Does capitalism work?

Discussion in 'Business & Economics' started by lixluke, Jul 12, 2006.

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Does capitalism work?

  1. Yes

    76 vote(s)
    62.8%
  2. No

    45 vote(s)
    37.2%
  1. Syzygys As a mother, I am telling you Valued Senior Member

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    But that is not what happened. When the government let the market to control itself, it went out of control and almost destabilized the whole system. It needed government interaction to stay alive. That is not capitalism...
     
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  3. CapitalismSUCKS Registered Member

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    Capitalism is a failing system it only worked as long as we worked together as a country, but it is has been failing for a while now. The rich will continue to stay rich and the poor will continue to become even more poor...our middle class is fading and our education systems are falling further and further back. Capitalism DOES NOT work because corporations are becoming much more powerful with every coming day our government is restricting them less and less. Republicans want to lower the amount of money that goes to school, now that is FU*KED UP! They don't give a damn if others suffer as long as they are making a gain and their kids get a good education. My highschool couldn't even afford to keep their music and arts programs as well as much of their science programs. Why is this done? It's because we are spending money on things like war.

    Sure war has always been in our countries best interest, we have almost always had an enemy be it communism, the Nazi's, Spain, The British, Vietcong, The middle east, oh yeah that's right OURSELVES! We are one of the most barbaric "super" powers on this earth. Sure we are not suicide bombing anybody but we are terrorizing the globe and have been for over a century. WE WERE THE FIRST REAL TERRORISTS and then came Ireland and now the Middle East. Why go to war you say? Because it stimulates our economy because without war we wouldn't be where we are today.

    The only problem is war is the worst possible thing we can do to the human race...some are justifiable but most of the ones we fight are not. We create scapegoats to give us reason to go to war. Unfortunately the war we are fighting now is a losing battle Afghanistan has never once been defeated and it will never truly be.

    Anyways back to my go old capitalist bash session... We need other ways of governing ourselves we can't go on with an outdated system we need reform and it won't happen, and my never happen, til our 2 party system pulls their heads out of their asses and looks at the everyday American and makes things better for them. Our constitution was even made to DEFEND the RICH from the POOR. Communism no matter how great an idea just cannot work, and we can't look at old failed ideas as things to compare to capitalism. We just need a new system where ALL of us are equal.

    Please feel free to discuss your ideas about this with me=)
     
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  5. John99 Banned Banned

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    And how on Earth (where we live) will another system prevent that and, more importantly, when has it?

    Thank You.
     
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  7. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    See below

    A sense of national unity is hard to create and maintain. There is a new economic system which is doing very well. It allows the invisible hand of Adam Smith to determine what is in the market place for consumers (thus avoiding the failures of central planning USSR style). It also avoids the short term investment (and neglect of repair) to the need infrastructure so common when infrastructure investment decisions are made by politicians who focus on project that will show results before their next election. I.e. Infrastructure investment decisions are made mainly by engineers with long term time horizons, typically in a series of 5-year plans.

    For 30+ years this system has provided a GDP growth rate at least 3 times greater than the US's GDP growth rate and often 5 times faster growth. You should be able to guess which country is using it, but if you need a hint that country has four times the US population.
     
    Last edited by a moderator: Sep 30, 2010
  8. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Answering thread's question, part one:

    Not very well for many Americans, but other factors, such as good schools only in rich neighborhoods, due to local funding of schools also must be blamed; however, in some sense that local funding is result of capitalism at work - invest only where you benefit, not for social reasons.

    Here, on the last day of "National Hunger Month" is some data not widely known:

    "... Based on studies from 2008, new research from the Journal of the American Dietetic Association shows that 15 percent of Americans were food insecure at least once that year. Worse yet, that number is going up. Billy T insert: now rapidly accelerating with the recession: For how much so, see: http://www.sciforums.com/showpost.php?p=2625278&postcount=217

    That rising number of hungry people includes 17.3 million with "very low food security," whose eating habits were seriously disrupted and food intake markedly reduced. Over a million of those very hungry Americans are children. The ADA study also found that parents in food insecure homes often opt to go without food themselves so their kids will have something to eat.

