Blame Cronyism, Not Capitalism
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There's something fundamentally undemocratic (and perhaps, sadly, realistic) about this take. Will advocating for broad de-regulation and business rule actually reduce cronism? Will it / can it reduce negative externalities?
I just think ... we've tried that. It's been the experiment of the last 40 years. What's next?
The main alternatives that have been tried concentrate power in the hands of a single group, or ultimately a single person. In fact arguably giving power to a single group implicitly gives it to the leader of that group. This has always been a disaster, and always will be a disaster as long as we are recognisably human, with all the associated flaws.
Corruption and abuses are the result of human failings. We're always going to have to continuously strive against them.
Developers can only build after attending dozens of meetings. City council must grant an exception to the NIMBY laws.
Only wealthy developers can afford the process. Various council and board member get kick backs for the exemptions.
Housing is an important example because its the most expensive thing most people purchase. Grift is enabled by individuals electing representatives who oppose construction, not capitalism.
Edit: ok, I should have worded better. What if we stopped allowing corporate lobbying through donations to elected officials?
I understand there would be loopholes to close, but isn't this the obvious source of government corruption?
Lobbyists aren't handing over wads of cash, they are spending money on things like ad campaigns, surveys, studies, talks, busing people in to talk to their representative, etc which are meant to legitimately sway the opinions of both the elected officials and the electorate. Maybe to get more politicians to show up the lobbyists pay to serve nice steak dinners at a talk, and in the extreme maybe the talk is just a thinly veiled guise for what is really an expensive gift of steak dinner, but conceptually it's no different from any other potential catering option, and there is no simple way to ban it. Sure you can make specific schemes illegal, but there will always be another loophole. So long as you allow people to interact with their elected representatives and speak freely, there will be people who have their politician's ear. You might be able to eliminate lobbying by sequestering the politicians throughout their term, but that's going to have the opposite of the desired effect of making government more democratic.
If you want to call lobbying 'bribery' in a sort of exaggerated way, go ahead.
In my experience most of the rhetoric around bribery is reapoy just interested groups doing regular politics stuff--like 'if you do not support bill xyz we will tell our million newsletter subscribers you're a bad person'.
And it’s very clear that at least people in congress are very happy with this situation.
Outlaw PACS/Super PACS.
Ban politicians from holding seats on corporate boards for 10 years following serving in any office, except they be returning to a board they already were on. (End revolving door/jobs).
Ban companies from donating at all to all elections.
Require news networks to supply free ads for candidates w/ equal airtime or ban all political ads period (I'd love this one). Let people get picked by merit of their debates alone.
I think the parties should also hold their primaries on the same day nationwide, so there's no 'game' or 'sport' it's just flat out - vote and be done with it, to the victor goes the spoils (the rest of the campaign$$ each candidate has amassed.
We also need ranked choice voting so that 3rd parties can have decent sway ...diluting the current duopoly and making it so interested parties and special interests if allowed would have to work harder and spend more to more parties to get their point across.
There's probably a slew of other things you could do. Of course this requires people in power to take away their own power...like that's gonna happen.
Instead, remove the power of lawmakers or reduce/decentralize the power as much as pragmatically possible.
I consider campaigning to one's representatives a cornerstone of democracy and political activism. To get rid if that because groups we don't like also use it is anti-democratic.
You mean, if you prohibit people (including other government decision makers) from communicating with government decision-makers about their preferences for government decisions?
Nothing good.
Many US citizens think lobbying is the source of the problem.At a first thought you may think that, but without lobbying you de facto have "unseen" lobbying: which is corruption, more or less.That's why in 'democratic' countries where lobbying is illegal, there's way more corruption.This is not to say that lobbying reduces corruption, no, but it's a way to somewhat keep transparency while influencing and pressuring politicians, which happens, happened, and will always happen.
This inability of capital to help itself from corrupting lawmakers is apparently the fault of the state, not the fault of capitalism for reasons I can't quite fathom but might make sense if I had a lot more money.
If somebody emerged from poverty in the third world though, and capital was tangentially involved then lavish praise is apparently due.
Exactly. It’s called “capitalism” for a reason. Karl Marx understood exactly how it worked when he started using this term to refer to it. It’s also the basis for Marx’s “political economy” which understands the politics are inseparable from the economics.
You will have to format the drive and install a new Government.
If we stopped it, we stop democracy?
Secondly, petitions are one thing, petitions with a hidden $1billion folded up in the middle is a bribe.
Bribes definitely should be illegal.
If I were to call up my senator, I should get the same 'attention' as Elon Musk would get if he were donating a Hospital to their hometown.
The elected representatives represent Human citizens not Corporations.
Companies are not people.
Personally, I think all governments of all persuasions have proved their ability to line their own pockets, sometimes subtly and sometimes with bare-faced shame.
Many people think the go-to is more laws to try and dictate what is and isn't acceptable but that also doesn't seem to work, just creates more jobs and more money for the lawyers.
