Capitalism - a device for economic progress for everyone everywhere, every time it is tried.

[Monte_RCMS]

Not exactly apples to apples. In Kennedy’s day, GNP (IIRC) was a measure of industrial output. When the tweaked the definition and renamed it GDP they lumped in all the useless services and products like Big Macs and manicures. I suspect that if you really did the analysis today on defense spending as a ratio of productive indutrial output our expenditures today would DWARF that of any other era. Our industrial base is a shadow of its former self and yet value added economic activities are the only REAL drivers of economic growth. Services that consist of passing the same dollar back and forth at an accelerating rate are NOT real economic growth. Taking a cheap raw resource and turning it into a valuable product is where wealth is actually created, and the USA does precious little of that anymore.

In short, I totally disagree with you. Our military budget is as bloated and top heavy as the rest of our federal spending, if not more.

There “must” be some economic service or institute or other that slices and dices the way you suggest.

[Does “The Conference Board” still do all their data analysis and charts and graphs? One of the places where I worked used to subscribe to their services.]

Services probably also include computer programming for gaming and landscapers and a variety of other items. Many manufactured products start out as chips from Oregon that get shipped to Mexico for assembly and then to Korea for batteries and then to China for packaging and to the United States for sale. Or textiles from India go to Pakistan for processing and then to Argentina for cutting and to Mexico for assembly and then to the United States.

The economy is complicated … if I buy a subscription to “Lifelock”, where does that fit in?

I once bought a car that I figured was made in USA, but the placard inside the read door said “made in Canada”.

It’s complicated.

One of the problems with “meat axe” cuts in military spending is that we end up with fewer bits of hardware … so the F-22 “stealth fighter” is now out of production after only a relatively short production run. The C-17 cargo plane would be out of production if not for onesey-twosey sales to other countries. The Navy has a terrible time getting ships built, and that puts the burden on old ships that are worn out. The Army has had problems getting the right armored vehicles in the past; the lead times for new designs are very long. When you need them, you need them. If you have to wait five years or if you need your guys to install armor taken from salvage yards is not an acceptable practice.

 

[fakename]

user "manualman":

Not exactly apples to apples. In Kennedy’s day, GNP (IIRC) was a measure of industrial output. When the tweaked the definition and renamed it GDP they lumped in all the useless services and products like Big Macs and manicures. I suspect that if you really did the analysis today on defense spending as a ratio of productive indutrial output our expenditures today would DWARF that of any other era. Our industrial base is a shadow of its former self and yet value added economic activities are the only REAL drivers of economic growth. Services that consist of passing the same dollar back and forth at an accelerating rate are NOT real economic growth. Taking a cheap raw resource and turning it into a valuable product is where wealth is actually created, and the USA does precious little of that anymore.

In short, I totally disagree with you. Our military budget is as bloated and top heavy as the rest of our federal spending, if not more.

In what way is our industrial output lower today than at other times? For instance, isn’t our industrial capacity basically located in China, that is, don’t we have industrial capacity except located in a non-US territory?

And depending on what you mean by value, clearly services are valuable since they represent conveniences that help people to augment their health, economize their time, etc.

And surely by “value” you don’t mean to measure monetary value? After all, the monetary value of something can be lower than at other times, and yet be in more abundant supply than previously.

 

[manualman]

In what way is our industrial output lower today than at other times? For instance, isn’t our industrial capacity basically located in China, that is, don’t we have industrial capacity except located in a non-US territory?

And depending on what you mean by value, clearly services are valuable since they represent conveniences that help people to augment their health, economize their time, etc.

And surely by “value” you don’t mean to measure monetary value? After all, the monetary value of something can be lower than at other times, and yet be in more abundant supply than previously.

Yes, it is tricky to separate productive services with non-productive. Probably that’s why economists seem to have given up trying to separate them. But does anybody here really think that a dollar spent on a design engineer is economically the same as dollar spent on a wedding planner? Many services consist solely of passing the SAME dollar back and forth instead of adding labor and skill to turn a cheap something into a valuable something.

As for China, that’s the problem. They buy cheap raw materials from us, we buy expensive finished products from them. That’s the root cause of the “trade deficit.” We’ve sent our industrial capacity to them and disguised its loss by counting Starbucks and car wash sales in our GDP.

