Milton Friedman: Is Capitalism Humane? (1977) [video]
youtube.com
youtube.com
"Look at the wage rate between the foreman and the worker in Iussia" - I have, a foreman in the US today makes twice the hourly rate of the worker and that's before benefits packages and other compensations low level hourly workers do not get. So it can be more than double.
In fact, the OECD's own data the US is now has a wider inequality gap than Russia.
https://data.oecd.org/inequality/income-inequality.htm
Only in economics could someone be so provably wrong yet considered a luminary...
The downside is, if you find his arguments convincing, it will leave you feeling even more angry about the current role of government in society.
https://www.forbes.com/sites/noahkirsch/2017/11/09/the-3-ric...
https://globalnews.ca/news/4360299/wealth-inequality-canada/
As an example, how far did Bloomberg's billions take him in the democratic nomination?
https://www.bop.gov/about/statistics/statistics_inmate_offen...
Criminal justice reform or simply decriminalizing drug use will eliminate this problem entirely.
His argument and his positions are horribly simplistic. Neither capitalist nor socialist structures can meet all of the needs of a society.
The problem with sustainable monopolies in a free market is that there are a hundred thousand ways to skin a cat. Even if a particular business has a lock down on a particular resource it can't control alternatives. The only way a monopoly can be sustained is that businesses price things so low that there isn't any profit in competing against them with alternatives. And that is not really terrible and is not likely sustainable anyways.
Most people seem to operate under the misconception that somehow large corporate interests and large governments are opposing and balancing powers.
This is untrue.
Large businesses and large government are interdependent and complimentary. They feed into each other. They need each other. If you want bigger business you need to have bigger government.
The sort of ultra concentration of capital in the hands of a tiny minority of businesses and individuals wouldn't be possible without the government creating a regulatory environment to ensure that it happens first.
And it should be noted that even when the monopoly does not exist, regulation and government intervention almost always favors the larger players in the market. In many cases, they are the ones writing the regulations. Those regulations make the barrier of entry more difficult and discourage new competitors from entering a marketplace.
Big business and big government are symbiotic.
>Even if a particular business has a lock down on a particular resource it can't control alternatives. The only way a monopoly can be sustained is that businesses price things so low that there isn't any profit in competing against them with alternatives.
This is empirically false, there are many ways a large business can lock down a market/resource, or very nearly so, and prevent competition from smaller upstarts. Look no further than two-billion-dollar-a-day-revenue Walmart, whose signature practice is running competitors out of town by undercutting them and sustaining the losses until they close.
The Rise of Amazon as a serious threat to Wal-mart is a great example of the aforementioned principle in action.
Granted, Queen Anne's lace is a good source of nutrition for bees and wasps - a trait which dollar stores sadly do not emulate, cf. https://www.cbsnews.com/news/dollar-stores-and-food-deserts-...
So I have to say that, in my estimation at least, the plant comes out ahead. But even so, it's a mistake to confuse a thriving mass of Queen Anne's lace with a thriving ecology.
A better way to word this is this: consumers chose Walmart over its competitors because they believe they get better deals there than the alternatives.
I, and millions of other Americans, shop at alternative grocery stores and department stores every day.
In fact with online retailing and hyper competition things are cheaper and easier and choices are more plentiful then at any other time in the past.
The problem faced by smaller retailers is that people really don't like going to them. It's charming and romantic to think about small hardware stores and local grocers, but the reality is that before Walmart came along and before internet retailer a lot of retail shopping was extremely expensive and downright miserable. Stores took advantage of people's lack of information about goods/services and lack of alternatives all the time.
The growth of internet retail and big box stores and big grocer chains like Costco/Walmart/Kroger/etc have actually done a lot to keep prices low and keep the economy healthy.
So, no. Picking on Walmart in this situation is pretty much proves the exact opposite of what you are intending.
not if you're definition is that there must be one, and only one, market participant to be a monopolist.
but monopolies, in practice, are defined by market power (and monopsonies, by supplier power). you can control a market without 100% market share. that's the defining feature of a monopoly (market power), not market share.
walmart has both monopolistic and monopsonistic power in the US, despite thousands of small alternatives and a few big ones (like costco, target and amazon, which together form an oligopoly, that individually and collectively have market power).
Undoubtedly, and the examples are numerous, Wal-Mart has used its market position to exploit its suppliers and to use their suppliers to creatively sell their own products.
