Supporters of capitalism are crazy, says Harvard

Originally posted by Frankidealist35

 

Why, economists would enforce the rules.

Actually, there should be some oversight of the free market... but not by the government.

And we would have to check on the economists who would help oversee the market.

Geez, before I even finish my post you say something else that doesn't make any sense.

Who do you think regulates our economy now? Economists! The very act of having oversight of the national economy would make them the government! And you say "we would have to check on them", well, who's we exactly? The government by default!

Do you even know what the word "government" means?

You're just going in circles, not making any sense.

I think a lot of it has to do with asymmetric information between producers and consumers. Predisposed psychological tendencies naturally disrupt the process of the free market. Our brain is evolved for short-term rationality. Obviously, it takes decades to perfect the kind of temperance that a Buddhist monk, for example, regularly displays. It would be too difficult for common investors to acquire such persistence. People are easily discouraged.

Technological changes in the past 10,000 years have allowed us to overcome the burden of hunting and gathering, which is largely an asymmetrically spatially auto-correlated phenomenon. It would make sense for a short-term rational being to succeed in this given environment. Agriculture, on the other hand, requires an evenly distributed body of knowledge. It is much easier to produce and consume agricultural and other controlled, commensurable products. When this ability to produce comes out of equilibrium with our short-term rational tendency to predict for failures in production, we revert to primordial psychological tendencies and this results in the disruption of a flowing, free market.

Free market only has to be regulated when our investments become short-term rationally motivated. However, regulation is only necessary after the fact- so in reality, we are to blame in the first place. This often gets people thinking that perhaps we should regulate ourselves in the first place. That is where our social institutions, such as the education system, the labor market, the nuclear family, and to an extent the insurance market, and other normal positive values about society come into play. This keeps the psychological insufficiency of an unregulated free market in check. "Over regulation" occurs when these social institutions fail and there are seemingly no other alternatives, or conversely when governmental interference puts the free market out of a naturally and socially determined equilibrium for purposes of preferentially favoring one group over another, such as easing lending for entrepreneurs in times of economic insecurity, securitizing risk for investors where investment is not regularly condoned, easing regulation in areas of home mortgage purchasing where social institutions have failed to produce individuals capable of creating their own wealth and instead rely on nonexistent credit, financed by foreign corporations out of the idea that the U.S. tax payer is an infinite pool of wealth... which it is obviously not in the long run. In the short-run, however, the U.S. tax payer is a bottomless pot of gold.

I think there are two instances where market failure occurs. Where natural equilibria for social and market institutions fall out of place, thereby producing individuals that are incapable of perpetuating normal social behavior and meeting satisfactory objectives for the economic system in question, and second, where governmental interference preferentially selects for the development of particular groups in society based on some short-term motivated desire for change. Governments' short-term rationale for appeasing their constituencies often falls prey to the ability of mob-like citizens voting into power representatives who can dedicate resources to short-term goals rather than long-term solutions. I think there is an interplay between an abuse of democracy, psychological insufficiency in naturally predisposed short-term rational agents, such as human animals, the inability to sustain normal positive behavior and satisfy societal objectives, and finally an to a lesser extent the inability to extend capital to areas where risk is inappropriately calculated, and where if appropriately accounted for, might provide positive economic returns where it would otherwise have been ignored.

[edit on 17-3-2009 by cognoscente]

reply to post by Frankidealist35


Let's turn that around: do you really think that business is free of blame from this problem?

I've said it before and I'll say it again: "pure" free-market capitalism is an ideology, one that just like Marxist state socialism, simply doesn't work in the real world.

So really, this is a thread on free-market capitalism being crazy,
not one on capitalism as socio-economic system in general?

Honestly bankers, beuraucrats, economists etc. are like mechanics tinkering with a steam locomotive. A different shaped piston here, a hotter boiler there.
Constant tinkering with fundamentally indentical machines,
Theres only so much that can really be done to improve it.

