How would you improve our economy system?

[TheVat]

Otherwise you devolve into the No True Scotsman argument. One main corrupting aspect of capitalism is when there is no firewall between corporations and political races. Capitalists, in order to satisfy the amoral imperatives to maximize profit for themselves and stock holders, will try every trick to boost the campaign budget of the candidate whose policies will favor less regulatory oversight. It's a deeply corrupt system.

 

[parmalee]

Otherwise you devolve into the No True Scotsman argument. One main corrupting aspect of capitalism is when there is no firewall between corporations and political races. Capitalists, in order to satisfy the amoral imperatives to maximize profit for themselves and stock holders, will try every trick to boost the campaign budget of the candidate whose policies will favor less regulatory oversight. It's a deeply corrupt system.

Yeah, this is something I've never quite been able to work out: What exactly constitutes a good capitalist--that is, a true capitalist who always and only acts in good faith? Presumably, such a capitalist would not break or bend the rules; however, doesn't being a good capitalist--as in, highly competent and, well, capitalistic--necessitate finding and exploiting every (legal) loophole imaginable, in order to maximize profit for oneself and the shareholders? Otherwise, one isn't really a capitalist, right?

 

[Jeeves]

What exactly constitutes a good capitalist--that is, a true capitalist who always and only acts in good faith?

Most apologists for free-market capitalism are not heavily into answering direct questions.
They rarely know exactly what a free market is, though most allow as to some regulation being necessary, but not too much, and the regulating is to be done by some amorphous 'government' that doesn't plan centrally - only they seem unaware of the influence capital tends to have on all forms of governance. They seem equally unclear on what is and is not normal capitalistic behaviour, as the negative activities cited are all exceptions.

The simple, inescapable fact of life is: nothing comes from nothing.
A plant can keep growing as long as it takes moisture and nourishment from the soil, essential gases from the air and calories from the sun. Whatever is in the plant is no longer in the air and soil. It can grow only as long as the supply of nutrients last. When the plant can't take any more from the air and soil, it stops growing, dies and is reduced to its constituent parts and returned to the environment.
When capital investment requires a return of more, that more has to come from somewhere. When the somewhere is used up and there isn't any more, the economy dies and decomposes into its constituent parts: people and things; the arbitrary values like money and profit, merit and efficiency return to the ether whence they were plucked by human imagination.

 

[parmalee]

The simple, inescapable fact of life is: nothing comes from nothing.
A plant can keep growing as long as it takes moisture and nourishment from the soil, essential gases from the air and calories from the sun. Whatever is in the plant is no longer in the air and soil. It can grow only as long as the supply of nutrients last. When the plant can't take any more from the air and soil, it stops growing, dies and is reduced to its constituent parts and returned to the environment.
When capital investment requires a return of more, that more has to come from somewhere. When the somewhere is used up and there isn't any more, the economy dies and decomposes into its constituent parts: people and things; the arbitrary values like money and profit, merit and efficiency return to the ether whence they were plucked by human imagination.

Every economic system has it's flaws, but capitalism seems to originate from a flawed premise which ignores the obvious: all resources are finite. That sort of ignorance is somewhat understandable when one considers capitalism's origins in mercantilism several centuries back. Their understanding of such limits was scant, and most practitioners (and theorists) didn't even regard like 98 percent of humanity as fully human, so, in their minds, they had lots to work with. By the time of Adam Smith, say, it's starting to look a bit silly. Then, some people started to consider matters of economics from a perspective that might be described as kind of scientific, I guess--but not the capitalist thinkers, of course, but rather the expressly anti-capitalist sorts like Marx and Proudhon. I suppose by the very late 19th/early 20th century, capitalist sorts were at least making some kind of effort to scientific pretense, but... they fell short. Unlike Marx, they've always seemed a bit fixated upon wholly unattainable ideals.