 

[fakename]

user "manualman":

Yes, it is tricky to separate productive services with non-productive. Probably that’s why economists seem to have given up trying to separate them. But does anybody here really think that a dollar spent on a design engineer is economically the same as dollar spent on a wedding planner? Many services consist solely of passing the SAME dollar back and forth instead of adding labor and skill to turn a cheap something into a valuable something.

As for China, that’s the problem. They buy cheap raw materials from us, we buy expensive finished products from them. That’s the root cause of the “trade deficit.” We’ve sent our industrial capacity to them and disguised its loss by counting Starbucks and car wash sales in our GDP.

Supposedly, the Chinese also invest enough into the US to offset the deficit. There are statistics on this but I’m too lazy to post them.

 

[manualman]

Supposedly, the Chinese also invest enough into the US to offset the deficit. There are statistics on this but I’m too lazy to post them.

Is that supposed to make you feel better? Think about it. They buy (making it up) $500B of materials from us, we buy back $800B of finished products from them. They take the $300B of profits (trade deficit) and use it to buy real estate, mines/mineral rights, and profitable businesses here. That’s what you are saying.

Let that go on too long and anything worth owning will be owned by the Chinese.
We will be tenants in this country that they can evict at their leisure.

 

[fakename]

I’m just saying there’s no imbalance of trade or payments. Actually Richard Cantillon gives a story of how this comes about; if I read him right, he said that banks lose customers if they can’t pay off the debits in their vaults with credits from somewhere else. So banks will try to get someone to enter into a trade relationship to balance all their accounts.

 

[Monte_RCMS]

Yes, it is tricky to separate productive services with non-productive. Probably that’s why economists seem to have given up trying to separate them. ** But does anybody here really think that a dollar spent on a design engineer is economically the same as dollar spent on a wedding planner? Many services consist solely of passing the SAME dollar back and forth instead of adding labor and skill to turn a cheap something into a valuable something.**

As for China, that’s the problem. They buy cheap raw materials from us, we buy expensive finished products from them. That’s the root cause of the “trade deficit.” We’ve sent our industrial capacity to them and disguised its loss by counting Starbucks and car wash sales in our GDP.

The difficulty is: it is difficult or impossible for central planners to know what to “plan”.

But does anybody here really think that a dollar spent on a design engineer is economically the same as dollar spent on a wedding planner? Many services consist solely of passing the SAME dollar back and forth instead of adding labor and skill to turn a cheap something into a valuable something.

We may not NEED certain kinds of design engineers. It depends on what they are going to design.

There was a HUGE push to build railroads. They were basically done by the private sector working with towns and cities with some land grant stuff thrown in that probably didn’t help because it pushed things too fast … all that free money from the government.

But once the rails were down, then we were done. No need for any more design engineers for those particular railroads … There were a lot of upgrades … but they were done on an as-needed basis. Certain routes were very popular with shippers and with passengers. So that’s where the upgrades with multiple tracks and heavier rails went in. Other lines languished because there just wasn’t the volume of traffic. The Pennsylvania Railroad did fabulously … and it was almost all in Pennsylvania … hauling coal from the mines to various users … the free market customers who were willing and able to pay for the coal and to have it delivered.

But there did develop a demand for wedding planners.

And that gets us to energy.

The central planners now in Washington are negative on developing energy. They are chasing after boutique energy such as solar and wind, which is only 1% or so and runs only only on nice days. This is nice if you are camping out and going to make a video about how great it is to be a subsistence farmer … but only on nice days.

But if you need reliable all-weather energy, then you need more than that.

And we have it.

We do have coal … we have used coal for … how long? … 200 years in the United States? … but all of a sudden someone discovered carbon dioxide and they are pushing carbon dioxide like it was nerve gas … and they want it stopped NOW. Well, carbon dioxide isn’t toxic in a normal wide range of concentrations … just isn’t. But, there are rules on the books right now that are going to shut down vast amounts of smokestacks. Then there is mercury … evil, causes all sorts of things … been breathing it for centuries … but all of a sudden, it is evil … [even though the government is pushing mercury light bulbs].

So, basically we have some folks in our capital, who are making very arbitrary decisions … changing technological things that have worked just fine for 200 years.