    The American Dietetic Association's position paper also warns of the dangers of food deprivation, everything from disease and malnutrition to trouble at school and psychological difficulties. Importantly, the ADA called for increased funding of programs to combat hunger and improve nutrition. ...

    So how do we make that right a reality for the nearly 50 million Americans who don't have reliable, healthy food? The ADA offers a host of strategies ... innovations to support individual and household economic self-sufficiency. (Like, you know, jobs that pay livable wages). ..."

    Quote from: http://uspoverty.change.org/blog/vi..._so_know_this_49_million_americans_are_hungry

    Billy T adds: Often the hungry are over weigh or even fat because they eat a lot of cheap high calorie foods like potatoes or day old bread discounted for quick sale. They can not afford the recommended intake of expensive fruits and vegetables. This is why study was done by the American Dietetic Association. They will cost you money in health care and are part of why Americans pay twice as much as Europeans for medical services yet live 2 or 3 years less.
     
    Last edited by a moderator: Oct 1, 2010
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Answering thread's question, part two:

    Quite well for the supper rich who can get tax relief and build factories in fast growing China, etc.

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    Buffett got a $10.1 million return on his investment in BYD in 2nd quarter of 2010.

    Since Nov 2009 China has been selling more cars than the US. It is leading the world in green energy investments like wind machine, smart grids, high speed rail*, etc.

    --------------
    * "green" as is replacing airplanes with equally fast and more energy efficient center to center city travel for trips of about 500 miles or less. China's high-rise apartments are also very green compared to surburban sprawl.

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    It may not appeal to you now, but when Gasoline is $20/ gallon it will.

    Note the tree lined street and that first levels are for walk to jobs in stores and all your daily needs. No need of a car** with better public transport for longer trips too, especially as high speed rail becomes more common.

    ** The wealthy Chinese are buying cars. In US there are approximately 3 cars for every 4 persons, in China there are more than 40 persons for every 3 cars. China (and India's) demand for petroleum will greatly increase in a decade and they have to money to bid the gasoline price to $20/ gallon as the supply volume decreases during the next decade. Don't expect EVs to significantly reduce US gasoline demand in less than 15 years. China controls the Rare Earths needed for their batteries and motors and is drastically reducing exports of them NOW. So much so that the US military can't make all the smart bombs, etc. it needs. - See http://www.sciforums.com/showpost.php?p=2626723&postcount=11
     
    Last edited by a moderator: Oct 1, 2010
  10. Otto9210 Registered Senior Member

    Messages:
    32
    I read the paper today that had an article called "Austerity won't restore prosperity" where the writer talks about the stimulus package and the options the conservatives wanted which was obviously tax cuts and cut gov spending. He also talks about Germany which at the time of the recession used the conservative solutions and is now having a growth rate of 9%. He also cites however that the German economy is primarily based on exports and they have a vast number of social programs to benefit everyone and their educational system isn't falling to shreds like ours. The US should become more industrial like it once was. Do people really think everyone is born to be a lawyer, doctor, businessman, or banker? We don't need Chinese crap. Free trade needs to become fair trade.
     
  11. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    The Chinese don't make as much "crap" as they once did. They now mainly make higher value added*, high tech stuff, such as digital camera, iPads, modern cars, internet support systems, computers Li-ion batteries, Rare Earth magnets, etc. Also better stuff for their military and science efforts. For example, just a couple of days ago they launched their second moon orbiting survey rocket. (The first launched about three years ago did orbit the moon for more than a year and collected data for choosing the site of their maned lander to be launched in a few years.)

    * They had to move up on the value added chain and import many components from others who still have cheap labor. In China REAL wages are rapidly rising. - Nearly 20% per year for the coastal areas and still there is a labor shortage. For example, FoxComm, world's largest maker of electronic devices like the iPad, has raised wages about 30% or more, greatly improved the provided living quarters, is giving more vacation time, medical assistance, better food in the companies cafeterias and still cannot get all the workers it needs, so has move two factories to the interior when cheaper labor is still available.

    You are speaking of an older China, which no longer exist.

