How the rich get richer – money in the world economy [video]
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Capitalism has to be replaced. Trying to change it is futile.
We've been trying to tweak capitalism for a couple of hundred years and we're still stuck in a global board game of Monopoly.
There is only one outcome in such a game and everyone knows it: one winner takes all and the rest ...
Second, capitalism can be replaced in a free society if a superior model is introduced. No one is stopping people from starting up worker cooperatives, communes or non-profit organizations.
By all means try to replace enterprises that are motivated by remuneration, but don't do it by violating people's right to freely contract. Do it by making a better model that people freely choose to switch to.
Funny how HN comments are so full of complaints about practices that inhibit businesses our system is actually designed for. What makes coops and communes so easy?
Communist Manifesto isn’t a work anyone seriously defends. Marx didn’t even defend it. It’s a history scrap; significant by contextual events. If you read Marx’s seminal work, you’d not honestly raise such a moot point.
Insofar as there are obstacles to starting businesses, communes, etc, they are a result of interventions by the state that inhibit the free market, like permitting and licensing requirements, so the solution there is to go more toward a free market, not less.
>>Marx didn’t even defend it.
That's extremely disingenuous. He authored it. He titled it 'The Communist Manifesto', thus placing it at the center of his political platform.
Capitalism isn't going away I don't think, but rather the reverse. However it could be managed a bit better.
That is; a society, and a social contract.
Your basic “apple-for-a-dollar” trading will always be around, sure.
But billionaires and massive wealth concentration are a thing that can only exist if society is structured to allow it.
Trade and markets might be, absent of all outside interference (I don't think this is even possible), but capitalism has definitions that go well beyond that.
- There was the Bretton Woods system (c. 1958) which established a kind of gold standard for currencies; the U.S. dollar was pegged at $35 per ounce, and the U.S. owned over half the world's official gold reserves—574 million ounces at the end of World War II. Foreign governments could exchange their dollars for gold.
- As Germany and Japan recovered, the U.S. share of the world's economic output dropped significantly (from 35% in 1950 to 27% in 1969). The French called the Bretton Woods system "America's exorbitant privilege" - i.e. the U.S. could produce a $100 bill for a few cents, but anyone else would first need to produce $100 worth of goods to get one.
- In February 1965 French President Charles de Gaulle announced an intention to exchange its U.S. dollars for gold. By 1966, non-US central banks held $14 billion, while the United States had only $13.2 billion in gold reserve (with only $3.2 billion available to cover foreign holdings). By 1971, the money supply had increased by 10%.
- In May 1971, West Germany left the Bretton Woods system. Other nations began to demand redemption of their dollars for gold (e.g. Switzerland redeemed $50 million, France acquired $191 million). On August 5, 1971, the United States Congress released a report recommending devaluation of the dollar. On August 9, 1971, Switzerland left the Bretton Woods system.
- On August 15, 1971, Nixon directed that the convertibility of the dollar into gold or other reserve assets is to be suspended (with certain exceptions) - hence, foreign governments could no longer exchange their dollars for gold (presumably for the time being, at first).
From this lay-person's perspective, an improving economy and a growing population would naturally bring about an increase in the demand for money. Gold isn't as constraining on the supply of money as some folks may insist (there were already too many greenbacks for the gold in reserve by 1966). Everyday working Joes will still need some cash in their pockets to purchase their day-to-day needs, and the more such "Joes" you've got the more money you'll need to put some into the newer pockets. For that reason alone, fractional-reserve banking becomes a thing; at the end of the day, a "Joe" has a more immediate need for food-clothing-shelter than for gold. So long as banking clients collectively have other more pressing desires than that for gold, the "virtual gold" of its ledger books could suffice.