Is Capitalism Self-Destructive? (1 Viewer)

[Makhno]

At the moment, yes . . . because, when you look at the capitalist word today, there is always the threat of war, nuclear holocaust, the destruction of the environment etc largely due to the capitalist system. Although I don't think this necessarily has to be the case. I think all economic systems have the potential to self destruct, but I think capitalism has more potential that most.


poll to follow

 

[Voidwar]

largely due to the capitalist system.

Completely Unsubstantiated.

 

[rathi]

Capitalism is not a driving factor for war. Many capitalist countries don't go to war and many socialist countries do. War has many causes. In Africa it is most around ethnic divides. In the middle east religion plays a big part.

 

[Sauwan]

I think all economic systems have the potential to self destruct, but I think capitalism has more potential that most.

Why more potential? That seems silly. Most of the successful countries in the world are capitalist, although some (like Sweden) have embarrassingly high tax rates which leads some to the unwarranted conclusion that they are not a capitalist country.

When you say capitalism then, do you really mean Laissez-faire?

If so, explain why. There really is no more need to criticize/defend a claim like what you are trying to make than there is to criticize/defend the claim "I like blueberries". An opinion is nice and everything, but if you try to tell me you like blueberries only because they play Chopin's Funeral March beautifully, then we have something to talk about.

 

[Real Korimyr #9]

Capitalism isn't inherently self-destructive. The problem with modern capitalism-- and with all of the attempts to replace it so far-- is that it is incompatible with industrialization.

The most basic exchange in any modern system of economics is the exchange of labor for resources-- you work for someone else, and he gives you money.

Of course, what has happened since the late 19th century is that we have found newer and more innovative ways for labor to be produced by machines. Since machines can produce vastly more labor than people-- and, indeed, they produce over 99% of production labor now-- the price of labor plummets and the portion of labor produced by humans (and thus the real wages paid to humans) shrinks.

There are a number of ways we can artificially keep this from occurring. We've tried most of them already-- wars followed by rebuilding contracts especially-- and we're increasingly trying to uphold our economy on the basis of "false industries" that are labor-intensive but cannot be performed by machines and do not produce consumable goods.

Which is where advertising and IP come into play. Advertising is completely useless-- and widely regarded as a nuisance-- an IP can be infinitely reproduced at near-zero costs. Yet... we still charge for these things as though they were automobiles, cheeseburgers, or shoes.

Only way to fix the emergent problems of capitalism is to develop a system of economics-- distribution of goods and services-- that does not rely on exchanging labor for resources. Easier said than done, of course.

 

[SFLRN]

Capitalism isn't inherently self-destructive. The problem with modern capitalism-- and with all of the attempts to replace it so far-- is that it is incompatible with industrialization.

The most basic exchange in any modern system of economics is the exchange of labor for resources-- you work for someone else, and he gives you money.

Of course, what has happened since the late 19th century is that we have found newer and more innovative ways for labor to be produced by machines. Since machines can produce vastly more labor than people-- and, indeed, they produce over 99% of production labor now-- the price of labor plummets and the portion of labor produced by humans (and thus the real wages paid to humans) shrinks.

Which is where advertising and IP come into play. Advertising is completely useless-- and widely regarded as a nuisance-- an IP can be infinitely reproduced at near-zero costs. Yet... we still charge for these things as though they were automobiles, cheeseburgers, or shoes.

Only way to fix the emergent problems of capitalism is to develop a system of economics-- distribution of goods and services-- that does not rely on exchanging labor for resources. Easier said than done, of course.

I could not disagree more. The basis of capitalism, which is individualism, has created industrialization. No one made the scientific discoveries that led to the Industrial Revolution by government action. In fact, it was individuals pursuing their own interests, whether in science or in profit that first spawned the agricultural revoltion. Then came the industrial revolution.
Secondly, real wages and standards of living have been growing in every state that has had their industrial revolution. Consistent economic growth and consequently rising living standards over the years is a direct product of the capitalist model. What has actually been happening is that as machines cover more physical labor humans are doing more mind oriented labor. This of course can be proven by the increasing number of Americans who qualify as "white-collar." Along with this has come the search for higher and higher education levels. When machines do jobs better than we can we are given opportunities in more mentally demanding fields. I could find no proof to show that the standard of living in the U.S. has in any way declined after the Industrial Revolution.