In a broader philosophical sense, it seems high time we moved on to the Internal combustion engine. Something entirley different.



[edit on 17-3-2009 by TheSilentProtagonist]

www.zeitgeistmovie.com...

This is the future of social engineering and economics. The Venus Project entails a complete redesign of the world along the lines of an automatic free market economy, orchestrated by a coherent and logical system of cybernetically coordinated robotics. Resources are defined, isolated and extracted and then traded independently of property rights and human profit seeking, according solely to the energy requirements of each robotic system, because resource extraction and their consequent assembly into industrial materials would have different preliminary energy costs in different regions of the world. Basic commodities and materials would be manufactured automatically, and all people would have an inherently equal opportunity to gain access to those resources for purposes of creation and invention.

[edit on 17-3-2009 by cognoscente]

reply to post by drwizardphd


Okay, then let's get rid of regulation altogether.

At least then the regulators wouldn't be able to cause more problems.

reply to post by Frankidealist35


What problems do they cause that don't stem from being monetarily corrupted by ANOTHER company?
Point out one issue that isn't because of a conflict of interests.

Thanks for the entertainment of watching you tie yourself in knots...

Originally posted by Frankidealist35
I don't think we need a regulated free market.

I just think there should be some rules... I agree that we can't have a market that has no rules... but to say that the market needs to be regulated... that's very vague...

So, which is it to be? Rules or no rules? Or, you want "some rules" but not "regulations". What's the difference?

And quoting the Mises institute. What a bunch.

They're basically funded to try to persuade useful idiots that the mythical "free market" is a good thing. A guy I knew years ago gave me a printout of one of their articles. At the time of the California brownouts, it was arguing that more deregulation, not less, was what was needed.

What had actually happened was that, in violation of antitrust rules, the power companies supplying California had got together to hold the state to ransom by a) manipulating the energy market and b) deliberately allowing the infrastructure to degrade. According to an industry report of the time, power stations that were supposed to come onstream at times of peak demand were taken off-line, and maintenance schedules were not followed.

The power companies were holding California to ransom and deliberately driving up energy prices.

Regulation was initially set up to prevent this kind of abuse. Under successive governments, this protection was eroded and finally pretty much dismantled under Bush 43.

The then Governor of California, Gray Davis, took some of the power companies to court for several billion dollars for ripping off the State of California. The power companies then had a secret meeting with Arnie to persuade him to run for governor. They bankrolled the "recall" vote and Arnie's candidacy. When he got into power, the lawsuit went away.

That's how the free market works. That's why people who believe in it are believing in Santa Claus and the Tooth Fairy.

Why, economists would enforce the rules.

I'd love to see you try to explain how economists are going to enforce these "rules" which aren't "regulations". Nice one, Adam Smith.

Actually, there should be some oversight of the free market... but not by the government.

So who, then? I think Jon Stewart's busy doing a fantastic job on The Daily Show... maybe Steven Colbert could be persuaded.

And we would have to check on the economists who would help oversee the market.

Any other vague ideas you'd like to bat around?

hilarious.

Originally posted by tothetenthpower
reply to post by Frankidealist35

 

And since the Federal Reserve is not a government agency then the Government really had nothing to do with it by that logic.

Look Capitalism did work in the past, when the focus of the expanding economy was to help the average person live better. Now that our system has been hi-jacked are re-designed in order to serve only the wealthy it is no longer a system worth keeping.

It needs to be dismantled and rebuilt from the ground up. It can still be Capitlism so long as it is regulated for the people by the people, with their interests being the outcome, not those of the corporations.

~Keeper

Exactly, good example of unregulated capitalism is China.

You should be thankful that the capitalism in the US has been countermeasure with Socialism or we would be in a lot worse situation right now than we are now.

Capitalism does not = freedom! Wake up!

"That's not the point here. The point is that the people at Harvard are saying that people who believe in free market capitalism are crazy"

They ARE crazy! Free market capitalism would mean no check on how much a corporation pays their employees. There be no reason for an employer to give an employee health care. There would be no reason for them to send the employee to college if he gets fired.