I think the old adage, "don't curse the darkness, light a candle" is the best back-stop. If anyone knows a better way, do it and show how it is better, then others will copy it.
We’re seeing a shift to greater distribution for labor, but that’s after a very long period of favoring capital that doesn’t seem so much to be breaking down as giving way just a tiny bit (like a pressure release valve).
In a fully automated farming, manufacturing, and delivery future, it’s hard to see how capitalism alone would allow for the maintenance of a functioning society. Such conditions would heavily favor engineering/design, raw resources, and (most of all) capital over physical labor.
And, of course, any practical regulation will be imperfect and will lead to functional cronyism as a result of imperfect people working to craft evolving and imperfect laws…
As with everything else in the universe, it works for some, it doesn't work for others and there are plenty who have almost literally no opportunities for whatever reason.
In western nations we think that most people have basically the same opportunities but if you are from a low-income family, you are likely to have more issues with your family, potentially more emotional and financial dependents. If you have been knocked back too many times, you can lose confidence and not have anyone to encourage you.
I guess in moderation, wage differences can motivate but at the point someone drops too low, they easily get caught in a cycle and then it becomes societies problem.
Until that becomes part of the social contract - wealth inequality for some is a prison or death sentence or the means by which one is enslaved by their wages.
if it was possible for an accumulation of wealth within one group to essentially divide humanity in different groups that could never be changed despite skill level compitance or morals of the individuals in each group would that be bad? so someone whose great great granddaddy did something now has power for no reason. and their line of decendands wont be able to spend money as fast as they accumulate it - without even understanding how or why.
wealth accumulation and private serveices (like education and healthcare) kind of make this an inevitability imho.
AFAIK its not one person being paid more than another thats the issue.. its those that are paid because they were born with money and add nothing to society that i think bothers people.
EDIT: a good book -The Ragged Trousered Philanthropists- for considering capitlism and the accumulation of wealth (also shock how relevant it is still 120 years later): https://freeclassicebooks.com/Robert%20Tressell/The%20Ragged...
The game is incredibly competitive and challenging and just understanding that is difficult.
Sure, but how many wealthy people inherited their wealth and contribute nothing? It's actually a tiny fraction. It is quite common for people from better off backgrounds to be more successful, but arguably that's result of the previous generation investing in their kids and benefiting society as a result. Most doctors come from above average wealth families for example, but we want good doctors, right? The solution to that problem is better public education, not taxing the rich into the ground.
I can't imagine anyone here thinks idle trust fund babies are a wonderful benefit to society, there's a good argument for steep inheritance taxes, but equally it's not actually a significant problem in our economy. It's just a hot button topic that upsets people, but it's really a distraction.
I trust fund babies are the extreme on the spectrum but any time your parents wealth is the biggest factor in whether or not you are a success the system is broken.
imho i see many people who had support or investment from their parents doing very well when they are average or below average abilty.
Education is ulimately the absolute most important thing.. a nation (or humanity as a whole) has a limited number of assest: land, infrastructure and people. the people being the most dynamic with the largest value multipliers possible. IMHO its a no brainer that you want to invest in people via education as a top priority as it will in turn multiply up all other investment (and anything that means money has a bigger sway than ability i think is a bit broken).
To be clear i am not looking for the systems to be perfect, thats silly.. but i do prefer for example the idea of private education being illegal to ensure that grades actually mean something (not just how much money was spent on you).
Also as a side note i belive that people who think they are worth many times more than others within their oragnisation dont understand how their value is derived and where it came from.. so while i dont seek for all salaries to be equal, i do think within an org they should all be within a certain range (e.g. highest paid no more than 5 or 10 times lowest paid).
I have made / saved millions of dollars with a few hours work - but it was the existance of the org, the customers and the history that gave me the chance to do such good work more than it was my skill. people who can deliver solutions are actually more common than you think - good requirements and problems ripe for solving are thin on the ground.
Clearly productive investment is better, that last point is a bit tongue in cheek, but there’s at least some truth to it. The least productive use I could think of would be buying bitcoin, which is basically just funding turning electricity into heat.
Someone gives up most of their life to make the investor even richer. In exchange they get barely enough to eat and put a roof over their head (in some cases not even that). What a fair deal, praise the investor!
I mean, honestly, your narrative is very much in line with trickle down economics - which we know doesn’t work…
It's the average persons absolute amount of wealth going up that matters.
I think the real question is: Is an uneven distribution necessary to drive absolute levels of wealth up more quickly ? What level of wealth inequality produces the most growth ?
There's nothing stopping wealth inequality from raising at the same time as living standards for the world's poorest do. In fact, it's exactly what's happening right now.
On a global scale, it may be possible to show that the world's poorest are improving. I hope so! But when people talk about income inequality, they're generally referring to national economies, where living standards for the poorest have been declining as the number of billionaires skyrockets.
So when arguing about inequality, we're actually arguing just how much inequality exactly the system can work with.
But... I will say that etymologically (ie in the early rhetoric), the word "capitalism" meant "regime where capitalists rule." Monarchy = monarchs rule; democracy means the people rule, etc. IE, the old banana republics would have represented near perfect capitalism.
