Why Capitalism doesn't work. You can only break the law so long.

[Sirveri]

Capitalism (noun); An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

But why does it not work. To understand that, we must understand what money is, or at least what it represents. Money is energy, packaged into a form that we can transfer between multiple parties. The farmer exchanges the energy he put into the field for food. This food is then traded to another for objects that the farmer requires to grow and survive. The object used as the middle man for these transactions is money. All it is is the passing of energy from one to another.

But, money, like energy must follow some basic laws. And capitalism by its very nature breaks those laws. Capitalism requires continuous growth to work, without which it falls into disarray, depression, and collapses in upon itself. The problem with this is that one can never escape the second law of thermodynamics. All energy moves to a state of entropy. Entropy being the fundamental force of balance. There is only so much energy passing thru the earth, and our species can only capture and harness so much of this energy. That said, in our economy, there is only so much 'wealth'. Thus it is not possible for a company to have infinite growth, because doing so violates the second law of thermodynamics.

The very energy stored by these companies will if possible escape in order to seek true balance in the society. This fundamental law of physics can not be broken, and those who are arrogant enough to believe otherwise are soon shown the error of their ways. When the people who become rich in energy resources accumulate so much energy that there is not enough energy left to allow allow the energy poor people to survive, these people do the only thing they can. They balance the structure. They enforce the second law of thermodynamics.

Capitalism would have one believe that resources never run out. That even if they did it would be irrelevant, as a replacement would be found. But one can not replace energy. They continue to produce products to make profit. But fail to understand, that if their customers do not have the energy resources to purchase their products, then their company will fail. A pure violation of the first rule of thermodynamics, that energy is conserved. You can't get any more energy out of a system than you put into it.

By continuing to put less money into the market which purchases their products, they undermine their ability to sell those products. Every factory moved to a cheaper locale in the name of profit displaces the money going into the population that you would have buy your product. Every person fired contributes less energy to the economy as a whole. All done in the name of cutting costs in times of crisis.

In the end, the greatest period of economic growth in recent years occured because of one single thing. Entropy. Companies which did NOT make a profit. This money was taken from the rich and distributed to those with less, these people then spurred a growth of epic perportions. Before that the government took money from the rich and spread it out amongst the poor. The made the economy turn over and begin to roll forward again. The enforced the second law of thermodynamics and spread that money out over a greater populace.

Does marxism work? Maybe not, but it is clear the capitalism does not work either. Perhaps the answer lies somewhere between the two poles. One ignores human nature while the other ignores the basic laws of the universe. If this rollercoaster that is our society is to survive the next depression, then we must quickly learn where this sweet spot is. And do our best to move into it. Or we can continue upon the tragic cycle of crashing and waring. Ever more into the future.

[Wonk]

1. You wrote that? Pretty good, thanks for posting.

A dollar's worth of paranoia
http://jubal.westnet.com/hyperdiscordia/dollar_paranoia.html


Pyramania

There are pyramids in my head
There's one underneath my bed
And my lady's getting cranky
Every possible location
Has a simple explanation
And it isn't hanky-panky

I had read
Somewhere in a book, they improve all your food and your wine
It said, that everything you grow in your garden would taste pretty fine
Instead, all I ever get is a pain in the neck and a
Yap yap yap yap yap yap yap

I've consulted all the sages
I could find in the yellow pages
But there aren't many of them
And the myan panoramas
On my pyramid pajamas
Haven't helped my little problem
I've been told
Someone in the know can be sure that his luck is as
Good as gold, money in the bank and you don't even pay for it
If you fold, a dollar bill in the shape of the pyramid that's printed on the
Back
It's no lie
You can keep the edge of a razor as sharp as an
Eagle's eye, you can grow a hedge that is vertically straight over
Ten feet high, all you really need is a pyramid and just a little luck
I had read, somewhere in a book, they improve all your food and wine
I'd been told, someone in the know can be sure of his good luck
It's no lie, all you need is a little bit of pyramidic help


http://www.snopes.com/rumors/20bill.htm

[liberalmike27]

109. Redistribution at some Point Absolutely Necessary

Wrote this a while back.

Many like to tie our government and development with the Marx Manifesto. "Ties" to Marx's manifesto are loose to say the least, as the government doesn't own all property for instance, and certainly in any society some restrictions on property have to be made. If you lived in a neighborhood and an owner of adjoining property wanted to open a swine farm, would you want to smell the stench constantly? In any method of government, some restrictions would apply there.
I'm not going over each point (originally written as counter to another poster, who had posted several ways in which our society has become better by capitulating to the collective, often to stop violence of the masses), but I'm going to take a more simplistic approach. The one great thing about capitalism is the fact that people can move ahead. Even under progressive taxation, even if it was 90%, a guy who makes 900 million a year is going to do very well, compared to the folks who work just as hard, perhaps much harder, and earn only $10,500 a year. This is certainly an advantage over communism comrade! Nevertheless, Capitalism allows people who are more motivated to move ahead. The down side is greed and avarice become commonplace, eventually simple compounding puts these wealthy folks so far ahead, they can buy everything, control everything the media and politicos completely, and eventually the people become chattel and are treated poorly. The inevitable concentration of money into the hands of the few occurs to such an extreme degree that the economy fails, since most people don't have enough to even buy many products any more is another problem of strict capitalism's problems. Some redistribution is inevitable, and necessary.
Communism, on the other hand seeks to more evenly split the wealth, give some property or a place to live to all, and assure that we all have meaningful work, clothes, the necessities of life, and that no one does without health care, or starves. In most people's estimation, these are all good things, and the truth is, even with our government making some progressive moves in the last century anyway, we still have a lot of people who "fall through the cracks" to use a trite saying. Supporters of Laissez Faire Capitalism seem to not care at all about that. Are we a lot better now than a century ago? Yes, of course. Are we where we need to be yet? No, I don't think so. On the down side of Communism, since motivation is sapped by limitations put on how much personal advancement you can ever achieve in income, or moving ahead, people tend to be less motivated. It is a kind of "slave ethic" that is used by many of the poor in this country, which goes, work just hard enough to get by since working harder won't get me ahead.

One who has a thinking mind sees the simple, basic advantages and disadvantages of both systems. So the solution has always been a kind of compromise, in which the Democrats and Republicans (now and then, pretty much the same) have given the poor and workers just enough to keep the violence that has always developed in this and other countries when the majority is abused for the advantage of a few royalty (we don't officially have them in America, but they exist anyway though not under the nomenclature). When concessions were not feasible revolt and violence were suppressed either by police or the army, and making laws which often abridged the freedom of speech (Espionage Act, sedition acts), and have used prisons to lock people up, in effect to control poverty. Ironically, this method was often more expensive than just offering things like SS, and unemployment, or welfare. But the prison-industrial-complex is very profitable to many in the private sector.

