What If ‘Capitalism’ Isn't the Problem? [audio]
musingmind.org
musingmind.org
What I think is very valuable within our system is markets as a tool. There's no functioning replacement yet for allocating resources through something like a market at large scale. Even socialism sympathetic economists like Oscar Lange recognised this a long time ago.
What's wrong with the status quo I think is markets as an ideology, confusing social ends or larger objectives with the outcomes markets or capital produce. There is too little coordination in society, too little forward thinking and planning at a high level. It shows in the covid pandemic into which we stumbled like fools despite knowing it would happen at some point, the way we're screwed every time a wildfire breaks out despite we know it'll happen. I think it's glorifying capitalism as a way of life rather than a tool that produces these failures.
I concur with the aims. Solving pandemics, climate change and nuclear proliferation require a different toolset than what succeeded for reducing global poverty.
Why would I want a man in Washington to guide Montana in the form of government though?
Spontaneously ordered systems are also better at dynamic adaptation to exogenous changes (such as technological ones).
The 40s to 70s broadly were an era in which there appeared to be a pragmatic balance between strategic planning and decentralized execution, in which markets where tools, serving national interest. It's also probably the era in which we saw more technological progress than at any other point.
Bringing up 'political economy' in this context is what produced the old saying 'Economists are the sort of people that see something work in practise and ask if it works in theory', it's exactly a symptom of the dogmatism that I think is plaguing us.
Every planned economy that has existed has used price signals by the end user in order to fix these issues. Planned economies are made to run an economy without markets, not without prices.
As long as you have an end-user price signal, subjectivism is not an issue and the calculation problem becomes a computational issue that can be solved.
It seems clear that a whole economy cannot be centrally controlled but that does not mean that parts of it isn’t better controlled by planned economics than be market economics.
It would be wrong to assume one size fits all.
One can also have hybrid systems. Where the value of market decisions is understood but where a central planner has some important insights which he can use to tweak a market to work better.
There have been economic systems that had free markets (feudal lords bought and sold goods in market economies) and there were also examples of capitalist enterprises that existed without free markets (some people would argue the Soviet Union fits this description, but if you prefer a less contentious example, most capitalist countries when they are functioning under a war economy have some form of central planning).
Capitalism refers to an economic system where the way in which production is organised is through an employer-employee relationship.
Capitalists exploit ownership to generate profit for themselves. Sometimes that's ownership of something they produced, like a machine or a building or a work of the mind. More often, it's something produced by labor that they exploit for profit. And sometimes it's something they didn't produce, but manage to own and profit from nonetheless, like land and natural resources.
If you adhere to a materialist understanding of the world, you come to the the conclusion that most of the features of our environment (which is validated by analysis) find their roots in the material organization of our world. And the material organization we are operating in is "capitalism". Which is why it applies so much.
I think part of the confusion comes with the understanding of what capitalism is. Capitalism isn't markets, we had markets before capitalism. Capitalism is the economic organization where:
* Production is organized under private ownership * Social relations are dominantly monetary relationships * Labour is dominantly done for wages * Production is done for profit * A market system is used to structure productive relationships * A de-facto class system which divides workers and owners
That's what capitalism is, and when people, especially academics say that something is caused by capitalism, they refer to capitalism as defined, loosely, by those elements. Capitalism is not a tool, it is a state of being. Markets are a tool, that have wonderful advantages. Markets aren't an ideology, capitalism is a group of ideologies that promote markets as much as possible. For an extreme example, in the USSR, food production was overwhelmingly mediated by markets. Was that capitalism? No, because it was not done for profits, and because production was not based on wages.
Everyone agrees that markets is an amazingly useful tool and is fit for many applications, except some which lack a good grasp of economics, or others which are deluded into abstracting economics from society and which therefore miss when they are not fit for the task. What people don't agree with is that capitalism is a system which should be perpetuated, and the two are perfectly consistent positions to hold.
[0] https://en.m.wikipedia.org/wiki/Socialist_calculation_debate
https://www.kateraworth.com/doughnut/
An idea that stuck with me is that markets are powerful tools that need to be embedded into other systems but arent self regulating systems all by themselves. It seems too often in debates on big problems the argument is simply we need a market solution not how is the system designed to best utilize a market.
"We need a market solution" is politician for private interests want to change laws so that they can expand their businesses.
Putting them under government ownership instead doesn't seem like the solution to anything, unless you are very sure that the government will follow your ideological beliefs, not be corrupted by its newfound direct power over peoples lives, and not get taken over by populists.
And even if you are very sure, you have to be sure the future government will follow your idealogical beliefs as well - people die; power changes hands; social movements and political fads come and go...
