get stuff done. Eventually in the future everything will be so automated that its unlikely people will have to work as much as they do now. The 8 hour day will be a thing of the past. Within 25 years 6 hour work days will be standard. Within 200 I'm guessing most people will work an hour or less a day. There simply wont be a huge NEED to work. The answer to unemployment isnt more jobs, its shorter work days.

The best book on the subject of modern capitalism/socialism is Cyber Marx by Dyer-Withford. You can read it for free online here (http://www.fims.uwo.ca/people/faculty/dyerwitheford/).

There is the quote from Usual Suspects about the devils greatest trick being that he convinced the world he doesnt exist, but you could say capitalism's greatest triumph is convincing the world it couldnt survive without it.

[mojo]

pros and cons, eh? well, i can do a few of thems. this may be brief, but me still busy :P


pros:

really cool stuff
competition can assure quality
competition can regulate prices
stuff available more readily
productivity payout scale apparent (as an oversimplification)- hard work=get more stuff
medium of trade can cross boarders with conversion
quality of life better over all



cons:

stuff costs money
since there is an "upper class"...there has to be a "lower class"
monopolies are a bitch
greed causes tension
unemployment is a bitch
rising prices are...um...bitches
underemployment is a bitch
layoffs during economic downturn (to scale) is...yes...a bitch

[Butch]

Originally posted by chrissy



So, captialism is good for the individual who is nearsighted. Meaning that while you (the individual) make the money/trades that suit you, there are ripple effects that might hurt others. (industrial revolution?) The more I read, the more I think I am confusing myself. I think I am trying to make this harder than what it really is.

It's not a matter of the near-sighted who can hurt the system and benefit personally . . . it's a matter of the cheaters who can benefit if there is no regulation and enforcement mechanism in place to ensure that all costs are fully realized. Capitalism is best when everyone is playing by the same "rules." For instance, there needs to be a system in place to enforce contracts and prevent fraud. This is where government intervention comes into play . . . and a very fine line needs to be drawn between government intervention to ensure fair play . . . and government manipulation of the economy to suit a particular interest.

Also, while I think you were using "near-sighted" in a slighty different context (referring to the scope of who will be affected) . . . if you change the context a bit to refer to a context of time, then the near-sighted tend to be the most hurt by capitalism because not thinking about the future effects of your actions does not allow you to fully understand the costs of your actions. Overuse of credit cards, for example, comes to mind.

[chrissy]

Okay, so with capitalism it is hard to separate personal needs, no, not right...

umm...personal feelings/urges/responses. I mean, without it, there is no drive to be successful. But yet, because of these there is a need for capitalism?

/me is talking in circles

wow, I do see ways it is good, but then again, bad results from the good that does occur. (right?)

Okay, so how does Enron and Worldcom and, now AOL (is that really true???), play into capitalism?

I know morally what they did was wrong and it was against the law, but as one that does not pay attention to stocks (too poor to care maybe?), I guess what I am asking, does capitalism boil down to greed? to first come first served? out for number one?

If captalism is for the individual, why does instances like that hurt mostly the little guys? (I know the obvious answer, but in our "mixed economy" ways, why are the little guys not protected?)

[Cantacuzene]

Originally posted by chrissy

umm...personal feelings/urges/responses. I mean, without it, there is no drive to be successful. But yet, because of these there is a need for capitalism?

I disagree. You fell into capitalism's trap. The "no drive to be successful" is bs. What about the 15,000 years of human history before capitalism? Did people not try to be successful then? The Roman Empire was run on distinctly socialist lines, yet there was plenty of drive for plenty of people to succeed. In the middle ages under fuedalism there wa sno capitalism, yet people still strove to excel.

People will always do what they think will make them happiest. Even under socialism or fuedalism its possible to be happy and successful. Capitalism has raised us to belief that only through capital can we be happy, which isnt the case at all.

[Butch]

Originally posted by chrissy
Okay, so with capitalism it is hard to separate personal needs, no, not right...

umm...personal feelings/urges/responses. I mean, without it, there is no drive to be successful. But yet, because of these there is a need for capitalism?

/me is talking in circles

wow, I do see ways it is good, but then again, bad results from the good that does occur. (right?)

Okay, so how does Enron and Worldcom and, now AOL (is that really true???), play into capitalism?

I know morally what they did was wrong and it was against the law, but as one that does not pay attention to stocks (too poor to care maybe?), I guess what I am asking, does capitalism boil down to greed? to first come first served? out for number one?