In any case, I don't see why "Academy of Management Perspectives" decided to bring big-c "Capitalism" into it. What part of capitalism are they examining/exonerating? Defining capitalism simply as "private ownership & the existence of markets" is silly. This exists in many times and places that you couldn't credibly call capitalism.
Considering the context (Macedonia?) I think what is meant by "capitalism" is economic policies & changes of the last 30 years. Washington Consensus monetary policies, international/american compatible corporate/contracts law and such.
There is always a justification offered for this, which is that the losses go to capital also (i.e. investing capital in some enterprise is more risky than investing labor or ideas). There are numerous, excellent refutations to this claim.
Prior to the industrial revolution, most private property was land and slaves (or serfs, same thing). Land supports only so many people, and land is finite, so both of those have limits on growth. And tools for any given trade were generally cheap enough that anyone of that trade would own their own set.
With the industrial revolution, suddenly the best ways to produce certain goods were wildly more expensive than what any given worker can afford, and even more wildly more productive. So there needed to be a mode of organization besides "every worker owns their own set of tools," and at the same time, factories were the first thing ever to be more valuable than owning land. So that's why "who owns private property" suddenly became an important question about 200 years ago, when "who owns land" would've been the entire discussion for most of human history.
It is newly independently significant, not new.
> Prior to the industrial revolution, most private property was land and slaves
No, “private property” in the Marxist sense excludes both land and slaves, but most private property was generally held in the same hands that held land and, if not actual slaves in name, power over subject people equivalent to that of government (and often recognized as governmental authority) as a personal (though often not freely transferrable) property right.
.. It perturbs me because it's usually a (imo) dirty rhetorical trick. The argument never really sticks to a "just markets & property" definition of capitalism. The way it usually works is: (step 1) define capitalism in a way that applies to most societies at most times; (step 2) proceed with the rest of the argument with a much more specific definition.
In this case, what the paper actually means by capitalism isn't just "Markets & Property," even though they do define things this way. What they actually mean by capitalism is privatisation and other major policies adopted post Yugoslav and Soviet dissolution. None of the paper makes sense otherwise.
If we're discussing history (the original context for the term "capitalism") the uber-broad definition doesn't work either. Capitalism has something to do with the industrial era, the ascendancy of merchants over medieval aristocracies & such. No one actually sticks to a definition of capitalism where the early stock markets of Amsterdam & London are not more capitalistic than feudal systems or whatnot.
It's just disingenuous, basically. If that's the definition of capitalism, there's not much to discuss. Most systems are capitalism. It's also ahistorical, since it ignore most usages of the term.
"An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." But wasn't that true in many ancient civilizations? Haven't individual merchants and property owners been around for a long time?
I think the significance of industrialization for capitalism was that it marked the first time that an individual could rapidly amass a large fortune within their own lifetime. Prior to that era, you had to be affiliated with the government in some way, able to raise taxes from a large number of subjects, to pull in that kind of money so quickly. The gap between the royals and the serfs began to fill with a middle class. Once capital became disentangled from government, people started talking about it more as an independent entity. It wasn't so much that capitalism emerged as phenomenon in the 18th century so much as it emerged into the public consciousness then.
>I've also long been perturbed by the definition of capitalism largely focusing on markets, private property, and even entrepreneurship. Since those are like, as old as human civilization probably.
It seems like you want another definition of capitalism that would reflect a more recent development of it. Again, I'm not criticizing at all, just wondering what the perturbing aspect is.
I don't think that's limited to "places like India or China".
I enjoyed his appearance on the "Economics for entrepreneurs" podcast.
Sort of, if you narrowly define cronyism as government favoritism. But it would be more accurate to say that capitalism itself encourages cronyism---in the absence of regulation, there is no need to rope in government officials and so the cronyism stays in the private sector. But it is no less cronyism. The article misses the real problem, which is that the over-concentration of capital that develops naturally in unregulated capitalism starves the general population of economic opportunities that they would otherwise have if the capital were more decentralized. It's also corrosive to democracy, which depends on the assumption that people are more or less equally empowered politically, at least within a few orders of magnitude.
In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.
We're living in a time where interest rates (set by appointed technocrats) don't keep pace with the rate of inflation. Inflation as it is originally defined means literally to inflate the money supply. Again, the money supply is determined by unelected appointees. These same experts form a "plunge protection team" determined to protect financial markets, at the expense of all other participants in the economy. So yeah, we're seeing a large amount of wealth inequality currently.
We could turn to the historical cases as well. Railroad monopolies and government bailouts of these essential industries owned and controlled by blue blood families.
What I have a hard time turning to and finding empirical evidence for, would be this mythical unregulated capitialist economy which produced so much of the the inequality critics of laissez-faire capitalism ceaselessly cite.
No. You can concentrate massive amounts of wealth simply by freely trading. As you get wealthier, it gets easier to accumulate additional wealth. This is the essential feedback loop of capitalism. It's a feature, not a bug, and it is readily modeled (see, eg, https://www.wealthinequality.info/). But it causes significant social problems if left unchecked, as we are seeing today.
