Supporters of capitalism are crazy, says Harvard

Originally posted by Frankidealist35
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.

Let's go one step further and abolish all forms of currency. Arguments about Capitalism vs. Communism, Regulation vs. Non-regulation over.

Technically they're right. Capitalism, like any ism, doesn't address many of the technical problems the world faces. Of all the systems, the Original Free-Market concept is a harmony, with a few caveats:

1. If you build things to fall apart you can make a lot more money than with things that last

2. You maintain "control" of certain resources and social processes through the flow of goods and services, which at the whim of any man, can affect sections of the population in adverse ways, which in turn begins to spread social degradation throughout every community in rapid succession. The Fat Cats call it "Trends".

3. The hoarding of resources creates scarcity and in many cases abuse. War is a typical event to take place when resources are needed to meet certain demand.

4. Companies are required to continue to maximize profit with major confines in the ability to do so, this causes many things, scarcity, war, corporate abuse, environmental destruction. I really do like the idea of a resource based economy. I find it harder and harder to defend old ideas with old ideas.


This said, there's Constitutional Republic Capitalism(America), there's Socialist Capitalism, Communist Capitalism. It's all the same damned thing. The result is the same. Have and have nots. And it does not change.

That's why I believe in one world. Not one world government. I believe in decentralizing resources and pushing for renewability at every turn. The use of technology, and the exploitation of Alternative energy sources.

[edit on 17-3-2009 by projectvxn]

reply to post by Frankidealist35

I am shocked that one of the biggest schools in the world says that people who support freedom are crazy... these people would rather see a return to market socialism or to more regulation with a central planner.

I just am outraged that a top university like Harvard would make such an ignorant statement about something they didn't understand. Who are you to question Harvard anyhow?

Corporations are antithetical to free markets. Free markets, to work, must be unpredictable (that is, if you buy the proposition that free markets are diametrically opposed to planned socialism -- which is to say, if everything is planned then there is no incentive to innovate). Corporations, to profit, need to minimize risk. Thus, corporations seek vertical integration so they don't need to rely on markets for supply (price stability), they seek monopoly status so they are not subject to competition (certainty that an investment will pay dividends), and they rely heavily on marketing and advertising to ensure demand (people seek out food, but iPods need to seek out people).

The closest we can come to a free market is a business environment in which regulation prohibits both monopoly and oligopoly. If you want free markets, you have to get rid of corporations. Corporations do more planning than government.

Even Friedrich Hayek -- Milton Friedman's mentor in the Chicago School of Economics -- was opposed to laissez-faire, monopoly, and intellectual property.

The real debate is not between capitalism and socialism, but between centralization and decentralization. And if you want to be all nitty-gritty about the Constitution and capitalism, stop talking about freedom and read up on liberty. To the Enlightenment thinkers to drafted the Constitution, freedom was Thomas Hobbes's state of nature -- nasty, brutish, and short-lived. Freedom is useless. Liberty is what we gain from the social contract: an exchange of individual sovereignty for protection from the arbitrary exercise of authority. Nations are free and sovereign, not individuals.



[edit on 17-3-2009 by incoherent_television]

Originally posted by sadisticwoman
Come on now, do you really believe that capitalism is synonymous with freedom?
Freedom of what?
"Freedom" to buy from monopolies?
"Freedom" to watch your small business get taken over by Walmart?
"Freedom" to barely be able to buy food?

You seriously have no idea what you are talking about do you? Go Read "Capitalism and Freedom"...the free market is the largest democratic force in existance.

Originally posted by Frankidealist35
I am shocked that one of the biggest schools in the world says that people who support freedom are crazy... these people would rather see a return to market socialism or to more regulation with a central planner.

I just am outraged that a top university like Harvard would make such an ignorant statement about something they didn't understand. Who are you to question Harvard anyhow?

First, let's address the absurd claim that "Harvard" says anything of the sort. Harvard hosted an annual conference at its Law School called The Free Market Mind: history, psychology, and consequences. At this conference, several scholars, both from Harvard and from other universities, and representing a variety of fields (law, psychology, sociology, history, economics) presented research about how the institution of the "free market" developed, and some of the ramifications of that.

