What is wrong with Capitalism? (Please stay civil!)

I remember that I created a thread about what is so wrong with communism, just last year or two years ago.

To be fair, here's another question, "What is so bad about capitalism?"

IMO, I've tried studying the economy a lot more and came to terms that a more laissez faire economy is ideal than an economy with government interference. It's very important for an economy to thrive, that is why the economies of countries like Hong Kong, Singapore, New Zealand, and Australia have been booming.

The United States economy has not been laissez-faire at all. Yeah, misconception #1, "free markets have failed us and hurt us." Government bailouts, subsidies, and excessive regulations of business hurts. It also distorts market forces as well. Part of decreasing the gap between the rich and poor is deregulation and elimination of government bailouts.

Remember when General Motors and other car companies in Michigan went under but the government jumped in to bail them out with our tax money? Should a business's faulty and risky practices be fixed by our taxes? No! These bailouts go into the pockets of the rich. If you believe that free markets cause the rich to stay rich and get richer, think again. Government is the reason for it. The management (CEOs, COOs, etc) of these companies would have gone bankrupt a long time ago.

 

I think it comes down to a balance between the two.

If the government doesn't get involved things like "Trusts" start forming and everyone gets screwed over.

If the government gets too involved...

yeah.


I think the key is finding a balance between government and free market.


I'm not a big expert on economics though so I won't get too involved here.

 

Yeah, at least you acknowledge that

 

Pure capitalism doesn't really exist and the way we have a mixed economy in the United States means the government can actually influence and/or stifle "free markets."

That said, without government regulation, free markets can eventually lead to a situation where the most effective model for a good/service is a natural monopoly or oligopoly and therefore the government must interfere to ensure that profits eventually reach "normal profit" and not "monopoly profit."

Further, while free trade leads to the greatest overall increase in aggregate welfare compared to a state of autarky, the distribution of benefits of trade are not equal and there'll be losers in both sides of the equation. The benefit of free trade is that the winners theoretically win more than the losers lose, but the "fairness" of such policies is always debatable.

 

Nothing, if you value your own (rational) self interests over everything else.

 

The primary problem with Western capitalism is the insance notion of profit.
That people should get payed more for their work than they actually delivered.
That loaning money should mean you have to pay back more than you got.

 

What? Supply and demand. If a consumer is willing to pay the price that a supplier is willing to sell the good/service for, an exchange is made and profit follows if you price it right. competition helps to limit the prices but nonetheless suppliers will be profiting. There is opportunity and liberty. Why shortchange yourself?

 

Capitalism often leads to demanding more than is supplied/suppliable.
A person has to get that extra money from somewhere, that somewhere being someone else.
Leading to a viscious circle were certain people always have to pay for the greed of others.

Because an economy that runs on the idea that wealth can endlessly increase is fated to self-destruct. As we've done at least twice now, once in 1929 and recently again.

 

Ronald Reagan.

Spend 'em to Hell.

 

Which is inherently evil. Should a society be based on Voldemort's life philosophy?

---------- Post added 17th Sep 2015 at 09:41 PM ----------

I think this is the number one reason why capitalism is a bs economic system.

It will implode because of its economic inefficiencies in and of themselves. Then you have the, I would say, even more significant variable of the stress it puts on the natural world. Check this article* What is the reason for this happening? The answer isn't that complicated. Capitalism is the answer. Capital has one purpose: to accumulate. It will do so no matter the costs, including making the Earth inhospitable for human life.

*Marine population halved since 1970 - report - BBC News

 

Overpriced plastic crap from China and no free healthcare. I'd mention more, but I don't want to get offensive.

 

Inherently evil? Clearly doesn't live in 'Murica. It's the way we do things, trying to be as free as possible, owning as much as possible, living our lives to our liking having the opportunity to use our resources where we as individuals see fit. (Charity is something you can work to give too) centrally planned economies take our wealth and indirectly redistribute our wealth so we as individuals don't have to do it directly... Talk about cold and heartless.

 

Clearly doesn't live in the under-privileged parts of 'Murica. Plus, the US economy isn't based on consumer willpower in a free market with rigorous competion. It is based on corporate power. Not individuals. Capitalists, i.e. CEOs etc., have the opportunity to use resources as they see fit, much more than people do.