>1. All people (or, in model-speak, “agents”) start with equal wealth. 2. For each transaction, choose two agents at random. 3. Calculate a percentage of the poorer agent’s wealth. This percentage will be the amount exchanged. (If they have the same wealth, it doesn’t matter which you choose. This will be the amount exchanged.) 4. Randomly choose which of the two agents will receive the exchanged wealth and which will lose it.
While inequality is a symptom of a dysfunctional financial system, equality isn't a good unto itself. Systems which institutionalize inequality through cronyism are the problem. Not surprisingly, these half-baked economic models are used to double down on interventionism, resulting in further cronyism.
Ideas don't have people, people have ideas. Every human action is carried out by a person. No action has ever been carried out by an idea.
I think this concept applies to cronyism as well: we will always have cronyism and corruption and no system we can dream up will eliminate it. Therefore we should distribute the cronyism as much as is practical to minimize and localize the damage it can do. Bad behavior is less likely when you live within driving distance of the person you are inflicting it on.
In practice this means many more small, relatively independent political units. An idea for which there is nearly zero support amongst the current elites who are nearly unanimous in wanting more centralization, which makes sense when considering their interests. I do hear occasionally about a national divorce, which would be a good start.
Does pure capitalism without cronyism give everybody an equal chance though? What if cronyism is the very product of current capitalism?
Finger swap is useless. To actually fix a problem, we need to find the root cause and fix the entire tree of problems one by one.
Insight: It's not capitalism. It's something else.
Perhaps the actual problem for the author is education because any moderate amount of reading comprehension coupled with a little skepticism should keep "insights" like this from spreading.
Link: https://www.mr-sustainability.com/stories/2020/dictators-han....
While it becomes expensive to outright buy people, it also becomes prohibitively expensive to educate, and an ability to outspend with emotional appeals becomes more important than having a cogent argument.
In unregulated capitalism, corruption provides a huge competitive advantage, so controls must be put in place to counteract that. Typically that’s done with government intervention.
The idea that we can “blame cronyism, not capitalism”, is a red herring. Cronyism and corruption is something capitalism, as a system, must be able to deal with, or else capitalism is a poor system.
It’s like saying “don’t blame the engine, blame friction forces” for why an engine has poor qualities. Friction is a given and will always exist, it’s the poor engineering design of the engine that’s the problem. The design didn’t mitigate the friction appropriately.
But is that the world we want?
The fact of the matter is that corruption, like crime, will always exist, so the system within which the corruption exists better be able to handle it, or it’s a poor system.
The author’s argument is basically the opposite - “the system is fine, it’s the pesky non-idealities that are the problem!”
My point is that this is a totally useless take. It’s like trying to build a rocket and wondering why it collapses on the launchpad because you hand waved away all the non-idealities: “oh, the rocket design was fine, it was those pesky non-idealities that we’re the problem!”
It won't be found even harder in communism, where the cronyism is baked into the system of governance.
It won't be found in communism or socialism, either.
The problem is that the loudest voices arguing for capitalism, also tend to argue against regulation, accountability, and that sort of thing.
- Regulations are often used as a tool of corruption and cronyism, e.g. regulation of housing construction entrenching landowner power.
- Regulations can block legitimate progress, e.g. the private antigen tests that were blocked throughout 2020.
- Regulations create complexity which acts as both a barrier to entry which creates monopolies, and as a hidden tax.
- Regulations are often theatre.
- Bad regulations are sticky; they don't sunset.
That's why I favor less regulations overall. But I don't favor no regulations. I still want regulations (or just "laws") that stop pollution, deceptive marketing, and so on.
Not allowing pollution isn't regulation, it's enforcing property rights.
Not allowing deceptive marketing (fraudulent contracts) isn't regulation, it's enforcing property rights.
If you can't see the difference between regulations and property rights then yeah, opposition to regulations will seem a bit bizarre.
In a general sense, perhaps, but not in the sense that people mean when they say that they're opposed to regulation. Context matters. In this conversation, "regulation" means a deviation from natural property rights, whether that involves directly infringing them, e.g. by attaching extra rules or penalties beyond simply respecting the equal rights of others, or granting artificial "property rights" which will necessarily infringe on others' natural ones.
> Expanding property rights to more areas is regulation.
"Expanding" the concept of property rights to areas where they don't naturally apply (like copyrights and patents) is definitely regulation, in the negative sense. But at that point you're not really talking about property rights any more.
Blindly trusting regulators to know what's best is just as bad as blindly trusting corporations to know what's best.
Read "The Path to Power", LBJ biography. They describe this process plainly and how he continuously used his across his entire career in this way. Its very enlightening.
If it is the government then it goes back to the people being aware of their interests and not allowing themselves to be manipulated. Which is never going to be the case.
There is no one to regulate the regulators because the state in its entirety is isolated from accountability to the public.