How is advertising uselesss? It provides a means for consumers to become more aware of the variation of products they have to choose from. This also can support a competitive market by allowing people to comapre the prices in advertising between two different retailers. It is true this adds a barrier to entry for firms; however, the increased competition that results from advertisement of sales and general prices leads to a more informed consumer. This then means the consumer is more likely to shop somewhere based more off of price rather than just what is close by.

Do you mean Intellectual Property by IP? or Internet Protocol?

 

[SFLRN]

At the moment, yes . . . because, when you look at the capitalist word today, there is always the threat of war, nuclear holocaust, the destruction of the environment etc largely due to the capitalist system. Although I don't think this necessarily has to be the case. I think all economic systems have the potential to self destruct, but I think capitalism has more potential that most.
poll to follow

What data would show a high correlation between wealth and conflicts? All of these things were present without capitalism. But there would not be nuclear holocaust, there would be a plague, or a large feudal war. If capitalism has the most potential to do so then why is it that countries that have had capitalism for an extended period, tend to be rather stable in terms of governments, on the whole.

 

[Gunface]

I don't see why it would, but I suppose it's possible.

 

[Real Korimyr #9]

The basis of capitalism, which is individualism, has created industrialization.

The basis of capitalism is not "individualism"; the two have nothing to do with each other. The basis of capitalism is the theory of property, and the system of laws based upon that theory of property.

And yes, capitalism led directly to industrialization; industrialization could not have occurred without capitalism, and industrialization is absolutely a good thing. However, industrialization makes capitalism unstable and unsustainable, for the reasons I explained in my post.

No one made the scientific discoveries that led to the Industrial Revolution by government action.

Government action regulating the economy-- whether in a mixed economy or overt socialism-- has the same fundamental problem as capitalism. They're still based on the exchange of labor for goods.

In fact, it was individuals pursuing their own interests, whether in science or in profit that first spawned the agricultural revoltion.

Nonsense. It was packs of primitive humans pursuing their collective interests which spawned the agricultural revolution which-- over the course of millenia-- allowed division of labor to progress to the point that the concept of individualism could even exist.

Capitalism could not have developed without mercantilism before it, which was an outgrowth of-- and the cause of death of-- feudalism. Every economic system eventually makes itself obsolete.

Secondly, real wages and standards of living have been growing in every state that has had their industrial revolution. Consistent economic growth and consequently rising living standards over the years is a direct product of the capitalist model.

No, every State which experiences industrialization has an immediate surge in standard of living, followed by rapid growth. The first States to have done so then proceeded into economic calamity-- the worldwide depression of the Twenties and Thirties-- followed by systems of artificial economic support. (Spiralling debts, cycles of warfare and rebuilding, false industries.) Latecomers took their cue from these first States and jumped straight into artificiality.

There was no shortage of resources during these times, remember. Aside from a few localized agricultural problems, we had as much arable land, minerals, and other natural resoruces as we had in the decades previous. What we had was an inability to distribute those resources, because the system of labor exchange had broken down.

What has actually been happening is that as machines cover more physical labor humans are doing more mind oriented labor.

Which roughly translates into one of three things: designing newer and better machines, convincing people they need the products of these machines, or creating "intellectual property".

The first, while valuable, perpetuates the cycle of having to find ways of creating extra work so that people can buy stuff. The second, while having some value as you claim, is mostly useless-- pushing products that do not enhance our lives or fighting for market share between products that aren't meaningfully different.

The third, the creation of intellectual property, is the greatest benefit of industrialization. However... intellectual property, whether it is practical software applications or cultural expression, is not a consumable good. It is infinitely reproducible and people have an alarming tendency to create IP free of charge, when they have the time to do so.

It's also the largest sector of our economy, despite the increasing encroachment of pirates and skilled amateurs alike.