I am sure that the questions that your source poses came up during the question and answer sessions at the relevant presentations. If you've never been to an academic conference, you probably don't know how confrontational and snide they can get. It's not a bunch of people cheering each other on most of the time.



Second, what's wrong with questioning the free market ideology? You apparently feel that it can do no wrong, so shouldn't it be able to stand up to questioning and examination?

In our current situation, we are a country that pays lip service to the idea that laissez-faire capitalism will lead to balance, although our history has shown us that it requires restraints. You seem to be saying that people should only study the history of free market ideology in so far as they support it: would you ask that of any other scholar? Shouldn't they examine the good and the bad of free markets?



By the way, did you happen to check out the web site for this conference, or did you just base your opinion on the word of a blog that clearly has an axe to grind?

The website can be found here: The Free Market Mindset.

Abstracts of the papers that were to be presented can be found here: Tentative Schedule and Abstracts

This was an academic conference, not a policy workshop. Do you really want people to stop examining our economy and society from all different angles, including those that put it in a negative light?


[edit on 3/17/2009 by americandingbat]

Originally posted by Techsnow
You don't know wth you are talking about.

This statement would be much more accurate if said when looking into a mirror.

Fiat currency isn't backed by anything. You're whole post is so easy to rip apart its not even worth the effort.

Perhaps your Wikipedia education is getting in the way, so let me break this down for you.

A fiat currency isn't backed by any standard physical asset. There isn't some reserve of gold or silver sitting around which the government has said your money is worth X amount. It IS backed by the market, which determines its value. The market determines the value of the assets, the value of the currency, and the value of the companies themselves.

The market decides what the dollar is worth, thus if the market says an ounce of gold is worth $738 dollars, that is the value of the dollar. If tomorrow you woke up and saw that an ounce of gold is $532, that is the new value of the dollar. Don't get confused and say "that is the new value of gold". The value of gold is consistent.

How do I explain this to you more simple, so you can get this. If news came out that ford, gm, and Chrysler were all going bankrupt, the dollar would fall. This would happen because the economy would be doing horrible and the demand for dollars would decrease significantly. Also, it would take more to meet the same value as another currency who has a strong value to it.

Strong currency= More likely foreign investment. It is a matter of demand.

So demand determines the value of the dollar. Demand= the market. They back the dollar via demand for it. Its not physically backed, and I never said it was. Get with the program.

"The problem is when stupid people get greedy. "

You're a fool,

Again, the mirror, cricket...er..grasshopper.

the whole system prescribes to make SMART people get greedy! If they don't get greedy they don't get their freaking bonus!

What are you even talking about? Smart greedy people= smart profitable business ventures. Stupid greedy people= Credit Default Swaps.

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

No, it really didn't. Logic is like a train, yours derailed before it got to the first station. Don't even bother rereading my post, it would be wasted effort for you to even try and get it.

"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?

hahahahaha. Ok so whos the lucky guy who owns just about all of earths resources? He owns all the coffee trade, the oil trade, the diamond trade, etc. etc. Who is this mystery god among men?

All the conflicts we have been fighting over the years, they had nothing to do with resources. We were just bored and needed something to do! See, I can use an exclamation point too, did it get my point across any better?

reply to post by grimreaper797

The market decides what the dollar is worth, thus if the market says an ounce of gold is worth $738 dollars, that is the value of the dollar. If tomorrow you woke up and saw that an ounce of gold is $532, that is the new value of the dollar. Don't get confused and say "that is the new value of gold". The value of gold is consistent.

This example is a little misleading. The US pulled out of Bretton Woods in 1971. What you're describing sounds more like capital than currency. Currency is a medium of exchange: it says, "I performed X hours of work which I can trade for Y product."

A fiat currency isn't backed by any standard physical asset.

Relatively few assets represent physical holdings. If I give a bank $1 and they lend out $8, those $8 are assets and my original $1 is a liability. The value of the $8 lent out -- why they qualify as assets -- has to do with the function of currency as a promise that a certain amount labor will be performed at some point in the future.

Strong currency= More likely foreign investment.

Do you mean: weak US currency = foreigners invest? There are lots of businesses that want a weak dollar because foreigners can then buy more US-made goods.

Originally posted by Zepherian
The money as debt model I'm talking about refers to the fact that all money is created originally as a loan, with interest.