Capitalism is just evolution without physical war. It has the same beauty and horror as a lion eating a gazelle alive.
Yes, as a matter of fact, it is! Or rather, lack of effective government. An effective government would not only have laws to protect the workers, but also have a regulatory zeal to enforce such laws in ways they bite the employer, who obviously isn't treating its workers well enough.
Then again, not a lot seem to happen when pointing at short-comings or issues of prioritizing profit and growth above all else in society either.
The whole thing is based on the assumption that human nature tends to lead to exploitation of others, and build in safeguards against it.
Laws and regulation that prevent cronyism are the solution.
Look at a "simple" case in the news today. Several men who were abused in the 1970s have lost their case against Manchester City Football club who they say were responsible for the "scout" who abused them. If it was really simple, there would be no case. However, the Judge rules that at the time of the abuse, the man (who is currently in prison) was not officially a member of Man City staff so they are not liable vicariously for his actions.
I think something that is lacking in the UK at least, is more like a Charter for Society. What is it that we accept and don't accept. It would be much easier in Court if a ruling is made not just on the letter of a law that might not have thought of the specific scenario, not on common law of something that was close enough to this case but on whether it violates the charter.
Don't know, just a thought.
What do you mean by Charter for Society? A Constitution?
Doesn't this just devolve to the same problem? If the law doesn't address a specific scenario, what makes you think the charter will?
If a constitution/charter had something like "Our society does not accept people who are unecessarily aggressive or quick to get violent", then the perpetrator doesn't get away with it because they didn't actually hurt someone or reach the burden for proving "fear of violence" needed for assault.
Don't know. Probably not realistic but at least then a society could know how infrastructure, government and public services are directed; people who want to immigrate can see clearly that e.g. "We respect the rule of law and property" so that they don't think it is OK to not pay tax, to not insure their car etc; and also for people who are a pain because they are just selfish and do things that rub people up the wrong way, "we are mindful that the community is more important than the individual and the community can decide that they don't like what you are doing even if it isn't illegal"
I think these kinds of things are captured in law all the time. Giving judges recommended sentencing guidelines but with leeway for discretion in a specific case. Distinguishing between assault and aggravated assault and battery, murder and manslaughter, etc.
Cronyism can exist in an economic system where there are positions of power. However, if you were to limit position of power, I believe you could make an economic system more resilient to cronyism. Obviously systems like the USSR had positions of extreme power so it was very prone to cronyism.
The US Constitution tries to do that by pitting different groups in power against each other, diffusing their power and forcing them to cooperate to achieve anything. And then adding a Bill of Rights specifically limiting the power government has over the individual.
Do you have a better idea?
[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
Try reading the article?
[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
Capitalism is a great platform for cronyism because it accumulates huge amounts of wealth in one place. Without capitalism the wages of corruption would be much less.
Capitalism is private ownership of (and thus control, and benefit from) the means of production. Of these things you've listed, only corporate stock is—at some remove—a means of production. The stockholder owns part of the corporation which in turn owns capital goods.
Anyone can save and invest and become an owner of capital. The only thing leading to concentration of wealth (under any economic system, really, not just capitalism) is that most people don't care to sacrifice present consumption for a larger future gain. Fortunately there are some who do.
Institutions like contract law and constitutionally limited government helped the reign in corruption to some extent. If corruption is to mean deceit, abuse and exploitation, corruption has existed since as long as humans have existed. That is why homicide rates in prehistory were 30%.
When people consider your ideology "natural state of the world", you know your propaganda succeeded.
Now, that obviously doesn't happen in all areas all of the time. And we have moved away from that kind of rules-structured ideal over the last forty years or so in pursuit of greater efficiency (which has re-introduced cronyism in the UK to a greater degree, for example - see the present government) but it's grossly over-simplified to say that cronyism is an 'essential' part of big government, when its original foundations were intended to produce a (big) government of laws and not men.
Edit: the problem is kind of moral hazard. Much like a chemical plant or nuclear reactor needs a range of protection systems to prevent the dangerous chemicals from going out of control, public administration needs a range of systems to prevent corruption getting too out of hand.
It's not just a public admin problem, either - corruption and self-dealing are potentially endemic in the private sector, too. The concern has traditionally been higher for the public sector, both because of the potential for abuse of state power and because it is/was seen to be corrosive to public trust and self-government. A private company is more likely to trade off the cost of controls versus the dollar value of the future loss (or the controller is the one running the firm strictly for their own benefit, in which case they're likely to get away with it without intervention by the legal system). And the largest companies have had actual public power greater than the smallest countries for centuries by this point, so the two concerns are not completely disjoint.
Same here.
The corruption is NOT typical to capitalism, both capitalism and communism have plenty of corruption. As a citizen of a former communist state, I can say that communism has even more corruption in general.
I think this is because capitalism doesn't deny that there is corruption and human beings at their innermost are not fair and just, so the capitalist institutions are designed to work around that. Communism on the other hand, assumes there is "a new man", which is fair, works as hard as they can and takes only what they need. But this is false, and never happens, so you need the state to enforce it, but then the people will still be humans and do what humans do: trade goods, services and influence, but under the table.
