Capitalism, Communism; there is a third alternative

Originally posted by Johnmike
I think capitalism works perfectly fine. I don't want an alternative.

Ditto that.

Capitalism works fine. Capitalism, tempered by a Republic with Democratic ideals. Capitalism is the best way of doing things.

You don't give any reason why totalitarianism has anything to do with capitalism.

A very simple dynamic leads to pure capitalism devolving into violence.

In any purely capitalist society, wealth tends to increase, but it also tends to concentrate itself. IE the people who have money are in a better position to accumulate more money, so while everyone's wealth increases, wealth increases more rapidly for the wealthy.

Eventually you end up with a wealth distribution pattern that looks like a pyramid, with a tiny few at the top controlling great wealth, and huge numbers at the bottom with little to nothing.

People being what they are, eventually this leads to violence. Which is why the successful industrialized countries have tended to quickly incorporate socialist features into their market economies. This is done to change the shape of the pyramid, to bulk it up in the middle to create an artificially large middle class. Relatively prosperous populations are far less likely to decide to kill off the people at the top than teeming masses of proles.

Where we've seen this model adopted successfully, the US, Europe, and increasingly Asia, we've seen relative stability. In the Third World we've seen a pattern where unfettered capitalism has destabilized societies, they undergo "socialist" revolutions, resulting in economic stagnation - because planned economies simply don't work, you just get a huge bureaucracy corrupted by a huge black market, and wealth tends to decrease over time for all.

Then the socialist state implodes, to be replaced by lassiez-faire capitalism again, completing the cycle and setting the stage for a repeat.

[edit on 4/1/07 by xmotex]

Any country can print as much money as the wish and become trillionaires overnight. Money is nearly worthless for its face value. The value of an economy is either in one of the following: the possession, allocations or control of natural resources.

Be a cazillionaire in Mozambique. Worthless because no one wants to trade with you because you have nothing of value. People think gold is of value. It is worthless. All the gold can dissapear over night or gold could become as abundant as the dust of the earth, wouldn't make a significant impact on the economy.

Farm land, iron, coal, oil, rare/precious metals, aluminum, salt, trees, water, calcites are what make the world go around. Capitalism and communism are mass marketed national idea's to justify the trade of commodities. If you live in Russia: communism. If you live in USA: capitalism. It is all the same thing. No one goes to war to take someone's paper money, people go to war to take your land, animals and women.

Originally posted by xmotex
A very simple dynamic leads to pure capitalism devolving into violence.

In any purely capitalist society, wealth tends to increase, but it also tends to concentrate itself. IE the people who have money are in a better position to accumulate more money, so while everyone's wealth increases, wealth increases more rapidly for the wealthy.

Eventually you end up with a wealth distribution pattern that looks like a pyramid, with a tiny few at the top controlling great wealth, and huge numbers at the bottom with little to nothing.

Not really. If anything, capitalism creates a more even distribution of wealth as dictated by the laws of supply and demand. Meaning, instead of the government controlling class, people are free to move up and down the social ladder, with the nature of the economy as their only restraint.

Originally posted by etotheitheta
Any country can print as much money as the wish and become trillionaires overnight. Money is nearly worthless for its face value. The value of an economy is either in one of the following: the possession, allocations or control of natural resources.

Not really. Fiat currency is, but it's based on the expectation of value. It's worth something because people want it.

Originally posted by etotheitheta
Be a cazillionaire in Mozambique. Worthless because no one wants to trade with you because you have nothing of value. People think gold is of value. It is worthless. All the gold can dissapear over night or gold could become as abundant as the dust of the earth, wouldn't make a significant impact on the economy.

Gold is very valuable, and its worth is relatively stable compared to most things. It would hurt the economy because people invest in gold, and because of the gold industry.

Originally posted by etotheitheta
Farm land, iron, coal, oil, rare/precious metals, aluminum, salt, trees, water, calcites are what make the world go around. Capitalism and communism are mass marketed national idea's to justify the trade of commodities. If you live in Russia: communism. If you live in USA: capitalism. It is all the same thing. No one goes to war to take someone's paper money, people go to war to take your land, animals and women.

Not at all. Capitalism and communism are very different.

I don't know what fiat is, but people who invest in gold are fooling themselves. No one needs gold, but everybody needs oil.

Originally posted by Johnmike
Not really. If anything, capitalism creates a more even distribution of wealth as dictated by the laws of supply and demand. Meaning, instead of the government controlling class, people are free to move up and down the social ladder, with the nature of the economy as their only restraint.

That's a nice theory - as a former "big L" Libertarian I used to believe the same thing. Then I had a few unfortunate encounters with reality.

Do me a favor.

Find me one time & place in human history where laissez faire capitalism has resulted in "a more even distribution of wealth" and not the opposite.

Bill Gates is the best example of capitalism

Capitalism has been rampant in the United States since WWII however we should keep in mind that this system has resulted in a vastly reduced standard of living through inflation, devaluation of the currency and the rich getting richer while the poor get poorer. Perhaps we should mette our capitalism with a tinge of responsible socialism.