But these scenarios aren’t the product of Wal-Mart exercising monopoly power, but rather exploiting those suppliers who violate rule #1 of manufacturing: don’t be dependent upon a single customer or that customer effectively owns you.
no. and besides, that's a false dichotomy. i literally described the foundational understanding of monopolistic behavior by economists and regulators (that it's predicated on market power, not market share). this is a basic tenet taught early on in business schools and economics programs.
such clarifications are needed because many commenters fail to avail themselves of even a baseline understanding of the topic, which can be gleaned from just reading a wikipedia page let alone by having experience or even cursory training in the field.
it's tiresome to read the same shallow misperceptions over and over again. let's establish the basics quickly and move on to the more meaningful discussion that can be had.
the exclusive possession or control of the supply of or trade in a commodity or service
Dress it in as much nuance and confident language as suits you, it doesn’t change the reality that there is ample evidence Wal-Mart is not a monopoly.
If there's a state, it's natural to try to corrupt it to use its political power. If there is no state or that option looks unappealing, the alternative is to get some political power of the sort that grows out of the barrel of a gun, i.e. to be organized crime.
The implication of the question, that the state is necessary to produce a monopoly, fails to give the full picture. It's not as much that the state is necessary, that economic power can eventually be translated into enough force to subvert the rules. In the absence of a state, that force just takes the shape of an authoritarian proto-state, itself.
https://mattstoller.substack.com/p/this-is-not-a-democracy-i...
[EDIT] OK that was a bit glib. My point is things are a lot more complicated than "capitalism does this, government does that" and the two are essentially inseparable. Further this entire thread is full of "markets = capitalism" which is missing the mark—tendencies toward free market policies are a defining feature of capitalism, but free markets per se aren't identical to capitalism.
Governments aren't fundamentally needed per se to create a free market. But rules are needed. And whatever system we have to enforce those rules would resemble a defacto government. How that governments power is distributed, who's interests it represents, and how far it goes in regulating the market may vary.
Without someone enforcing rules to keep monopolies in check, I think those monopolies would become defacto governments. And they wouldn't be democratic. This is what I mean (but did not carefully express) when I said that some government intervention in the markets are needed to prevent the powerful from take advantage of the weak. (And it can go the other way too... governments tilting the scale in favor of existing powerful interests.)
Would that be different from the way that governments normally maintain a regulatory environment for businesses to expand?
Can free market capitalism even exist without the property enforcement that what we'd consider as organized crime or governments provide?
My second point would be: monopoly or not, it's not clear that they would have maintained the advantage they had. Of course we know that the government intervened, and some people will say that's what broke MS's alleged monopoly, whlile others will say it made no difference, and still others will say that they couldn't have maintained it for long in a free market anyway. We'll never know, since it happened the way it happened, but personally I don't see how the government's actions made the success of Linux, Apple and Google products possible where they weren't before; therefore I find the last argument more convincing - that is, that Microsoft had the jump on everyone, but it was never going to last. A free market doesn't guarantee that there won't be a clear front runner in any given competition.
People who usually ask "give me an example of a monopoly not maintained by the government" are usually not asking in good faith. Many laissez faire capitalists explain away natural monopolies, or pretend they don't exist. So perhaps you expected this answer, and are already prepared to dismiss it.
capitalism isn't uniquely prone to monopolies or cartels. all economic systems face problems of gaming, because humans relentlessly probe weaknesses in systems to gain advantage.
and capitalism doesn't attempt to address monopolization head-on and instead relies on competitive dynamics and invisible hands to control the problem. and to be sure, in many cases, it's been enough, but runaway market dynamics like network effects do occasionally overwhelm those mechanisms.
we now have enough practical experience to realize that those occasional runaway trains accumulate and we no longer have very free markets across the economy.
that's why governments step in with regulation (yes, regulatory capture is a problem too) and laissez faire capitalism simply isn't viable long-term.
we should iterate on market-based economies beyond capitalism to reach a more resistant economic system (capitalism =/= market economy, which is a commonly misunderstood).
edit: note that you can have a market-based economy featuring choice and competition without it being capitalism, who's defining feature is putting the means of production into the hands of the (moneyed) citizenry.
Go to github.com. Look at all the different software languages, operating systems, shells, web servers, and so on and so forth.
Tool manufacturers. Housing choices.
All that stuff only can possibly exist in a capitalistic system. There is no other way. People have tried. We have massive amount of historical precedent on this sort of thing. At this point it should be self-evident.
It's easy to see this from the perspective of the customer only, but think of how many lives and brilliant minds are being wasted away in the system.
Go to Home Depot. Lots of tool brands to choose from, right? Ridgid, Milwaukee, Ryobi, Makita, maybe a couple of Hiltis over in the contractor section. Amazing variety thanks to capitalism, right?
Wrong. The first three brands I listed all belong to the same company, TTI. The only significant difference among them is in build quality, and it's minor; other than that, all that changes is the injection molds for the shell, and the price - which varies out of all proportion to the quality of the product.