I could find no proof to show that the standard of living in the U.S. has in any way declined after the Industrial Revolution.

No? "Real wages" have declined steadily since the 1950s, as public and private debt per capita have skyrocketed. As you may have noticed, the work-week is certainly longer than it used to be, as well.

I'm not making arguments against capitalism, or claiming that it hasn't been a positive force in human development. I am certainly not arguing in favor of state-controlled economies.

However, capitalism-- along with other economic systems-- was made obsolete over a hundred years ago. It is not sustainable, and the economic conditions of the most industrialized countries are precariously unstable. Currency no longer holds any relationship to any measure of physical resource; all of the money that makes our entire civilization work is imaginary. Even the money represented by paper currency is a small fraction of the global economy.

Unless we acknowledge this and do something about it-- adopt an economic system based on objective physical resources-- we are eventually going to watch our entire house of cards collapse. And we're going to rebuild it, like we did last time, and then we're going to watch it collapse again.

And the cycles will just keep getting faster and faster as machines become capable of doing more and more work and a growing population is going to be fighting over a smaller and smaller portion of the wealth generated.

 

[SFLRN]

The basis of capitalism is not "individualism"; the two have nothing to do with each other. The basis of capitalism is the theory of property, and the system of laws based upon that theory of property.

Capitalism is most certainly based on individualism. Capitalism bases itself on the idea that one exchanges something with another person for their own benefit. Individualism inherently reinforces the individual doing what they want to do. The two are most certainly interconnected.

And yes, capitalism led directly to industrialization; industrialization could not have occurred without capitalism, and industrialization is absolutely a good thing. However, industrialization makes capitalism unstable and unsustainable, for the reasons I explained in my post.
Nonsense. It was packs of primitive humans pursuing their collective interests which spawned the agricultural revolution which-- over the course of millenia-- allowed division of labor to progress to the point that the
concept of individualism could even exist.

I am not saying we do not trade with others. However, the reasons societies were able to form was due to increased productivity and thus substence farming started to loss sway. The technology that allowed for such increases in productivity were the result of individuals who saw a problem and made a product for their own gain, whether it be monetary or not. The point being that there was no collective cotton gin, no collective horse plow, it was the result of individuals.

Capitalism could not have developed without mercantilism before it, which was an outgrowth of-- and the cause of death of-- feudalism. Every economic system eventually makes itself obsolete.

Mercantilism failed because of its inherent supression of freedom to one party. Capitalism however, has no such effect when given a few very good regulations. It is the most freest system and will therefore insulate itself from becoming obsolete.

No, every State which experiences industrialization has an immediate surge in standard of living, followed by rapid growth. The first States to have done so then proceeded into economic calamity-- the worldwide depression of the Twenties and Thirties-- followed by systems of artificial economic support. (Spiralling debts, cycles of warfare and rebuilding, false industries.) Latecomers took their cue from these first States and jumped straight into artificiality.

The Great Depression was the result of poor monetary policy by the Federal Reserve, this was the claim that won Milton Friedman the Noble Prize. The video that explains this can be found on you tube under Mlton Friedman, the anatomy of a crisis.

Which roughly translates into one of three things: designing newer and better machines, convincing people they need the products of these machines, or creating "intellectual property".

The first, while valuable, perpetuates the cycle of having to find ways of creating extra work so that people can buy stuff.

Increasing productivity, which technology does, is responsible for increases in overall standards of living.

The second, while having some value as you claim, is mostly useless-- pushing products that do not enhance our lives or fighting for market share between products that aren't meaningfully different.

I disagree once again. How are people comparing prices a bad thing?

The third, the creation of intellectual property, is the greatest benefit of industrialization. However... intellectual property, whether it is practical software applications or cultural expression, is not a consumable good. It is infinitely reproducible and people have an alarming tendency to create IP free of charge, when they have the time to do so.

That is why we have patents and copyright laws.

No? "Real wages" have declined steadily since the 1950s, as public and private debt per capita have skyrocketed. As you may have noticed, the work-week is certainly longer than it used to be, as well.