Roosevelt brought together a kind of Democratic Pluralism (or trend toward Socialism, not nearly such a bad word as it has been represented) unlike any president before, or since. He used the government to work between industry to allow all of the people to gain ground, get power to remote areas, to provide work when there was none, and improve conditions for us all. His success, in America's can be most accurately measured by the fact that he was elected four times. His pluralistic policies certainly agreed with the voters then, and the truth is if a similar president were to gain office now, he'd be a two term president also. It is questionable now whether this can happen, since the media is so carefully controlled by the right, so no progressive person can gain office. When America detects this kind of dedication to people, not companies and huge corporations they will flock back to the polls, and keep him in office as long as possible.

Failure lies in most Republicans, who don't understand that the answers are often found not in black, or in white, but in shades of gray. The constitution is amenable, and certainly at least some of the founding fathers wouldn't have agreed with much of what our country has developed into, this plutocracy of ours. They would have never agreed to allowing corporations to gain "citizenship" which, along with the system of buying Congressmen to do their bidding with campaign contributions, over the short period of our country's existence are the very things that spoil our country, not the things that makes it great. I'd venture to say they'd never have expected us to not amend the constitution to whatever conditions developed in our country that needed to be dealt with. Yes, the founders had a pretty good thought, trying to keep us from becoming like so many other royal dynasties throughout history, but as always, money has corrupted absolutely, and the powerful firmly grip the reigns of power. What difference is our system from totalitarian communism if both parties neglect the poorest, and only serve the needs of 30% of our population? Two parties, except around the fringe of mostly unimportant issues, they have about the same policies, give us pseudo choice during elections pretty much boils down to totalitarianism, and we certainly have a burgeoning proletariat, and an ever narrowing possession of money.

One final historical note, until the Espionage Act was passed by Wilson, to stop people from speaking out against enlistment and conscription, the things Marx described were happening. Only by locking up many of the Socialist leaders for bringing up the very real question of whether the poor should fight in the war, since they'd come back to the same tired squalor ridden conditions they left, and often through violent suppression of labor movements, and minimal changes, were they able to suppress a growing Democratic Socialism in this country. This same option was replaced by a manipulative and deliberate effort of the media in the decades afterward to demonize the thoughts of workers improving their own conditions by trying to enlist the help of the government. You see the results here on the boards, people so indoctrinated against it that any thought of paying people more, or better, less dangerous conditions meeting with the pre-conditioned minds shouting "Socialism" as if it were akin to murder. The success of brainwashing people against their own collective betterment is extremely apparent, to me anyway. I'd be willing to bet that many who chant the governments double-speak, many who have been conditioned by Big Brother, are the very same people who would be benefiting. Brainwashing is alive and well in this country, and usually it manifests the most in assertions like this, where people shout down measures that would achieve their own betterment.

[Lucky Luciano]

2. Your hypothesis would make more sense under

the assumption that there are no new innovations. However, as long as there are new innovations, continuous growth may be possible. When we reach entropy in terms of innovation, then capitalism may be doomed. I suspect we are a long way off before that happens though. It is still an interesting post though.

[leftyandproud]

3. I agree

good post...but big business is not a physics experiment...and I believe there will always be new innovations to satisfy the demands of the people. Those who don't innovate and don't change will die. Those who do will thrive. If the entropy hypothesis is right, we should just leave the system alone and the bad enterprises will collapse under their own weight...they will die, and new enterprises will rise to take their place...so long as they aren't smothered by a government trying to micromanage everything. That would guarantee the failure of the system.

[Sirveri]

10. That's exactly what happened

in the great depression. Herbert Hoover left the system alone and it collapsed under its own weight.

The question is not about new innovations, new innovations are irrelevant if a person only has enough money to buy food, shelter, and transit. They won't be able to buy whatever new innovation you've produced because all the energy is being hoarded by the rich.

[leftyandproud]

13. actually

hoover put on a huge tax increase DURING A RECESSION in the name of balancing the budget...

then we had the depression.

[myopic4141]

4. For the record.

Since you are referencing the second law of thermodynamics, then entropy takes on a specific definition, namely, "the log of all accessible states of a system" and is used to calculate the energy unavailable for work. The second law of thermodynamics (aka - the law of increasing entropy) is fully stated as: "If two systems at some instant are in a configuration other than the most probable configuration, then the systems will most probably evolve in such a way that they approach the most probable configuration, and the generalized entropy will increase monotonically with time".
Simply put, in closed systems, things tend towards balance. This has nothing to do with the failure of capitalism.
If there is a failure of capitalism, it is that there must be a continuous growth in profit. This implies that 100% consumption will never be reached; however, reality states otherwise.

[Sirveri]

9. the failure of capitalism is the divide between rich and poor

that's primarily what I was referring to with the second law of thermodynamics. By promoting the vast accumulation of wealth in the form of greed they push society out of equiliberium. The reason the great depression occured in this country is because the flow of money stopped circulating. Clearly a system driven by a impetus of greed will create wealth. But the problem with such a system is that it will tend to operate to its own detriment. By taking all the wealth out of the hands of those they require to purchase their products, they kill the very company they created. This is irrelevant to the owner at most times because the owner has enough money stocked away to live comfortably for the rest of his days. Until the people realise what has happened, or out of sheer instinct rise up and correct the balance.

[myopic4141]

17. Debt

The underlying failure behind the great depression was phantom wealth (aka, excessive debt). That will be the underlying failure of this economy as well unless something is done. The CMD (Credit Market Debt) is the total debt of the nation (government, corporate, and private) and is a good measure on how the economy is doing from a debt standpoint. At the end of 1981 (the last year of the Carter budget), the CMD as a function of GDP was 168%. At the end of 2002, the CMD/GDP ratio is 303.48%. The Reagan/Bush I years had the highest ratio increase by going from 168% to 243% over the 12 year period. During the depressed period between 2001 and 2002, the CMD growth was $1.16 per every $1.00 of GNP. The capitalistic system of continuous growth (not just consolidation of wealth) is what is driving the need to greater indebtedness. Greed is the driving force behind consolidation and maybe even the driving force behind the desire for continuous growth; however, it is the indebtedness that will be the downfall for both rich and poor (mostly for the rich).

[Sirveri]

18. That's a interesting post.

Do you have any good sources that I could read further on CMD? It's basically another reason why capitalism fails. From my personal standpoint it will most likely be the recent uprising against outsourcing. One can only knock so many of the bourgeouis out of their station before they demand justice. I should know, I was on my way to becomming one of them. Lost my 'good' job in 2/02 and have since then taken a 10k a year pay cut. Not to mention the endless job surfing.

One of these days, I will find someone who is as unhappy as I am. And together we will set out to find others. And on that day the rich will learn what the Germans found out. There are a lot more of us than there are of them, so it wasn't smart to piss us off.

[myopic4141]

21. To find CMD

http://www.census.gov/statab/www/ CMD will be under Banking, Finance, and Insurance in the Flow of Funds Accounts - Credit Market Debt Outstanding. The Statistical Abstract of the US is published every Sep for the previous year. It becomes internet accessible in January. Check the library in your area for earlier year additions.

[BraveMan]

60. Exactly what are you advocating?

That the "poor" rise up and take away the wealth or the rich by force? At the end of a gun perhaps? That idea used to be considered lawlessness . . .

