Comment by zenogais | Hacker News Reader

Comment by zenogais | Hacker News Reader

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There is no "anti-capitalist bogeyman", not even really sure what such a phrase means. Certainly to ignore capitalism in a critique of present conditions is to miss the facts that capitalism is (A) A fairly recent re-organization of the material conditions of existence and not something fundamental to human nature or society and (B) A direct cause in many large-scale catastrophes unfolding in the present. You can find critiques that attempt to refute (B) and look elsewhere for the source of problems (eg. the state, lazy individuals, and so on), and many have, you can look to such writers as Ayn Rand, Tim Ferris, Michael Ellsberg, for a start. Having read Marx and the later critical theorists as well as these pro-capitalist writers I can say that the case against capitalism is fairly damning and well-supported. The case for it being much weaker and always falling back on some sort of "hand of the market" type mysticism at some point from what I have seen.

While capitalism has serious problems, it actually produces objectively better results than most of the alternatives. (Capitalism with some state socialism on top seems to be the only alternative that does as well or better.)

If you dispute my statement, can you show another system that produces objectively better outcomes than capitalism?

I think the "objectively" part can be disputed, since it's very difficult to be objective about this. What are you measuring? To be truly objective you must measure outside the parameters of capitalism, otherwise you'll be measuring just what it's optimized to do (e.g. you could be measuring the ease with which one can become an entrepreneur and start a company, but why would that be the best way to measure a socioeconomical system?).

How do you measure happiness of the population, self-fulfilment, solidarity, sustainability, etc?

Capitalism has run its course in my very subjective opinion. Hopefully there will be a successor that is more sustainable and people friendly, and hopefully it won't involve the invisible hand of the free market, state enforced monopolies, laissez faire or unsustainable consumerism.

Well, one can certainly say that Marxism and feudalism both produced less happiness and self-fulfillment for the population. I'm not sure they did better on solidarity, either. Sustainability? Feudalism could be argued to have done better there, but not Marxism.

My main point, though, is this: What is your better alternative? Everybody's got criticisms of capitalism (me included), but as a broad organizing pattern for society, what is your alternative? How has that alternative actually worked when it's been tried? Is there real-world experience, or just theory?

You cannot "certainly" say any of those things. They are debatable, and you'll find plenty of educated people to debate them, and dismissing them as cranks is probably too comfortable a position to take.

I don't know what will replace Capitalism, or even what shape it'll take. As you say, flawed alternatives have been attempted -- and some were better at particular aspects, and some even forced Capitalism to take its current form in order not to perish. So you could argue modern day Capitalism owes its shape at least partly to competing systems.

How can Capitalism have 'ran its course'? It was never on course. Even in the most economically 'free' parts of the world... interest rates are still set by a central government, people are still taxed, imports and exports are still subject to tariffs, and markets are regulated and swung in favour of the central state. All of which are distinctly anti-capitalist. There are no Capitalist nations, not truly.

This is some sort of No True Scotman. If you are truly going to follow this road, then there hasn't been a truly Socialist or Communist nation either, not truly.

In this case, we haven't made any inroads in deciding about the relative merits of Capitalism, Socialism or any other -isms, since there haven't been any nations that implemented them. Not truly.

I don't know about you, but it seems like a fruitless viewpoint. I believe Capitalism as practiced in the real world has run its course. This, of course, doesn't mean it's going to go in the next few decades, but I believe its days are counted. Call it optimism.

So the market is an 'invisible hand' but any other form of centralised planning, that you yourself can't name or suggest isn't?

By definition the invisible hand metaphor stands opposite to any kind of centralized planning.

But you're nitpicking. The central of my comment is that you absolutely cannot assert that Capitalism is "objectively" better than every other system. Objectively better at what? By whose objective measurements?

It seems to be better in terms of efficiency. After all, it optimizes for profit, costs are a given for every market participant (in a free market), just as profits are bounded, so the most efficient gains more market share at each "time slice". (Sure, sometimes this efficiency is observable only in marketing, lobbying or in other exploitative mechanisms.)

I'm willing to concede it optimizes for profit (of some people, of course). So maybe Capitalism is "more efficient" at this than other competing systems, but does this make Capitalism objectively better as a system? Maybe if profit-making is the main metric. I remain unconvinced.

I would like to see some experiments in basic income. I'm not sure it works, but the premise is not completely absurd. It does cause inflation, maybe so much of it that it's unsustainable. It also may remove too many incentives from work. I don't know. But some experimenting too see what happens would be great.