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    Chang'e-2 entered the orbit with a perigee of 200 kilometers and apogee of 380,000 kilometers as scheduled. There it separated from the carrier rocket. It was the first time that a Chinese lunar probe directly entered the earth-moon transfer orbit without orbiting the earth first.

    "It is a major breakthrough of the rocket design, as it saves energy used by the satellite and speeds up the journey to the lunar orbit," said Pang Zhihao, a researcher with the China Academy of Space Technology. The lunar satellite is expected to take about 112 hours, or almost five days, to arrive at its lunar orbit, faster than the 12 days taken by the Chang'e-1 three years ago.

    "It travels faster and closer to the moon, and it will capture clear pictures," Wu said. Chang'e-2, named after a legendary Chinese goddess of moon, will orbit 100 kilometers above the moon, compared with 200 kilometers for Chang'e-1. Total expenditure for the Chang'e-2 mission is about 900 million yuan ($134.33 million).

    China launched its first lunar probe, Chang'e-1, in October 2007, marking a milestone in the country's space exploration. After orbiting for 494 days and intentionally crashing onto the lunar surface, Chang'e-1 sent back 1.37 terabytes of data, producing China's first complete moon picture. The data has been shared with other countries for free.
     
    Last edited by a moderator: Oct 2, 2010
  12. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

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    15,162
    Does capitalism work?

    It depends what constitutes "work". It's the system functioning, well yes. Is the system beneficial? That's a bit of a different question, and it depends on your perspective. If you are a wealthy millionaire you will say "oh, yes, the system works!". If you graduated from law school 3 years ago, haven't been able to find a job, is in deep debt and starving.... then you might say "non, capitalism doesn't "work", it's not beneficial to me".


    I would give two answers to this question. First, I would answer no, because the system benefits only a few people and is neutral or harmful to the vast majority of the global population. Second, I would answer no, but on a systems perspective. Capitalism is unsustainable. The argument for capitalism is that the "invisible hand" of the market will regulate itself and benefit all. That's just a big load of bullshit, actually. Capitalism is a system that cares only about accumulating capital in the hands of people who exploit natural resources and other human beings. It has also evolved into a huge money laundering operation. The banks of the planet resemble a lot more like a mafia then businesses.



    So... the question wasn't framed so well, but given the above interpretations, the answer is that capitalism only works to those who use capitalism to exploit natural resources and other human beings.
     
  13. keith1 Guest

    Capitalism failed when Socialism bailed out it's bank system.
    But that is just an indicator of Capitalism's shortfall.

    Add to it that, after 50 years of post world war Capitalism, those
    children who grew up in the capitalist game house of their parents (especially in the U.S.),
    have found a naturally occurring "plateau of exhaustion", turning to more
    basic existential and frugality lifestyle forms (regardless of the amounts stacking up in their accounts).
    This trend was appearing long before the housing bubble, which stemmed from a shortage of willing buyers...which stemmed from a shortage of willing players.
    This "capitalism burnout" trend continues today.
     
    Last edited by a moderator: Oct 2, 2010
  14. kmguru Staff Member

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    11,757
    Capitalism - Chinese (Korean, Singaporean, Taiwanese) style works.
     
  15. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    You make good points, and I tend to agree. I also gave two answers (post 885 & 886, which support your answers with specific examples).
     
  16. Dinosaur Rational Skeptic Valued Senior Member

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    Capitalism worked very well when it existed: That is from perhaps 1700 (or earlier) until some time in the late 1800's or early 1900's. That era had a very close approximation to laissez faire capitalism. For 50-100 years, the USA has had what is often called a mixed economy: Partially capitalism, partly socialism.

    In the United States, capitalism started to become a mixed economy in the 1800's. The start of a mixed economy began with The Sherman anti-trust laws (circa 1890) & the earlier government programs encouraging the development of the Western railroads.

    The beginning of the end came when the constitution was amended in 1913 to allow a Federal Income Tax, giving the federal government the means to become a primary force in the economy.

    While the so called Robber Barons were not always nice guys, their net effect was to provide a huge increase in standard of living for a typical worker.