Per Capita income and standards of living in the U.S. are some of the highest in the world, I do not know of an instance where a non-industrialized country is performing better than us. Furthermore, Americans have more free time than when they worked day and night on their substence farms or in industrial style factories.

Unless we acknowledge this and do something about it-- adopt an economic system based on objective physical resources-- we are eventually going to watch our entire house of cards collapse. And we're going to rebuild it, like we did last time, and then we're going to watch it collapse again.

Switching back to the gold standard would be rather disastourous. A failure in the Gold standard caused the Great Depression. Floating Currency is preffered by nearly every economist.

And the cycles will just keep getting faster and faster as machines become capable of doing more and more work and a growing population is going to be fighting over a smaller and smaller portion of the wealth generated.

I disagree, the economies in the 1st world with capitalistic systems are much more stable than other world economies.
You are assuming we live in zero-sum game, this is not economic fact. Furthermore services are another form of products people can buy from labor.

 

[Doremus Jessup]

I don't think that capitalism is destructive to itself, the wealth is just destined to move to new areas. If the US is believed to be under what is called "high capitalism," made up of high consumption and a service-based economy, I don't see how growth can continue unabated. This "high consumption" has led many people to go into severe debt that has not yet been realized, people are signing third mortgages like it is going out of style and making interest only payments on all of their credit cards.

I guess we can continue to see growth so long as people continue to live beyond their means, but it seems to me that the whole facade has got to come crashing down eventually. If that were to occur, would that just be considered a re-adjustment as the $$ moves to China or to MNCs as they become more powerful than states?

 

[Real Korimyr #9]

Mercantilism failed because of its inherent supression of freedom to one party.

I wasn't aware that mercantilism had failed at all. It was the development of mercantilism from feudalism that allowed the merchant class to flourish, which led directly to the emergence of capitalism. And, I believe you would agree with me that industrialization and all of its benefits could not have occurred without capitalism.

It is the most freest system and will therefore insulate itself from becoming obsolete.

This, I believe, is an expression of "pop economics". While freedom carries demonstrable economic benefits-- which is why old Communist regimes are starting to liberalize-- freedom itself can't insulate an economic system from basic economic forces.

And those economic forces have created a situation in which the only way for the economy to remain afloat is for every industrialized country to continually produce more than it can consume. This situation is inherently unsustainable.

(on advertising)

I disagree once again. How are people comparing prices a bad thing?

When the difference between the prices is considerably less than the portion of those prices dedicated to the advertising. Then the benefit of increased consumer awareness-- assuming that the information is even accurate-- is outweighed by the cost of the advertising.

The societal benefit of advertising isn't awareness. It is, primarily, creating jobs that do not lead to an increase in consumable goods-- so that advertising professionals can afford to purchase goods without contributing to the overabundance of said goods.

It's like war. The purpose of modern warfare-- unlike ancient warfare, which was to seize resources-- is to employ large numbers of able-bodied men, not only to keep them from producing, but to destroy large quantities of durable goods so that our industries can be paid to replace them. Munitions is perfect for this, because they must be replaced on their own... even when they're fired in training exercises.

However... intellectual property, whether it is practical software applications or cultural expression, is not a consumable good. It is infinitely reproducible and people have an alarming tendency to create IP free of charge, when they have the time to do so.

That is why we have patents and copyright laws.

Exactly my point. These laws are an attempt to turn an abundant resource-- information-- and turn it into a scarce resource in order to make it possible to pay people for it. This encourages people to create more information-- a good thing-- and allows them to purchase goods without producing goods.

Of course, it does so at the expense of the free flow of information... taking something that everyone could have, and depriving them of it for the purpose of giving it market value. It's a stopgap measure at best, and technology is poking holes in it... leading capitalist corporations to attempt to stifle the development of technology.

Rather the opposite of the major benefit of the capitalist economy.

Unless we acknowledge this and do something about it-- adopt an economic system based on objective physical resources-- we are eventually going to watch our entire house of cards collapse.

Switching back to the gold standard would be rather disastrous. ... Floating Currency is preferred by nearly every economist.

