Is there any practical Alternative to Capitalism?

[Seeksadvice]

Socialism isn’t more sustainable. It’s other people’s money. In many cases, it’s giving other people’s money to folks who won’t get out and do for themselves. I watch social safety net programs pay out to “disabled” people who would be more than capable of holding jobs. Of course, have also seen people with absolutely no need for additional money get massive windfalls from the government due to their ability to influence things. Then, there are the human shaped worthless fleshy meat sacks who manage to get positions of power/wealth due to mommy/daddy having sufficient connections. Simply stated, no system is perfect, but socialism/communism doesn’t really work.

In some cases, it and communism can kill motivation; why work harder, produce a better product if, in the end, I still get the same gruel served in the same little government provided housing as “Bob” who sits on his rear and does nothing. Of course, the most esteemed leaders of the ruling party do not live in the tiny government housing units or eat things similar to scrapple/head cheese.

 

[niceatheist]

Relative scarcity isn’t the only consideration. Gold and silver became the standard because gold and silver were used in coins. Those were used in coins because people valued it, it is easily divisible and some other reasons I’m no doubt forgetting.

And in practical terms, that aspect of money; durability, is a thing of the past. So if durability isn’t an issue, if scarcity isn’t an issue, we’re left with inherent value, and guess what, that’s where the gold standard really is arbitrary. It might have made sense a thousand years ago, but it really hasn’t made any sense in a long time.

Hyperinflation in Germany was due only to Germany printing money. They did owe a lot, but owing money doesn’t increase the money supply.

And why was it that Germany was printing so much money? Because their economy was in a post-war freefall, and the government couldn’t pay its bills. Fiat currency or gold standard, Germany would have been in the same place; a misfiring broken economy, vast internal and external debts, and no real way to pay for them. It was sufficiently bad that the US actually started making cheap loans to Germany to ease the fiscal crisis.

The idea that if Germany had just been on the gold standard during its economic collapse in the 1920s things would have been better is absurd.

 

[exnihilo]

And in practical terms, that aspect of money; durability, is a thing of the past. So if durability isn’t an issue, if scarcity isn’t an issue, we’re left with inherent value, and guess what, that’s where the gold standard really is arbitrary. It might have made sense a thousand years ago, but it really hasn’t made any sense in a long time.

What exactly doesn’t make sense? It does exactly what it is supposed to do. It gives money some real underlying value. It prevents governments and their central banks from being able to print money and steal your wealth by allowing owners of money to exchange it for something of real value. This is the sole reason why gold standards have been abandoned. Fiat currency is the key to all powerful central governments and fundamentally undemocratic as it takes away real power, money, from the people.

And why was it that Germany was printing so much money? Because their economy was in a post-war freefall, and the government couldn’t pay its bills. Fiat currency or gold standard, Germany would have been in the same place; a misfiring broken economy, vast internal and external debts, and no real way to pay for them. It was sufficiently bad that the US actually started making cheap loans to Germany to ease the fiscal crisis.

The idea that if Germany had just been on the gold standard during its economic collapse in the 1920s things would have been better is absurd.

I never said Germany had a good economy. I simply said hyperinflation was the result of printing money. But if by Germany you mean the people they would have absolutely been better off with a gold standard. This wouldn’t have allowed hyperinflation and wouldn’t have allowed the stealing of wealth of the people. Hyperinflation itself is far more devastating to an economy than almost anything else. When prices aren’t stable markets don’t perform well.

 

[niceatheist]

niceatheist:

And in practical terms, that aspect of money; durability, is a thing of the past. So if durability isn’t an issue, if scarcity isn’t an issue, we’re left with inherent value, and guess what, that’s where the gold standard really is arbitrary. It might have made sense a thousand years ago, but it really hasn’t made any sense in a long time.

What exactly doesn’t make sense? It does exactly what it is supposed to do. It gives money some real underlying value. It prevents governments and their central banks from being able to print money and steal your wealth by allowing owners of money to exchange it for something of real value. This is the sole reason why gold standards have been abandoned. Fiat currency is the key to all powerful central governments and fundamentally undemocratic as it takes away real power, money, from the people.