Right, like I said, you are talking about credit/debt, NOT fiat currency. They are not interchangeable. Fiat currency can exist without having to be made by private banks who charge interest from our government just to borrow its own money.

You can have a Fiat Currency, without having the system we have now. The system we have now, like you said, is a debt model designed to make private banks rich off lending our government its own money with interest. Ridiculous, yes. Could they do the exact same thing with regular currency? Yes.

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.

Look at money like stock. You have a stock worth 5 dollars. Say there are 100 of this stock. The company decides to put out 100 more stocks, but the value of the company hasn't changed. Now your 1 stock is only worth 2.50.(AKA, they doubled the amount of currency in play.) They keep doing this until your stock is practically worthless.

This could just as easily be done with real currency rather than Fiat currency. The reason being government is so big and it's so far from transparent that nobody would know just how much government really had on hand backing the currency. Not at least until its too late anyway.

Lets do it like this:
I have 5000 ounces of gold. I have the Grim Currency. 1 Grim is worth .1 ounces of gold. I could print out 50,000 Grims. Now, say I decide to put out 70,000 Grims, because demand is up and I want to expand my economy. Unless somebody comes around with more than 50,000 Grims, or there is a third party professionally monitoring my reserves, I can just say I have the Gold available.

Since demand is up people aren't going to be demanding the gold, they are going to be demanding the Grims.

The problem hits when something like Bank Runs happen, and suddenly people realize, we didn't have the backing we claimed. That happened during the great depression. During the great depression, gold backing was still in play. Partial gold standard, but still a gold standard.

Issues result when too much lending takes place, be it under a fiat currency or backed currency. Lending comes with interest. Once a certain limit is hit, the interest that is charged simply doesn't exist. If I lend you 5000 dollars, at 10% interest a month, I want 500 more dollars a month. Once you hit a certain point, that 500 dollars physically doesn't exist. Every time the new month roles around, I just demanded 500 more dollars from the overall economy in a sense.

That is fine so long as 500 dollars worth in gold reserves is coming in every month, and the dollars are being printed out accordingly. Unfortunately, in economic booms in the 1920's when the boom was manufactured out of credit lines, even under a complete gold standard, the interest would exceed the inflow of gold, and thus debt would be created.

What would happen under a complete gold standard is that the interest would exceed the inflow of gold, and eventually the credit limit for many people would be hit and then consumption plummets because nobody has money. They all have to pay back their credit, and interest on said credit. Many may never get out of that debt to the creditor. They may have a steady balance of 5000 dollars on their bill, after interest. The issue with that is that every month, they just created more debt for the overall system.

This, on a mass scale, can happen in both a fiat system or a back system.

So I stand by my original point that this is a credit crisis, not a fiat currency issue.

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.

You are pretty much saying what I said. I just don't see how you connect that to fiat currency. It can just as quickly happen under a backed currency system. The only difference is that under a backed currency system, once back runs occur, the entire system collapses and defaults, leaving anyone who didn't get their share, broke and screwed.

True, the market decides the value of the currency, but it does nothing to address the relationship between money loaned and money repayed.

Neither does backed currency. If I have 5000 dollars on hand, backed 100% by gold, and I lend it to you at 10% a month, every month I am demanding 500 dollars that probably doesn't exist in the system.

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.

In the current state yes. But again, that is not a fault of fiat currency or backed currency. Currency itself is not at fault for lending/credit practices. Also, the economy might have the equity in certain cases where the government might not. Say you have a gold standard. Suddenly the market has a boom in coffee beans, if it was a fiat currency, the currency would go up in value accordingly. Under a 100% gold backed currency, the currency could not go up since it is not gold inflow that increased. The demand for the dollar would go up since we had this boom in coffee bean resources, but we couldn't put more dollars out. This would choke the economy to death in the long run.

Having a specific resource backed currency is a very bad idea because its not an accurate representation of the value of the economy which that currency represents. Gold standard is obsolete.

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, you are criticizing practices, not fundamentals. You can take the best system, and totally destroy and corrupt it in practice, if you don't know what you are doing or have ill intent.