Forced redistribution of wealth will be the death of this country. The impetus to work hard and succeed will vanish, just like it did in the (former) Soviet Union. When everybody earns the same amount no matter how much (or how little) they contribute, the very motivation to try and succeed will be gone. Atlas will shrug and the economic engine will grind to a halt.

[liberalmike27]

110. That isn't true

The system grinds to a halt when the wealth distribution becomes so extreme that the majority of people don't even have enough money to buy the basics. That is happening now. It would have happened sooner, were we not such an Imperialistic country, taking so much from third-world countries. Many places that we employ third world labor, which takes our jobs away, don't even pay them enough to buy the product they produce in their own country. This is not to mention all of the natural resources we get for a song. That's one thing the Saudi's are pissed off about, our presence there holds down the cost of oil, our influence.

He's right in his original contention. We can fix it now, and avoid the problems, or we can let it all crash down around us, and the poor will suffer greatly (who says the rich will suffer most, that is crazy), the rich will lose some money. There will be plenty of product, and no one to buy it.

Finally, during the Roosevelt years, by using programs like the minimum wage, Social Security, and make-work programs, Roosevelt jump-started the economy. We've been using them to some extent all along. Many of the programs were directed at infrastructure, like Dams, roads, which boosted our productivity, and created a need of more products. There were more newly rich during that era than every, so that puts the kaibash on your theory that no one will work, or have a reason to try.

The trick is to find a balance. I believe now we desperately need a wage-floor. The minimum wage is no longer doing it. As Clinton says, we are at a hinge point in history, good jobs are leaving, and the money removed from our society needs to be replaced somewhere, to keep the buy-side intact. I'd say we should fix it now, rather than wait.

But the guy is right, violence will eventually follow if we don't. No matter the government, whether dynastic or capitalism, when you get enough folks wandering the street, without, there will be widespread tumult. That is why we need a tremendous wave of populism to sweep the country. Only then can we have the money on the buy-side, for new people to create businesses, and still have customers to buy from them.

[the Kelly Gang]

5. I like that..we seem to forget that Capitalism is really only an

experiment of the last century and it can all go haywire.

I think when you get an administration like Bush & Co who do everything they can to circumvent the laws that keep capitalism in check..they undermine the whole structure of the system and hasten it's collapse.

Unfortunately Capitalism has become a religion.

[Mecil]

6. Good post

Good post, but one flaw in the logic is that you equate Earth with a closed system (by using the second law of thermodynamics). Earth is not a closed system, the farmer will keep getting new (and free) energy from the sun, which makes his plants grow, and in turn that sends "new" energy into the system (earths capitalistic economy).

Hence there is a continuous influx of value (energy) into the capitalistic system - and it therefore can continue to grow.

[Sirveri]

11. That's true to a point

the farmer WILL keep getting new energy from the sun(well for the next 8 Billion years, after that we'll have problems). But that energy is merely a catalyst to change the earths resources into food stock resources. Right now we're allowed to ignore that balance because of the vast overuse of fertilizer, which is derived from Liquid Petroleum Gas. Currently we have no real LPG import capabilities, something Alan Greenspan warned us about back in Feburary.

The point being, yes a Farmer will continue to get energy from the sun, but it's all irrelevant if there is no nitrogen in the soil. Or if the soil has been so overworked it has turned to dust. Thus it's still a closed system.

[mulethree]

77. LPG -> Anhydrous ammonia (NH3)

Was wondering what petroleum has to do with ammonia which is nitrogen fertilizer. The hydrogen is used to convert Nitrogen from the air into ammonia - basically water soluable nitrogen, the process uses a lot of heat and so even more petroleum.

http://www.agrium.ca/products_services/ingredients_for_growth/nitrogen/anhydrous_ammonia.cfm

Manufacturing Process -
How we make Anhydrous Ammonia 82-0-0

Ingredients for the production of anhydrous ammonia are air, natural gas and steam (air is 78% nitrogen). In the first step of the process, natural gas reacts with steam over a catalyst, producing a hydrogen-rich gas. This change is completed at a temperature ranging from 760 to 816° Celsius (1400 to 1500° Fahrenheit). Next, air is added and carefully regulated to provide the exact amount of nitrogen needed for ammonia synthesis.

After a series of processes to remove carbon monoxide and carbon dioxide, the remaining high-purity gas (high in nitrogen and hydrogen content) is compressed under extreme pressure and sent to a reactor vessel where ammonia is synthesized. The anhydrous ammonia is then liquified and stored at a temperature of approximately -34° Celsius (-30° Fahrenheit). The carbon dioxide from this process is used in urea production.

---
Fertilizer market, imports, shortage due to LPG prices

http://utfb.fb.org/Index/nitrogen.htm

---

Another good piece

http://www.ipm.iastate.edu/ipm/icm/2001/1-29-2001/natgasfert.html

[dumpster_baby]

7. capitalism & the social-status-seeking social animal--> homo sapiens

I think that capitalism has a lot to do with the way that the social animals such as humans have evolved. We are hardwired by evolution to develop hierarchies. THe "fittest" get to the top. This gives them enhanced social status, enabling them to have better reproductive successs: they can have more sex and better provide for their children. THis way the genes of the best get propagated more widely than the genes of the lesses social animals. Capitalism is all about playing into the competition for social status.

What the problem is, is that some of us have seen that there is a different way to live, a way that abandons in large part the social status drives, the reproductive drive. You can see one aspect of this in the decreased birth rates of developed and educated countries. Once people get some perspective on the whole situation, many of them begin to see some of the aspects of the reproduction/social status trap.

Many Europeans are already way ahead of the learning curve on this. Look at how they are now living--with extensive cradle to grave social safety nets. Many countries in western europe work 1500 hours per year, with Americans averaging about 2000. That means we work 1/3 more than they do! ALso, they are living longer and growing taller. This the product of stepping outside the reproductive/social status trap.

WHat the Europeans are doing is using and controlling the competitive social status drives of their citizens for the common good--mostly social safety net stuff. In AMerica, most of the fruits of capitalism are being taken by the rich. In most the earlier decades of this century, it was taken off by the govt for fighting communism (the rich cannot afford to let good examples of socialism thrive). A lot of the fruits of capitalism are still used for that.

It really all comes down to propaganda. The only way to shift the USA and the global neoliberal regime towards rational leftism is to put out propaganda. If you want to end the reign of neoliberalism and the current cutthroat brand of globalized capitalism, you need to show AMericans another path--the path of the social democracies. THe internet is the only way to do this. You made a good start by posting your ideas here, but most people do not like to read extensively. So we need to make movies that get across the rational leftist ideas.

But how do you distribute these movies? You need to have cheap computers and cheap broadband. Cheaper computers are already on the way. But we need to put pressure on Congress to make the FCC live up to its purported mission to promote competition in broadband.

Global neoliberal capitalism is sowing the seeds of its own destruction. It really only came into being through the auspices of mass propaganda via electronic mediums (radio and TV). Once $25/month broadband is accessible on $100 computers, distributing leftist movies made using cheap digital cameras and edited using nearly free software, then a more egalitarian propaganda network will be able to reach the minds of all Americans and peoples of developed countries.