Their true intentions … to shut down Western Civilization … have become manifest and public and obvious, when the technology and industry sector of our culture came up with cheap natural gas. About as benign an energy source as you can imagine.

And what are the central planners doing? They are fighting it in … and in sneaky ways. In upstate New York, where they have some natural gas, a farmer can no longer harvest hay in the normal harvest period if there is a natural gas well in a field of a certain size UNLESS a special THREE-YEAR study is conducted. OR, certain techniques, that have been used for 60 years cannot be used unless additional studies are performed. There just happen to be 600,000 or so miles of pipelines in the United States, but a pipeline needed to connect an oil field with a refinery cannot be build even after a three-year study because all of a sudden more studies are needed.

There is a need for infrastructure to build energy facilities … pipelines and drill pipe and such. And it is working on its own without any government intervention. Railroads are developing on an as-needed basis. We don’t need high speed rail, and people don’t want to spend several days on a train getting from coast to coast … you would have to connect specific city-pairs so several transfers would need to take place. The central planners haven’t figured that out yet. We do have airlines and they offer a variety of direct and connecting flights that are able to be changed to meet demand. The central planners don’t understand that.

It becomes pretty obvious that the people in our central government just are unable to decide between the need for a design engineer and a wedding planner. They don’t trust the free market to decide and THEY can’t decide, so they will allow neither. Even though the people themselves want both but they want one in one place and the other in another place.

 

[manualman]

Monte I agree with nearly everything you just said, which confuses me. Did you think you were arguing against what I said? I don’t recall anybody here arguing for a socialist, centrally planned economy.

It is a false dilemma to assert that anyone who opposes utterly laissez faire capitalism is implicitly endorsing socialism.

America is great because we’ve historically had a very broad swath of the population who owned their own means of economic production (farmers originally, and more recently small business). No, this was not centrally planned. But on the other hand, it didn’t come about via laissez faire either. It came about because the supply of open land (resulting from 90%+ of the native Americans dying of Eurodiseases and the rest being herded into reservations on ‘useless’ land) created so much opportunity for individual ownership that there was no way a few oligarchs could keep up at first. Homesteaders quickly established towns, towns quickly needed a general store, and a blacksmith, etc. But in recent years the oligarchs have made a dramatic comeback. The general stores are all gone and replaced by Walmart. The farmers are rapidly dwindling and being replaced by leverage pawns to ADM and Monsanto.

Why is central planning by CEOs less alarming to you than central planning by bureacrats? The basic problem of laissze faire capitalism is actually the same problem of socialism: eventually a very few people with their OWN best interest in mind (not the populace at large) make the decisions and manipulate events. The way to prevent that is to structure law, taxation, policy and finance to favor the small entrepeneur over the corporate megalith. Only then can the free market do what its boosters claim. And along the way, the market becomes more humane when both seller and customer experience each other as human beings instead of just economic targets.

 

[manualman]

Monte I agree with nearly everything you just said, which confuses me. Did you think you were arguing against what I said? I don’t recall anybody here arguing for a socialist, centrally planned economy.

It is a false dilemma to assert that anyone who opposes utterly laissez faire capitalism is implicitly endorsing socialism.

America is great because we’ve historically had a very broad swath of the population who owned their own means of economic production (farmers originally, and more recently small business). No, this was not centrally planned. But on the other hand, it didn’t come about via laissez faire either. It came about because the supply of open land (resulting from 90%+ of the native Americans dying of Eurodiseases and the rest being herded into reservations on ‘useless’ land) created so much opportunity for individual ownership that there was no way a few oligarchs could keep up at first. Homesteaders quickly established towns, towns quickly needed a general store, and a blacksmith, etc. But in recent years the oligarchs have made a dramatic comeback. The general stores are all gone and replaced by Walmart. The farmers are rapidly dwindling and being replaced by leverage pawns to ADM and Monsanto.

Why is central planning by CEOs less alarming to you than central planning by bureacrats? The basic problem of laissze faire capitalism is actually the same problem of socialism: eventually a very few people with their OWN best interest in mind (not the populace at large) make the decisions and manipulate events. The way to prevent that is to structure law, taxation, policy and finance to favor the small entrepeneur over the corporate megalith. Only then can the free market do what its boosters claim. And along the way, the market becomes more humane when both seller and customer experience each other as human beings instead of just economic targets.