That is a very hard to defend statement...mass deportations, famine, misery and all the other staples of communism are not nearly as bad in capitalism. And if capitalist countries do this to each other, it's not capitalism per se to blame, it's other aspects of politics (imperialism, colonialism, Neo-colonialism etc.) that can be separated from capitalism. Whereas communism on its own cannot separate from its worse tenets.
Being that they're not equally evil, IMO the middle ground is better to be closer to capitalism rather than in the middle.
I personally believe in UBI, but I consider myself a liberal right winger. I believe UBI is good because it makes the bureaucracy and the government mostly obsolete except for the places it really matters: infrastructure, military, education etc. The UBI will be more transparent and automatic, people will know they live off other people's money, not "the government". And the government cannot keep robbing Paul to pay Peter with each and every bill. This should over time reduce the amount we spend on social programs, which is in line with what I believe as a liberal that wants less taxes.
> And if capitalist countries do this to each other, it's not capitalism per se to blame, it's other aspects of politics (imperialism, colonialism, Neo-colonialism etc.) that can be separated from capitalism
That's just the branding decision I was speaking of. You chose to brand the sane modern version of capitalism - still capitalism, but sane modern version of communism - socialism. That way you get the conclusion you want cause of your political beliefs. I don't really care for branding, but lets be honest - it's not some universal truth, it's just a consequence of your decision of assigning labels to political systems in a particular way.
BTW famines were pretty common before Haber-Bosch process. Usually caused by natural causes + mismanagement. Sometimes also by bad intentions. None of these are political-system-specific. See the famine in Ireland for capitalist example.
> This should over time reduce the amount we spend on social programs, which is in line with what I believe as a liberal that wants less taxes.
As I see it in future most of the productivity will be concentrated in top 1% of people assisted by global empires of AI and automation and protected by IP laws [1]. And the rest of us will pay almost no taxes because we will provide almost no value so there's nothing to tax. If the rich fear the revolution and state control enough to pay for everybody else - we get post-scarcity. If not - we get a dystopia. Possibly both in different places or for different groups of people.
As for the mechanism - I don't really care. Make it UBI or make it 95% employement with most people doing useless jobs for 8 hours a day. End result is the same.
[1] thought experiment - in a world with self-improving general AI and IP laws but with no political mechanism to force someone to give up his IP to others - how do you prevent a world-wide monopoly
That is not just branding. Communism had these tenets whenever it was tried. The only logical conclusion is that it's inevitable to get there. Capitalism had it's bad years, but now it's pretty good, it lifted billions out of poverty.
Communism still did intentional famines well into the 1940s, after WWII. Pol Pot was even later. By then, capitalist countries are much more tame and humane. Blaming intentional famines on the lack of fertilizers is just arguing without good faith. It's much more because of 1. lack of regard for human life and 2. central decisions like exporting food in a drought. These 2 traits are so common in communism that I believe they're inseparable.
How would you classify the countries where starvation is common right now on the communism-capitalism spectrum? [1]. I'd say most of them are more on the capitalism side.
> Communism still did intentional famines
Introducing another variable (we only count "intentional" famines now) is just a way to distance the "capitalism" brand from famines in capitalist countries. BTW - there's a humanitarian crisis and possible famine in Afghanistan[2] which was recently destabilized by the tame and humane capitalist countries (including my own). It wasn't a great place to live before, but at this point it's hard to argue we improved things. But you can always say it wasn't intentional so it doesn't count.
That's the issue with ideologically-motivated branding I was trying to convey. You choose examples and adjust definitions to fit your cause.
I'm mostly fine with that, communism really sucked when it was introduced in my country, and I don't want to play the devil's advocate for much longer, but I hate it when people put their biases out there as objective truths.
[1] https://www.scoopwhoop.com/world/countries-starving-to-death [2] https://www.hrw.org/news/2021/11/11/afghanistan-facing-famin...
And cronyism, too.
LOL, so yet again, govermint is the problem!
It should be increasingly clear by now that capitalism itself is the problem. It naturally leads to the rich getting richer, and despoils everything in the name of profit, unless it is reigned in by government, taming it for the benefit of society, not just profit and growth. Cronyism is a symptom of too much private power.
It's human nature to want to help your friends before helping strangers, but that attitude leads to corruption when people in positions of power practice it repeatedly.
Yet in general it makes a populace who tries it, more fat, and grants a life of more pleasure, than any of its counterparts.
This itself might be bad for a nation though.
First you get a bunch of people in government who think they should get a percentage of that wealth made by the merchants (just like the feudal lords of old)
Second, the nation becomes so wealthy it has to just keep consuming more and more, and at some point people start having to come up with insane ideas, and gladiator sports, and just become a bunch of addicts because life has no purpose and is too easy.
I think I’m personally ready for some socialist/communist policies so people in my country can experience some actual suffering, and maybe even go hungry, and then at least they will stop talking about the pointless crap they always go on about it.