Plus. Quote: "according to research conducted by sociologists Dr Kjetil van der Wel and Dr Knut Halvorsen from Oslo and Akershus University College in Norway, “generous welfare benefits make people more likely to want to work, not less”."
Source: Do benefits make people want to work? | World Finance

Central planning is inherent to a capitalist economy. Please don't be confused here. First, a free market based economy requires central planning by a state. That is because as capital seeks to accumulate, it will lower wages lower and lower, and in general just do all it can to accumulate further, and people will seek to revolt in the end. This is clear throughout the history of capitalism. Central governmental planning is thus necessary to protect capitalism against itself. People are willed to believe they have it okay, and will thus continue to go to their boring jobs and have their microwaved pizza, oblivious to that the value of the service or good they produce actually far exceeds that which they are granted by their bosses. This is a bandaid which capitalism needs to survive.
Furthermore, companies are centrally planned. The boss has the ultimate authority to dictate what the company is going to be doing, how it's going to do it, etc.

 

Sorry, P. I'm with Becki on this one. She makes a better point.

 

Companies are centrally planned in the private sector and yes, they do make decisions regarding pricing and how much to pay. It's what businesses do. But it's private.
I agree with you that we have a mixed economy, we try to be as laissez faire as possible but nonetheless crisis does arise from time to time. Keynes said "in the long run we are all dead" so some government action is needed to pull out of crisis quicker although the economy will regulate itself over time. government will interject to relieve emergencies (new deal). But, in order to maintain maximum liberty, we need private ownership and less regulation.

---------- Post added 17th Sep 2015 at 05:41 PM ----------

Also, it seems you assume people live boring, unfulfilled lives contented with only "microwave pizza". There is so much room for expansion, new ideas that will make your living if they're successful. It's what distinguishes the more productive from the less productive and yes, it is extremely competitive.

 

Capitalism bases itself off of the idea that everyone is born equal.

''If you work really hard, you can become a millionaire!'' Hence, if you are poor, you didn't work hard enough. Obviously, that's not how it works in real life. You can be born in a poorer family that cannot send you to higher education. If you don't have higher education, you won't get as much money ect.

Capitalism doesn't believe in paying taxes for healthcare and education (which we do in Quebec). This makes the system harder to access for people with low income. This continues with the mentality that everyone one can be rich if they only try hard enough, so why would anyone give taxes to such institutions? If you can't pay for healthcare, it's your fault, right? If your kids can't go to university, it's because you didn't spend your money correctly, right? Not quite.

To continue, capitalism lets big businesses operate however they wish. You want to have the monopole and inflate the prices? Yeah, sure, do that. You want to put your prices so low that all the small businesses have to close down? Yeah, who cares. You want to get your products done in China by underpaid workers so you can save cash? As you please. Basically, businesses control the economy, which is not always beneficial as 1929 told us.

 

From Opinions on Communism?:

 

(I removed all your fancy text stuff, Kaiser, please don't bite me ^.^

Just to clarify; this is talking about Marxist-Leninism rather than communism in general. Marxist-Leninism is the ideology that gives justification to the common remark "Communism doesn't work in reality!"
Marxist-Leninism falls under under the umbrella of communism, and has probably been the one most explored in practice, seeing its relevance in the 20th century.

I don't agree with everything here, but I do agree to some extent, in that with time, people will not, privately or publicly, have control over the economic factors that guide their lives, but that that power will rather be concentrated in the hands of a few, i.e. the capitalist class. Thus democracy will be erroded.
For example, the free trade agreements that are being negotiated secretly by the US with different nations; the TTIP, TPP and TISA; are focused on giving corporations massive power over individuals. This is what free trade means in reality on a macro-level.

 

Just because I have company coming over shortly (it's a semi-date, for the curious) and don't have the time, and you seem so enthusiastic about this, I'll provide you the chance to amuse me...

In your opinion, how would communism be brought to the United States? Better yet, how do you make such a change -- that transitioning stage I speak of -- so that it works?

Also, to keep on topic, and because I'm feeling devilish, what are 3 good things about capitalism?

^.~

 

I'm far from being an economics expert but I do think a capitalist state is the best alternative, what other alternative is there? That doesn't mean the government shouldn't intervene in key economic sectors, raising or cutting taxes in order to stimulate certain activities and accelerate the recovery from recessions that are bound to happen. I also believe that the state should supply its citizens with basic services, such as healthcare ( ''free'' healthcare doesn't exist)

I oppose most socialist policies because. by trying to push equality into humans, which are a group of individuals, each with unique thoughts, abilities and aspirations, they bar innovation and ambition, slowing down society progress. And by progress I'm not talking about just profit, I'm talking about research and scientific advances, you know, research that made curing a lot of diseases and preventing them possible and gave more access of information to a lot of people.

And it's funny to think that it's capitalism's fault for humans being so selfish, when selfishness has always been present in human nature. Capitalism is just a reflection of that.