 

[manualman]

For brutal clarity, I consider socialism/communism and laissez faire capitalism to BOTH be erroneous ditches on opposing sides of the straight, narrow and high road of economic freedom and justice.

 

[Abu]

manualman #28
The basic problem of laissze faire capitalism is actually the same problem of socialism: eventually a very few people with their OWN best interest in mind (not the populace at large) make the decisions and manipulate events.
#29
I consider socialism/communism and laissez faire capitalism to BOTH be erroneous ditches on opposing sides of the straight, narrow and high road of economic freedom and justice

.
No Catholic papal social teaching refers to “laissez-faire”, which is a term coined by a school of economics – the “Physiocrats”.

You appear to be confusing the political interventions of governments, plus graft and corruption, with the free enterprise developed by the Catholic Late Scholastics. Not only has free enterprise raised the welfare of untold millions out of poverty, but is emphatically affirmed by Bl John Paul II in Centesimus Annus, 42, 1991.

 

[TheTrueCentrist]

In a sufficiently free economy, political power is a commodity like any other. What stops a government in a truly capitalist society from simply being an agent of the highest bidder?

 

[essie7777]

I appreciate the conversation has moved on a little – i am still back trying to figure out what the US debt is actually built on … does anyone have a good source?

I can find what the debt is, who it owed to and where a minority % of current debt has been accumulated from and where it is still being spent, there seems to be this huge gap of over $8 trillion that i can’t find where or what it has been/is being spent on – i presume this is not just servicing debt???

thanks

 

[Abu]

TheTrueCentrist #31
In a sufficiently free economy, political power is a commodity like any other. What stops a government in a truly capitalist society from simply being an agent of the highest bidder?

Like everything else in life, the wise laws enacted by the wise, and the responsible actions of individuals: “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas et Veritate, Benedict XVI, 2009, #36).

 

[Seaumas]

I’ve been an avid reader of Ayn Rand and her brand of Capitalism or more precisely “Randian Objectivism”. I do not think Rand would agree with Christian concepts of Capitalism because it serves the weak and mundane. Her only faith, as she indicated, was the $ sign and what that means. Her philosophy has a very strong Existentialist streak which I am sure is not a side of Roman Catholicism. Of course the Church does have on ‘ubermensch’, Jesus Christ.
She would never have allowed into her philosophy the “teleological suspension of the ethical”.
How she would have felt about the bulls “Rerum Novarum” and “Quadregisimo Anno” could be argued all night getting nowhere. Capitalism’s prime objective is Acquisition of Power and Wealth, not sharing. She did not believe in the dignity of the proletariat. Even in “Atlas Shrugged”, John Galt is superman who uses his workers while Dabney is his follower. Rand’s example of the, say, Capitalist collective, is quaint, even silly and highly flawed.
Nowadays Randianism is passe’ and replaced with Global Control and what many say is “Ordo Novum”. In that new environment the economic rulers are governing countries, peoples, societies, conflicts, education, economics and most certainly religion. There may be only one avenue left to return to the source of principles espoused by the Catholic Worker Movement, Peter Maurin, Jacques Mauritain (sp?)and Personalist others. (I do recognize that the CW has never had a self sustaining community. But it is still a great laboratory deeply rooted in Catholicism).
Randian ethics do, of course, allude to doing what is good for the course of the human condition, especially in “The Fountainhead”. The message was clearly "I have the right to create and I also have the right of ultimate responsibility and the freedom to self determination which no one, no matter the social or political status, can usurp. I think the defense summary says it all. And it does share a “strive and succeed” spirit, but no holy sacrifices. Rand was no Petrine.
Capitalism is based upon greed, usury, avarice, gluttony and a egomaniacal sociopathy with subterfuge, ultra-violence and utter malevolence.
“capitalism”, the philosophy of personal gain for which serve civility, brotherhood, charity without compensation and to keep the fires of life itself burning, therefore raising the human condition from drudgery and suffering to one of health, renewal, hope, reverence and spiritual rebirth is its ways, means and goal. If only Catholics and others were introduced to St. Jerome, St. Francis, Thomas Aquinus and Pope John XXIII.
At least that’s how I feel.

