I got into a long discussion with eli_gottlieb here but I don't think either of us got the answers we were looking for https://news.ycombinator.com/item?id=9335125
It does this (in general) by giving points to people who satisfy other people's values and proportional to how much they satisfy them. These points can be used to satisfy their own values after and this creates a feedback loop of value satisfaction. IMO a very good thing.
If I understand you correctly, you think that what Adam Smith explained with the invisible hand, that all individuals pursuing their best interests will usually result in a beneficial situation for society as a whole, is true. If that is the case I have to disagree, otherwise just ignore the rest of the comment.
There is nothing that justifies this assumption, if everyone just tries to maximize its individual gain there is no force that will ensure that gains for society as a whole are simultaneously maximized. Let's just stick with the topic of the article, slavery. If a few people exploit the workforce of a large number of slaves they surly maximize their personal gains but you can hardly argue that it leads to a good overall situation.
By the way, I want to avoid the moral discussion and will just take it for granted that we agree that a world in which the slaves are not slaves but receive a fair compensation for their work is a better world.
The very next sentence I wrote disagrees.
> Of course there are problems, every system has winners and losers and thats why we have taxation and welfare, to smooth out some of the issues.
The choice of capitalism depends on moral subjectivity, its a necessary part of the discussion. As I said before, capitalism is a type 2 system. https://news.ycombinator.com/item?id=9338441
At the end of the discussion I asked a question that eli_gottlieb didn't get around to answering. https://news.ycombinator.com/item?id=9345477
This was specific to economic democracy but you can replace that with any other alternative system, the question would still apply and be interesting.
Let me pick an example, all humans are equal. This might be an objective truth or a society might just agree on that as a foundational value. But in both cases you can build the exactly same society or economic system that honours this value independent of its origin. But I guess I missed a crucial point of your argument, maybe our understanding of subjective and objective morality differs. Are you talking about the distinction between a society where everybody lives by his own moral values as opposed to a society where all people share more or less the same moral values?
For this discussion, I'll initially restrict it to just "value subjectivity", i.e. a person's desires are dependent on their state of mind and that state of mind is personal and varying. For example, ranking your preference for a cool glass of water and a delicious sandwich depends on how thirsty you are.
Scale this up to millions of people and you find that there is no objective ordering of "things" that can satisfy everybody bhttp://en.wikipedia.org/wiki/Arrow%27s_impossibility_theorem
Capitalism, as a system, recognises this and is effectively a distributed consensus mechanism. Allocating "points" to people who provide the most value to the system. BUT like any system, it has winners and losers (not necessarily evil, just benefitting) and without checks and balances would lead to a state of the world that I'm unhappy with. Which is why taxation and welfare.
For any proposed alternative/update, I'm interested in the new winners and losers as well as how this distributed consensus is achieved.
There are also some advantages in a planned economy, you can for example penalize environmentally unfriendly products directly in the plan while controlling a market is only possible indirectly via laws and regulations and their enforcement which might be less efficient. But all in all market and price mechanism with some added planning, i.e. regulations where market forces are not aligned with goals agreed on by the society, seems at the very least a reasonable choice for an economy.
I take issues with capitalism in other places, for example with the ownership of the means of production. Let's again take an example. You found a company, your workers produce goods or services sold for 10 millions per year. You pay 8 millions for consumed raw materials and in salaries and invest 2 millions into the growth of the company, say a new offices, a new production floors or new machines. For the moment this is all good and even necessary for the growth of the company. But when you decide to sell your company you alone get all the money your workers worked for. This is of course unfair and leads to inequality because one or a few owners are able to capture a share of the value created by a lot of workers.
Unfortunately from Arrow's impossibility theorem (linked above), there is no objectively "best" ranking for allocating resources so all plans will be sub optimal (provided values are subjective). Because of this, any system/allocation will always produce winners and losers, the only difference being who they are.
In a planned economy you can prevent those products from being made entirely or at least kept to a minimum but again, who decides the trade off. Subjective morality is always an issue. Democracy, btw, is based on a principle of subjective morality, if a majority of voters feel that their plastic toy is more important than an endangered fish then isn't that the way it should be? If not, why not? Of course, the real issue is that people have a hard time predicting the consequences of their decisions. (see http://en.wikipedia.org/wiki/Futarchy for a possible fix).
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As far as the means of production go, I'd like to set aside the moral argument (for now) and just talk about incentives. A country (with any political structure you choose) has a natural gold source somewhere in an area, they don't know exactly where.
0. Who predicts a market for gold and how are they incentivised?
1. Who searches for the mine and how are they incentivised?
2. Who develops the mine and how are they incentivised?
3. Who discovers and researches new mining tech and how are they incentivised?
4. Who organises and hires miners, craftsmen, support and how are they incentivised?
5. Who pays these employees and other operating costs and how are they incentivised?
6. Who markets, ships, advertises the finished gold and how are they incentivised?
And the big question, what if the venture fails? does everyone above get paid? If any loans are taken to start this venture and can't be paid back who takes the liability?
It is not that I don't believe there isn't an alternative but capitalism, as a system, has answers to all of these questions and the list isn't exhaustive by any means. Any upgrade/fix/replacement should have answers to questions like this before it can be seriously considered.
edit: formatting