That's not a true choice. That's an illusion of choice, deliberately promulgated by a near monopoly in order to gain access to as many market segments as possible, and exploit each to the maximal possible extent - by pretending to compete with itself, TTI makes a lot more money than if it didn't, because that means it can sell three kinds of differently shaped boxes of 18650 cells, and in the modern consumer/prosumer power tool business, that's where all the margin is.
That's great for TTI! For everyone else, not so much, because only the Milwaukee line doesn't actively suck, and even then you're better off spending more for Makita, precisely because that's not a zombie brand, and is still competing.
So, TTI's a great example of capitalism, sure. Is it a good thing? One of the major complaints about Soviet communism, after all, was precisely the lack of consumer choice that it imposed. If that's really the crux of the problem, then why isn't it a problem when capitalism produces the same outcome? Is it only a failure when the Reds do it, but an example of freedom and apple pie when the same exact thing happens under capitalism? Why?
Housing choices? Is that the choice to buy / rent vs live on the street? Capitalism has given us the homeless crisis which was non-existing just 70 years ago.
So don't buy the big brands. Buy local.
Are you telling me that there is no possible way that you can go to a farmers market and buy food? That the only choice you have is one of Conagra's food brands?
That you can't go one the one of probably hundreds of grocery stores and restaurants that are probably within driving distance of your house?
This is what I mean by 'Open Your Eyes'. Like just go outside and look around! If you live is in a developed western country and you are complaining about lack of choices it's very likely that the problem is you and your own choices.
> Housing choices? Is that the choice to buy / rent vs live on the street?
Since when in human history has people never had to work for housing?
There is only a thin band of habitat in the earth that humans can survive and thrive without housing and technology and work. Too hot and we die. Too cold and we die. Not wet enough and we starve. Not dry enough and we starve.
To spread across the rest of the planet we had to work our asses off.
If you think life is harder for a 20-something having to deal with the indignity of living in a un-hip part of town because they can't afford a nicer place... then it is for a frontier family that has to grow their own food and build their own house from supplies they had to drag behind mules from hundreds of miles away? If so, I have some bad news for you.
"Having to work" is not evidence that capitalism is terrible. You are going to work no matter what. Whether it's socialism or capitalism or if you live in some monastery somewhere. It's not optional. It's never going to be optional.
Great.
Whenever I analyze arguments against the free market, it almost always seems that the person speaking thinks the market should give people what the person speaking thinks they ought to want.
Even if they make all the different kinds of, say, cheese (and they don't), the quality is terrible, because they don't have those 99 competitors.
Most notably, people are not "misled" into valuing the "wrong" things. You just have a different opinion of what people should value based on your own culture, values, etc. It doesn't mean they're wrong, brainwashed, or anything of the kind.
What does China tell us about Republics, given that it is the Peoples Republic of China? What does North Korea tell us about democracy and repulbics, given that it is "The Democratic Peoples Republic of Korea"?
No? But we are willing to take at face value oppressive regimes using "socialist" language?
As for cartels and monopolies, if you take a look at late 19th to early 20th century USA, where business could in fact form cartels and monopolies -- they were formed, but didn't last. They were ruined by both new competition and by "price busters", the cartel equivalent of a "scab".
That is one of the origins of "progressive" legislation. It seemed that the most efficient way to preserve monopolies and cartels was to use government. Indeed, the original meaning of the word wasn't a "large share of the market", but "exclusivity given by government".
EDIT: Show yourselves, downvoters. Give a rebuttal.
For example, the minimum wage is clearly helping out skilled workers. Imagine an experienced railroad worked earning $5 an hour laying tracks. To match his productivity, you'd need at least 3 unskilled workers, which are worth it at $1 each. The railroad union, to guarantee long-term work for its members, lobbies for a minimum wage, and now when it's, say, $2 an hour, those 3 unskilled workers are too expensive and no one hires them.
EDIT: multi-century. Yes, governments sometimes do stupid things (on shorter timescales), but it’s also a great opportunity for each new government/generation to pin the folly on the old, and do better.
It is often argued that the gulag in the USSR was never a net gain economically. You could conclude one of two things from that:
1. The Soviets were dumb or
2. The Soviets had other reasons for maintaining an expansive network of prisons
I would go with 2 and I'd also argue that the colonial powers had other reasons for maintaining colonies.
How is that remotely comparable? The main purpose of the gulag system is plain enough: punishment, control, and only secondarily, slave/forced labour for economic gain.
The colonial system is precisely the opposite: the main purpose is to extract value, through extraction, trade, industry, etc, from the colonies to the mainland.
