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The Almighty Buck

Journal Pinball Wizard's Journal: Capitalism sucks 6

I hate nearly everything about capitalism. Unfortunately, its the best economic system going(at least the U.S.' bastardized version of capitalism, anyway). So you can infer that I hate all the other systems(communism, socialism, etc.) even more.

What irks me is when I see some pseudo libertarian going off on how wonderful everything would be if the government would just leave the market to its own devices and let the Invisible Hand of the economy take over. Why then, it really would be a workers paradise! Everybody would automatically reap the fair contribution he/she made to the system! NOT. What would happen is the biggest and strongest fish would take everything and make slaves out of you and me. Our Corporate Masters already have too much power and I already feel like too much of a slave.

Whats wrong with capitalism? Despite a capitalists claim otherwise, capitalism is extremely inefficient. Having 5 percent of the labor force unemployed at any given time is inefficient. Competition, the kind of competition we have in our country, is extremely inefficient. Competitors aren't friendly to their competition, they are at war with the competition, the goal being to drive their competitors out of business. Lets look at this here. Basically when you have a situation where two or more companies are fighting each other to the death, as occurs so many times here in our great country, you have a situation where all players are gutting their companies, laying off their workers, and flailing along in hopes the other guy will be driven out of business first. Nobody is profiting, stocks are tanking, unemployment is increasing. All until the competition is finally driven out of business, then the remaining survivor is now a monopoly, and can raise prices, lower wages, and basically tell everyone "go to hell, because we have you by the balls" in a nice way. Look at Kmart, or any number of small mom-and-pops that have been laid waste by Wal-mart. Once all of Wal-marts competition is gone, you think its still going to be such a great deal to shop there? Look at Microsoft, and how much they charge for Windows and Office. When a PC gets sold, twice as much profit goes to Microsoft as does to the manfacturer of the PC itself. Anywhere you have a monopoly things become expensive, leaving you with less money to do useful things like spending it to improve the economy.

This is the natural state when you allow unrestrained capitalism.

The government is the only thing we have to keep our corporations in line. Despite its faults, our government is democratic in nature where corporations are not. And despite people claiming that government is less efficient than business, in a lot of cases, its very efficient. Our very best technology is created not by corporations, but by our government. And look at our military. Thats one highly efficient organization if I ever saw one. So the claims of our government being inefficient don't wash.

I propose that we democratically depose capitalism and vote in a system that will really work. And I propose we each pitch in and build this new system. There are a few people out there like John Perry Barlow of the EFF who have already proposed such a system. Its based on the idea that you completely do away with scarcity. We are already well on the way of eliminating scarcity in the digital world. Once the values of open source make their way into the physical world we will finally have a chance to eliminate scarcity.

Now, how would you alter our economic system in such a way as to provide the elimination of scarcity? With technology, that's how. Get our brightest engineering and CS minds together and devise a solution that allows the majority of people to work 20 hours a week or less and efficiently produce the amount of goods to eliminate scarcity. Instead of a tax on our earnings, you would have a labor tax. Being such a system would be democratically based, it would be fair to everyone. You would still have the concept of private property. Only with this system everyone would have all the private property they could ever need(obviously there would have to be controls to prevent abuse).

And think of it really. If the majority of people thought that way, then the few that held on to their wealth from the old capitalist system might just come to realize their "wealth" doesn't really mean that much anyway. Its not buying them anymore happiness, education or opportunities that could be had by all. So why bother trying to be wealthier than the next guy, when if you eliminate scarcity, it doesn't mean a thing! Besides, wealth is just a figment of people's imagination anyway. What a companys stock or your house or car is worth is entirely subjective. What matters is that we are now developing the technology capable of producing the goods necessary to eliminate scarcity, and at the same time we could greatly reduce the hours we all need to work.

Our current capitalist system is antiquated and cannot make the world a better place for everyone to live in. It must be replaced with a system that eliminates scarcity. I must emphasize that I'm not advocating anything like communism. It is based on democracy and private property. Its a throwback to the days of our Founding Fathers, men who believed in the rule of the people and who distrusted corporations. Its far closer to the democratic ideals of our Constitution than capitalism could ever be. Whereas communism is just pure slavery and capitalism is both anachronistic and feudalistic, eliminating scarcity is inherently democratic.