 

[parmalee]

The simple, inescapable fact of life is: nothing comes from nothing.
A plant can keep growing as long as it takes moisture and nourishment from the soil, essential gases from the air and calories from the sun. Whatever is in the plant is no longer in the air and soil. It can grow only as long as the supply of nutrients last. When the plant can't take any more from the air and soil, it stops growing, dies and is reduced to its constituent parts and returned to the environment.
When capital investment requires a return of more, that more has to come from somewhere. When the somewhere is used up and there isn't any more, the economy dies and decomposes into its constituent parts: people and things; the arbitrary values like money and profit, merit and efficiency return to the ether whence they were plucked by human imagination.

Incidentally, I was thinking of EF Schumacher's Small Is Beautiful when reading this post.

There's something about reading pure economics that I've always found off-putting. I need my economics cut with anthropology, history or social science to make it more palatable. I've often wondered about this--I can read books on mathematics, statistics, programming, etc., all of which tend to be rather dry (there are notable exceptions--Horowitz and Hill'd The Art of Electronics is a great read, and quite massive), but I can power through the boring bits. I think the difference is that with the latter, I can always rely upon some sort of "eureka" moments to break tedium. Not so much with economics.

 

[Jeeves]

Incidentally, I was thinking of EF Schumacher's Small Is Beautiful when reading this post.

There's something about reading pure economics that I've always found off-putting. I need my economics cut with anthropology, history or social science to make it more palatable. I've often wondered about this--I can read books on mathematics, statistics, programming, etc., all of which tend to be rather dry (there are notable exceptions--Horowitz and Hill'd The Art of Electronics is a great read, and quite massive), but I can power through the boring bits. I think the difference is that with the latter, I can always rely upon some sort of "eureka" moments to break tedium. Not so much with economics.

That may be because mathematics, statistics and programming are invented disciplines (like tennis and ballroom dancing; each with man-made figures and rules), thus internally consistent. Each assertion is founded in a solid principle that can be understood and respected by all practitioners , upon which the next deduction can be securely based.

The foundation of economic theories tend to be assumptions or observations, each 'scientist' in his own time, of his own society, according to their current social arrangement, rather than on principles of physical fact. The economy of survival is all about physical reality, its potential and limits.
Economists generally begin with the assumption that the system prevailing in their country is the only viable system, and go on to theorize as to how and why that is the case.
(JK Galbraith is not only the exception, he's also quite readable.)

 

[Seattle]

The principle of central planning doesn't involve profit. The practice does. Like the CEO on whom so very much of the success of the enterprise depend, rather than on the workers, the Commissar of Transport entitles himself to a larger share of railway fares than the engineer and conductor. (Some animals are more equal than others.) Where value is measured in money, money corrupts.

So, if every example of wasteful, unfair, inefficient and corrupt business is an exception (That's not capitalism!), can you show us any examples of the typical, or proper capitalist in action?

Sure, the US works much better than Cuba or Russia.
What system doesn't use money? Barter?

 

[Seattle]

Incidentally, I was thinking of EF Schumacher's Small Is Beautiful when reading this post.

There's something about reading pure economics that I've always found off-putting. I need my economics cut with anthropology, history or social science to make it more palatable. I've often wondered about this--I can read books on mathematics, statistics, programming, etc., all of which tend to be rather dry (there are notable exceptions--Horowitz and Hill'd The Art of Electronics is a great read, and quite massive), but I can power through the boring bits. I think the difference is that with the latter, I can always rely upon some sort of "eureka" moments to break tedium. Not so much with economics.

Read Freakonomics. I enjoyed Small Is Beautiful during my college years as well.

 

[parmalee]

Read Freakonomics. I enjoyed Small Is Beautiful during my college years as well.

Thanks for the reminder. I've actually had that one for years (ebook, so I don't see it on a shelf, which makes it easier to forget about), but still haven't gotten around to reading it.

 

[Jeeves]

Sure, the US works much better than Cuba or Russia.

Well, there's 'works' and there's 'works'. One could possibly factor in pre-existing conditions and outside influences, were one inclined toward a balanced view. However, as long as a nation has to 'work' on a monetized global economy dominated by capitalist superpowers, disparity of income is part of its gestalt. Whether the industry is owned by a robber-baron, a corporation, or 'the state' - a nebulous entity in the procedures of which the average citizen has no share or voice - CEOs are commissars and vice versa.