> The colonial system is precisely the opposite: the main purpose is to extract value, through extraction, trade, industry, etc, from the colonies to the mainland.
That's your opinion; I don't think it's true. I think the point of colonialism is an attempt to guarantee the nation state's survival. Churchill:
> We shall never surrender, and if, which I do not for a moment believe, this island or a large part of it were subjugated and starving, then our Empire beyond the seas, armed and guarded by the British Fleet, would carry on the struggle, until, in God's good time, the New World, with all its power and might, steps forth to the rescue and the liberation of the old.
I don't pretend to know whether or not colonies were a net-benefit economically. But, either way, I don't think economic arguments provided the fundamental justification for colonialism. I think the colony exists for the same reason the family, the polis, the nation state, and the empire exist, which is a desire for immortality or, if you prefer, an attempt to prevent the achievements of men from being obliterated by time.
If you're at disbelief at that, wait until you take a look as the US national debt
From a perspective shaped by a strong commitment to an ideology and also by the Soviet Union being, in 1977, still a going concern, I can see how someone could err in this way. But that's no reason why we still need to take it seriously, four decades on.
> whatever system most effectively leverages comparative advantage / generates the most wealth / most efficiently allocates resources is that which is most humane, because it has the possibility to lift the most people from poverty, from inhumane conditions.
It is, of course, up to societies to regulate the allocation of those resources to maximize the realization of that possibility.
If I buy an iPhone from Apple for $1000, you'd think they "accumulated resources at my expense", but I got something -- an iPhone.
That iPhone is worth for me more than $1000, otherwise I'd keep the $1000.
For Apple, it's worth less, otherwise it would raise the price or go bankrupt.
Both parties are better off.
What people call "late stage Capitalism" is not Capitalism at all -- it is Cronyism. It is the private sector buying favors from the government. Capitalism prevents that by definition.
True capitalism may as well make people very rich, and although I've not verified it, I am willing to concede that it widens the wealth gap. However, poor people in capitalist countries are far richer than they would have been without it.
Why would you care about the gap? Care about how you are doing.
Under capitalism the government is nothing more than a management committee for the rich because the rich have millions of times more political influence than a regular citizen. Here's what a long term Cambridge study [3] found about the effects of capitalism in America:
>What do our findings say about democracy in America? They certainly constitute troubling news for advocates of “populistic” democracy, who want governments to respond primarily or exclusively to the policy preferences of their citizens. In the United States, our findings indicate, the majority does not rule—at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.
This mythical true capitalism you speak of has never been observed in practice because it's at odds with basic human nature. Capitalism favors psychopathic behavior because those who are willing to be ruthless, to step over others, cheat, lie, and steal will out-compete those who do not. Likewise, the idea that poor people in capitalist countries are far richer than they would be without it is a complete and utter fantasy. [4]
[1] https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...
[2] https://www.forbes.com/sites/noahkirsch/2017/11/09/the-3-ric...
[3] https://www.cambridge.org/core/journals/perspectives-on-poli...
[4] https://sci-hub.tw//https://journals.sagepub.com/doi/abs/10....
> Under capitalism the government is nothing more than a management committee for the rich...
You are mixing definitions here. Capitalism means private ownership, and what you've described there is government control. The US has Cronyism, not Capitalism. Your argument for it being mythic also mises the mark. Cheating, lying and stealing are illegal under Capitalism.
The 4th citation is completely false, as it considers non-capitalist countries capitalist. In that list, half the countries are "Mostly Unfree" or "Repressed" according to the Index of Economic Freedom[0].
If you actually look at capitalist countries, that paper supports that so-called "fantasy", as the countries mentioned as "High-income" are "Free" or "Mostly free". Irony at its best.
My claim is that capitalism accumulates wealth with a small percentage of the population who then end up running the country as an oligarchy. Your iPhone example does not in any way contradict that.
>You are mixing definitions here. Capitalism means private ownership, and what you've described there is government control.
No, I've described how capitalists subvert the government to the interests of the rich oligarchy produced via the system of capitalism.
>Your argument for it being mythic also mises the mark. Cheating, lying and stealing are illegal under Capitalism.
That's the whole point, cheating, lying, and stealing are all effective means of being competitive under capitalism. Since making profit is the sole metric for success, these behaviors are inherently encouraged by the system.
>The 4th citation is completely false, as it considers non-capitalist countries capitalist.
False, the study clearly explains its methodology and the definition for capitalist countries.
>In that list, half the countries are "Mostly Unfree" or "Repressed" according to the Index of Economic Freedom[0].
The discussion is whether capitalism improves quality of life, and the study clearly shows that it's false across the board.
