Sure, but does that mean that economics is a lie? There is no system better than others?
Again vague. How would you practically enforce this.
What? Nothing has helped the poor more than free trade and the division of labor. Do you remember how the poor did before free markets took hold?
Socialism by its nature is a system of envy and covetousness. It is rife with sinfulness.
Sure, but does that mean that economics is a lie? There is no system better than others?
Again vague. How would you practically enforce this.
What? Nothing has helped the poor more than free trade and the division of labor. Do you remember how the poor did before free markets took hold?
Socialism by its nature is a system of envy and covetousness. It is rife with sinfulness.
There are a few things that we know from history, and from current statistics. Pure and unregulated capitalism is a very cruel system, which inevitably results in an extremely wealthy economic ruling class, riding on the backs of an exploited working class. I doubt that any economist, politician, or historian would advocate unregulated markets. Finding the balance between laissez faire, safety, and fairness is not always so easy.
There are also statistics which show that the flatter the income distribution, then the healthier a capitalistic society is, by almost every social measure. Today, Sweden and Japan hold the top spots, and the US is dead last, among the modern economies. Japan achieves this by limiting income, Sweden achieves it by higher taxation. So, the mechanism may not be as important as the result.
I see the biggest economic challenges which we face today for individuals to be the flattening of the labor markets due to technology, and the elimination of jobs by technology. The factory jobs which have moved to Asia, and soon to Africa, may be replaced by robots. Then what? More profits for the robot factory owners, if they can find a market for their products, but no labor jobs available. Today’s engineering or accounting graduate is in direct competition for a job with job seekers in the US, Asia, India, and Europe, including the low wage eastern parts of Europe.
Capitalism will find the path of least resistance. Technology allows large enterprises to span the globe effortlessly. This allows the circumvention of health and safety regulations, environmental regulations, taxation regulations, and fair labor practice regulations, simply by placing different parts of an organization in those places which are the most favorable environments for the company. Did you know that Wyndham Hotels does all of its accounting in India? Labor has moved offshore. Intellectual professions are moving rapidly now. Leal briefs are written for large US law firms offshore, while the customer is still billed at full rate. This is a similar model to moving the manufacture of Nike shoes offshore. When production costs are reduced by 80%, this only improves profitability. The market price is determined by other factors. This is part of why the middle class is disappearing, and the top minority is growing richer at an unprecedented rate. We have forgotten what Henry Ford knew, that in order to sell his cars, he needed to pay his workers enough to buy them.
As real income remains flat, while productivity doubles, people use credit instead of cash, until the credit market collapses. Sound familiar?
As for “socialism”, it’s no secret that some things work better to achieve some goals, when delivered by the government. One example is medical care. If the goal is an expensive system, which provides excellent care for some of the population, then capitalism works best. However, such a system will not provide adequate care for the lower middle classes, or the elderly on fixed incomes. It will exclude many children. And, it will exclude those who need medical care the most. Private insurers will not insure anyone with a chronic condition, or who requires substantial assistance (such as a person at the end of life), unless they are regulated to do so, or there is a way to profit, otherwise,
If the goal is to provide good healthcare for the entire population, and at a lower cost, then private insurers need to be eliminated. While they introduce efficiency, when the goal is profitability, they impede efficiency, if the goal is healthcare for everyone.
There are other examples where “socialism” just works better than pure capitalism. It just depends on what the objective is, and what the industry or market segment is. Sometimes efficiencies of economies of scale will naturally result in market domination and monopolies, if left unchecked.
Much of the perceived success of the American system is really more of an accident of history, than many would like to admit. From 1930 to 1944, the US was in a depression, as it is now, resulting from over-leveraging in the securities market. We are in pretty much that same spot now. The difference then was that the government raised tax rates to pay for WW2, even though it did accrue a record level of debt. But the most significant event was that, at the end of the war, the US economy was the only industrial economy in the world. Every other country with industrial capacity had been bombed into economic collapse.
So, the unprecedented growth of the US economy from 1945-1980 was as much the result of a complete lack of competition, which waned as foreign industrial capacity was rebuilt, or newly built. Japan and Europe ascended to eclipse US auto manufacturing. Asia in shipbuilding and steel, etc… While capitalism played an important role, we should not forget the historic context. It is possible that another economic system would also have done quite well in the same global environment.
. If said starving nations want to stop starving they should adapt a decent form of government with a decent moral code. It’s not our fault that the rest of the world wants to run itself so inefficiently. Of course I can’t say that “now”, because we’re in a debt hole, but that is only due to the fact that we’ve deviated from the course set by the founding fathers and the constitution.
Nothing motivates the have-nots quite as much as envying the moneyed Wall Street set, and the power, social recognition, and freedom that comes with money. (Watching the way the upper class works in this country, I actually think that the ego benefits are more prized than the material benefits; social status is much more important to the rich – as is the dread of losing it – than the goods themselves.) Perhaps the operative Capital Sin in this case is not Avarice but Envy.