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Capitalism sucks

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  • How exactly are you going to determine a more efficient way of distributing resources? Through mathematical analysis? By the time you have enough data to act you'll already be months behind the curve.

    While managed (communist, yes communist, a ``commune'' decides production and distribution schedules) economies have a flatter business cycle, they also experience slower growth. That means less technology improvement, fewer new jobs, more paperwork as people try to press their new jobs into production, etc.

    I fail to see how capitalism has not worked well. Who is the leader in technology? America. Who has the most obese people? America. Who is the most decadent? America. It seems we're beating out most of the rest of the world with our outmoded capitalist system.

    You are right, the restrictions of the government are what keeps our economy so powerful, but not through any laws that are passed. It is the Federal Reserve bank constantly adjusting interest rates in order to drive investment up and down that keeps things steady.

    It has been well over 200 years since the market system started and so far nothing better has been found. Not to say that nothing better exists, but markets seem to be the best answer we've come up with so far.

    To refute some points directly:

    capitalism is extremely inefficient - Did you ever wonder what would happen if the 5% unemployed were employed? At 100% employment, no firm, no matter how big, will be able to hire a new employee without offering a significant raise over there last position. This costs money which will shoot inflation through the roof. To contrast, in a managed economy all the workers may be employed, but they won't be working at capacity. Output will be significantly lower than capitalist societies. extremely inefficient - So you want to assign quotas? How do you know you'll make enough? What about to much? This will create far greater inefficiency than that wasted on competition. Nature uses it to greate effect, ever examine the rabbits vs. wolves problem?

    You fail to realize that by attempting to manage an economy you'll do nothing but slow everything down. Economies have cycles, you can smooth them, but you can't erase them. Introducing full management will smooth them at the cost of growth and an increase in waste. If management is so great, how come China and the USSR aren't beating our pants?

    To paraphrase: You don't have a vote in capitalist systems - What do you mean? If you have dollars in your hand, you can vote by how and where you spend them.

    • I see I have failed to explain myself clearly enough. Fair enough - what you read was an introductory essay exploring my thoughts about the future, and why a 200 year old economic system is not going to cut it with the kind of technology we are going to see in the next 20-50 years.

      I fail to see how capitalism has not worked well. Who is the leader in technology? America.

      We are the leader in technology, but because of our government far more so than our private corporations. The leadership we display in computing comes directly from academia, not Microsoft and Sun. In this case it was our government, through taxes, that spurred development. Look at other areas where we lead, oh, say military technology. Its the national labs that are in the lead of technology, not private companies. So, you have to answer the question, why is it that our government is the entity behind high tech and not private enterprise? It has very little to do with our capitalist system, other than the fact that the government gets its money through taxes.

      Think about what I said another way. You spend the first 4.5 months of the year working for nothing but paying your tax bill. And, your taxes fuel a hell of a lot of innovation. The system I just proposed replaces a monetary taxes with a tax on your labor.

      This is the part I didn't talk about nearly enough: any system that is going to work has to give people the freedom to improve themselves outside of the system. Thats why I proposed people only need to work 20 hours or less. That gives people ample time to further their education or become even wealthier than the system itself would allow.

      You mentioned communism a couple of times, so I guess I need to reiterate. I'm not talking about communism, I'm talking about eliminating scarcity. When you do that, money becomes unnecessary. Wealth becomes irrelevant.

      As far as "managed economies" go, well we already live in a very managed economy with lots of rules and regulations. You aren't as free as you might think. Nobody gets anywhere without working and paying taxes, and to do those things you have to follow a lot of rules. Yes, it would be a system where there was "overproduction" - that is the nature of eliminating scarcity.

      By rabbits and wolves I assume you are inferring overpopulation. That's something that will have to be managed by the governments of the world or else we won't survive! We have to manage the population regardless of whether we replace capitalism with something better or not.

      Now, just another thing to consider: We are already well on the path to where we will be able to manipulate physical matter at the atomic level. We will be able to copy physical objects as easily as we copy files. That fact alone obsoletes capitalism. The elimination of scarcity will happen whether we replace capitalism or not!

      But with capitalism, and especially with unrestrained capitalism, you could wind up with a world that would be nice for the very few and not so good for everyone else. What if Bill Gates was able to produce all of Microsoft's software(and it was developed sufficiently as to virtually be impossible to compete against him) with only 20 people working for him? What if Ford destroyed all its competitors and managed to produce their current output with less than 1,000 workers? The problem with capitalism as it intersects with technology is that as technology increases, fewer people are needed to produce goods. The people who are not needed to produce become either impoverished or slaves or both. A democratic way out of this will be our only hope.