I'm not advocating a return to the Gold Standard, especially not in the presence of artificial labor. The economists are absolutely correct that the gold standard cannot hold up under these circumstances; the current, unsustainable system (floating currency) is a direct result of the previous system collapsing.

The problem is, it hasn't solved the original problem caused by abundant goods. It has only bought us time. We've had seventy years so far, and we've had a few strokes of brilliance along the way, but there is a limit to how far we can ride this out.

What I am advocating are two separate reforms, which are unfortunately radical in nature:

1) Replacement of subjective market values with an objective measurement of the amount of energy necessary to produce specific, physical goods.

2) Separating the distribution of goods from labor, and using other means of encouraging acheivement.

In other words, we need to distribute goods according to their production and usage instead of the market value of human labor, and find a way to encourage humans to do necessary work without bribing them.

Capitalism (with some regulation) was the best way of distributing goods and services when resources were scarce. Now that capitalism has made abundance possible-- now that we can easily produce more than we can consume-- it is no longer ideal. Clinging to capitalism and other outdated economic theories is holding us back.

 

[SFLRN]

I wasn't aware that mercantilism had failed at all. It was the development of mercantilism from feudalism that allowed the merchant class to flourish, which led directly to the emergence of capitalism. And, I believe you would agree with me that industrialization and all of its benefits could not have occurred without capitalism.

It depends on how you define failure. It is true that after this system went out of vogue that capitalism eventually took place. However, colonialism was present well after the industrial revolution. It took many years for capitalism to be the dominant economic force.

This, I believe, is an expression of "pop economics". While freedom carries demonstrable economic benefits-- which is why old Communist regimes are starting to liberalize-- freedom itself can't insulate an economic system from basic economic forces.

It is not pop economics. A market wherein both parties enter a transaction based off of their own self-interest and not coercin is the most free system.

And those economic forces have created a situation in which the only way for the economy to remain afloat is for every industrialized country to continually produce more than it can consume. This situation is inherently unsustainable.

This is not true. If we had hit our maximum production capacity or everyone could not consume goods then that claim may have merit. However, there are many untouched markets where market forces have yet to grab hold. Much of the 3rd world proves this. How is capitalism based on producing more than we can consume? What profit incentive is there to do that? A companies only incentive is to maximize profit. That is why there is a point where profit goes down as one increases production due to rising marginal cost.

(on advertising)
When the difference between the prices is considerably less than the portion of those prices dedicated to the advertising. Then the benefit of increased consumer awareness-- assuming that the information is even accurate-- is outweighed by the cost of the advertising.

I disagree, if companies were not making a profit from advertising then why is it they continously invest in it?

The societal benefit of advertising isn't awareness. It is, primarily, creating jobs that do not lead to an increase in consumable goods-- so that advertising professionals can afford to purchase goods without contributing to the overabundance of said goods.

But capitalism is not based on the trade of simple physical goods. It can be anything from ideas to services.

Exactly my point. These laws are an attempt to turn an abundant resource-- information-- and turn it into a scarce resource in order to make it possible to pay people for it. This encourages people to create more information-- a good thing-- and allows them to purchase goods without producing goods.

Of course, it does so at the expense of the free flow of information... taking something that everyone could have, and depriving them of it for the purpose of giving it market value. It's a stopgap measure at best, and technology is poking holes in it... leading capitalist corporations to attempt to stifle the development of technology.

Rather the opposite of the major benefit of the capitalist economy.

Its a measure that encourages people to create those ideas at other times. What would be the point in investing in such ideas if one could not see a sizable return for them. This is a positive externality and government provides regulation to encourage it and prevent a cycle wherein the creation of such ideas are considerably slowed.

I'm not advocating a return to the Gold Standard, especially not in the presence of artificial labor. The economists are absolutely correct that the gold standard cannot hold up under these circumstances; the current, unsustainable system (floating currency) is a direct result of the previous system collapsing.

The problem is, it hasn't solved the original problem caused by abundant goods. It has only bought us time. We've had seventy years so far, and we've had a few strokes of brilliance along the way, but there is a limit to how far we can ride this out.