If captalism is for the individual, why does instances like that hurt mostly the little guys? (I know the obvious answer, but in our "mixed economy" ways, why are the little guys not protected?)

The examples of Enron and Worldcom (I will withhold judgement on AOL) are examples of fraud and the need for rules and their enforcement.

Ya see, in order for people to accurately weigh costs and benefits in their minds (ie "Should I buy this stock at this price?" or "Should I sell this stock at this price?"), they need to have accurate information. The SEC makes an effort to ensure that accurate information is available to investors so that they can make an informed decision.

Those in charge of Enron and Worldcom cheated in that they did not give accurate information to investors . . . so those investors made decisions that they would not have made otherwise had they known what was really going on.

When the accurate information came to light, everyone realized that the companies had been improperly valued and that their share of the companies was not worth nearly what they thought it was.

The little guy gets hurt because the little guy has the least recourse in trying to claim damages. If a company is worth nothing, how can they pay everyone back for the damage they caused?

But, you'll also see that the people who perpetrated this fraud SHOULD ultimately be very hurt by this and hopefully end up in jail. The reason for this will have been their near-sightedness in being greedy and cheating the system and not thinking of the long-term consequences of their actions. Regulations will hopefully be able to enforce the costs that these criminals thought they would not have to realize.

[chrissy]

Canta, I see what you are saying but I don't know how to respond to it.

Of course they were happy before capitalism. There is natural drive in humans that make us want a better life (fire, the wheel...).

Is it that with capitalism, we are more materialistic? Or is that too broad of an example?

[dbax791]

Originally posted by Cantacuzene
Capitalism works for now, but it wont be around forever. Capitalism thrives because people have to work to get stuff done. Eventually in the future everything will be so automated that its unlikely people will have to work as much as they do now. The 8 hour day will be a thing of the past. Within 25 years 6 hour work days will be standard. Within 200 I'm guessing most people will work an hour or less a day. There simply wont be a huge NEED to work. The answer to unemployment isnt more jobs, its shorter work days.


I don't buy that at all. I'm sure people were saying that 100 years ago when the industrial revolution started to take shape. We are 1000x more automated today, but the work just doesn't go away. It is just channeled into a different direction.

And that is a result of capitalism IMO - b/c one of the tenets is free competition, and while you may be working a 6 hour day, your competitition is going to work that much harder to get your customers, improve their products, etc.

[chrissy]

Originally posted by Butch


The examples of Enron and Worldcom (I will withhold judgement on AOL) are examples of fraud and the need for rules and their enforcement.

Ya see, in order for people to accurately weigh costs and benefits in their minds (ie "Should I buy this stock at this price?" or "Should I sell this stock at this price?"), they need to have accurate information. The SEC makes an effort to ensure that accurate information is available to investors so that they can make an informed decision.

Those in charge of Enron and Worldcom cheated in that they did not give accurate information to investors . . . so those investors made decisions that they would not have made otherwise had they known what was really going on.

When the accurate information came to light, everyone realized that the companies had been improperly valued and that their share of the companies was not worth nearly what they thought it was.

The little guy gets hurt because the little guy has the least recourse in trying to claim damages. If a company is worth nothing, how can they pay everyone back for the damage they caused?

But, you'll also see that the people who perpetrated this fraud SHOULD ultimately be very hurt by this and hopefully end up in jail. The reason for this will have been their near-sightedness in being greedy and cheating the system and not thinking of the long-term consequences of their actions. Regulations will hopefully be able to enforce the costs that these criminals thought they would not have to realize.

okay, so that goes back to this?


Originally posted by Butch


capitalism is essentially a system that allows every person to value anything and everything as they desire and to freely make decisions about acquiring, allocating and selling resources and products.


If someone at the top is greedy and falsely values an object (ie: stock values), and that object is sold at this inflated value, it underminds what capitalism is? or stands for? And when that happens, government steps in and becomes the regulator? (is this where "mixed economy" comes in? Because in a true capitalist economy, government really doesn't have a role, right? or did I scramble something I read?)

[Cantacuzene]

Originally posted by dbax791


I don't buy that at all. I'm sure people were saying that 100 years ago when the industrial revolution started to take shape. We are 1000x more automated today, but the work just doesn't go away. It is just channeled into a different direction.

And that is a result of capitalism IMO - b/c one of the tenets is free competition, and while you may be working a 6 hour day, your competitition is going to work that much harder to get your customers, improve their products, etc.