Except it doesn’t. The value of gold is arbitrary. You could pick Helium 3 or antimatter, if scarcity and value were the real measures.

And why was it that Germany was printing so much money? Because their economy was in a post-war freefall, and the government couldn’t pay its bills. Fiat currency or gold standard, Germany would have been in the same place; a misfiring broken economy, vast internal and external debts, and no real way to pay for them. It was sufficiently bad that the US actually started making cheap loans to Germany to ease the fiscal crisis.

The idea that if Germany had just been on the gold standard during its economic collapse in the 1920s things would have been better is absurd.

I never said Germany had a good economy. I simply said hyperinflation was the result of printing money. But if by Germany you mean the people they would have absolutely been better off with a gold standard. This wouldn’t have allowed hyperinflation and wouldn’t have allowed the stealing of wealth of the people. Hyperinflation itself is far more devastating to an economy than almost anything else. When prices aren’t stable markets don’t perform well.

Even if Germany had had any gold left in the reserves, its response would have been the same, and the hyperinflation would have been the same. The economy was wrecked, vast debts had been forced on to it by the Allied Powers. It didn’t have enough precious metals to pay a fraction of the bills, so they would have printed money either way.

The gold standard doesn’t prevent hyperinflation in such circumstances, not unless the nation in question has vast amounts of gold, but do you think the Allies would have just said to a defeated Germany in 1919 "Oh sure, you just keep all that gold!’ The Allies entire intent was to bring Germany down as far as it could go, in part as punishment, and in part so they could rebuild it. In reality, Germany during the hyperinflation period, had very little control at all over its monetary policy.

 

[exnihilo]

Even if Germany had had any gold left in the reserves, its response would have been the same, and the hyperinflation would have been the same. The economy was wrecked, vast debts had been forced on to it by the Allied Powers. It didn’t have enough precious metals to pay a fraction of the bills, so they would have printed money either way.

The gold standard doesn’t prevent hyperinflation in such circumstances, not unless the nation in question has vast amounts of gold, but do you think the Allies would have just said to a defeated Germany in 1919 "Oh sure, you just keep all that gold!’ The Allies entire intent was to bring Germany down as far as it could go, in part as punishment, and in part so they could rebuild it. In reality, Germany during the hyperinflation period, had very little control at all over its monetary policy.

By treaty Germany couldn’t repay the debt in its printed fiat currency. This is actually proof of the usefulness of hard money. Germany’s debtors didn’t want paper money it printed. Other governments don’t want fiat money. They demand gold backed money, or they did until the US reneged on the system in the 70s.

Hyperinflation simply can’t exist in a gold backed system. This is clear because when hyperinflation hits people try to immediately exchange the currency for a hard asset. People will buy up anything they can. There are stories of people buying up toilet seats just to have something that holds its value. Hyperinflation is proof positive of the value of hard currency.

 

[Vonsalza]

Socialism isn’t more sustainable.

As the more tightly socialist economies generally have lower GDPs, this means they consume and produce fewer goods, directly making them more sustainable. Their economic engine consumes less “fuel”.

We shouldn’t view this as a “bad” thing. Just something that simply is.

A requirement for soberly evaluating differing systems is divorcing yourself of emotional judgements on them. I think you display some friction here, respectfully.

It’s other people’s money.

As the system of distribution is macrocosmic rather than microcosmic, it is indeed everyone’s money. That’s part of the social contract of socialism. Property is owned by the collective rather than the individual. Think of an ant colony.

In many cases, it’s giving other people’s money to folks who won’t get out and do for themselves.

In many, but not most. But I agree. The “freeloader problem” is one of the inherent problems of socialism that socialist economies must deal with. In the same way, classism is one of the inherent problems of unrestricted capitalism. Pluses and minuses either way.

Simply stated, no system is perfect, but socialism/communism doesn’t really work.

Socialism and communism aren’t synonyms, respectfully.

In some cases, it and communism can kill motivation; why work harder, produce a better product…

Sure. And in a similarly sober evaluation of unfettered capitalism, there is very little, if any, social mobility. The wealthy elite are highly incentivized to control who else becomes wealthy. It begins to look like the Indian caste system where if you’re born poor, there’s a 99% chance you shall so remain.