Meanwhile, I fundamentally disagree with your definition of freedom. A system that forces people to sell vast majority of their lives simply in order to survive is a form of slavery. It takes an incredibly dim mind to primarily conceive of freedom in terms of consumerism.
Please do not change the subject, we were discussing zero sum game.
> No, I've described how capitalism subverts the government to the interests of the rich oligarchy produced via the system of capitalism.
Capitalism requires a separation of economy and state. What you're describing is Cronyism:
> Cronyism is the practice of partiality in awarding jobs and other advantages to friends or trusted colleagues, especially in politics and between politicians and supportive organizations.[0]
If capitalism is polluted with cronyism, you get Crony Capitalism:
> Crony capitalism is an economic system in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class.[1]
> That's the whole point, cheating, lying, and stealing are all effective means of being competitive under capitalism. Since making profit is the sole metric for success, these behaviors are inherently encouraged by the system.
Except for the part where you spend jail time for fraud or theft.
> False, the study clearly explains its methodology and the definition for capitalist countries.
> The discussion is whether capitalism improves quality of life, and the study clearly shows that it's false across the board.
Look, the point here is not terminology. If you think Ghana is capitalist (as the paper claims), I can see why you won't like that system. Please consider, for the sake of this discussion, my definition of capitalism.
> Meanwhile, I fundamentally disagree with your definition of freedom. A system that forces people to sell vast majority of their lives simply in order to survive is a form of slavery. It takes an incredibly dim mind to primarily conceive of freedom in terms of consumerism.
That's the beauty of Capitalism. You're free. If you don't like the way of life, you go with people who think the same way, and you build yourselves a _voluntary_ communist heaven. No one will stop you, as in capitalism, all the state does is protect you from violence (which I guess is a role we agree on).
I'm not changing the subject. My claim is that it's a zero sum game of resource accumulation. We're now at the point where over half the resources in the world have been accumulated with a handful of individuals. Capitalism is the engine that allowed this to happen.
>Capitalism requires a separation of economy and state. What you're describing is Cronyism:
Cronyism is a necessary result of capitalism. People who have capital will always be able to influence the state, there is no way to separate the two. Capitalists are able to buy media, fund political campaigns, bribe politicians, and so on. This is why capitalist countries necessarily turn into oligarchies.
>Except for the part where you spend jail time for fraud or theft.
Rich people in Western countries practically never go to jail for fraud and theft. The most egregious example was the 2008 global economic collapse where millions of people lost all their savings and none of the people responsible were punished. What's more, the institutions and people responsible got massive bailouts at the expense of tax payers.
>That's the beauty of Capitalism. You're free.
Vast majority of people under capitalism have to spend large portions of their lives working just to live. This idea that you can just go and do whatever you like is a total fantasy because the only people who have the means to do that are those who were lucky enough to be born rich. The rest of the population has to spend their lives subsidizing the lifestyle of these birth lottery winners. Any regular person needs to work for at least 40 hours a week just to live, this is majority of their week taken away from them. It's utter absurdity to claim that they're free to build themselves anything in the little free time they have remaining.
You appear to have an incredibly infantile understanding of the relationship between capitalism and society.
And here you just changed the subject. You again talk about the wealth gap. The wealth gap and zero sum game are not the same subject.
> Cronyism is a necessary result of capitalism. People who have capital will always be able to influence the state, there is no way to separate the two. Capitalists are able to buy media, fund political campaigns, bribe politicians, and so on. This is why capitalist countries necessarily turn into oligarchies.
But buying the state has nothing to do with capitalism -- it has to do with the existence of a state, and the existence of rich people. Rich people exist in every system we ever had in history, so unless you suggest we do something other than a state, all that is left is to strengthen our protection of capitalism with a better constitution.
> Rich people in Western countries practically never go to jail for fraud and theft.
Source please. But if true, is probably the fault of cronyism.
> The most egregious example was the 2008 global economic collapse where millions of people lost all their savings and none of the people responsible were punished. What's more, the institutions and people responsible got massive bailouts at the expense of tax payers.
That is the fault of government going hand the hand with the private sector. Without the government, the crisis couldn't have been that big. In short, the government had (1) very very low interest rates and (2) encouraged risky home buying (3) practically insured bad mortgages. Do you think a bank would loan to someone who can't pay back? Only if the government is there to the rescue.
There's a reason many Austrian economists predicted that crisis to amazingly fine detail.
Now, you may reply "they did it because rich people bought them". Maybe, but that's Cronyism, not Capitalism.