Originally posted by arius
Capitalism has been rampant in the United States since WWII however we should keep in mind that this system has resulted in a vastly reduced standard of living through inflation, devaluation of the currency and the rich getting richer while the poor get poorer. Perhaps we should mette our capitalism with a tinge of responsible socialism.

Actually FDR made us practically socialist under the New Deal. His deficit spending and bloated agencies set the United States up for debt that lasts even today.


xmotex: While I find specific examples, can you find one where socialism or communism has resulted in a more wealthy society? The way I see it, they potentially make wealth more even, but makes everyone poorer together.

Originally posted by powerbomb1123
Bill Gates is the best example of capitalism

Bill Gates...is a loser. He made his money from government/military contracts and military technology. The definition of capitalist I was taught would never fit Bill GAtes...who is a loser.

xmotex: While I find specific examples, can you find one where socialism or communism has resulted in a more wealthy society? The way I see it, they potentially make wealth more even, but makes everyone poorer together.

Oh I agree, IMHO a purely socialist system can never succeed.
OTOH the wealthiest countries on the planet all have mixed economies, market driven with socialized education etc...

So if we're going to go by what works in the real world, mixed economies are it.
The US, Europe, the wealthy countries in Asia - all have market driven economies with social safety nets, without exception.

Well what socialistic practices do you advocate?

I would advocate socialized education whereby everyone has equal access to colleges and universities if they qualify through academic merit as well as socialized medicine.

Well what socialistic practices do you advocate?

Education most importantly - nothing else has the same power to promote class mobility.

I am comfortable with a social safety net that ensures basic health care, food & shelter for all. Beyond that, not much.

Free food and shelter for everyone? So you want to make even more poor people?

If you live in Russia: communism.

The soviet union disappeared nearly 20 years ago now

Originally posted by Johnmike
Free food and shelter for everyone? So you want to make even more poor people?

I want to ensure we don't have citizens dying of starvation or exposure.
Not exactly too tall an order for the richest country on the planet.

As far as it "making more poor people", it doesn't work that way in the real world. People want more than just food and shelter, and the vast majority are willing to work for it.

If you've noticed our friends across the Atlantic have a far more socialized system than we do, and yet don't have anything close to the semi-permanent underclass we do. The Scandanavian countries in particular have far more socialized economies than we do, and still have a higher average per capita income (and lower infant mortality rates, fewer dropouts, etc etc etc...)

The problem is that when comparing two different countries, you have to take into account a variety of factors. This is including, but not limited to, culture, population density, resources, trade agreements, location, and so on. What we really need to look at is examples of one country after a change in economic structure, implementing a socialistic or capitalistic policy, after taking other factors into consideration (for example, if the minimum wage is raised, but there's a business boom for whatever reason, you will see an economic boost whether the minimum wage was raised or not).

You said that free food and shelter will solve, or help solve, poverty, or at least death and pain from it. I don't think that this could be further from the truth, to be honest.

Simply, the flaw is here, as is with most people who advocate socialistic "humanitarian" programs that are funded by the government: "The wealthy can afford it."

Yes, the wealthy can afford it, personally. But by using that argument the dynamics of the economy are largely ignored. The rich are a large producers, huge consumers, and a massive source of investment capital. By taking money from the rich you are making it far more difficult to:

A) (The business owner) Start a successful business. While again, one can say, "the wealthy can afford it," it just doesn't work. The businesses of the rich fail just as well as those of lower economic classes should they become unprofitable; there is no reason for someone, regardless of wealth, to maintain a stagnant business. The wealth that goes to taxes could be used for providing more jobs, acquiring a failing business, increasing product quality, and lowering prices. Likewise, it can be used to start a new business (ties in with C) or keep an existing one afloat.
B) (The consumer) Buy, well, anything. It's fairly obvious that the wealthy buy a lot of things. And many of these things can be quite expensive, or in large quantities. This can tie right into part A if the person in question is a business owner of some sort. Regardless, they are a large source of the demand on the market, just as much as they are a source of the supply. By reducing their spending power, you're reducing the demand of anything and everything that is geared toward or simply sold to the wealthy in any quantity whatsoever.
C) (The investor) Invest in any way. It's no secret that investment capital is excessively important to an economy. And, as you can imagine, rich are a massive source of this. By intentionally reducing their spending power, and therefore the amount of money that can be used as capital, you not only hurt the potential investor, but you decrease the power of the stock market as well. The demand for shares declines, as many that the rich would like to have bought have now gone to the government through progressive taxation. This will also naturally make it harder for new businesses to take root and grow, as there are now fewer potential investors, and less investment capital.
This is obviously counterproductive to achieve the social mobility you (and I) advocate.

The point is that while these programs sound very good, nice, compassionate, and whatever, you have to look at it more broadly than "let's give money to the poor!" The government gets its money from the citizens through taxation, and this taxation has a DIRECT effect on the economy, potentially hurting people of ALL social classes, ESPECIALLY the poor, those who can't afford to be hurt, even through taxation specifically directed toward the rich in a progressive or otherwise targeted manner.

[edit on 8-4-2007 by Johnmike]