 

[manualman]

.
No Catholic papal social teaching refers to “laissez-faire”, which is a term coined by a school of economics – the “Physiocrats”.

OK, if we’re going to argue vocabulary: show me a catholic document that affirms your apparent assumption that unrestrained capitalism is the only true form of “free markets.” I can hardly believe that you can read the totality of Rerum Novarum and assert that government regulation and interference, when intended to restrain the excesses that can result from capitalism, is always a slippery slope to tyranny.

You appear to be erroneously assuming that any government regulation, differential taxation or legal restrictions on commerce is an abolition of “free enterprise.” It is not. GK Chesterton in many of his writings did an excellent job of explaining how governments could create economic environments where ownership still lies in the hands of individuals, but structures are created that discourage exploitation and encourage cooperation.

 

[TheTrueCentrist]

Like everything else in life, the wise laws enacted by the wise, and the responsible actions of individuals: “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas et Veritate, Benedict XVI, 2009, #36).

But capitalism is not predicated on human wisdom, responsibility, or conscience, it is predicated on human greed. It assumes people will always want to maximize their profits. I am not saying that the market would destroy society, just that powerful (i.e. wealthy) companies and individuals would be able to buy political clout in the same way they buy any other commodity. While there might exist politicians who would refuse to be bought, it is likely their tenure would be short. After all, to a certain extent, public opinion can also be bought.

 

[Abu]

Seaumas #34
Capitalism’s prime objective is Acquisition of Power and Wealth, not sharing.
Capitalism is based upon greed, usury, avarice, gluttony and a egomaniacal sociopathy with subterfuge, ultra-violence and utter malevolence.

False.
Free enterprise is not a world of its own, it is a set of principles based on cause and effect and developed by the Catholic late Scholastics for the common good. The vices of people can corrupt any endeavour (such as marriage) and the assumption is totally wrong.
To fantasise that some other inferior system would somehow suddenly operate with people devoid of vices is myopia.

 

[Abu]

manualman #35
show me a catholic document that affirms your apparent assumption that unrestrained capitalism is the only true form of “free markets.” I can hardly believe that you can read the totality of Rerum Novarum and assert that government regulation and interference, when intended to restrain the excesses that can result from capitalism, is always a slippery slope to tyranny.
You appear to be erroneously assuming that any government regulation, differential taxation or legal restrictions on commerce is an abolition of “free enterprise.”

False.
Where, and who, here has called for or supported no government regulations?
See post #4 against Ayn Rand:
“Hardly useful as her definition and meaning of “uncontrolled and unregulated” is quite unacceptable as the State has the right and duty to make wise laws, and that’s why we have laws to seek and punish those who steal, cheat, swindle, and against monopolies as people can, and some do, undermine the common good, and the primary role of government is to support families in solidarity, and the role of the Church in subsidiarity and, yes, the common good.”

Listen, learn and love concerning the teaching re free enterprise in Centesimus Annus, Bl John Paul II, 1991:
‘42. Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

‘If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’

The sneer of “capitalism” came from the Karl Marx of Communism, and Bl John Paul II in Centesimus Annus clearly dislikes the term, preferentially substituting instead, and seeing the great worth of, the “modern business economy” and the functioning of the the “free market”, as well as the “**market economy **or simply free economy.” (#42)

 

[Abu]

TheTrueCentrist #36
capitalism is not predicated on human wisdom, responsibility, or conscience, it is predicated on human greed.

Predicated= proclaimed, and free enterprise is not proclaimed as “human greed” – the movie world is not necessarily a measure of reality.

Dr Chafuen notes that “many people close to Jesus were quite wealthy for their times. Joseph seems to have had his own business and perhaps a donkey; Peter owned a fishing boat, and Matthew was a tax collector. Jesus praised the rich man Zaccheus. It was the wealthy Joseph of Arimathea who kept faith even when the Apostles were beset by doubt (Mt 27:57). Jesus does not condemn the possession of riches but, rather disordered attachment to them.” Notice also that Jesus did not ask His Apostles to renounce their property. Christians For Freedom, Ignatius 1986, p 45].