[myopic4141]

22. From the ideal standpoint.

Capitalism a methodology for the distribution of resources (goods and services that help a society flourish) in a peacefully coexistent manner. It is not so much that humans require a hierarchal structure as it is that functions within a society require a hierarchal structure to meet and maintain goals within that society. The American form of capitalism differed from its predecessors in that individuals have the freedom of vertical as well as horizontal movement within the system rather than a fixed class system which is why we are referred to as a classless society. Items such as progressive taxation, taxation on capital gains, and inheritance tax are there to prevent consolidation of wealth which is antithetical to a classless society for as wealth becomes more consolidated, vertical and horizontal mobility within the system become more restricted.
The social safety net provides relief from two aspects of the system, namely: those who cannot provide either goods or services for physical reasons and those who are caught in transitional changes or functional limitations within the system. Transitional changes within a system are those such as changing from a agrarian to an industrial base, from an industrial to information, or industrial to service. An example of functional limitations would be the maintenance of a minimum number of unemployed to prevent wage inflation (an unwritten and little taught understanding).
There is much more that I neither have the time or space to go into here; but, I think I have laid the foundation for the ideal version; however, reality has a tendency to deviate from the ideal.

[blindpig]

55. I agree with your analysis

Money was invented as a tool to facilitate trade but was soon adopted by the elites as a means of social dominance. That's the kind of animals we are but not the kind of animals we have to be.The evolution of the human mind has transcended the normal constraints of natural selection, for better or worse. Thus our species has the option of altering our behavior, such as the tendency toward social hierarchy. We have done it before, cannibalism and slavery are no longer considered options. The evolution of social mores is one of the few really distinctive aspects of our species. Socialism is another step in that direction, imperfect though it is.
Your solution leaves me less hopeful. The internet looks good today but I fear that it will be co opted and become a tool of the elites just like tv.
Religion(of some sort or something like it) is another option, scary as it is. In any case education/propaganda of the masses to wards an ecosocialist ethic is the only hope for the continuance of civilization.I'm pretty damned pessimistic.

[dumpster_baby]

65. it is not a sure thing, by any means.

But it is the only possible path to rational leftism that I can see.
We really cannot predict what the consequences of cheap wireless broadband plus cheaper computers, which could be what you might see in 5 years, IF we can get multiple wireless broadband providers competing for customers.

Once we get that infrastructure and 200 dollar computers, who knows how that will play out when combined with P2P networks. But it is surely our only hope.

[starroute]

8. It may come down to zero-sum vs. non-zero-sum systems

Your argument assumes that the global economy is zero-sum -- that you can never get more out of it than you put into it.

I don't believe that's so. On one hand, as was pointed out above, the continuing influx of solar energy serves as a free lunch. On the other, increases in efficiency that make it possible to do more with less and payoffs for synergy also enable the system to expand. The entire evolutionary history of life on Earth has been about expanding the system through improved tapping and utilization of energy sources.

Growth in this sense has also been present throughout human history. The development of agriculture, the further extension of farming through technological innovations (irrigation, metal axes to clear forests), the creation of efficient redistribution systems through trade and nation-building -- all these have made more energy available to the human system.

In this context, capitalism isn't wrong in being based on a model of natural growth. Its weakness, rather, is that it isn't satisfied with the relatively leisurely pace of natural growth and therefore tends to become parasitic on existing systems. Oil is extracted from the earth, tropical forests are cut down for hardwood and cattle-raising, farms are paved over for housing developments. All these things actually decrease the total energy available to the system.

I would say that the real problem is that capitalism is based on a mechanism of investment by people who have no motive except greed, no particular attachment to whatever they're investing in, and no incentive to do anything other than extract the maximum profit from it and then move on to the next thing.

Investment in this sense began in the 1500's and 1600's as a way of managing risk. There were certain enterprises that were so large that no one person or small partnership could undertake them, or so risky that no one would want to wager their entire fortune on them. By breaking ownership up into small, manageable chunks, it became possible to do things that would not otherwise have been possible.

This depersonalization of investment had a net positive effect a hundred years ago, during the heroic era of railroad-building and oil exploration. But now it's just a major drag on innovation and sustainable development. One interesting case in point is Google, which recently went public under terms which attempt to insure that the original owners will maintain creative control and still be able to undertake interesting experiments, even if they decrease short-term profits.

Another case in point is Microsoft, which is so huge that it can no longer afford to invest in anything that will not guarantee billions in profits. As a result, it's stuck grinding along with Windows and Microsoft Office -- which are gradually becoming obsolete -- and has effectively shut itself out from the real areas of innovation.

If the culture as a whole moves away from the model of investment-for-profit and towards a model of creativity, innovation, and optimizing the global system, I don't think we'll have to worry about the old arguments between capitalism and Marxism. Something new and better will emerge on its own.

[mulethree]

78. no free lunch

The energy we capture from the sun is usually lost again by radiating it out into space. Capture some with a solar panel, convert to electricity, feed it to a light bulb and most of it goes immediately to waste heat; the rest becomes heat when its eventually absorbed by some object and is then later radiated - eventually out into the dark night sky.

Most of the energy sources we've tapped into are either other manifestations of solar energy (e.g. hydroelectric or wind or wave is weather powered is sunshine powered ) or solar energy stored ages ago (e.g. coal, natural gas, oil)

Geothermal, nuclear and tidal energies are more interesting in how they represent solar energy. Pre-solar energies to some degree though the Geothermal and tidal are to a degree supported by solar-wind-assisted orbits?

[starroute]

91. Doing more with less

The real question about energy is how much you can do with it while you've got it -- before it does turn into waste heat and radiates away. It's a matter of efficiency and recycling. An advanced ecosystem, like a tropical rainforest, is a marvel of efficient energy use.

I strongly believe that the engine driving evolution has always been the need to maximize energy efficiency and not let energy go to waste. That was what enticed life out of the warm, hospitable seas and onto the harsh, barren land. That was what pushed animals to evolve elaborate mechanisms for raising fewer offspring with a higher survival rate. That is why brains get larger and able to process more information -- because it cuts down on waste activity.

The economy is no different. It is possible for it to grow, but in the long run that depends on investing in new forms of energy optimization. We've had the illusion of a free lunch thanks to fossil fuels for the last two centuries, so it's easy to think that when those run out, we'll be stuck. But we won't -- we'll just have to be more creative about it.

[fedsron2us]

12. M. King Hubbert of 'Peak Oil' fame ....

had some interesting thoughts on this subject

"The world's present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of matter and energy; and the associated monetary culture which has evolved from folkways of prehistoric origin."

"The first of these two systems has been responsible for the spectacular rise, principally during the last two centuries, of the present industrial system and is essential for its continuance. The second, an inheritance from the prescientific past, operates by rules of its own having little in common with those of the matter-energy system. Nevertheless, the monetary system, by means of a loose coupling, exercises a general control over the matter-energy system upon which it is superposed.