It sounds like you are against the mishandling of Fiat currency, not fiat currency itself. I am against the mishandling of it as well. Fiat currency is a great system with a great deal of potential, but it is also very dangerous in the wrong hands, which it is right now.

Things like credit/debt issues, deficit spending, interest rate manipulation, its not the fault of the system, but the people running it. Fiat currency can be manipulated easier than backed currency, it is true. That doesn't change the fact that backed currency can be manipulated and exploited very easily as well.

Fundamentally, gold backing is obsolete to fiat currency. In practice, Fiat currency has been getting utterly exploited on every front to cheat people out of their assets. No doubt there. But criticizing the system for the faults of the people running it does nothing.

Put the blame where it belongs, government and banking systems running the credit market, not the currency itself.

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

I think the first time it was just misunderstanding as this post makes me see that we are much more on the same page this time around.

We both agree that the practices going on are very destructive, scrupulous, and criminal since they know what they are doing. We both agree that creating money that has no value is bad. We both agree that interest cannot exceed inflow of resources which create value in the economy, or resource which backs the currency.

We agree on many points. Where we disagree is where the blame is. The blame is on the people practicing the regulation of currency and the credit market, not the fundamentals themselves. The market is fundamentally sound. Its the practices that are destroying our economy and monetary value.

[edit on 17-3-2009 by grimreaper797]

Originally posted by incoherent_television
This example is a little misleading. The US pulled out of Bretton Woods in 1971. What you're describing sounds more like capital than currency. Currency is a medium of exchange: it says, "I performed X hours of work which I can trade for Y product."

I am saying more along the lines of "today your work was worth X, thus we gave you an I.O.U. of X (currency), but if tomorrow the economy does better and your saved the I.O.U. for X, your work is now worth X+Y, Y being the value gained in our currency as a result of the economy booming."

Strong currency= More likely foreign investment.

Do you mean: weak US currency = foreigners invest? There are lots of businesses that want a weak dollar because foreigners can then buy more US-made goods.

No. Say I have 1000 euros. The economy and the value of the dollar are directly correlated in our current system. Say the real estate market starts to boom. I want a piece of that action. I can't buy real estate in Euros in the US, I need dollars.

If the currency is going weak, only the probability of a bull market in the near future is going to really draw foreign investment. You don't invest in a countries business unless you think that a bull market is coming or is here and has a ways to go before slowing down.

Buying product is completely different. If anything its bad. If a company produces Product X for 500 dollars a piece, and sells it for 600, then the economy takes a huge plummet, and the only people willing to buy are foreign companies that value your product at 75% of your price(600 dollars), you can either refuse (thus making this point moot), or accept, and incur losses in your company.

In a mark to market system, you REALLY don't want to hold onto those assets if they are rapidly depreciating and would likely sell them. It becomes a lose lose situation for the company.

So now, weaker currency does not= investment. It might = bargain hunting, but that is in no way good for US business.

[edit on 17-3-2009 by grimreaper797]

Originally posted by Frankidealist35
reply to post by sadisticwoman

 

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.

Why not a council of 50 economists voted on during state elections? They would NOT be a part of the Federal Government, they would be STATE representatives. They would hold the main function of gathering the information and reporting back to the state elected congress. If the states, in general assembly voted to keep a practice viewed as unconstitutional, or favoring business in an inequitable way, they could use a "veto" power by 2/3 majority to block that economic legislation. The measure would then go to the supreme court to decide whether or not it should be implemented.

There's no way to completely keep the Feds out of the mix, but it would at least give the system a little more transparency, and the people a little more power to vote in their economic representative as opposed to have the Congress appoint the committee's and what not.

I think these economists must already be very well off financially in they're own state, but must abstain from voting, and not lobby other committee members on matters that directly reflect their financial interests. The penalty for such crimes would be treason. Also, this is an unpaid position.

At that point, you would only have the civic minded, and honest people running.

Just a thought

Originally posted by sadisticwoman
reply to post by Frankidealist35

 

You really think that without government regulation,

The problem with that is sometimes the government screws up...well, alot of times the government screws up...

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.

Who f'kn knows... Its pure speculation on your part at this point.

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

I reckon its better to have a job then to not have one at all...

Originally posted by sadisticwoman
reply to post by Frankidealist35

 

Yes, people usually start a business to make money. They want to make as much money as possible. If that means exploting, underpaying their workers and overcharging for services and goods, then they'll do it.

