That's easily shown. Give me $20 of art materials, and I will turn out something I have to pay someone to haul away. Give it to Picasso, and he'll turn it into a million dollar creation.
In fact, the entire software industry is based on creating value out of nothing.
This tends to lead to concentration of capital over time, and greater and greater inequality. In the end, it leads to impregnable monopolies if unchecked. Picasso was an interesting example to choose - he's a rare example of an artist who did well from their work, most die poor and their work is then sold for millions after their death, precisely because being able to create value does not mean you will necessarily be rewarded for that value, often the inverse - often others with capital are the ones who benefit from creation, not those who create. You can see this in art, games, engineering and in startups, almost any domain you care to think of - those who do the work are not necessarily or even usually those who benefit, those who control capital are the ones who benefit most, because it is not very hard to grow capital once you have it. So the trick is to have capital and control others who labour, not to work hard.
Regulated capitalism is an answer to this fundamental imbalance. Progressive taxes, bans on monopolies, inheritance tax are all there to even the playing field a little, but it is still vastly skewed to those with capital rather than those who live off labour.
That said, people who talk about 'evening the playing field' scare me. For starters, armchair analysts underestimate the amount of good done by greedy people in a well created market economy. For seconds, fairness is very expensive. And for thirds, people don't understand what the regulation of the current systems does. There is no need to pronounce capitalism doomed when it has such a track record of success.
Completely agree. Capitalism could not function without enforced property rights of all kinds. In addition regulation often hands out monopolies(e.g. Patents), sometimes usefully, sometimes distorting the market horribly, but regulation is also used to prevent monopolies and other forms of market abuse.
a well created market economy
Do you mean well regulated? Economies are not created. I agree enlightened self interest is useful and regulation is hard.
fairness is very expensive
Civilisation is expensive.
Nobody is saying capitalism is doomed, but the heavily regulated version we have now is superior to unregulated capitalism, which leads to monopolies, cartels and other brutal forms of oppression.
This assumes that governments are incorruptible. Monopolies don't exist without government collusion. In the game of Monopoly, that part is played by the roll of the dice - which favors certain players.
So ironically, more regulation would potentially lead to creation of bigger monopolies as it gives the capitalist's more incentive to influence the regulations and create monopolies for themselves. That is what we see happening in the real world.
That's the conventional wisdom, but there are no examples of it happening, and examples of the reverse. Rockefeller's market share diminished throughout the years of SO's anti-trust trial.
See "Titan" by Chernow.
The notion that the internet required government technologies and so otherwise there would be no internet is not correct. Google FidoNet, for just one example (there are others).
Perhaps a better example is that a farm increases in value as the techniques and technology for growing increases. Ultimately the extra value comes from somewhere, everything else is just redistribution.
If I paint a painting, I do not have more stuff. Someone else might be more willing to trade my paint for more of their stuff.
But in an econonmy where there are only $20 for the paint, Picasso won't be getting a million no matter how hard he paints. The money simply isn't there!
Reality is complicated, but if you're looking for a simple example of creating value in a "closed economy", art is not intuitively right
If we give you $20 if art materials, we can't give Picasso those materials because you already have them.
The world is finite. Resources are finite, and infinite expansion is impossible.
If you were right, the $10 trillion China added to its economy annually (you know, just ~$64 trillion of new GDP that didn't exist before, over the next five years) - in just the span of ~16 years, would have had to come out of someone else's pocket, which would have caused extreme collapse in numerous other major economies to make room for it. That of course didn't happen at all, the rest of the globe's GDP expanded along with China in real terms.
For all realistic practical purposes - since we're nowhere near maximum resource utilization - that has yet to be an actual problem and we're up to 7.x billion people now. Every serious problem to that expansion, we've managed to solve, enabling continued expansion (see: we were all supposed to starve to death decades ago).
Back in reality - and out of the realm of theory that only exists in a strict vacuum - Capitalism is the exact opposite of a zero sum game. That has been proven by the radical improvement in living standards at the median for all the developed nations, all of which heavily utilize the free market economic system (including all of the Scandinavian nations, none of which are actually Socialist at all).
If Capitalism were a zero sum game, China would not have just enjoyed the greatest, fastest mass standard of living improvement in world history thanks to its modest adoption of the free market, and its blatant shift away from Statism.
The free market largely won globally, and thanks to that, the world has less poverty, war, violence and starvation than at any other time in history.
Is this true, though? Certainly as a percentage of global population things like poverty and hunger are in decline but some of this can be attributed to population increases. There were 795 million hungry people in 2015 [1], but this is more people than were alive in 1750. It stands to reason that 300 years ago there were considerably fewer individuals living on the brink of starvation.
[1] http://www.npr.org/sections/goatsandsoda/2015/06/01/41126502...
Society is vastly more wealthy than we've ever been before. Access to education, medicine, information, transportation, entertainment are at all time highs. Life expectancies continue to rise and gdp adjusted by purchasing power on a per capita basis is up over 40% in the last 3 decades.
https://www.cnbc.com/amp/2017/02/22/us-life-expectancy-is-lo...
Either way, you shouldn't look too much at short term trends when trying to measure long term development. If you start from 1990, life expectancy has actually risen by 4 years.
Software is a fine counterexample. It's made of bits, which cost nothing to create, and the value is in the order of the bits, not the bits themselves.