"Despite their inherent incompatibilities, these two systems during the last two centuries have had one fundamental characteristic in common, namely, exponential growth, which has made a reasonably stable coexistence possible. But, for various reasons, it is impossible for the matter-energy system to sustain exponential growth for more than a few tens of doublings, and this phase is by now almost over. The monetary system has no such constraints, and, according to one of its most fundamental rules, it must continue to grow by compound interest. This disparity between a monetary system which continues to grow exponentially and a physical system which is unable to do so leads to an increase with time in the ratio of money to the output of the physical system. This manifests itself as price inflation. A monetary alternative corresponding to a zero physical growth rate would be a zero interest rate. The result in either case would be large-scale financial instability."

http://www.hubbertpeak.com/hubbert/monetary.htm

It will be interesting to see over the next 20-30 years whether he or the free market economists are proved correct

[Sirveri]

27. Hubbert is backed by history. Free Market idiots aren't.

Not like we have a free market anyways. I find it really how amasing peak oil has taken off lately. It's kinda funny how it took off in the 70's too. And then everyone was proved right, except that we found another cheap source of oil. 70's we peaked, and the slight ammount of exports we had to pull in suddenly saw a weakness and showed it to us. And now here we are, getting ready to see if Ghawahr is ready to finally die.

[mom cat]

14. Money is like manure. If you spread it around it does a lot of good.

If you keep piling it up, the stench becomes unbearable.

[pacifictiger]

15. the problem with both capitalism and communism

is that the each ideal assumes that people within each system are honest and free of corruption.
No system can work without transparency and high ethics. Sadly, the greed and ego in lesser evolved human natures will always take over unless there are measures put in place to counteract those baser instincts.

[CHIMO]

16. Capitalism

Without getting into the laws of nature, I think one should start with a definition of capitalism.
If Adam Smith is taken as the one who defined it then one would have to say we do not have capitalism today. It requires a free market in which there are competitors.
It does not prevent government involvement to maintain a free market. If government can not be an independent arbiter and allows monopoly then we do not have capitalism.
No more than communism was Marxism.
Both systems proposes the betterment of the individual and both systems have become sidetracked for the betterment of the empowered.

[fedsron2us]

19. So true

The 'crony capitalism' that has come to dominate the western world does not bear much resemblance to the variety propounded by Adam Smith.

Some companies such as Microsoft and WalMart aim to establish monopolies in their given market.

Other firmsd such as the oil giants operate as virtual cartels.

A third group of businesses, like Haliburton, rely heavily for profits on the business that is pushed their way by their political friends.

The greatest lie propounded by right wing politicians is that they will look after the interests of the small independent business. In fact they care no more about them than they do about the poor.

[Jim__]

20. Your metaphor of money as energy is interesting.

I disagree with it on a couple of points. First, you say:

... Money is energy, packaged into a form that we can transfer between multiple parties. The farmer exchanges the energy he put into the field for food. This food is then traded to another for objects that the farmer requires to grow and survive. The object used as the middle man for these transactions is money. All it is is the passing of energy from one to another.

But, money is not actually a packaging of energy, but rather a packaging of output, as noted by your statement: This food is then traded to another for objects that the farmer requires to grow and survive, which acknowledges that the output, food, is traded. It doesn't matter how much energy the farmer puts into the growth of food; if, say, a tornado rips up his crop before it can be harvested, the farmer gets nothing for the energy he expended. On the other hand, a wealthy landowner who has laborers pour energy into his fields, can put very little of his own energy into his product, but because he gets the bulk of the product, he gets the money. Once again, money represents product, not energy.

A second point that I disagree on is that you say capitalism collides with entropy: ...Capitalism requires continuous growth to work, without which it falls into disarray, depression, and collapses in upon itself. The problem with this is that one can never escape the second law of thermodynamics. All energy moves to a state of entropy. Entropy being the fundamental force of balance. There is only so much energy passing thru the earth, and our species can only capture and harness so much of this energy. That said, in our economy, there is only so much 'wealth'. Thus it is not possible for a company to have infinite growth, because doing so violates the second law of thermodynamics.

The statement is true enough; but it's not actually capitalism, per se, that is colliding with entropy, but life itself. It seems to me that the second law of thermodynamics dooms life on earth; capitalism is a mere incidental here.

I'm not sure whether or not there are economic laws that doom capitalism. There appear to be some historical laws in play that doom, after a certain number of years, any social system that we form . Inequities build up and eventually these inequities bring about the collapse of the system. Certainly, there are inequities in capitalism; and I expect that one day it will be replaced by some other system, in an ongoing tradeoff between overall wealth and overall equality. When entropy actually kicks in, what particular economic or social system we happen to be under will be irrelevant.

[Karenina]

23. Frankly, I think our whole concept of "money"

is FUBAR. This concept is sprearheading our collective destruction. In today's world it is no more than 010101 on a computer screen and has absolutely ZIP to do with tangible "goods and services."

I like this thread. Please carry on. :kick:

[Jim__]

24. Doesn't electronic money serve the same purpose as paper money?

And, doesn't the 010101, when it represents money, represent goods and services. If I work for a company for 40 hours and they transfer some electronic money from their account to my account, isn't that equivalent to their handing me a check, or a certain amount of cash for my work?

Why do you think that the concept of money is spearheading our collective destruction? I think its a pretty good way to keep track of he quantity of goods a person is entitled to.

[Karenina]

25. You must be under 30

Please correct me if I err. This concept is central to my world view and as a Luddite old woman. I would like to make my understanding clear to you, if you are willing to listen. I am several time zones ahead of you and must sleep now... Please watch this space, I'll gather my thoughts and check in tomorrow.

[Sirveri]

26. multi response

goods and services are merely stored potential energy. Well technically Services are kinetic energy while goods are potential energy. I think the problem she has with the concept of money is that it's currently based on faith. It used to be based on the gold standard, we threw that out once the depression happened.

I personally agree with that idea, because that better reflects the energy weight provided by our population base. Our population has exploded since the year 1900, I don't think a gold standard based system could properly represent that. That and we own something like 60% of the worlds gold, so every nation on earth would go bankrupt and restart a great depression.

In any event, you work for a company, and that company gives you a check. But they will fire you on the spot if you don't produce more money than you cost them. Basically if you don't work for less than your worth. In 2002 the worlds GDP was 32.x Trillion dollars, the USA had 10 Trillion of that. Think about that for a second.

Now imagine you're a company, you hire on a person in Zanzibar. That person gets paid 100 dollars a month. In exchange your company gets 2000 dollars out of him. In this case both parties are likely quite happy. But what is happening is that the 2000 dollars that person should be getting for their work is instead going to someone else. well at least 1900 of it. Then most of that 100 is burned on food and lodging. His station in life doesn't really improve, the economy of Zanzibar doesn't really improve, but the American company has just pulled 1900 dollars of energy out of that society.

It's like a screwed up form of colonialism. Except that they do it here in America too. You'll work for company B and they'll pay you, I dunno, 3k a month. Yet they'll get 4k out of you. What do they do with this extra 1k? They use it to make themselves richer, or in other words, grow further. Unless they've hit peak growth, in which case they reward themselves with huge bonuses and stock dividends.