Go live in a cave if you have a problem with it.
Capitalism doesn't prescribe
We should praise Capitalism for describing humanity better than other *ism
Capitalism describes a system where ownership over all capital is marketized. A society can adhere to that system or not. Under Feudalism, for example, land ownership is instead attached to hereditary titles. You can argue that Capitalism is the best economic system for a society, but it is hardly the only one. In fact, compared to the millenia for which Feudalism lasted, Capitalism is very, very recent.
There are plenty of examples of non capitalist societies thorough history.
What does "capitalism" describe about humanity, exactly?
Discussions should be on the level of what rules allow society to reach a better result, not just try to artificially fix problems because it leads to even bigger problems.
Regulations typically limit the power of the most powerful in society, whose power in turn restricts the rest of us. Thus, regulation frequently increases the freedom of most citizens.
Consider a business owner who treats his workers poorly. The workers could find new employers, but odds are they'd be treated just as poorly there, because these labour conditions are not atypical. Then a bill is passed which forces employers to improve labour conditions. Less power for elites means workers' freedom from having power exerted upon them increases.
a) One dollar one vote? That's "ultimate democracy"? Really?
b) how much labour would you say the average ceo does compared to the average low level worker? The ceo works 200-500 times as hard? Really?
So only those who can perform jobs and buy things are able to vote? That sounds dystopian to me.
Why is unregulated capitalism bad? Because it distributes opportunity based on capital rather than merit.
But cronyism by definition operates at a human scale---a person can only have so many friends, after all---while the scale of capital is unlimited. in principle, one person can deprive millions of people of opportunities that might otherwise be available to them. So unregulated capitalism is a much, much bigger problem than cronyism.
If your friends are Senators, Representatives, and the President, you can also deprive unlimited millions of people from opportunities.
Look at China, Capitalism transformed that country. I know, my wife is Chinese and I first went there in 2001. It's raised hundreds of millions of people out of poverty after half a century of grinding poverty and starvation.
As for growing wealth inequality, that seems to be mainly a US phenomenon, the evidence for it having grown in Europe is pretty weak. I certainly don't see it as inevitable, it's an issue of direction and leadership.
I assume by "that", you mean the concentration of wealth. But capitalism does concentrate wealth as a mathematical inevitability, because of the strong feedback loop between capital and income. The old saying, the rich get richer is literally true: having money makes it easier to make more money. It's intrinsic to the system. On an individual level, it's worldwide (ie, the disparity between individuals is increasing, though the disparity between nations is decreasing; see https://unu.edu/news/news/global-income-inequality-up-or-dow...).
That doesn't mean we should throw the whole thing out, but it does mean we can't just take our hands off the wheel and let it run laissez faire.
What needs to happen in the US to help right the ship is that the legal system needs to be tightened up and money needs to be significantly taken out of politics, the K street rotating door between government needs to be severed, and public wages (i.e. being a judge or public attorney) need to be competitive to private wages to ensure we have talent working to uphold the lack of corruption.
This wave of pro socialism is (a) greatly misunderstood by the majority of the people peddling it and (b) is a vote against the current situation without understanding what the situation they are about to jump into looks like (always thinking their are greener pastures).
I had a discussion on reddit recently with a communist and the gist of their argument was basically:
1. I'm having a tough time in life because I have skills that aren't very profitable under capitalism.
2. Under communism the idea is 'from each according to their ability and to each according to their need'.
3. This removes the profit motive so my skills will be valued more under communism.
The problem is that these people aren't thinking about 3rd, 4th, 5th, etc order effects of their ideas. For example, profit isn't necessarily a bad thing. Profit encourages people build more things and efficiently use resources. You can't expect the same level of prosperity without a profit motive.
If it was this simple, why have so many gigantic corporations gone out of business over the years? Sears was once the world's largest retailer and built the world's tallest building to use as its headquarters. Now it's a penny stock. Why didn't they just lower their prices to push out competitors? Remember every town in America had a Blockbuster and AOL was synonymous with the internet? What happened to those companies?
Even feudalism had numerous examples of once-powerful barons being deposed, but that didn't mean inherited privilege and killing off weaker competitors weren't characteristics of the system.
While financing this might become profitable after the competitor goes bankrupt and A raises prices again, there is a continuous stream of competitors trying to profit, which might erode A's capital to a point where it's not worth dumping.
There is also the risk of a bankrupt competitor open-sourcing their product out of either spite or benevolence, significantly and permanently demonetizing the product in question, damaging A (the dumper's) finances.
And yet another risk is the competitor not going bankrupt, but merely scaling down while A is done with its dumping.
You can say something is flawed, but compared to what, and how would you improve it?
If you are against it and you don’t have a solution then you are simply destructive.
I can see that my car is sputtering black smoke when I drive it and correctly identify that it's a problem, but I bring it to an expert for a suggestion to fix it since I don't have much knowledge in this topic either.