All these things are regulated by socialism.

I think people are starting to wake up to what a beast capitalism has become. I have.


"Okay, then let's get rid of regulation altogether.

At least then the regulators wouldn't be able to cause more problems. "

You can't be serious.

[edit on 17-3-2009 by Techsnow]

There are two main problems with our current incarnation of capitalism, one is specific to it, the other is common to any incarnation of capitalism.

The first problem is fiat currency, or the money as debt model. This is an elitist construct designed to financially engineer an artificial wealth centralization process whereby all the wealth, real wealth not money, goes to the banks. How this happens is that the banks emit all currency as debt, and when an economic growth cycle comes to an end they collect all the debt still out there, which will be the majority of the economy. It's not pump and dump as much as pump and eviscerate. This is the real reason for the economic cycles, the banks just recall the money and since people are in legal debt they are forced by the system to lose their material assets. Equity and debt. Our equity on the line for their debt. It's a scam, plain and simple.

Then there is the common problem of any capitalist system, even with real precious metals or otherwised indexed currency. This is that money has gravity. It takes money to make money, and the more money you have the easier it is to make money, it's an exponential, up to the point where the economy can't sustain more growth, ie, when someone owns almost everything. So even a really free market, and we don't really have one, will lead to elitism, oligarchy, tyranny, as when there is nothing left to invest in, the elitist psychopath, the psychological profile that usually concentrates more money, due to lack of ethical constraints, will invest in taking over the government, in going for total control of not only assets but people. Some people only know "more" as a motivation.

So, in a sense, unchecked capitalism will never "work", if by work we understand an ethical distribution of wealth (of which the universe has a near endless supply should we cooperate enough to tap into it) and a free society, where the only limitation is the freedom of others. Market economy will not allow that, unless checked by law. Law is of fundamental importance, if the people do not realise the limitations of the system and get blinded by greed the system becomes entropic and the only way is down. For an economy to work there has to be ethics injected. Darwinism won't work here, because the lack of scruples in a technological era will lead not only to the destruction of the individual but also the species, because of the destruction of the environment.

And thus we get where we are today.

Originally posted by Zepherian

The first problem is fiat currency, or the money as debt model. This is an elitist construct designed to financially engineer an artificial wealth centralization process whereby all the wealth, real wealth not money, goes to the banks. How this happens is that the banks emit all currency as debt, and when an economic growth cycle comes to an end they collect all the debt still out there, which will be the majority of the economy. It's not pump and dump as much as pump and eviscerate. This is the real reason for the economic cycles, the banks just recall the money and since people are in legal debt they are forced by the system to lose their material assets. Equity and debt. Our equity on the line for their debt. It's a scam, plain and simple.

This is REALLY well put Zepherian! Amazing!

The thing is, I understand that there is a fiat conspiracy and there may be certain (or a certain) institutions that are milking our nation.

BUT... if in fact they had STOPPED inflating our economy, I believe the outcome would have been the end of the flow of money. Meaning, you and I, would have ended up making less and less, instead of more and more. Of course this inflation has had serious consequences. But the reasoning behind the need for the inflation is capitalism.. hence 8( business cycles.

To respond again to unchecked capitalism. Yes, it will never 'work', see China for example. May God help them.


[edit on 17-3-2009 by Techsnow]

Harvard isn't stupid for claiming that free market is good or bad, since that is up for debate. Harvard is stupid for believing we actually live under a free market.


If free market means you are free to take from the government wallet whenever you have a bad day, then sure, we live in a free market.

If Free market means you are free to leverage 35 to 1 and lie to your shareholders, then yes, we live in a free market.

Unfortunately, that isn't what a free market means, and we don't live in a free market. So for Harvard to say a free market is bad, is like playing basketball, then saying "From what I just experienced, football is a terrible sport to play".

If we lived in a free market, we never would be here to begin with, and neither would the FED.

reply to post by grimreaper797


Well, yes and no.