In this way, the money pools ever higher. But the problem is that there is only, as of '02, 32 Trillion dollars in the world. There are 6 Billion people in the world. If only I dunno, 50,000 of them can bilk the rest of each of them for 1k dollars... Oh sure, they'll spend some of that money. But they'll always be making more. lets see, 6 Trillion a year pulled into the pockets of 50,000 people. And then that's used to pull more money out of those 6 Billion people. Keep doing that and pretty soon there won't be any money left.

[IrateCitizen]

28. You've touched on an interesting point here

That being the accumulation of global investment capital by the United States through international banking institutions essentially controlled by the US Treasury (i.e. the IMF).

Emmanuel Todd discusses this in his latest book, After the Empire. Essentially, Todd (a French demographer and historian who predicted the imminent demise of the USSR in 1976) presents the idea that the United States is actually a weak country, attempting to hold on to a hegemony that no longer exists in order to avoid facing the reality that the rest of the world is finding out that it can live WITHOUT the US at the same time that the US is discovering that it cannot get along without the rest of the world.

There are two things primarily that are allowing the United States to maintain a seeming position of global hegemony: rampant consumer spending, and accumulation of nearly all global investment capital. While US industrial output accounted for over 1/2 of all global output in the years immediately following WWII, our economy is becoming increasingly overshadowed, from a production standpoint, by both the Japanese economy, and the European economy led by the relatively new Franco-German leadership. Without the industrial production of these regions -- the Pacific rim led by Japan, and the European region led by France and Germany -- the US economy would collapse because it would not be able to hog the investment capital for itself that is necessary to maintain consumer spending at present levels.

The reason I have not mentioned military hegemony to this point is because it is largely meaningless in the current world climate. Despite massive expenditures, the US military is largely bogged down in an unsuccessful occupation of a decimated country in the Middle East. Even if we are "successful" in maintaining control over the Middle Eastern oil spigot, Europe and Japan will simply turn increasingly to a stabilizing and recovering Russia to meet their energy needs. Furthermore, should Europe and Japan decide that it is no longer in their best interest to support the consumer spending of an increasingly reckless and arrogant United States, the United States as we know it will largely cease to exist. We will almost immediately come to realize a 20% reduction in living standards, and will suddenly have to play by the rules of the rest of the world. However, this will also require a bit of short-term pain on the part of Europe and Japan as well, even if the ultimate outcome would most likely be a much better world in many ways.

Anyway, thanks for stimulating an interesting discussion. As a democratic socialist, I agree with many of your observations. While a market economy in some form is the most efficient way of delivering goods and services, the startling lack of democracy within the current capitalist system is quite alarming -- and is simply highlighting the fact that political democracy cannot co-exist with economic oligarchy (or even totalitarianism). We need to look for models that combine the best aspects of a market economy with the foresight and egalitarianism that is possible under various forms of socialist organization.

[myopic4141]

36. Interesting.

The CMD of the US is 303.48% of US GDP ($10.4T+) as of 2002 which makes the dollar debt $31.7+. This means that the entire US debt is almost 100% (99.06%) of the world's GDP. Something to think about.

[PATRICK]

29. It is its own law

and it corrects itself by correcting civil government laws so much that lawlessness can breed chaos. Ponzi scheme with a more dynamic shifting base, but a head as greedy as any crime organization by its nature. If not the human reality, which of course can always merely suffer and be played out each against its parts with the necessary evil of poverty and unemployment built into the suspect system, then nature itself must inevitably reach the limitations of tolerance for which no capitalist course correction is possible.

Humans choose their own mental superstructures to build upon nature. Somehow they have lost themselves in a fantasy of the abstraction being an actual God, a dynamic Eden, a Horn of Cornucopia. The only balance is the dull, cruel pyramids of rule and oppression so that system managers make it "work" as they could do with any system.

As to the energy analogy, it is right to conclude you cannot confuse the analogy with the REAL relationship between the economic superstructure and the real, real world where energy(oil, etc) and all other natural factors punish the distracted and the one track species. The analogy is confusing because actually the tweo ARE related on a more substantial level than symbolic.

When has any group of real policy wonks with power or influence gathered to disassemble the basic premises of arbitrary custom and structures to play with alternatives better suited to a self-sustaining, limited but united global economy moving toward a new human evolution away from class and violence? Toward real human needs and desires of a basic yet higher order than greed gamesmanship and number crunching? Instead we have capitalists and anti-capitalists, each reacting negatively to the need for new thinking and change, for sanity and racial maturity and the handling of greater powers within more fragile limits. Yet with still the adolescent shortcomings of troublesome human nature.

The premium has to be put on a higher, universal moral plane, future and compassion oriented, caring for the individual not as the servile, climbing unit but as the model of society. Instead we have "pragmatism" and base desires not just tolerated but glorified to attract the worst humans to achieve the most in a mortally flawed absurdity. The mistake of our founders was in thinking they could jump the gap easily and let the "civilized" democracy breed artists and poets without seeing what should happen to the economic and political system that breeds tyrants and ugliness when the "good" are opted out of the ruling forces of the world.

Boy, I can say all sorts of pretentious things here. As far as positive suggestions I am reduced to echoing some things of Kucinich which again are dreamy gauzy things compared to the citadels of the established world. Probably freeing our majority to struggle to make a world as best they can free of all instruments of tyranny is one step, an ongoing struggle, whose answer will only come when the world settles down into a progressive peace toward a a truly better humanity. That means no absolutes, no absolute future model to be certain of what we are striving for. Many people would prefer slavery or demagoguery or religious absolutism to that personal burden. I think it is the universally natural challenge, the last test? of evolution for any intelligent species. It cannot be shirked, only failed or constantly worked at.

[IrateCitizen]

30. May I suggest "The Soul of Capitalism" by William Greider?

It's a book that touches on some of the themes you bring up in your post, Patrick -- namely the idea that an economic system should work for society, not the other way around. We have elevated "free-market capitalism" to the status of a diety while ignoring the injurious effects of its excesses on our society as a whole. Additionally, the current system, as you correctly note, rewards some of the worse aspects of human nature while penalizing its better instincts. Wouldn't it make sense to help adjust our system to one that does the reverse?

Check out the above referenced book. I promise you you won't be disappointed. It's filled with real-life examples of people from both the left AND right who are attempting to propel such a transformation.

[Karenina]

34. I'm really having difficulty

assembling my thoughts here, but you, Chris, and Patrick have touched on them. What has been swirling in my head for years are questions of "What is 'work?'" and "Who decides what its 'value' is?" In present day society our "regulations" preclude our making judgements about such things as members of a community. Our "trades" with each other have become a top-down enterprise. I was always fascinated by discussions with fellow students from the former East-bloc about their "underground" economic systems, which were in those days, by all accounts, thriving.

As an underemployed musician I am quite naturally at odds with a "let-the-market-decide" system that in truth is anything but. Our human relationships have been completely corrupted by our concepts of money that narrowly define value and worth. And indeed there are many enforced restrictions to us defining it on an interpersonal level. The technology we now possess is a double-edged sword.