> Vast majority of people under capitalism have to spend large portions of their lives working just to live. This idea that you can just go and do whatever you like is a total fantasy because the only people who have the means to do that are those who were lucky enough to be born rich. The rest of the population has to spend their lives subsidizing the lifestyle of these birth lottery winners. Any regular person needs to work for at least 40 hours a week just to live, this is majority of their week taken away from them. It's utter absurdity to claim that they're free to build themselves anything in the little free time they have remaining.
I get what you're saying, but if you think there's a better way, a truly capitalist system doesn't stop you from implementing it inside of capitalism. So if you want that communist heaven, capitalism saves you the need for revolution, or the need to go find a large-enough desert island. You just build the commie heaven inside the capitalist land.
> You appear to have an incredibly infantile understanding of the relationship between capitalism and society.
That's bold, coming from the guy claiming Ghana is capitalist.
Either way, it seems like we are in agreement that Capitalism is not the problem, Cronyism is. The disagreement is if the end of all Capitalist systems is Cronyism. I think Cronyism is independent of Capitalism. All it needs is a state (=monopoly on force) and rich people. Just look at every country we had in history, capitalist or not, they all had a ruling class. The solution to that is to have the constitution limit the power of government even more. That way, when rich people will come to buy favors, there will be none for the politicians to sell.
It's the same subject, the wealth gap is precisely what's being discussed here. This is my original comment:
>The real question is towards what end those resources are being efficiently allocated. Capitalism is an incredibly efficient system for accumulating resources with a tiny percentage of the population at the expense of everyone else. This is precisely why late stage capitalist societies inevitably turn into oligarchies.
If anything, you're the one who keeps trying to change the discussion from the original topic.
>But buying the state has nothing to do with capitalism -- it has to do with the existence of a state, and the existence of rich people. Rich people exist in every system we ever had in history, so unless you suggest we do something other than a state, all that is left is to strengthen our protection of capitalism with a better constitution.
In practice, some systems are much more unequal than others. For example, people like Gates or Bezos simply didn't exist in USSR, there was no generational wealth, and the highest gap in pay was around 10x. Saying that there is no difference between that and what happens in capitalist countries is simply false equivalence.
>Source please. But if true, is probably the fault of cronyism.
And cronyism is a direct byproduct of capitalism and inequality.
And here's a breakdown of prison population by wealth in US. The prisons are predominantly filled with poor people, and you'll be hard pressed to find a CEO going to prison for any crime. Just recently Boeing killed two plane loads full of people due to criminal negligence, nobody's going to jail for that. The CEO got a golden parachute instead. https://www.prisonpolicy.org/reports/income.html
>That is the fault of government going hand the hand with the private sector. Without the government, the crisis couldn't have been that big. In short, the government had (1) very very low interest rates and (2) encouraged risky home buying (3) practically insured bad mortgages. Do you think a bank would loan to someone who can't pay back? Only if the government is there to the rescue.
And why is the government going hand in hand with the private sector? It's as if, and bear with me here, the private sector bought the government with all that wealth capitalists have accumulated. It amazes me to no end that you're unable to make this connection.
>Now, you may reply "they did it because rich people bought them". Maybe, but that's Cronyism, not Capitalism.
Capitalism is the engine that creates a system of cronyism because it allows wealth to accumulate in the hands of the few. Again, this is not a complex concept that a fully grown adult should be struggling with.
>I get what you're saying, but if you think there's a better way, a truly capitalist system doesn't stop you from implementing it inside of capitalism. So if you want that communist heaven, capitalism saves you the need for revolution, or the need to go find a large-enough desert island. You just build the commie heaven inside the capitalist land.
Capitalism was the cause of the revolutions since it's been around. Meanwhile, you might want to read up on what USA does to communist and socialist countries around the world. Go read some history of South Asia, and Latin America for starters. No single socialist regime has been left unmolested in the past century.
>Either way, it seems like we are in agreement that Capitalism is not the problem, Cronyism is.
No, I'm saying that capitalism is a mechanism that allows wealth to be accumulated with a small percentage of the population, and these people end up running the country as an oligarchy as is the case with US, and other Western regimes right now. I don't think any system that allows large scale inequality is compatible with democracy.
Meanwhile, limiting the power of the government achieves the complete opposite of what you're proposing. A democratic government answers to its citizens, while private interests only answer to their owners. Wealth inequality is the root cause for the corruption of the government, and that's what needs to be eliminated to have actual democracy and representation of the people by the government.
"at the expense of everyone else" implies a zero-sum game. Wealth gap, however, can widen even in a positive-sum game. As demonstrated by my iPhone example. I can also create a simplified game that does this. Every turn, player A gets 10 points, and player B gets 1 point. Gap widens, yet all gain.
> In practice, some systems are much more unequal than others. For example, people like Gates or Bezos simply didn't exist in USSR, there was no generational wealth, and the highest gap in pay was around 10x. Saying that there is no difference between that and what happens in capitalist countries is simply false equivalence.