We got to the current situation because free markets still lead to the concentration of wealth, because of the money has gravity situation I explained in my first post here. The oligarchs, to get richer, made the FED, which is really just a continuation of the aristocratically inspired european banking models.

But they got rich enough to do it because they had the psychopathic motivation to concentrate wealth to it's full potential, destroying competition and taking over the state (or being taken over by the state, by the royals, that one is up for debate and investigation I guess).

Capitalism evolved free, but it's natural dynamic is centralization, which smothers freedom, imo.

Originally posted by Zepherian
The first problem is fiat currency, or the money as debt model. This is an elitist construct designed to financially engineer an artificial wealth centralization process whereby all the wealth, real wealth not money, goes to the banks. How this happens is that the banks emit all currency as debt, and when an economic growth cycle comes to an end they collect all the debt still out there, which will be the majority of the economy. It's not pump and dump as much as pump and eviscerate. This is the real reason for the economic cycles, the banks just recall the money and since people are in legal debt they are forced by the system to lose their material assets. Equity and debt. Our equity on the line for their debt. It's a scam, plain and simple.

I think your ideas of money/debt/and fiat currency are getting massively mixed up. Currency, an I.O.U., is considered an asset to you in the financial system you live under. This currency is backed by somebody with some physical, valuable asset, to make the I.O.U. worthy of you accepting it. For example, silver. Silver backed currency means that the I.O.U. that you got can be exchanged for X amount of Silver.

Fiat Currency is like much regular currency, but it lacks that backing. It follows the same rules. It is an I.O.U. from the bank, from your employer, etc. etc. It is somebody saying "OK you gave me this, I owe you this much in exchange", the only difference is that there isn't some entity holding a certain physical asset for that dollar.

To make it simpler, the market now decides what that debt is worth, as oppose to a specific organization, like government. Depending on how the country and its economy is doing, the market will decide the value of its currency. This is actually beneficial for a variety of reasons.

The difference between fiat currency and actual currency is that actual currency is an I.O.U. for X material, or the equivalent of that material, as decided by a certain group, like government, where as fiat currency is a market value of what something is worth.

So actual currency= government telling you how much one dollar is worth. Fiat currency= Market telling you how much one dollar is worth.

Now debt, or credit, is not fiat currency. Credit is not the same as fiat currency. Fiat currency is what you get after you do a job, and that currency has a certain value according to the market. Credit is the promise you will do a job, for the currency, be it fiat currency or actual currency.

Credit is based on faith. It is an I.O.U. from the person receiving it.
Actual Currency= I.O.U. from government, with physical backing
Fiat Currency= I.O.U. from the market, no physical backing
Credit= I.O.U from you, to the government or market, no physical backing

Fiat currency really has nothing to do with the problems that we are facing here. It has everything to do with credit.

I'm tired of seeing people blaming Fiat Currency for the problems of today when it has little to nothing to do with the problem. Just because a currency is not physically backed by government does not suddenly mean that the currency is worthless. The only difference is now the general market is deciding somethings value, rather than a set value.

Fiat currency is better than regular backed currency for that reason.

Then there is the common problem of any capitalist system, even with real precious metals or otherwised indexed currency. This is that money has gravity. It takes money to make money, and the more money you have the easier it is to make money, it's an exponential,

That is 110% incorrect. All it means when you have more money is you have more assets to risk. That doesn't mean the risk will pay off. That is the huge misconception that brought us to a 50% market failure. That as long as you had the assets and value, be it credit or physical assets, that it was a profitable venture.

Maybe business adventures fail. You might have 10 billion dollars, and decide to take two big risks and incur 4 billion in losses. Just because you have more money, does not mean it is easier to make money, just easier to take more chances without completely screwing yourself out of your life work.

up to the point where the economy can't sustain more growth, ie, when
someone owns almost everything.