The other part of this stream-of-thought is that as these top-down "valuations" become all-important, our air, water, food, relationships, etc ad nauseum are increasingly poisoned for "profit." The bottom line for me is WHAT does it profit? Hmmmm... I realize this is a bit scattershot, but it's a connection I've been thinking about for many decades and to be honest, this is my first attempt to connect the dots which I instinctively find SO OBVIOUS in a communicative way...

[IrateCitizen]

42. Economics has transformed over time

Economics was initially the study of how to allocate a scant amount of resources with the greatest efficiency. WRT the United States, scant resources are no longer a confining factor. In fact, if anything, it could be said that the United States experiences an overabundance of resources. This has led economics to be increasingly approached from the angle of simply maximizing profit margins (at whatever cost) as opposed to efficiently allocating resources. The "manufacture of wants" engaged in by the advertising industry is a prime example of this twisted excess.

The problem doesn't lie with the "ism", whether it is capitalism, socialism, anarchism, or communism. The problem lies in the values that are promoted by the system. Our current system in the United States values greed, excess, aggressiveness and selfishness -- while values such as altruism, cooperation and compassion are not rewarded. Some will say that socialism or communism would be a solution to this problem, but it is not. Many of the same problems existed within the old Soviet system, with the elite amassing privilege for themselves at the expense of others.

Now, I'll be the first to say that unregulated capitalism tends to reinforce these negative attributes. But I won't go so far as to say that pure socialism is the answer either. The answer, I believe, is to pick and choose the best elements of all systems, while introducing mechanisms that discourage excess and reinforce the better aspects of human nature. For instance, when a product is produced, it should bear not only the cost of simple production, but the environmental costs assumed in making it and disposing it, and so on. This way, the system would naturally tend toward the original goal of economics, which was the most efficient allocation of scant resources, as opposed to the current model which seeks to reinforce and replicate excess.

[forgethell]

31. Sorry this is BS.

I wish I had the time to pick it apart line by line, but lunch is almost over. I'll settle for this one statement. Maybe I'll return to this discussion later.

But, money, like energy must follow some basic laws. And capitalism by its very nature breaks those laws. Capitalism requires continuous growth to work, without which it falls into disarray, depression, and collapses in upon itself. The problem with this is that one can never escape the second law of thermodynamics. All energy moves to a state of entropy. Entropy being the fundamental force of balance. There is only so much energy passing through the earth, and our species can only capture and harness so much of this energy. That said, in our economy, there is only so much 'wealth'. Thus it is not possible for a company to have infinite growth, because doing so violates the second law of thermodynamics.

Entropy is a measure of disorder in a system. If the system is "closed", then entropy of the system must and will always increase. But if the system is "open", that is, if energy can be input and output from the system, then the entropy increase can take place outside the system.

Think of it in terms of evolution. A complicated system, such as even the simplest life, could not have formed if it was a closed system. But energy could be input into inorganic chemical systems, and then into simple life forms, and so on, till complex systems were formed. Or, how about a baby. First, a fertilized egg, a single cell, then a cluster of cells, then a fully formed embryo, that grows and develops until birth and beyond until death. Then, it decays.

But capitalism is not a closed system. Even if physical resources are limited, human ingenuity, which is the Maxwell's demon of economics, will discover better, more efficient ways to use those resources. But only so long as there is something in it for the ingenious ones. Otherwise, they will sit on their hands. And brains.

[JustFiveMoreMinutes]

32. .. and thankfully for Creative Advertising

We're suckered into buying things we have absolutely NO USE FOR, NO need of, and the fools and their money are soon parted...

... and THAT runs today's Capitalism!

<tongue in cheek of course>

[forgethell]

33. Speak for yourself.

I've been suckered, plenty of times. But never to spend money for something I didn't need, or want. And if I didn't know that I wanted it, or even that it existed, before I saw the ad, well, so what? Having been made aware that it was available, I wanted it. And got it , or didn't, depending on my financial situation at the time.

[JustFiveMoreMinutes]

35. No Pet Rocks huh?

OKAY okay.. not the literal 'we' as me and you.. but 'we' as American Society....

[forgethell]

38. So? Everybody is

entitled to make their own choices. isn't that what liberalism is about?? And the freedom to choose means the possibility, no the certainty, of making mistakes. But who is harmed is someone buys a useless toy? Especially if they receive enjoyment from it?

And, no, no Pet Rocks for me. I do have 4 dogs and two cats, and innumerable, or so it seems small fuzzy rodenty things as family pets tough.

[IrateCitizen]

41. "Who is harmed when someone buys a useless toy?"

That's an interesting question.

Well, let's apply the age-old idea of supply and demand to this equation. The more people are convinced to buy a useless toy, the more of them will be made to satisfy that demand.

Now, let's say that this useless toy is made of mold-injected plastic, in a plant in China. It's a known face that the production of various forms of plastic has many detrimental environmental effects. In China, a country with little or no pollution controls, these problems are not even addressed. So, the plant that makes these toys may just empty out industrial waste into a nearby river, and spew pollution into the atmosphere, causing illness among many of the nearby residents.

Furthermore, for the people that work in these factories for a few dollars a day, they are surely breathing in hazardous fumes during the manufacturing process, leading to serious health problems as chemicals from these fumes accumulate in their bloodstream and body tissues.

And since it's a "useless toy", it probably breaks pretty quickly. If it's plastic, it doesn't really biodegrade. So, it has to be deposited in a landfill. As such, there is always the possibility that it could leach out chemicals over time, seeping into the groundwater supplies.

You asked, "Who is harmed when someone buys a useless toy?" The problem with your analysis is that you only looked at the transaction at the purchase of the product. The reality, however, is that the production, sale and disposal of the product must be considered, if we are to gain an accurate picture of its true effects. This is one of the biggest problems with modern-day capitalism -- it doesn't consider in the least this entire process, and many of these "unseen costs" are therefore paid by the public-at-large, whether financially, environmentally, or in the cost of broken lives.

[forgethell]

44. NO,

each step must be considered separately, and the best solution applied at that step. Any engineer could tell you that the way to solve a complex problem, or design a complex machine, is to break it down into discrete, simple, solvable steps. To try to design, say, a space shuttle, from scratch, without breaking it into its component systems, and further breaking them down is impossible. The same for social problems, IMNSHO.

The problem with your analysis is that the buyer doesn't give a shit about problems with pollution in China. So in steps the government to make him care. Fine. BUT, does the government have the ability to make better decisions? It does? Fine. BUT, are civil servants, aka bureaucrats, going to make any more moral, more efficient decisions? I seriously doubt it. Why are they wiser, or more moral than the rest of us? You might say they have more information than we do. But do they have it all? If they do, can they process it all? You have a greater faith in fallible human beings than I do.

It is easy to be clever; what is clever is to be simple.

[IrateCitizen]

45. First, I don't need an engineer to tell me about complex systems...

... because I AM an engineer.

What you are proposing is would be the equivalent of an engineer completely ignoring aspects of a system that are inconvenient to address for the problem he/she wants to solve. The end solution, while it might look fine on paper to someone who didn't want to consider undesirable realities, would fail miserably when subjected to those realities.