One of the primary mechanisms for social mobility is the US is through education - a largely socialized institution.

Pros and cons accompany any system. Including the one you like - whatever that may be.

 

[Theo520]

Is there any practical Alternative to Capitalism?

What do you see as the problem with capitalism? Capitalism combined with Rule of Law and property rights has been a great boon to the poor of the world. Countries that enable these policies prosper.

I think what’s wrong is when people pretend capitalism doesn’t also include consumer protections and the break up of monopolies, so competition can happen.

Believing in capitalism doesn’t mean you don’t also pursue spiritual growth, it just means you have more choices in the bread you buy, and your employment.

 

[Wesrock]

I feel like people speak of capitalism and socialism as hard and defined systems rather than general principles which have a wide variety of practices.

I will say that a system which is based on selfishness, consumerism, and material greed as its virtues seems rather incompatible with Christian teachings. Please keep in mind I’m not saying there shouldn’t be free markets and private property and capital. Nor does my objection require a welfare state. I’m just talking about what we teach as virtues. Perhaps you could have a free market society, but it shouldn’t be because “selfishness is good and rational”, but founded on some Christian principles that make it better than an alternative.

 

[exnihilo]

As the system of distribution is macrocosmic rather than microcosmic, it is indeed everyone’s money. That’s part of the social contract of socialism. Property is owned by the collective rather than the individual. Think of an ant colony.

There is no social contract. That is an invention to justify forcing a man to accept things against his will. The idea is like saying a slave, because he is born into slavery, agrees to be a slave. Proponents of slavery never were so bold. They never tried to suggest the slave agreed to be a slave. They just said he was and had no recourse.

Sure. And in a similarly sober evaluation of unfettered capitalism, there is very little, if any, social mobility. The wealthy elite are highly incentivized to control who else becomes wealthy. It begins to look like the Indian caste system where if you’re born poor, there’s a 99% chance you shall so remain.

What examples of more pure capitalism do you have where social mobility is low? Modern capitalism emerged from the feudal era in the West and immediately created a mercantile class who were able to rise above their previous class. As time went on in the West classes became almost non existent.

 

[exnihilo]

I will say that a system which is based on selfishness, consumerism, and material greed as its virtues seems rather incompatible with Christian teachings. Please keep in mind I’m not saying there shouldn’t be free markets and private property and capital. Nor does my objection require a welfare state. I’m just talking about what we teach as virtues. Perhaps you could have a free market society, but it shouldn’t be because “selfishness is good and rational”, but founded on some Christian principles that make it better than an alternative.

Selfishness or greed isn’t limited to capitalism. These things are features of man and exist in any system.

Man will be selfish no matter what. I don’t think capitalism works because of selfishness. It could be said to work because of self interest, but even that isn’t really the core reason it works so well. It works so well because of the free market. The free market works to best allocate goods according to the desires of the men who comprise the economy taken as a whole.

Socialism sets prices and allocate goods using political power. The problem with that is that it is economically inefficient. So overall the amount of goods produced is much, much less.

 

[niceatheist]

niceatheist:

Even if Germany had had any gold left in the reserves, its response would have been the same, and the hyperinflation would have been the same. The economy was wrecked, vast debts had been forced on to it by the Allied Powers. It didn’t have enough precious metals to pay a fraction of the bills, so they would have printed money either way.

The gold standard doesn’t prevent hyperinflation in such circumstances, not unless the nation in question has vast amounts of gold, but do you think the Allies would have just said to a defeated Germany in 1919 "Oh sure, you just keep all that gold!’ The Allies entire intent was to bring Germany down as far as it could go, in part as punishment, and in part so they could rebuild it. In reality, Germany during the hyperinflation period, had very little control at all over its monetary policy.

By treaty Germany couldn’t repay the debt in its printed fiat currency. This is actually proof of the usefulness of hard money. Germany’s debtors didn’t want paper money it printed. Other governments don’t want fiat money. They demand gold backed money, or they did until the US reneged on the system in the 70s.

Hyperinflation simply can’t exist in a gold backed system. This is clear because when hyperinflation hits people try to immediately exchange the currency for a hard asset. People will buy up anything they can. There are stories of people buying up toilet seats just to have something that holds its value. Hyperinflation is proof positive of the value of hard currency.