Objectively better results at what specifically? You cannot optimize for multiple outcomes simultaneously.

The usual argument seems to be that capitalism (or the free market, or free enterprise) is the "greatest engine of wealth creation" ever. The origins of that assertion are vague. It's part of the platform of the Libertarian "Campaign for Liberty", founded in 2008:

"We believe that the free market, reviled by people who do not understand it, is the most just and humane economic system and the greatest engine of prosperity the world has ever known.

"We believe with Ludwig von Mises, Henry Hazlitt, and F.A. Hayek that central banking distorts economic decisionmaking and misleads entrepreneurs into making unsound investments."

The phrase seems to have emerged popularly during the Gingrich "Contract for America" campaign of the mid 1990s.

In the 1930s through 1950s, "engine of prosperity" was a claim attached to numerous entities or policies: railroads, advertising, debt, tariffs, etc.

In 1961, capitalism is attached to the phrase, but not in a positive light:

"was it that converted capitalism from the cataclysmic failure which it appeared to be in the 1930s into the great engine of prosperity of the postwar Western world?” In pursuit of that question, the Director of Studies at the Royal Institute of ..."

From Recent Books on International Relations - Page 998, via Google Books.

It's not until 1961 that I see the claim linked positively to capitalism or free markets, and there it's in the context of a prior political claim:

"I, too, would agree with Senator Bennett that our free enterprise economy is the greatest engine of prosperity and high living standards known"

National Alliance of Postal Employees (U.S.). - 1961, via Google Books.

Comparing per-capita GDP rankings with the Wall Street Journal / Heritage Foundation's Index of Economic Freedom, I find some correspondence, but it's at best weak.

Only half of the top 10 of each list coincide, and of the top 5, only one of the top 10 IEF nations is present (Singapore).

Six of the top-20 ranked per-capita income states come from outside the top-20 of the IEF (GDP/IEF rank): Qatar (#1/27), Norway (#4/31), Austria (#11/25), Sweden (#12/27), Iceland (#14/23), and Kuwait (#17/66). Three of these are oil states (Qatar, Norway, and Kuwait), four are highly socialized progressive states (Norway, Austria, Sweden, Iceland).

The correspondences are Singapore (#3/2), United States (#6/10), Hong Kong (#6/1), Switzerland (#7/5), Canada (#9/6), and Australia (#10/3).

Looking at the highest ranked IEF states, three of the top 10 fail to fall within the top 20 income states (IEF/GDP rank): New Zealand (#4/30), Chile (#7/54), Mauritius (#8/63).

Of the lowest IEF scores, several nations have oddly high income rankings: Argentina (#160/55), East Timor (#166/48), Iran (#168/78), Equatorial Guinea (#170/44), and Venezuela (#174/73).

Several highly respected economists have observed that economics cannot explain growth (Paul Krugman and Tony Atkinson). Most modern orthodox theories of growth date to Robert Solow's work in the 1950s, but they're strongly criticized. J.K. Galbraith associated prosperity with population and land, environmental and biophysical economists point to the associations with access to energy, though there's more than just that.

Looking at a list of nations with maximum per-capita GDP, particularly looking at the CIA's rankings (more comprehensive than the IMF or World Bank's rankings), six of the top ten nations are banking havens: Liechtenstein, Bermuda, Monaco, Jersey, Falkland Islands, and the Isle of Man. And the top-ranked nation is an oil state with a remarkably low IEF ranking: Qatar, #27 on the IEF scale. That's fewer than 50 places higher than one of the lowest per-capita GDP nations, Madagascar. Kuwait, 17th by income, is 66th on the IEF scale.

http://www.reddit.com/r/dredmorbius/comments/2arikp/capitali...

http://www.reddit.com/r/dredmorbius/comments/1wf57z/econ_pau...

The fact that you're referring to 'capitalism' in context of the present day, indicates to me that you have misunderstood Capitalism, with all due respect.

There is no 'damning and well-supported' case against Capitalism, if there is then I'm yet to find it (and believe me I've been looking). There is however a damning well-supported case against what many wrongly refer to as Capitalism i.e Corporatism.

There is absolutely no 'mysticism' to the market, it's very quantifiable. Theory of subjective value, marginal utility, subjectivism, individualism etc. The likes of Menger, Rothbard, Mises, Hayek, Spooner and co have written hundreds of thousands of pages detailing every last aspect of human/value interaction. But the core tenets are pretty simple. Certainly no mysticism or ambiguity.

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