What I am advocating are two separate reforms, which are unfortunately radical in nature:

1) Replacement of subjective market values with an objective measurement of the amount of energy necessary to produce specific, physical goods.

2) Separating the distribution of goods from labor, and using other means of encouraging acheivement.

In other words, we need to distribute goods according to their production and usage instead of the market value of human labor, and find a way to encourage humans to do necessary work without bribing them.

Capitalism (with some regulation) was the best way of distributing goods and services when resources were scarce. Now that capitalism has made abundance possible-- now that we can easily produce more than we can consume-- it is no longer ideal. Clinging to capitalism and other outdated economic theories is holding us back.

I am not aware of any economist who supports these claims. You're distorting scracity. Scracity can be related to the inability to do everything we want to because of a limited resource of time. We can produce more than we can consume, but in a global market we insulate ourselves from that. Furthermore, what incentive is there for us to overproduce, no one makes a profit when they overproduce to the point no one buys their product.

 

[Real Korimyr #9]

It is not pop economics. A market wherein both parties enter a transaction based off of their own self-interest and not coercion is the most free system.

That is not the idea that I am dismissing as "pop economics"; this is simple, logical truth. What I am dismissing is the idea that simply being a "free market" protects from market collapse, and automatically solves economic problems.

And those economic forces have created a situation in which the only way for the economy to remain afloat is for every industrialized country to continually produce more than it can consume.

This is not true. If we had hit our maximum production capacity or everyone could not consume goods then that claim may have merit. However, there are many untouched markets where market forces have yet to grab hold.

Exporting goods is one way of disposing of them without consuming them. The problem is, either those Third World countries cannot afford our goods, or they are in the process of industrializing and will soon have the same problem as we do. Who will they sell excess goods to in order to sustain their own economies?

It isn't a matter of maximum production capacity. We already use only a tiny fraction of our maximum capacity-- and that's based only on existing manufacturing equipment.

How is capitalism based on producing more than we can consume? What profit incentive is there to do that?

It isn't based on overproduction, and overproduction isn't profitable. That is the problem. Because of cheap machine labor, the price of human labor has plummeted; a human worker would have to sell the amount of labor necessary to build dozens of cars before he could afford to purchase one car.

Now, if every worker has to build the equivalent of seventy-two cars (to pull a number about of my ***) in order to purchase one, what can his employer profitably do with the other seventy-one? Remember, everyone else they would sell them to would have had to build seventy-two cars of their own in order to afford it.

Our economy has recovered from the Depression, of course, largely because we have found numerous solutions-- some elegant and others less so-- to "waste" large amounts of labor and create large amounts of artificial demand for goods and services. Essentially, we have done for labor prices the same thing that we've done for food prices by paying landowners not to grow crops and by purchasing and destroying food.

The farm subsidy system isn't very healthy, either.

I disagree, if companies were not making a profit from advertising then why is it they continously invest in it?

For the same reason that we built enough nuclear weapons to exterminate the entire human species several times over: because, with their enemies doing it, they cannot afford not to.

And I'll note that advertisers profit off of this. But that profit contributes nothing to the material standard of living of society; it's a false industry whose primary function is to waste human labor. (Since machines cannot produce advertising.)

I am not aware of any economist who supports these claims.

That is because all economics is based on the distribution of scarce resources; the idea of abundant resources is absolutely alien to the science. It's like applying the principles of Freudian psychology to an artificial intelligence.

 

[SFLRN]

That is not the idea that I am dismissing as "pop economics"; this is simple, logical truth. What I am dismissing is the idea that simply being a "free market" protects from market collapse, and automatically solves economic problems.

I did not say that, but I am sorry if I implied it. A few good regulations are needed for markets to work. I never said that there should be absolutely no market regulation.

Exporting goods is one way of disposing of them without consuming them. The problem is, either those Third World countries cannot afford our goods, or they are in the process of industrializing and will soon have the same problem as we do. Who will they sell excess goods to in order to sustain their own economies?