      So once more, I'm not talking about communism, but rather a system that reflects the abundance that will be possible. As our technology improves to the point where everyone can have everything they want, we need to devise an economic system capable of dealing with that. In such a world, too many of the concepts of capitalism are simply outdated.

  • You seem to be making the classic fallacy that "There are problems with the implementation of X. Therefore, X must be discarded and replaced with what I advocate." This argument is a hallmark of junk science. If we discard capitalism, there is no guarantee whatsoever that anything we replace it with will have fewer problems, or that it will actually solve the problems that we claim of capitalism.

    You're probably right in arguing that capitalism is inefficient, compared to the ideal, and everything you argue suggests some central authority to solve this problem. However, I percieve capitalism as a distributed system, and whatever inefficiencies crop up are a result of distributed planning versus centralized planning. My objection to exchanging systems is as follows: In a centralized planning system, the person making the plan is just as human as I am, and therefore just as prone to error. Why should I trust that person to make decisions for me, especially since I have a direct interest in my own well being?

    And finally, your comment: And look at our military. Thats one highly efficient organization if I ever saw one. You have clearly never served in the armed forces! The military is as bureaucratic and moribund as it is possible to be. Given the amount of paperwork and hassle that accompanies the most minor of operations, it's a miracle that the military gets anything done. And even if one accepts your argument, you could hardly convince people to accept universal conscription.

    • This argument is a hallmark of junk science.

      True, it was an ad hominem argument. Since there is nothing in the real world to compare my ideas to I can't cite statistics and fact.

      suggests some central authority

      Actually I am suggesting a democratic way to run the economy. The modern world of capitalism is very feudalistic - its based on a small number of individuals controlling the vast amount of wealth. I feel democracy has worked well for governments, why not the economy?

      I am also imagining what the future will be like one day when physical objects are created and replicated as easily as we create and replicate digital objects nowadays. Already things like open source are becoming thorns in the side for commercial software houses. You can buy operating systems, but you can also get them for free. Our capitalist economy doesn't know how to handle this; Microsoft views Linux as a thorn in its side.

      Perhaps a "dual economy" will evolve, with people being able to both purchase things and get other things for free. Even so, that would eliminate much of the poverty and suffering in this world. So yes, I'm just speculating, but I also have an agenda. Capitalism leaves a lot to be desired. I desire to live in a better world, so I'm speculating on what would make it a better place. :)

      • I don't really buy your scarcity arguments. Humans seem to see scarcity everywhere, even in the midst of plenty: if food and shelter are plentiful, we squabble over beachfront property. And we're a long way from the Star Trek world of replicators.

        I'm a capitalist, not because of economic arguments, but because it forces people to take initiative and responsibility for themselves. Have an idea? Go start a tech company! You'll work your ass off and put in 20-hour days for months, but this is how great things are accomplished. And, who knows, you might make a billion dollars. In a world where everything is plentiful, perhaps nobody would bother doing anything. There would be no inspiration, no ambition -- just a tyrrany of mediocrity.

        I see a role for government, as you say, to regulate and ensure that people's rights aren't trampled. As for democracy ... what could be more democratic than voting with my dollars, which I've already done against MicroSoft?

        ps. I got a kick out of your "Religion" post.

        • And we're a long way from the Star Trek world of replicators.

          Not as long as you might think. Sandia National Labs built a machine that can take a block of steel and turn out virtually any sort of machined part. Before the replicators though, will come the robots.

          I used to buy the argument that there would be no ambition in a world of plenty. Now I see that its not true. In a world of plenty you would still have many people striving for excellence. They just wouldn't be competing with a bunch of wannabes any more. Case in point: the IT industry, and all the MSCE's who are in it because they believe a big paycheck is there. Perhaps in a world of plenty those MSCE's would follow their real dream, whatever it is, and leave computing for those truly interested in it.

          I feel the need to point this out. I consider myself to be very well off under the capitalist system we live in. I feel bad, though, for the 80% of the world's inhabitants for whom daily life ranges from struggle to nightmare.

Genius is ten percent inspiration and fifty percent capital gains.