Don't forget that you have to be sure the government has the perfect knowledge to price things correctly even it's otherwise a good government. This is actually the main reason that centralized planning is frowned upon by capitalists. Without competition to drive price discovery, the market ends up being super inefficient and people end up under-served or output resources don't collect enough input resources to sustain themselves.
Or, in the Democratic primaries, Bernie Sanders railed against capitalism, whereas Elizabeth Warren embraces the term, and they both had very similar policies. They were talking in different ways to appeal to different crowds that have different definitions of capitalism. And it creates tribal responses for some supporters.
Indeed, uner feudalism, the means of production were not commodified, and de facto the lord did not have the right of ownership to the land, because he was only allowed to use it in one very specific way. Therefore, lacking the right of exclusive control, feudal property does not fulfill the definiton of private property.
This is why feudalism is universally understood not to a form of capitalism.
But yes, confusion about these definitions is due to the fact that we haven't had a serious remise en question of the social order in the anglophone world since the end of WW2.
As for my definition of private control of the means of production, I think it's fairly uncontroversial to say that if someone may not decide how to use something then they are not owners of such a thing, but merely hold a license to it. It's the same argument for why you can never own a copy of proprietary software, only own a license to it :)
That's why we have so much innovation in capitalism, but we had so little in communism. Just like in evolution, we need hundreds of companies doing hundreds of pretty similar but slightly different things. 90 will fail, 9 will survive, one will become the next Google or Facebook.
The government is no better than us at predicting success, it may even be worse, but it usually prefers a small number of big and ambitious projects over lots of small ones. Instead of embracing failure and thinking what to do about it, it tries to prevent failure, no matter the cost.
What if government regulations warp capitalism and give protectionism and favoritism to certain companies while excluding the rest and not allowing for the free market to work?
What if unregulated capitalism has cannibalized itself and destroyed the free market by way of big fish eating up all of the small ones and now we're left with a bunch of huge corporations with outsized power and no threat from competition?
Think about it, is it ever possible to orchestrate a society where money buys you media, re-election campaigns, charity and favours, without those having the most money wielding the above-mentioned elements to ensure they keep having the most money.
In other words, the social organization is a consequence of economic organization, which explains why it is impossible for a truly free market to ever exist.
It's not possible either to completely get rid of government, because the State is necessary to uphold property.
Doesn't seem like there's a solution.
If you think about it, human beings corrupt any system they're in.
Hierarchy is hardwired into our DNA.
How do you overcome human nature?
https://www.nature.com/scitable/knowledge/library/primate-so...
While that may be true, I think the reason we got here is because Capitalism inherently incentivizes those types of theories, assumptions, and incentives. You can argue that an ethical Capitalism is possible sure, but that would require labor power and a strong state to prevent the erosion that we have seen in the last half decade.
A society with a strong education system that perpetuates cultural values of long-term sustainability could get by with less explicit regulations, but I don't see us getting from here to there.
And even if we got there, such a utopian capitalist society would be fragile and prone to corruption towards over-exploitation. Other systems are needed to maintain balance -taxes, political advertising regulations, labor laws, etc
Meaning that it’s not a design issue it’s a political issue.
This is a little dramatic. There are no companies that qualify for the size of "undermining the whole system".
Like libertarianism, SV has a way of taking exactly what they want from Zen and leaving the rest of the beliefs lying in a pile behind them. The Zen teacher Les Kaye famously said about Steve Jobs that he understood “the art, not the heart” of Zen.
If SV really cared about Zen, would we have unskippable ads? Would we have “like” buttons? Would we have auto-playing Netflix movies while you’re merely sitting still in a menu?
They don’t care about Zen. They never have. What they care about is making themselves feel better about the horribly un-Zen-like things they inflict on their audiences. Zen is just a coping mechanism to stroke their ego a little more.
With a growing size of government, every conversation becomes a conversation about your life.
Capitalism taken to its fullest extreme is greed out-of-control. This is where the US is right now.
Einstein was not a sociologist, but it's an indication that about "egalitarian capitalism" is not exactly true.
Inequality is always going to swing back and forth. Eventually the American electorate will get so fed up with it they will vote in a party promising to do something about it.
I think this view point sprouts from envy.
"Capitalism when balanced is near perfect."
Capitalism is a level of balance. Similar to common law.
I think this is a rather lazy dismissal.
In particular in America capitalism has become a holy cow. If you suggest ideas from socialism you are labeled a dangerous radical and taken off the air.
The so called “liberal media” are bastions of capitalism. One can only look at the scathing criticism and scare mongering about Bernie Sanders.
When it comes to capitalism there is unfortunately a lot of pearl clutching. You are not say something negative about capitalism and positive about socialism in polite company.