You're forgetting that economies specialize and offer new products in the face of competition. Thats why the U.S. no longer produces cheap toys, China can do it better. We instead focus on a technology based economy that pays quite well. The point is that economies will continue to specialize. This problem you bring up does not take into consideration that competition can create new products for people to consume.

It isn't based on overproduction, and overproduction isn't profitable. That is the problem. Because of cheap machine labor, the price of human labor has plummeted; a human worker would have to sell the amount of labor necessary to build dozens of cars before he could afford to purchase one car.

Yes we have become more efficient. This has driven down the cost of much technology and subsequently created new markets for us to purchase and work in. Furthermore, higher productivity yields higher standards of living.

Now, if every worker has to build the equivalent of seventy-two cars (to pull a number about of my ***) in order to purchase one, what can his employer profitably do with the other seventy-one? Remember, everyone else they would sell them to would have had to build seventy-two cars of their own in order to afford it.

Our economy has recovered from the Depression, of course, largely because we have found numerous solutions-- some elegant and others less so-- to "waste" large amounts of labor and create large amounts of artificial demand for goods and services. Essentially, we have done for labor prices the same thing that we've done for food prices by paying landowners not to grow crops and by purchasing and destroying food.

We're not employing that policy anymore, of destroying food. Furthermore, the overwhelming majority of economist s say that it was WWII that helped us recover from the Depression.

But that profit contributes nothing to the material standard of living of society; it's a false industry whose primary function is to waste human labor. (Since machines cannot produce advertising.)

No it contributes by creating competition among companies to have the lowest prices and most appealing products. By making consumers aware of this they are able to make a more informed decision.

That is because all economics is based on the distribution of scarce resources; the idea of abundant resources is absolutely alien to the science. It's like applying the principles of Freudian psychology to an artificial intelligence.

Okay you keep citing Karl Marx by saying all value is based off of labor. But what actual economist supports this claim?
There will always be a scarce resource, our time. Thus there will always be some form of scarcity.

 

[Real Korimyr #9]

We're not employing that policy anymore, of destroying food. Furthermore, the overwhelming majority of economist s say that it was WWII that helped us recover from the Depression.

Yes, it was... by taking men out of the factories and fields and by creating a tremendous demand for disposable munitions and other military equipment that needed frequent replacement.

Of course, the Marshall Plan helped considerably, as well. Paying our people to build things in ruined countries... and then helping the citizens of those countries become wealthy enough to buy our surplus goods. Stroke of brilliance.

Okay you keep citing Karl Marx by saying all value is based off of labor. But what actual economist supports this claim?

I think we're talking ourselves in circles. I'm not saying that all value is based off of labor-- I am saying that the problem with industrial capitalism is the decreasing market value of labor caused by abundance. I am using the basic economics definition of "value"-- how much someone else is willing to pay for something, based on the laws of supply and demand.

 

[Feela]

Anyone with any kind of grip of real political economy and history can see capitalism is instable,but whether it is self-destructive I'm not sure.
If things got too bad like the 20s,I'd say the captialists would resort to fascism and the like again to save their position,whether that is self-destructing I'm not sure.

 

[Feela]

Okay you keep citing Karl Marx by saying all value is based off of labor. But what actual economist supports this claim?

Neoclassical mainstream economics is aload of rubbish,it is based on ridiculous assumptions and is internally,logically inconsistent(Piero Sraffa and the Cambridge capital controversy,Keynes etc.),its popularity has more to do with ideology. It is really unable to explain anything about the real world and just hides behind esoteric mathetical models that mean nothing.

 

[ptsdkid]

Must be wishful thinking on your part to think that Capitalism would self destruct. Only the inner mechanisms of liberalism/socialism would have the slightest chance of bringing down the great Capitalist country of America.

You need only to read Ann Rand's book "Atlas Shrugged" to witness what a real civil war, and what real economic self-destruction would look like if and when the socialist faction of America got it's way.

 

[Feela]

Must be wishful thinking on your part to think that Capitalism would self destruct. Only the inner mechanisms of liberalism/socialism would have the slightest chance of bringing down the great Capitalist country of America. .