This may be true if only currency was measured, but wealth is measured with assets and services as well (expenses), and in the USSR there was a ruling class, and those close to it, and they enjoyed much better lives than the common man in the USSR. They had better goods, better services, and they, yes, enjoyed Cronyism. Communism is a very poor example, as there is literally a ruling class the controls other people's lives, which is something I gathered you want to avoid.
> And cronyism is a direct byproduct of capitalism and inequality.
> And here's a breakdown of prison population by wealth in US. The prisons are predominantly filled with poor people, and you'll be hard pressed to find a CEO going to prison for any crime. Just recently Boeing killed two plane loads full of people due to criminal negligence, nobody's going to jail for that. The CEO got a golden parachute instead. https://www.prisonpolicy.org/reports/income.html
> And why is the government going hand in hand with the private sector? It's as if, and bear with me here, the private sector bought the government with all that wealth capitalists have accumulated. It amazes me to no end that you're unable to make this connection.
> Capitalism is the engine that creates a system of cronyism because it allows wealth to accumulate in the hands of the few. Again, this is not a complex concept that a fully grown adult should be struggling with.
All of these talk about either (1) Cronyism is bad or (2) Capitalism inevitably leads to Cronyism. (1) is something I agree with. (2) You've yet to demonstrate that is _unique_ to capitalism. Can you give me an example of a single country where there isn't a ruling class that enjoys better quality of life and government favors?
> Capitalism was the cause of the revolutions since it's been around. Meanwhile, you might want to read up on what USA does to communist and socialist countries around the world. Go read some history of South Asia, and Latin America for starters. No single socialist regime has been left unmolested in the past century.
That is Cronyism. Could you stop giving the Cronyisnt aspects of the US as examples of Capitalism? Capitalism calls for Non-aggression, and uses an Army in self-defense only.
> No, I'm saying that capitalism is a mechanism that allows wealth to be accumulated with a small percentage of the population, and these people end up running the country as an oligarchy as is the case with US, and other Western regimes right now. I don't think any system that allows large scale inequality is compatible with democracy.
> Meanwhile, limiting the power of the government achieves the complete opposite of what you're proposing. A democratic government answers to its citizens, while private interests only answer to their owners. Wealth inequality is the root cause for the corruption of the government, and that's what needs to be eliminated to have actual democracy and representation of the people by the government.
Well, we look differently at the role of government. To me, government isn't some tool to force other people. I don't care if it's the few rich forcing the majority middle class, or if it's the majority middle class forcing a rich minority. I am against forcing (using or threatening the use of physical force) other people.
This eliminates the "path to Cronyism" you described. When some rich people (not every rich person is bad) will go and ask for artificially low interest rates or for favoring regulation that limits competition, the government will be limited and could not give it to them.
Again -- if you believe some Communist or Socialist heaven is better suited to supply everyone's needs, no one is stopping you from building such a thing, as Capitalism lets you live as you wish. If it's as good as you say, most citizens will probably join you anyway. I'm not sure how democratic it'll be, but as long as it's voluntary, enjoy yourselves.
That's not what's happening in practice however. Your iphone example is frankly nonsense because the discussion is about wealth accumulation. And wealth is being accumulated with a small percentage of the population at the expense of everyone else. Average American has less savings than they did in the past decades, and they're forced to work more. Rich accumulate wealth at the expense of the rest.
Millennial in US have only 3% of the wealth while a handful of people own more wealth than the rest of the country. Thinking this isn't a zero sum game is height of stupidity.
https://www.cbsnews.com/news/millennials-have-just-3-of-us-w...
>This may be true if only currency was measured, but wealth is measured with assets and services as well (expenses), and in the USSR there was a ruling class, and those close to it, and they enjoyed much better lives than the common man in the USSR.
I lived in USSR, and that's completely false, and shows that you have absolutely no clue what you're talking about. First, there was no ruling class the way you have in capitalist societies because there was no generational wealth. The party consisted of regular people, and many of party leaders, like Khrushchev, came from villages. This was possible because social services like healthcare and education were evenly distributed. This is what meritocracy actually looks like. Second, the gap in quality of life was much smaller than it is in the west, and politicians and administrators were not the highest earners.
>All of these talk about either (1) Cronyism is bad or (2) Capitalism inevitably leads to Cronyism. (1) is something I agree with. (2) You've yet to demonstrate that is _unique_ to capitalism. Can you give me an example of a single country where there isn't a ruling class that enjoys better quality of life and government favors?