I think you missed the point. If there is no work to do then what are all these employees going to be doing with their time? 100 years ago people could not envision a modern factory like we have today. Its very easy for us now to envision a time when factories and farms are completely automated.

Once all the hard labor jobs are automated where will the population which is growing at an enormous rate work? They cant all be in management. You think the service industry will expand? If 99% of workers are making 25k a year in the service industry how will that make life better? It won't. People will be poorer than ever because there will be less high paying jobs to go around.

The only way to solve the employment problem is to shorten the work day. You example that another company will make their employees work more is stupid. The 8 hour work day is enforced by law in the US. That number is arbitrary. It could just as easily be 6 or 4. In many european countries a 6 hour work day is enforced and it has been shown to increase productivity verse an 8 hour day.

The basic question is this: why should humans have to toil? What are we creating this technology for? To make life easier or more complicated? I hope for easier. People simply do not NEED to work as much now as they did 80 years ago. We created industrialization and the enormous leisure time and wealth it created should be used to make life easier for ALL people. If the work is going to be "channeled into other areas" like you say then really technology is a dead end. We will still be stuck working our asses off for the rest of eternity. I really hope not. I really hope there is a point to technology. I hope someday the only work we have to do is cleaning up after ourselves and artistic endevours. We have the ability to make this so, if not now than in the near future. But capital has the majority convinced that this is a fantasy; that there is no alternative to mind numbing work. Its exactly that bleak outlook that fosters unemployment and creats an reserve labor force that lowers salaries for everyone.

[Cantacuzene]

Originally posted by chrissy
Is it that with capitalism, we are more materialistic? Or is that too broad of an example?

Capitalism tells us that the only way to have nice stuff and be happy is to be a capitalist or a worker.

Capital has given us one path to material happiness, but in doing so it blinds us to the alternatives.

Why do the profits of Ford Motor Company go to the stock holders and execs rather than the employees? The employees do the hard work. They planted the seed, they should reap the fruit. If you work for Ford there should be no excuse for you not to have the best product Ford makes. If I am a shoe maker, you can bet I will have a nice pair of shoes. Workers should be more tied to their product, and there is no reason for them not to be.

[RoniMan]

i might be opening up a whole new can of worms, but i felt like contributing my 2 cents.

chrissy, have you ever read stephen covey's 7 habits of highly effective people? (not to further confuse you/add to your reading list), but covey says something that i agree with; everything is principle based. try to argue with that principle, and you'll lose everytime.

the principle here is that capitalism, socialism, communism, democracy are all ideals. and hence they work in an ideal world. however, we don't live in an ideal world, we live in a world of emotions, and that's the monkey wrench in the whole thing. the ideal world doesn't take into consideration about greed/jealousy/anger (the negative emotions). it just works based on it's ideals. if you want to just understand capitalism, read a book. to understand how it's affected in our world, go walk in a mall.

so to somewhat answer your question, i believe people try to invalidate capitalism (or any ideals for that matter) to prove a point. but by proving that point, nothing has changed. so we find something else to support. but in turn, we run into the other end of the spectrum who supports capitalism, but disagrees with our ideal. so this cycle continues on and on. when in fact, i believe the truth is that capitalism won't/can't change. it's people that have change to meet the ideals. will that happen? hmmm...

[chrissy]

No, Roni, I haven't. But I do understand what he is saying by capitalism being an ideal. I think that is what I was trying to say earlier and just didn't have the words to put it.

Thanks :)

[Joshua]

cap·i·tal·ism (kp-tl-zm)
n.
An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

capitalism

n : an economic system based on private ownership of capital [syn: capitalist economy] [ant: socialism]

[whitak24]

Originally posted by mojo
i gotta do some stuff right now. if whitak doesn't fly in with his cape on and underware outside his clothes
/me looks down.....

hmm....looks like i remembered to put my underwear on FIRST this morning. do i get a medal? :P

[molecularfire]

Theory behind capitalism - Trust people to do what they think is best for themselves, and hope that somehow everything works out.

[Merlin]

Capitalism is basically just a mechanism for a society to get the most out of what it has (maximize its scarce resources). It is predicated first of all on property rights, that what is your is yours. You then take what is yours (called the factors of production - land - labor - money - ideas) and try to make the most out of it. The idea here is that by letting do what is best for them we will get the most overall good/benefit.

This in stark contrast to communist/centrally planned systems where you don't own anything but rather the society owns everything and gives you what you need and tells you what to do for work. This was the system the old Soviet Union was based upon.