    Capitalism worked very well while it was the dominant system. Its effects lasted until at least the middle of the 20th century, by which time the USA had a mixed economy. I believe that a lot of our current problems are more due to government control, overhead, & waste of resources than being due to flaws in a capitalist system. We no longer have a capitalist system. How can you blame our problems on a system which no longer exists?

    Check out a Sears or Montgomery Ward mail order catalogue from 1885 to 1909, which are available in libraries. I have reprints of some of these obtained via Amazon & eBay.

    These catalogues indicate the items which a typical worker could afford to buy. It provides a clearer picture of standard of living than dry statistics & comments by college professors of economics & sociology. My father was born in the 1870's & mentioned those catalogues to me when I was a teenager (circa 1943-1949).

    They provided eye-opening contrasts to the story of the down trodden worker often described as a wage slave by my teachers. Compare the typical citizen under capitalism circa 1800-1920 with the serf under feudalism which it replaced.

    Compare the growth of our economy from 1800 to 1950-1960 with what has evolved in the last 40-50 years. We are in the first era in which the typical worker is not better off than his parents.

    It was a capitalistic system which drove growth in America from 1750 to 1960. It is a mixed economy & government control at all levels (local, state, & federal) which has caused the decline of the USA economy in the last 40-50 years.
     
  17. Anti-Flag Pun intended Registered Senior Member

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    3,714
    Work for whom?
     
  18. John99 Banned Banned

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    That is common. The banks are regulated by the government anyway. You want to call it socialism then call it socialism. I honestly see no difference unless you just like the word.
     
  19. Dinosaur Rational Skeptic Valued Senior Member

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    4,854
    Anti-Flag: Nice sound bite with no substance.
    While it existed, it worked for all the factory workers & ordinary people who would have still been serfs under feudalism.

    The top few percent who are the most ambitious & resourceful will always be on top in any system. When we had laissez faire capitalism, those people gained their money & power by running large & small businesses which employed people & provided affordable goods/services enjoyed by the average person.

    For those who understand the concept of a Zero Sum game: Laissez faire capitalism was the first system which was not a zero sum game. In feudalism & simple agricultural economies, gains by those at the top come at the expense of those underneath (Id est: Zero Sum games).

    Under laissez faire capitalism, those at the top organized & ran businesses (large & small) which resulted idn employment at wages which allowed the purchase of a cornucopia of wonderful goods & services.

    What do you think was responsible for an average person having cars, computers, TV, vacations, & other good things? Government? Church charities? Taxes & regulation?

    Thought experiment: Suppose you could take some modern concepts & limited resources back 800-900 years with the hope of starting to improve the life of people from that era?
    • Would you take back a small army equipped with modern weapons? What system would you attempt to install? Could a small modern army win out & maintain its control without a modern infrastructure to support it?

    • Would you take back some politicians, campaign money, & a knowledge of our modern tax & spend methods? You would also need the army.

    • Perhaps some religious leaders to inspire the nobility of that era to be more benevolent.

    • I would suggest taking some entrepreneur types, some engineers, & a few tons of gold to finance them. This plan would have some chance of success.
    You do not get prosperity by running deficits & supporting a huge bureaucratic government. The USSR collapsed before learning th error of their ways. China looks as though it might be evolving in the right direction. The USA has been evolving in the wrong direction for 50-100 years.
     
  20. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    I admit to being weak on living conditions for the "average person" in the late 1800s early 1900s but think most lived at the edge of subsistence. I base this on the fact that Henry Ford, broke with the other capitalist of his era and decided to pay the workers several times more than subsistence wages. That greatly angered Firestone, and other industrialist who, as I understand it paid subsistence wages, or less for long hours of labor.

    About this time children and women worked in NYC garment factories, and several hundred burned to death as they were locked in. Chaining a child to a loom was rare, but happened. They could not even buy adequate food but continued to work long hours as they could buy some like potatoes and flour to make bread with. They would not be able to do even that without their meager salary.