Never going to happen. We are a great deal of time away from anyone coming even close to owning all the resources on earth. New technology, new resource hot spots, space, etc. etc. We will never run out of things to invest in, though we might run out of things to invest in, in America.

As our education falls further and farther down the list, as unions demand more for less, as consumption falls due to everyone too busy paying off credit cards to consume, you will see business leave America.

The economy cannot sustain RAPID growth. If something grows too fast for too long, it blows up in its own face. Credit cards being used for consumption is a terrible thing that ultimately damages the economies growth in the long run. Won't go into details here.

So even a really free market, and we don't really have one, will lead to elitism, oligarchy, tyranny, as when there is nothing left to invest in, the elitist psychopath, the psychological profile that usually concentrates more money, due to lack of ethical constraints, will invest in taking over the government, in going for total control of not only assets but people. Some people only know "more" as a motivation.

Not really. You are very far off the mark here actually. The only reason business interferes at all with government is because we give them a reason to via regulations and big money contracts.

The type of person you are describing would want to expand to every sector, when said person had every sector, said person would want to expand the sector at a specific speed. Whatever money was left over would be spent on new, future endeavors, like commercial space mining, deep sea exploration for new materials, which could prove to be highly profitable.

Any business person of that caliber already controls you, and has no interest in involving themselves in government. They control your food supply, your water supply, your heat in the winter, your AC in the summer, and your entertainment at all times. They have 0 purpose for doing anything in government as they already have complete control.

The only thing they would look for is more resources or more technology to obtain more resources.

So, in a sense, unchecked capitalism will never "work", if by work we understand an ethical distribution of wealth (of which the universe has a near endless supply should we cooperate enough to tap into it) and a free society, where the only limitation is the freedom of others. Market economy will not allow that, unless checked by law. Law is of fundamental importance, if the people do not realise the limitations of the system and get blinded by greed the system becomes entropic and the only way is down. For an economy to work there has to be ethics injected. Darwinism won't work here, because the lack of scruples in a technological era will lead not only to the destruction of the individual but also the species, because of the destruction of the environment.

Pretty much the exact opposite is true. Cooperation for the many, will lead to a severe decrease in production. Stop thinking about idealism, and start on the realism of human nature. The majority of people, knowing or not, act in selfishness. They strive out of greed. The problem is when stupid people get greedy. When stupid people get greedy, they do damaging things to the market. A smart greedy person, usually those elite business people, are the ones who look at opportunity at short term, and long term gains.

Ethics is idealism that will never be met. Figure out a way to pander human greed and manipulate it accordingly. Keep fighting human nature, and THIS is where we end up.

In debt up to our eyes, in a over regulated system, with an under regulated credit market.

reply to post by grimreaper797


You don't know wth you are talking about. Fiat currency isn't backed by anything. You're whole post is so easy to rip apart its not even worth the effort.

"The problem is when stupid people get greedy. "

You're a fool, the whole system prescribes to make SMART people get greedy! If they don't get greedy they don't get their freaking bonus!

You're whole post contradicts exactly what you say. You make no sense what so ever!

You're only posting for the sake of arguing!

"We are a great deal of time away from anyone coming even close to owning all the resources on earth."

It's already happened! Is that not obvious to you?

[edit on 17-3-2009 by Techsnow]

Originally posted by sadisticwoman
reply to post by Frankidealist35

 

You really think that without government regulation, people would be less greedy? No, they'd be paying their workers less, charging more for products, and believe me, there'd be way more, bigger monopolies.

Instead of having to look to Burma for sweatshops, they'd be right here on our streets!

[edit on 17-3-2009 by sadisticwoman]

Thankyou, you have said it all, this is it folks. Forget these mind boggles that some posters will come at you with, this post sums our whole world up in one sentence.

reply to post by grimreaper797


The money as debt model I'm talking about refers to the fact that all money is created originally as a loan, with interest. The money to pay the interest is never created, and interest is also debt. So the end result is you have more debt than money. All money is created as debt and there is a larger value of debt than face value of money. The only way the system keeps working is with new loans inflating the currency. When the economy stops growing and loans decrease the amount of debt in the system means that a lot of people will have to pay back the bank with money that dosen't exist in the system. This is where the true motivation of the banking system becomes apparent and they foreclose on property.