Interestingly enought communism is a wonderful and moral idea but it just didn't seem to work. Afterall people are in efect lazy and particularly so in a system where there is no incentive. It is a problem with free riders. But this system is still alive and well in the United States - it is how most families are organized. You do your chores, go to work, clean the house and everyone enjoys the living experience.

[Merlin]

Originally posted by Cantacuzene
Why do the profits of Ford Motor Company go to the stock holders and execs rather than the employees? The employees do the hard work. They planted the seed, they should reap the fruit. If you work for Ford there should be no excuse for you not to have the best product Ford makes. If I am a shoe maker, you can bet I will have a nice pair of shoes. Workers should be more tied to their product, and there is no reason for them not to be.

You can't possibly be serious with this. The worker at Ford put up nothing to begin with and takes no risk. He shows up does his job and gets paid. If things go bad for the comapny the worker simply goes somewhere else and gets another job. No real skin off his nose here. Those who actually own the capital stand to lose everything. Whatever they started with is at risk at all times. So why would they take this risk? Well only if they have the opportunity to enjoy some possible upside from their efficient use.

And as for the absolutely ridiculous comparison between the autoworker and the shoemaker...Of course the shoemaker would have a great pair of shoes since he is his own the friggin shop! He has the ability to do everything to get a good pair of shoes on his own. The tools are cheap, the raw materials are cheap, and he presumably has the expertiese so he can take care of himself rather that paying someone else to do it. The autoworker, on the other hand, does not own the tools, raw material, nor the factory. Moreover, he is only one small component to the finished product. If he wants a good car he has to buy it just like everyone else.

[Cantacuzene]

Originally posted by Merlin
The autoworker, on the other hand, does not own the tools, raw material, nor the factory. Moreover, he is only one small component to the finished product. If he wants a good car he has to buy it just like everyone else.

And that right there is the problem. I'm not saying that the owners should have no stake in the company, but that they have an equal stake with the labor. Workers should have a stake in the product they produce. Otherwise the employee becomes alienated and doesn't care. He will work only hard enough not to get fired.

You'll notice that many companies have employee stock holding programs. This is their way of combatting what I have suggested and its a step in the right direction. MOdern capitalism is full of these little 'comprimises.' The problem is they dont solve the problems inherent. Its like patching a tire. The patch will eventually wear out and you'll have to fix it again later. A more permanent solution to the economic problems will have to be found eventually.

[Merlin]

If you want them to have a comparable stake in the company that's great and I'm all for it - they just need to pony up some upfront cash like the other providers of the factors of production, and also agree to somehow share in the downside as well as upside. As it stands the employees shoulder very little risk - particularly upper management level (CEO) employees. That is they still get paid whether or not the company performs.

If you want the benefits of upside you have also bear the risks. And this is a real problem. Most folks don't mind taking risks with their portfolios but want/need a salary they can count on. I don't blame them, I count and budget for my salary being a set level. So I don't know too many folks who would accept risks around their regular pay, especially after we'vew seen three years of difficult markets.

As for employees having a stake in their performance...they do. If they don't do a good/aceptable job then they get replaced. Keeping one's job in a difficult labor market is a very motivating thing.

[Cantacuzene]

Originally posted by Merlin
As for employees having a stake in their performance...they do. If they don't do a good/aceptable job then they get replaced. Keeping one's job in a difficult labor market is a very motivating thing.

All the more reason to lower the length of the work day. Without a reserve labor pool of unemployed people the powers that be cant abuse their employees with the threatof being replaced.

[Merlin]

Originally posted by Cantacuzene


All the more reason to lower the length of the work day. Without a reserve labor pool of unemployed people the powers that be cant abuse their employees with the threatof being replaced.

Shorten the work day? That saound like a good idea until either someone else who is more willing to work comes along and eats your lunch or you want to get something done and nobody is around. There really is so much work to get done, especially by enterprising people who want to get ahead that a shorter work day will never happen. Now if you have different aspriations (note that I said different and not lower) you can indeed choose to work less but then don't expect to have the same standard of living. You only get what you earn.

[Cantacuzene]

Originally posted by Merlin


Shorten the work day? That saound like a good idea until either someone else who is more willing to work comes along and eats your lunch or you want to get something done and nobody is around. There really is so much work to get done, especially by enterprising people who want to get ahead that a shorter work day will never happen. Now if you have different aspriations (note that I said different and not lower) you can indeed choose to work less but then don't expect to have the same standard of living. You only get what you earn.