1. Regulated Capitalism
2. State Funded Infrastructure.
ad 1) Capitalism isn't a bad system per-se, but needs to be kept in check. States need to ensure that un-competitive behavior is kept in check, that too-large monopolies are reigned in, that consumers are protected, that fair taxes are paid and that private wealth has no undue influence on politics.
ad 2) Structural systems required for a society to function properly have to be, at least partially, state funded, state controlled, or even state owned, thus ensuring the availability and baseline quality of structural services to as many citizens as possible, with regard for revenue generation being a secondary concern.
They also rely heavily on the public being educated enough, interested enough and participatory enough to reflect bad behavior in their voting decisions.
None of this however is an argument for less regulation. It is an argument for education and political participation.
It's not an easy process, it is active work in fact, but it is possible.
This is why we have cronyism in the first place. Who do you think is writing the regulations? Who's funding the think tanks and the "grassroots" organizations? Who's paying for the campaigns?
"$35BN Match Group file multiple lawsuits against muzmatch following repeated failed acquisition offers" -
"Lets provide the better product/service at a lower price" is, by far, not the most common business tactic.
- Law for frivolous lawsuits created with criteria
- Company A engages in said behavior
- Company B files motion to dismiss based on said criteria
- Judge agrees and dismisses lawsuit, and warns of contempt if the behavior continues
As long as that capital is devoted to productive activities, such as investment in a company that employs people, or equipment that had to be manufactured and is used productively, I've no problem with that. None of those economic functions could have been substituted by labour, it took capital to do it, and in fact those activities promote and reward labour.
So we need to incentivise productive uses of capital, and tax unproductive uses. What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
I would agree that this would probably improve the situation, yes, as long as the concentration of wealth isn't leveraged to drive wages down.
>What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
However productive the economy becomes, if its fruits are not shared more widely than they are today, it won't benefit society as a whole in the long run. In the last 40 years overall productivity has boomed, but the wealthy have grabbed a wildly disproportionate share of the resulting economic growth simply because their disproportionate share of capital gives them the leverage to do so.
The issue we have today is one where the elite are completely devoid of any morals, or they have convinced themselves that they are acting morally in some fashion.
This is the issue with any system, whether it be capitalism, socialism, fascism, or communism. A select group of individuals eventually rise to the top, and they work to manipulate the system to their advantage -- just look at the conspiracies that were occurring immediately after Hitler and Stalin's deaths. Watch closely when Kim Jong inevitably passes, and there is a power void in North Korea. History repeats itself time and time again.
We, in general, are a morally bankrupt people, and everyone has been conditioned to act in one own's best interest. "I'm gonna get mine" because everyone believes the system is corrupt and that's how you have to behave to survive, but what people don't understand is it is the people that are corrupt, and this behavior simply perpetuates the corruption.
Too many people think it's a system issue. This place too much faith in structures created by man. This is an issue of hearts and minds. Always has been.
It's useful to suggest that everyone behave morally, if more did so the world would be a better place. But it's unwise to build a system where that suggestion is the only check on bad behavior.
Not sure I necessarily agree with this. I can understand how 1 might come to see it this way. Capitalism is about measuring ones contribution to society.
>What happens in practice is an accumulation of wealth == power in the hands of a small elite, which then no longer need to compete, cronyism or not, because they have the resources to defeat every competitor, even if the competing product is superior.
In our current system which is a regulated capitalist system this happens. It would be a strawman to assert this against capitalism and exclude any impact that government regulation may provide. I'm pretty most people could see government monopolies as abusing capitalism.
>Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.
Lets evaluate.
Tesla: Market Cap of ~1,030 Billion $ off of ~$30 billion revenue.
Ford: Market Cap of ~100 billion $ off of $150 billion revenue.
GM: Market cap of ~100 billion $ off of $150 billion revenue.
Stellantis: Market cap of ~64 billon $ off of $100 billion revenue.
Very clearly shows why Ford and GM are rushing to get EVs out to market. Stellantis who had good plans has basically not arrived to market with anything. This is one of the highest regulated industries and capitalism is working great here.
>Okay, but the consumers still get X' when A buys the patents from the now bankrupt B, right? Maybe.
Patents != capitalism. A true free market would not have any patents. If you build something new and unique, everyone would be able to come in and copy it. We could debate the merits of the patent system and perhaps from society's point of view it's a good thing. However, it the current subject, this isnt capitalism you're arguing against.
>They have eliminated their competition anyway, so why bother, when they can just continue printing money by making X, right? Remember, the maxime is maximize-your-profit not deliver-the-best-product.
I think this is a good spot to come back around. Capitalism is not competition. Yes it engenders competition but that's the wrong way to look at it. This is something business owners need to learn. Capitalism is about solving problems and contributing to society. Capitalism measures this in one of the most effective ways.
I will never work because it just can't work, everyone is different and has different priorities. A better world can only be built from the bottom up, just look at craft beer and how independent people were able to retake one of the most monopolistic industries in the world.
The DeFi space is a lot worse than the traditional economy by just about any measure right now: inequality, theft, fraud, instability, market manipulation, etc are all way worse.