True, the market decides the value of the currency, but it does nothing to address the relationship between money loaned and money repayed. And since all money is loaned with interest it dosen't address the key problem of their being more debt than equity in the economy. Money, as it is setup now, is a negative energy, it dosen't add value to the economy, it just sucks out value to the people sitting on the legal right to issue monetary credit (credit here being in reality debt). Deficit state spending for example is a euphemism for the nations paying the banks interest to use their own currencies.

Again, it's a scam. The interest is never created. The Debt never ends, it just grows. It's Usury.

If people could understand this and ignore the symbolic cloud of psuedo scientific mumbo jumbo in economics, the way the world works would become far easier to see.

I was going to reply to your other points, but as you're someone who says things like "110% incorrect" I'll just smile them off and leave it at this. If you don't agree with me fine, as nobody is 110% right, so I may be wrong on a few points (although I don't think so, obviously). Tell you what, how about we settle at me being 100% right and I give you the extra 10% as wrong? If you like that math you might want to go and take out some bank loans...

Peace.




[edit on 17-3-2009 by Zepherian]

reply to post by Frankidealist35


The only flaw in the free market is that it is not free and that special interests and large corporations are using anti-competition and protection from government in every industry, even insurance.

And this Allan Greenspan took a hit for the team to protect the New World Order, he will retire soon to some South American island with more money than the average American for taking the hit. Flaw in the free market, what a laugh.

One point I'd like to make: if there really were a free market we wouldn't have wealth being artificially retained in the hands of Americans just because they're nationals. What about political rhetoric such as "shoring up" the economy? Surely this has a lot to do with the public as well. We have the failure of social institutions, which capitalism absolutely requires to feed itself. With less educated, less productive individuals we start to feel a pinch on the wealth we have been so accustomed to for so long... eventually all our jobs go overseas, and then we cry to government and dig our grubby little paws into the treasury and vote ourselves exorbitant benefits, which range from lower interest rates on mortgages to bailouts for our largest "too big to fail corporations", so that we can all live easier lives, all the while without putting in the appropriate effort.

This results in increasing debt, which foreign countries must finance on a bet that U.S. tax payers will eventually repay them. You could probably say our whole way of life is false. It just doesn't add up in the end. The wealth we are experiencing is not proportional to our ability to create real value. For example, the last innovative and truly wealth-creating American enterprise was probably Microsoft. Since then, all we've been good for is creating over leveraged financial instruments and building highly elaborate securities and investment portfolios for foreign clients. Obviously, all that wealth never left Wall Street, and all at the expense of the common folk who provided the capital in the form of stocks and the assets in the form of property and mortgages to allow them to do any of that in the first place.

I started this thread a while ago: Does effort really merit reward?. It didn't get much attention, but I think its highly relevant given the current global climate.

[edit on 17-3-2009 by cognoscente]

Capitalism is a form of government ,not a business model in the true sense of that word

Everyone that supports Capitalism is going to discover it isn't what they thought it was,which is Free Market Economics

It isn't that Capitalism doesn't work it works perfectly, it's goal is to concentrate all the worlds wealth,and resources into the hands a few wealthy monopolies who are above government ,actually are government


By Capitalism some mean Free Market Economics,in that system someone or a group of someones ,Capitalizes a business which either succeeds or ,Fails based on the ,market, how well their product or service suits the needs and desires of the consumer to have such a system there must be rule of law ,which enforces a set of rules of play which apply to all the players

as you have probably noticed Capitalism ,is a whole different thing ,and that Capitalism must rely on a fascist system of population control to maintain it's monopolies ,and economic disparity

so everyone who supports capitalism is basically supporting and agreeing to their own enslavement ,we should be supporting free market economics

Sheeesh