    We have a different idea about the prosperity of the average worker. Why do you think in 1800 they were prospering and advancing economically? I think that was mainly caused by WWI jobs. The surplus of desperate, unemployed men found jobs in the army or war factories. The 150+ year era of capitalists paying subsistence wages, or less, ended with WWI.

    When looking back a 100 years it is necessary to take off your rose colored glasses:

    "... The average wage earner only made $16.00 a week. Some trades only made two, three, four, or six dollars a week. This family spent $2.50 more a week than the father made, and had nothing left for entertainment or clothing. The men driving the horse drawn streetcars in New York in the 1880's made $1.75 a day working 14 to 16 hr. a day. {That is $10.5 for a six day work week, in a government job.}
    During the Industrial Revolution, even children were employed, and working 14 to 16 hours a day. ..."

    Quote from: http://oldrecipebook.com/1800s-livingcost.shtml - the first Google hit of search "wages circa 1800"
    The section entitled: "Cost of Food Prices and Wages in the 1800's"

    Here is the cost of family's weekly (made at home of course) bare essentials (shoes, clothes, medicine, & other items not consumed each week are not included):
    1 bag of flour $1.80
    Small measure of potatoes daily at .17 per day $1.19
    1/4 lb of tea .38
    1 qt milk .56
    1 lb cheap coffee .35
    Sugar 3 1/2 lb $1.05
    1/2 ration meats per week $3.50
    4 lb. butter $1.60
    2 lb. lard .38
    Dried apples for treats .25
    Vegetables .50
    Soap, starch, pepper, salt, vinegar, etc. $1.00
    2 bushels of coal $1.36
    Kerosene .30
    Sundries .28
    Rent $4.00 week

    Total $18.50 I.e. $2.50 LESS than the average wage. Perhaps they economized by getting their blankets from hospital discards.
     
    Last edited by a moderator: Oct 4, 2010
  21. Emil Valued Senior Member

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    Yep...

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  22. Fraggle Rocker Staff Member

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    Before the Paradigm-Shifting Industrial Revolution, 99%+ of human beings were employed in the food production and distribution "industry." Most of the year they worked 100-hour weeks, including the children, about the same as your figure. Life may have been a little easier in winter, but on the other hand they had to use that "spare" time for maintenance on the buildings and equipment, making and/or mending clothes, etc.

    You have to go all the way back to the Paleolithic Era to find a time when people didn't work themselves to death. Hunter-gatherers had no homes to maintain and no possessions that they couldn't carry, so life was pretty carefree, if desperately bland and harsh. It's estimated that they worked about 30 hours per week hunting game and gathering food plants.

    Oh wait, I forgot something. They didn't have fire so they couldn't cook their food. It takes about three hours a day to chew up enough raw meat to satisfy your nutritional requirements!
    What family uses that much sugar and that much butter in one week? Especially considering that they also used two pounds of lard and their consumption of milk (one quart) was very modest. A typical American family in those days probably had four children; today they'd go through more than one quart of milk per day. In the 1950s TV ads urged us all to drink "one-two-three glasses a day."

    "You never outgrow your need for milk." That was America's motto. Of course, so was "Better living through chemistry"!
     
  23. Anti-Flag Pun intended Registered Senior Member

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    3,714
    Not in the least. For a start "works" requires a definition. By what accomplishment are we measuring its success? Are we considering all sides or just looking at that accomplishment whilst ignoring all else?
    You don't see any similarity to capitalism? Perhaps you should tell us who you consider the be at the bottom of a capitalist system?
    Capitalism revolves around the idea that you must produce more than you're payed for. If you're payed 5 bucks to produce 5 bucks of goods, the company makes no money(this without considering cost of raw resources, transport etc), you must produce more than you're payed for in order for the person in charge to receive a profit.

    That depends how high up the ladder you are. It could be argued that if we were payed for what we produced we'd all be better off.

    Exploitation. What do you think slaves have always been for? Free labour that produced goods for those higher up the ladder to enjoy! All that's changed is we now pay a minimal fee to those at the bottom, they still don't get anything resembling a civilised amount.


    • Ah good, we're back to the original point. System for whom? For "my" nation to be at the top? Or for everyone to benefit?
     

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