Germany literally had no money. It had no way of buying any more gold. The gold standard was completely beyond its grasp, and the nations it owed its debts to; the Allied Powers, being on the gold standard, only exacerbated the situation. If Germany had had some vast reserve of gold yes, maybe it could have stabilized, but it didn’t.

In fact, it was a severe enough situation that Churchill, in the first chapters of the History of WWII noted that the terrible financial position Germany was put into in the years immediately following the war via significant reparations was part of the reason for the dark sentiments that began to grow among the German populace against the victorious Allies.

If Germany had had any more significant gold reserves, those would have been sucked up into reparations as well. However, if all the nations in question had been on a fiat currency, the distortions might not have been so severe. If the creditor nations had been willing to accept payment in German fiat currency, rather than placing impossible reparation terms on Germany, the financial crisis might not have been so deep. In reality, the Allies are as responsible, if not more responsible, for the collapse of the 1920s than Germany itself was.

That being said, in the end the US did come to Germany’s aid and managed to stabilize the situation with loans, and the German economy was in recovery in the late 1920s, right up until it was swept up in the fallout from Black Tuesday.

 

[Wesrock]

Wesrock:

I will say that a system which is based on selfishness, consumerism, and material greed as its virtues seems rather incompatible with Christian teachings. Please keep in mind I’m not saying there shouldn’t be free markets and private property and capital. Nor does my objection require a welfare state. I’m just talking about what we teach as virtues. Perhaps you could have a free market society, but it shouldn’t be because “selfishness is good and rational”, but founded on some Christian principles that make it better than an alternative.

Selfishness or greed isn’t limited to capitalism. These things are features of man and exist in any system.

Man will be selfish no matter what. I don’t think capitalism works because of selfishness. It could be said to work because of self interest, but even that isn’t really the core reason it works so well. It works so well because of the free market. The free market works to best allocate goods according to the desires of the men who comprise the economy taken as a whole.

If a free market is truly the best way to distribute goods to where it’s needed, that’s great. The free market is the most economic efficient, generally, but economic efficiency isn’t always desirable. For example, if supply and demand are in balance, you have an efficient market. It wouldn’t matter if we’re talking about food and 10% of the population was dying every ten years from starvation, the market would still be efficient. A completely free market does not necessarily ensure access to security, roads, education, utilities, or health care for the majority or even most of a population. There are cases where certain goods (or any one of them) are not distributed to where they could be needed.

And “it [the free market] works so well because of the free market” is just a meaningless statement. The general idea behind the free market is the idea that people are rational actors who will act freely according to their self-interests. You can’t bury the idea of “self-interest” by hiding it behind another term.

Socialism sets prices and allocate goods using political power. The problem with that is that it is economically inefficient. So overall the amount of goods produced is much, much less.

As pointed out, economic inefficiency is sometimes desired for some goods over economic efficiency. Furthermore, you’re talking about the extreme of a totally planned economy.

I’m not even arguing against a mostly free market economy here. The principle of subsidiarity is important, in my opinion. A generally free market does work better at distributing goods in general than a totally planned economy. Property rights and self-direction are good. These arguments just tend towards punching strawmen based on political alignment. And I feel like you’re completely missing my point, anyway.

 

[exnihilo]

If the creditor nations had been willing to accept payment in German fiat currency, rather than placing impossible reparation terms on Germany, the financial crisis might not have been so deep

What creditor would accept a fiat currency as repayment of debt where the debtor can just print up money? I mean would a bank accept money you could make up on a homer printer in exchange for a house? Of course not.

Things are a bit different for the US right now. But that is only because of our military might, late abandonment of the gold standard, and agreement with the Arabs to require dollars for oil. People ultimately accept the US dollar because not accepting it is not good for you. You may be invaded and killed.

 

[niceatheist]

niceatheist:

If the creditor nations had been willing to accept payment in German fiat currency, rather than placing impossible reparation terms on Germany, the financial crisis might not have been so deep

What creditor would accept a fiat currency as repayment of debt where the debtor can just print up money? I mean would a bank accept money you could make up on a homer printer in exchange for a house? Of course not.