Liberalism is captialism,it just represents slightly different interests to conservatism.
Capitalism is unlikely to self destruct as you say,because the ruling classes would resort to force as they did in Germany and Italy and Spain during the war.

You need only to read Ann Rand's book "Atlas Shrugged" to witness what a real civil war, and what real economic self-destruction would look like if and when the socialist faction of America got it's way.

Do people still read the crank,she was as bad a writer as a theorist.

 

[Doremus Jessup]

You need only to read Ann Rand's book "Atlas Shrugged" to witness what a real civil war, and what real economic self-destruction would look like if and when the socialist faction of America got it's way.

You need only read 1984, and realize that the US is being goosestepped to our future. :2wave:

Oh, and it is Ayn Rand.

 

[SFLRN]

Neoclassical mainstream economics is aload of rubbish,it is based on ridiculous assumptions and is internally,logically inconsistent(Piero Sraffa and the Cambridge capital controversy,Keynes etc.),its popularity has more to do with ideology. It is really unable to explain anything about the real world and just hides behind esoteric mathetical models that mean nothing.

If you do indeed think that neoclassical mainstream economics are "a load of rubbish" then how do you suppose to debate in an economics forum? Furthermore, Keynes is not the only economic approach present. If neoclassical economics are so bad how is it that they were applied specifically in Bolivia and we saw a hyper-inflation end. Furthermore, economic policies instituted in Poland helped liberalize their economy. What other economic approach, has proven more sucessful than capitalism? What better proof do we have than history itself? The proof being that a free market can be a stabilizing force, granted with government regulation.

 

[Feela]

If you do indeed think that neoclassical mainstream economics are "a load of rubbish" then how do you suppose to debate in an economics forum?

What are you talking about? This is an economics forum not neoclassical economcis,I have a great interest in real political economy like Classical,socialist/anarchist/mutualist/,marxist,institutionalist,post-keynesian and neo-ricardian economics to name a few, economics is one of my greatest interests just not neoclassical rubbish.

Furthermore, Keynes is not the only economic approach present.
If neoclassical economics are so bad how is it that they were applied specifically in Bolivia and we saw a hyper-inflation end. Furthermore, economic policies instituted in Poland helped liberalize their economy. What other economic approach, has proven more sucessful than capitalism? What better proof do we have than history itself? The proof being that a free market can be a stabilizing force, granted with government regulation.

Right,have you ever heard of the great depression now neoclassical economics says depressions are impossible,it really has a great applicability to reality don't you think?

 

[SFLRN]

What are you talking about? This is an economics forum not neoclassical economcis,I have a great interest in real political economy like Classical,socialist/anarchist/mutualist/,marxist,institutionalist,post-keynesian and neo-ricardian economics to name a few, economics is one of my greatest interests just not neoclassical rubbish.


Right,have you ever heard of the great depression now neoclassical economics says depressions are impossible,it really has a great applicability to reality don't you think?

Considering you are so well read on economics then how are you not aware that the reason for such a Depression was the result of poor monetary policy by the Federal Reserve at the time?(this is what Milton Friedman won a Nobel Prize for). Furthermore, when did economists say a depression is impossible? Lastly, I already refuted your underlying support for your critique, he does a hatchet job. ARPA: Debunking Keen . Your supposed source makes "undergraduate economic mistakes."

 

[Feela]

Considering you are so well read on economics then how are you not aware that the reason for such a Depression was the result of poor monetary policy by the Federal Reserve at the time?(this is what Milton Friedman won a Nobel Prize for). Furthermore, when did economists say a depression is impossible?

Say's law says they are impossible and Milton Freidman is a fascist and a crank,have you ever heard the saying "monetarism is dead."?

Lastly, I already refuted your underlying support for your critique, he does a hatchet job. ARPA: Debunking Keen . Your supposed source makes "undergraduate economic mistakes."

You did not refute it,you posted an article from some cranks from Sydney uni economics department,if that passes for a refutation in your mind,no wonder you are a cappie.
You are not a creationist are you,you seem to use the same kind of arguments.