I don't have to demonstrate that this is something that's unique to capitalism. I only have to demonstrate that capitalism facilitates this problem. The fact that other systems aren't perfect is completely irrelevant to the question. Furthermore, you're making a false equivalence once again here. And your previous comment clearly shows that you're also deeply ignorant regarding how USSR actually functioned.
However, even if you were right that other systems failed to address the problem that is not defense of capitalism. It just means that we need to continue experimenting and trying new things.
>That is Cronyism. Could you stop giving the Cronyisnt aspects of the US as examples of Capitalism? Capitalism calls for Non-aggression, and uses an Army in self-defense only.
Cronyism is byproduct of capitalism. I'm not sure how many times I have to repeat this. The who are inseparable, and I've already explained why numerous times. If you still aren't able to wrap your head around this, I don't think there's anything else I can tell you here.
>Well, we look differently at the role of government. To me, government isn't some tool to force other people.
It appears that you don't understand what a democratic government is then.
>I don't care if it's the few rich forcing the majority middle class, or if it's the majority middle class forcing a rich minority. I am against forcing (using or threatening the use of physical force) other people.
And in your Mad Max world without government who prevents rich people from forcing poor people to do what they want again?
>This eliminates the "path to Cronyism" you described. When some rich people (not every rich person is bad) will go and ask for artificially low interest rates or for favoring regulation that limits competition, the government will be limited and could not give it to them.
It obviously does not. If you don't have a government that's answerable to the people, then all you're left with is Darwinism where strong abuse and exploit the weak.
>Again -- if you believe some Communist or Socialist heaven is better suited to supply everyone's needs, no one is stopping you from building such a thing, as Capitalism lets you live as you wish. If it's as good as you say, most citizens will probably join you anyway. I'm not sure how democratic it'll be, but as long as it's voluntary, enjoy yourselves.
Again, I've already explained that US has in fact been actively waging wars against every socialist and communist country out there. US currently forces sanctions on Cuba and Venezuela, it's done countless coups and regime changes in Latin America, it has installed brutal dictators like Pinochet, and killed millions of people to stomp out communism and socialism. You are deeply ignorant of history and geopolitics making your arguments naive and infantile.
You ignore other countries falling the exact same faults as you say Capitalism
You seem to support a democracy where a majority could vote to oppress a minority
You blame me for suggesting a world "without government" which is extreme intellectual dishonesty, especially when I mention limited _government_.
Then you, once again, point at the problems with the US that are Cronyism, not Capitalism.
Living in the USSR is nothing more than an anecdote, the same way Mainland Chinese claim wrongs about China, probably without even knowing[0].
I'm sorry, but this is the point where I leave this discussion, as it seems to go nowhere. I suggest you read a little about the quality of life in the 1950s in the US, before Cronyism caught up to it, and compare it to the quality of life in the USSR at the time.
[0]: Warning, difficult to watch. https://youtu.be/rbHxeOQA1Mc?t=933
The concrete numbers do not support your example. You just keep repeating nonsense over and over, but it's still nonsense. 3 richest people own more wealth than bottom 50% of the population, while millenials own 3% of the overall wealth. If you don't understand that there's a vertical wealth transfer happening to the capital owner class, then I really don't know what else to tell you.
>You ignore other countries falling the exact same faults as you say Capitalism
Regardless of what faults other systems have, it's clear that capitalism causes the problems I've outlined. The discussion is about capitalism and its impact on society.
>You seem to support a democracy where a majority could vote to oppress a minority
That's literally how democracy works, people vote and then we enact policies that are in the interest of the majority. Sounds like you're promoting authoritarianism here.
>You blame me for suggesting a world "without government" which is extreme intellectual dishonesty, especially when I mention limited _government_.
I'm not blaming you, I'm pointing out the absurdity of your argument.
>Then you, once again, point at the problems with the US that are Cronyism, not Capitalism.
Once again I'll repeat that cronyism is a byproduct of capitalism. I've explained this to you repeatedly, yet you keep on ignoring that and pretending that these things are separate. Now that's what I call intellectual dishonesty.
>Living in the USSR is nothing more than an anecdote, the same way Mainland Chinese claim wrongs about China, probably without even knowing[0].
Again, you ignore the concrete points I made about how USSR function. You're intellectually dishonest.
>I'm sorry, but this is the point where I leave this discussion, as it seems to go nowhere.
And here I thought I'd never see the end of your drivel. Meanwhile, you might want to watch some footage from Guantánamo Bay and Abu Ghraib. US killed over half a million people in Iraq alone buddy.
So, my stance is that money directly translates into increased opportunity in a capitalist society. Meanwhile, the relationship between capital owners and works is asymmetric where the capital owner keeps majority of the profit from the value that the workers create.