What system doesn't use money? Barter?

Even most barter systems base their exchange rate on the currency in use outside of their system. Except perhaps in tiny, isolated, self-sufficient communes, money is inescapable in the modern world, as well as infinitely corruptible.

That doesn't make it an objective standard by which to assess the health of economies.

 

[Seattle]

Thanks for the reminder. I've actually had that one for years (ebook, so I don't see it on a shelf, which makes it easier to forget about), but still haven't gotten around to reading it.

That one makes economics fun. I don't enjoy getting into the weeds with the standard economics books in terms of the math but the theory is interesting. It's really just a way of thinking. You can think as an engineer, an economist and as an attorney. Each discipline has a way of thinking for that discipline. I do enjoy that but for really making it practical and enjoyable...Freakonomics.

Real economics isn't the political economists that you see in the news. It's the guys designing a test, drawing data and letting the conclusions come as they come. That data and conclusions may then be provided to the politicians and they may chose to use or no use that data. If it doesn't go their way they generally won't use it.

You should be able to be for the minimum wage (for example), look at the economics of it and then decide that the minimum wage isn't helpful while still caring about the poor dude without a job. Sometimes it reinforces your prior way of thinking and sometimes it doesn't. You should be willing to change your way of thinking when you were wrong.

 

[Seattle]

Well, there's 'works' and there's 'works'. One could possibly factor in pre-existing conditions and outside influences, were one inclined toward a balanced view. However, as long as a nation has to 'work' on a monetized global economy dominated by capitalist superpowers, disparity of income is part of its gestalt. Whether the industry is owned by a robber-baron, a corporation, or 'the state' - a nebulous entity in the procedures of which the average citizen has no share or voice - CEOs are commissars and vice versa.


Even most barter systems base their exchange rate on the currency in use outside of their system. Except perhaps in tiny, isolated, self-sufficient communes, money is inescapable in the modern world, as well as infinitely corruptible.

That doesn't make it an objective standard by which to assess the health of economies.

In other words you aren't going to be happy under any circumstances.

 

[Jeeves]

In other words you aren't going to be happy under any circumstances

Not any that prevail under the current system.
Not to worry, though - nobody without a luxury bunker in the Alps is going to be happy very much longer.

 

[Seattle]

Every economic system has it's flaws, but capitalism seems to originate from a flawed premise which ignores the obvious: all resources are finite. That sort of ignorance is somewhat understandable when one considers capitalism's origins in mercantilism several centuries back. Their understanding of such limits was scant, and most practitioners (and theorists) didn't even regard like 98 percent of humanity as fully human, so, in their minds, they had lots to work with. By the time of Adam Smith, say, it's starting to look a bit silly. Then, some people started to consider matters of economics from a perspective that might be described as kind of scientific, I guess--but not the capitalist thinkers, of course, but rather the expressly anti-capitalist sorts like Marx and Proudhon. I suppose by the very late 19th/early 20th century, capitalist sorts were at least making some kind of effort to scientific pretense, but... they fell short. Unlike Marx, they've always seemed a bit fixated upon wholly unattainable ideals.

Most resources, practically speaking (not all) are effectively infinite. Earth is finite but Earth will be here a lot longer than man. Now, of course, I'm speaking of minerals in the ground as being relatively infinite.

However, capitalism is looking at resources as being scarce. You have to mine them or manufacture them, etc. The difference between mercantilism and capitalism is between a nationalistic state and local trade and a more global approach where we are able to make much more than we can use.

That's due to the industrial revolution. Now one man can make 1,000 pairs of shoes a day instead of 1. There is excess to sell rather than it all being consumed locally.

The free market and the profit motive is just the most efficient way to allocate scarce resources. It works! Sure, this is a simplistic view of capitalism but how else can one discuss these things other than to start with the basics.

You have bad actors in human beings and that's where regulation comes in, under any system. There is nothing unique about capitalism there. You have inequality of results in capitalism but that's a good thing. People aren't equal in their abilities and outcomes.