I again ask, why is the 8 hour work day so perfect? Why did we choose to stop on that number? We would be MORE productive if we had a legally enforced 6 hour work day. You cant use the "your competitors will work longer hours" because its legally enforced just like the 8 hour day is now.

[sbp]

Originally posted by Cantacuzene
All the more reason to lower the length of the work day. Without a reserve labor pool of unemployed people the powers that be cant abuse their employees with the threatof being replaced.Well geez does that mean folks are going to get paid an 8 hour wage for doing a 6 hour job?

If not here's a question...do people want to have 25% less earnings every year?

[Cantacuzene]

Yes, you get paid a full days wage for 6 hours pf work. Please dont say "businesses cant afford that." First the business will become more productive. Second, businesses afforded the change from 12 hour day to 8 hour day well enough. Mabye instead of criticizing the idea you should read about it from someone who can argue it and explain it better than myself.

http://www.fims.uwo.ca/people/faculty/dyerwitheford/Chapter8.pdf

[Johnnymac]

Does anyone here actually get to work an 8 hour work day? I wish I had one of those.

[dbax791]

Originally posted by Cantacuzene


I again ask, why is the 8 hour work day so perfect? Why did we choose to stop on that number? We would be MORE productive if we had a legally enforced 6 hour work day. You cant use the "your competitors will work longer hours" because its legally enforced just like the 8 hour day is now.

Sure you can. 8 hours is legally enforced for non-exempt workers. The entrepreneurs/competitors/exempt workers are not tied to this limit at all.

[Merlin]

Originally posted by Cantacuzene


I again ask, why is the 8 hour work day so perfect? Why did we choose to stop on that number? We would be MORE productive if we had a legally enforced 6 hour work day. You cant use the "your competitors will work longer hours" because its legally enforced just like the 8 hour day is now.

You're right, the 8 hours is arbitrary. Nevertheless, in our economy you are free to work as much or as little as you want. If I decided I only wanted to work a couple of hours I can get a part time job. If I decided I wanted to work more I can get a second job so in the end the number is really up to the indivudual, as it should be. It just seems to work out that around 8 hours two things seem to happen. Most people start to burn out on the day and as such their productivity goes down and more importantly people want to do their own thing. See family, go to the gym, watch the game, etc. Work is simply a trade off between your free time and money. We all need money so we give up some free time to work. After a while we have money and want to enjoy it so we choose free time. If that trade off point comes at 6 hours for you, well good or you. That does not mean it is right for everyone else.

[Cantacuzene]

Originally posted by Merlin
If that trade off point comes at 6 hours for you, well good or you. That does not mean it is right for everyone else.

You obviously don't even care to try to learn. You're so stuck in your ways thats you refuse to even acknowledge the possibility that something better than the system we have now may exist. I hope you're rich because otherwise its people like you that help contribute to keeping other working class folks down. If you're rich then at least you'll have a reason for doing it.

[Merlin]

Originally posted by Cantacuzene


You obviously don't even care to try to learn. You're so stuck in your ways thats you refuse to even acknowledge the possibility that something better than the system we have now may exist. I hope you're rich because otherwise its people like you that help contribute to keeping other working class folks down. If you're rich then at least you'll have a reason for doing it.

Various economic systems have been tried throughout history and around the world today. Funny thing is that markets really are brutally efficient. If a better way of organizing the factors of production and distributing wealth were to surface then it would be adopted. As for right now capitalism is the best we have been able to come up with. Moreover, capitalism, at least the way it is implemented today, evolves to meet the needs of its society. As we moved from agrarian to industrial then to service oriented the system has been modified and will continue to be modified going forward. So yes, I am willing to consider something different. But no, an enforced 6 hour work day is not the answer.

[Cantacuzene]

Originally posted by Merlin
If a better way of organizing the factors of production and distributing wealth were to surface then it would be adopted. So yes, I am willing to consider something different. But no, an enforced 6 hour work day is not the answer.

First, there are structural institutions present in capitalism that prevent other alternatives from surfacing. The fact that capitalism has ingratiated itself with politics and education has made it transcend being simply an economic system. Capitalism has spread deep roots in society and these roots prevent other tress from growing. So you are wrong, other systems would not be adopted even if they preventd themselves.

As far as you summarily dismissing the 6 hour work day, you have no real arguement against it other than you disagree with me and since I support it you are against it. When all the evidence indicates that a 6 hour work day will make people happier, increase productivity and reduce unemployment beign against it is simply being a stick in the mud.