Because if the debtor nation devalues its currency, the creditor will no longer be paid. You do understand how monetary policy works, right?

And as I said, it would have been irrelevant if Germany had a gold-backed currency, it would still have ended up broke and printing vast amounts of money, because the gold would have been gone either way. You understand that Germany was in a place by 1922 where it couldn’t even afford to buy gold to pay off its debts. The Allied Powers reparations payment requirements were pretty much impossible, unless Germany had been sitting on a literal mountain of gold.

Things are a bit different for the US right now. But that is only because of our military might, late abandonment of the gold standard, and agreement with the Arabs to require dollars for oil. People ultimately accept the US dollar because not accepting it is not good for you. You may be invaded and killed.

 

[Sunbreak]

There is no perfect system if that is what you are looking for. Every system has its flaws.

 

[exnihilo]

And “it [the free market] works so well because of the free market” is just a meaningless statement. The general idea behind the free market is the idea that people are rational actors who will act freely according to their self-interests. You can’t bury the idea of “self-interest” by hiding it behind another term.

Self interest motivates people in capitalism or socialism. It isn’t like imposing a political economic system makes individuals suddenly act contrary to self interest. In socialism the bureaucrats will act in their interest. In socialism the individual citizen will act in his.

As pointed out, economic inefficiency is sometimes desired for some goods over economic efficiency. Furthermore, you’re talking about the extreme of a totally planned economy.

Why would inefficiency ever be desired? You could desire a different outcome but why would you desire inefficiency itself?

 

[exnihilo]

You don’t understand monetary policy at all.

Really? I majored in economics at a very good university and got excellent grades. Just because I don’t agree with you is no reason to be insulting.

 

[niceatheist]

niceatheist:

You don’t understand monetary policy at all.

Really? I majored in economics at a very good university and got excellent grades. Just because I don’t agree with you is no reason to be insulting.

If I were you, I’d ask for your money back.

 

[Vonsalza]

There is no social contract. That is an invention to justify forcing a man to accept things against his will.

Nonsense. The notion of social contract is exactly why you’ll get sassed by a stranger in Japan if you smoke on the street or litter a small piece of trash.

From personal experience - a Japanese man or woman you do not know absolutely will sass you. Hard. if they catch you violating their societal norms in their nation.

That’s “social contract”.

What examples of more pure capitalism do you have where social mobility is low?

Any country that lacks a strong, centralized government that supports modest social programs. Somalia is an awesome example of what happens when government completely “gets out of the way” and the economy is purely laissez faire.

As time went on in the West classes became almost non existent.

I smiled at this.

We have social mobility, largely through education. Which is a social institution. Despite this, social mobility in America is still low. You’re like to make about what your parents made or a bit less. Study after study has confirmed this.

“But Vons! Most millionaires are first-generation!”

Yup. And they’re a small subset of population AND they generally come from families that were well-off. The genuine rags-to-riches story is so freakishly rare which is why they’re promoted so readily.

 

[exnihilo]

Nonsense. The notion of social contract is exactly why you’ll get sassed by a stranger in Japan if you smoke on the street or litter a small piece of trash.

From personal experience - a Japanese man or woman you do not know absolutely will sass you. Hard. if they catch you violating their societal norms in their nation.

That’s “social contract”.

I would call that social mores. It isn’t a contract unless all parties agree to it.

Any country that lacks a strong, centralized government that supports modest social programs. Somalia is an awesome example of what happens when government completely “gets out of the way” and the economy is purely laissez faire.

I am not familiar with Somalia but most African countries, regardless of political economic systems, are disasters.

We have social mobility, largely through education. Which is a social institution. Despite this, social mobility in America is still low. You’re like to make about what your parents made or a bit less. Study after study has confirmed this.

“But Vons! Most millionaires are first-generation!”

Yup. And they’re a small subset of population AND they generally come from families that were well-off. The genuine rags-to-riches story is so freakishly rare which is why they’re promoted so readily.

We are likely to make less than our parents precisely because of big government and its out of control spending and regulation which is stifling the economy.

Social mobility is low in most countries. But I think it much better in western countries with more economic freedom. It might have been greatest in communism but you get with that all the evils of communism.