Inequality is only because we have been able to move from subsistence to having excess. If you want everyone to have equality of outcome you will just have a system where everyone is poor. That is the most common case across the globe.

Worrying about how much a CEO makes is a first world problem. Wages in the US are higher than in most other developed countries. That gets lost in the conversation frequently.

 

[Seattle]

Not any that prevail under the current system.
Not to worry, though - nobody without a luxury bunker in the Alps is going to be happy very much longer.

So the world is going to be blown up and then your system can be tried out and you feel pretty confident that it will be much, much better?

 

[Jeeves]

So the world is going to be blown up and then your system can be tried out and you feel pretty confident that it will be much, much better?

I have no idea what it will be. If there are humans alive, they'll build an economy of some kind. If the only humans alive are in the luxury bunkers, they or their descendants will have to come out sometimes and deal with whatever reality they find. If people are left alive on the surface, the bunker-dweller will probably be eaten....
.... Didn't Philip K Dick write this already?

 

[Seattle]

I have no idea what it will be. If there are humans alive, they'll build an economy of some kind. If the only humans alive are in the luxury bunkers, they or their descendants will have to come out sometimes and deal with whatever reality they find. If people are left alive on the surface, the bunker-dweller will probably be eaten....
.... Didn't Philip K Dick write this already?

I don't read sci-fi so I don't know. I take that back. I did read Jules Verne as a kid.

I don't think you are too concerned with reality though are you? The "modern world" as you put it, is reality and you pretty much dismiss it.

 

[Jeeves]

The "modern world" as you put it, is reality and you pretty much dismiss it.

Pretty much, since the dominant species is busy committing suicide.

 

[LaurieAG]

Is that the way it seems?

I wrote the following in 1998 and they have added a couple of new rings since then.

The Global Economic Circus

Roll Up, Roll Up one and all. In honour of the coming change in the tide of international economic rationalism, the 'Global Economic Circus' presents three New World Wonders for your amusement. No questions asked, no responsibility taken, no refund or guarantee implied warranted or given.

Ring 1 - Atomic Rocket Science Revealed
The new economic 'rocket science' is easy to understand once the amazing Atom Man weaves his magical spell. If Energy (E) equals Mass (M) times c squared and E also equals 'user paid' dollars (UP$) per M then c equals both the speed of light and the square root of UP$, for all M greater than zero, according to current global economic theory. This explains why light speeds faster wherever the power system fails (time slows down, because energy costs more, to compensate for the faster speed) and light runs more slowly in other locations where energy is cheaper and time runs much faster. It's so much easier now, isn't it.

Ring 2 - The Mobius Python
Jack the explorer and a 'brave' economist*, recreate their recent expedition into the darkest financial jungle. They have just spotted a massive python in the process of eating itself by the tail under a huge hedge of obfuscatia vine. The economist remarks on the reptiles 'exceptional growth rate' while the explorer retorts that 'the stupid snake would probably die when it eats over half of itself'. 'No chance of that' says the economist, 'all I need to do is slow down the rate a bit to guarantee sustainability'. With a stroke of ironic genius the economist moves closer and disturbs the previously engrossed reptile. The starving snake, realising its folly, disentangled itself from its predicament, latches onto the economist and prepared itself for a real feast. *We have a conditional free offer of an inside ring seat for one economist during each and every performance.

Ring 3 - Frankenstein & Jekylls Cow
Dr's Frankenstein and Jekyll are two biologically inclined economists who have put together a cow that you can milk and eat at the same time as long as you keep on
feeding it. Unfortunately, the cost of feed went up just before the show and they didn't realise that their monstrous cow had died until the milk soured and the audience got a bad dose of BSE/ME (Bloody Stupid Economist or Mad Economist) disease. We apologise for the lingering smell and any inconvenience caused.

Do you know of any better ‘acts’ around the world today?

 

[tom5806]

The entire economy system is nothing but a scam . But also there is not monetary economy system which could actually work . Its mathematically impossible . There is not one economist on the planet who could actually show any working monetary economy model . The world will end up without money at some point , but the are two possible outcomes . World of total slavery , or paradise and we are really very close already to the first one .