Dont like it? THEN GROW YOUR OWN F'KN BUSINESS. And while your at that, if you could mind your own... Dont tell me how to run mine.




No matter what you do, you will NEVER have a perfect system... There will alawys be someone bitching and moaning about how theyre getting fukked over... blah blah blah... There will always be whiners...

[edit on 18-3-2009 by Fox News]

reply to post by Fox News


Yes, and there will always be trolls who run off on tangents about people whining, and there will always be those who try to circumvent ATS rules by purposely misspelling the the F word

reply to post by Fox News


Ha ha, are you joking? You want sweatshop conditions? Because I'm pretty sure people working in sweatshops barely make enough to EAT let alone enough to start their own business.

You're so silly!

reply to post by Fox News


Pure speculation- right! Because there were never children who were miners who were paid a quarter a week and ended up being crippled for life! And let's not forget that women seamstresses probably loved being killed in fires in their workplaces! They were probably cold anyway.

And no- sweatshop jobs are crippling, demoralizing, and generally not better than not having a job. At least without a job you can suffer on your own terms and you won't be beat for not producing fast enough.

reply to post by yellowcard


Ours sure as hell isn't! We don't choose what we can buy- the companies in our country are mostly one big monopoly without being a legal monopoly so they could be cut down to size. That means we don't get to choose whether or not Nike gets shut down, because they also profit from a clothing line and energy drinks (a hypothetical situation, as I can't remember who Nike is actually partnered with). We don't choose what's available in the market. We don't get to choose with our money.

[edit on 18-3-2009 by sadisticwoman]

A refreshing wind of change is blowing

jeeeeeeeeeeeze ...

I can almost feel that red boot pressed against the back of my neck. Citizens, can you feel it?
Repeat after me citizens - 'the red boot is glorious'.

This is madness indeed to support an economic system that goes against the interests of 98% of the population of a country. But for the elite who's in power, it makes sense to defend the interests of the ones who sponsor their shiny career, while the rest of us are being served with the # they produce to keep us submitted.

Fire and destruction is really the only way out of this madness, I might say, but I hope there are better solutions, like finding a small farm and grow a new life there with like-minded people who wanna heal themselves as well.

Originally posted by sadisticwoman
Come on now, do you really believe that capitalism is synonymous with freedom?
Freedom of what?
"Freedom" to buy from monopolies?
"Freedom" to watch your small business get taken over by Walmart?
"Freedom" to barely be able to buy food?

Actually, in a true free market economy ole' Sam would have never grown to more than a few department stores at best. It was DAS GOVERNMENT that gave him his wealth via corporate welfare. Moreover, monopolies would not exist because people like HEIR GATES would not be able to kill innovation via abuse of the trademark laws.

That being said, I kinda like the Star Trek model. Self improvement and individual achievement is the purpose of society. That's not communism or socialism by the way, so all the ardent right wing nut jobs relax! Star Trek is the world we could have without any monetary system at all.

Most industrialized countries run on a somewhat centralized economy (Japan, France, Germany, Sweden, Canada to some extent, GB was for a good while). The countries that are at this point most capitalistic and "everything goes screw regulations and sustainable growth" are Russia, China, and India. And that is because they are modernizing (re-modernizing for Russia). Once a country has modern infrastructure, it is advantageous for a government to help companies with long term R&D because it can sustain the losses while waiting on the returns over large periods of time. This is very much the case in how Japan caught up to and even surpassed the US in electronics and automobiles. Germany produces high quality products. France launches most of the world's satellites and runs the country on nuclear power without an accident. And what would we all do without good maple syrup? It also helps protect workers and the environment from exploitation.

All this is why I think subsidies for drug companies and elimination of long patent holding periods would be advantageous, particularly for the consumer. Everything would be at generic prices and the company does not have to have a high risk, high reward business model.

Originally posted by sadisticwoman
Come on now, do you really believe that capitalism is synonymous with freedom?
Freedom of what?
"Freedom" to buy from monopolies?
"Freedom" to watch your small business get taken over by Walmart?
"Freedom" to barely be able to buy food?

You think that "freedom" is so important because ...