What you decry as being so completely unfeasible is actually practiced in some Western nations. For instance, in Holland, people pay a tax on their cars at the point of purchase, the proceeds from which go directly to employing people to strip all useful materials from those autos at the time they are junked. This way, the public bears less environmental cost associated with disposal, not to mention using less raw material in the future.

In short, it is a representation of what economics is SUPPOSED to be about -- the allocation of scant resources in the most efficient way possible. It is also about breaking down the entire process into steps, and addressing each step.

What you are advocating isn't breaking down the process into individual steps and addressing them individually. What you are advocating is a system that just ignores certain features that are inconvenient. Sorry, but you're not going to get me to buy such claptrap as a workable solution.

[forgethell]

46. Well,

I'm an engineer, too. I am not advocating ignoring inconvenient features at all. But again, who gets to decide what is inconvenient, and what is not? What makes you better able to decide than me what is "inconvenient"? what makes either of us better able to decide than someone else. Back to the point. It's a harmless toy the man wants, not the weight of the world on his shoulders.

An engineer that doesn't ignore features that don't have anything to do with the problem he wants to solve will not be employed for long. Or didn't you take engineering economics? One of the many things that distinguishes an engineer from a scientists is that the engineer has to find cost-efficient solutions, as his work has a practical, rather than theorectical, purpose.

Economics is not "supposed" to be about anything. It is the "dismal science", and not scientific at all compared to, say, physics or chemistry. Nevertheless, it is the study of how things actually work in society. The "isms", the ideologies, should accomodate themselves to the facts, not the other way around.

[IrateCitizen]

47. But your "point" is a fallacy

Back to the point. It's a harmless toy the man wants, not the weight of the world on his shoulders.

If the production and disposal of the toy causes disproportionate environmental degradation and pollution, how can you consider it to be "harmless"?

But again, who gets to decide what is inconvenient, and what is not? What makes you better able to decide than me what is "inconvenient"? what makes either of us better able to decide than someone else.

I'm talking about factors like significant environmental degradation here. I'm talking about using materials that are genuine health hazards. Would you consider those to be legitimate concerns, or mere "inconveniences"? I'm talking about balancing the desire on the part of business to always maximize profit with the needs and interests of society as a whole. Our present system fails miserably at this.

An engineer that doesn't ignore features that don't have anything to do with the problem he wants to solve will not be employed for long. Or didn't you take engineering economics?

Yes, I've taken engineering economics. I've been a practicing civil engineer for the past 7+ years. I'm also aware of the difference between engineering, which is applied science, and pure science -- as I am currently pursuing a teaching certificate for HS physics and mathematics. But your statement raises some significant moral questions that get right to the heart of this argument. Is it OK for engineers to knowingly ignore unsavory side effects of the solutions to problems, if those side effects interfere with the bottom line? One of the major problems with our current system is that it actually ENCOURAGES this kind of behavior, as you summed up above yourself. The question then arises, how do we foster a system in which such behavior is actively discouraged, and "doing the right thing" is actively encouraged? "Staying the course" simply will not get it done, as our economic system is set up to ignore problems until they reach crisis mode (and thus interfere with short-term profits).

Economics is not "supposed" to be about anything.

It isn't? That's news to me! Here's the definition from the college of economics at my alma mater:
Economics is the study of allocating scarce resources among competing needs.
http://www.lebow.drexel.edu/departments/economics/

It is the "dismal science", and not scientific at all compared to, say, physics or chemistry. Nevertheless, it is the study of how things actually work in society. The "isms", the ideologies, should accomodate themselves to the facts, not the other way around.

The "isms" should accomodate themselves to the facts -- I couldn't agree more. The problem is that capitalism, as practiced in the US, at least, tends to be accepted more as a fundamental truth (free market fundamentalism) than something subject to the constraint of facts. Just look at the way we approach energy usage, for instance. We act as if we believe that fossil fuels are bottomless, through our marketing of gas-guzzling SUV's, disdain for public transit, and piss-poor growth planning models. Facts would tell us that such rampant energy usage is not only extremely finite, but is also contributing to environmental degradation. A true economic solution would seek to attach real costs to these factors, but the US model chugs along, oblivious to the reality all around it.

[forgethell]

49. No it's not.

<Economics is not "supposed" to be about anything.

I might have expressed myself a little unclearly here. I apologize. Economics is a field of study. It should not be driven by any ideology. Still, when it observed a series of repeatable observations, such as most of the people in communist countries are equally poor, while their leaders live a pretty good lifestyle, while most people in capitalist countries have enough to eat, while their leaders are extremely wealthy, then they can draw objective conclusions about which system is better.

As for the morals of engineering practices, well smarter people than me, and possibly you, have debated such things for centuries. My own thought is that in a free market, things that are destructive of the general welfare will perish sooner, rather than later, as individuals count the costs. Now, I have no disagreement with the government banning truly harmful products. But, I think the case should be made strongly, not weakly and/or hypothetically, as is so often the case.

Look, there can be regulation to prevent the use of harmful products, to provide safety to the worker's and the environment. I have no quarrel with that concept. But the original argument, if you will recall, was about whether capitalism works, or not. It obviously does, very well. It accomplishes its basic objective of creating wealth. No amount blather about the environment will change that. Capitalism is a tool, like an automobile. The early automobiles worked, but now they work so much better, are so much more comfortable, and will do so much more than Henry Ford ever dreamed of. Because they started with the basics, and keep adding to them.

Marxism, on the other hand, does not, and never did work. Oh, sure, people lived under it, poorly. It that respect it could be said to have "worked". In just the same respect the body of someone dying of cancer can be said to "work", because the patient is still alive.

But Marxism failed as a system, not because it failed to produce, but because it failed in its stated goals, to distribute the wealth, equally. All it did was succeed in destroying the wealth.

So, yes, capitalism works. And yes, it can be improved. But until you have something better, why destroy what you have.

And finally, do you really believe that a Pet Rock is harmful? Only if you knock it against somebody's head!!

[IrateCitizen]

50. My last refutation, point by point

Economics is a field of study. It should not be driven by any ideology.

Strawman. I never said it should be driven by ideology. You said that it wasn't really about anything. I refuted that assertion by pointing out that the study of economics is defined as the most efficient allocation of scarce resources. But don't take my word for it -- just look at any economics school around the country, they'll tell you virtually the same thing. I even gave you an example.

Still, when it observed a series of repeatable observations, such as most of the people in communist countries are equally poor, while their leaders live a pretty good lifestyle, while most people in capitalist countries have enough to eat, while their leaders are extremely wealthy, then they can draw objective conclusions about which system is better.

Which capitalist country are you using to support your observation here? If you're citing the United States, then your observation might have a certain amount of validity, but only because of some underlying realities that involve the US basically hogging global investment capital through international institutions such as the IMF in order to finance massive consumer spending to keep the economy afloat. If you're referring to the countries of Western Europe, a prime reason for the health of their societies is the embrace of the better aspects of both capitalism and socialism -- a prime example of remaining free from ideology. If, however, you are citing the capitalist economies of Colombia, Guatemala, Nicaragua, El Salvador, Indonesia, etc. -- you might find some opposition to such an assertion.

WRT communist countries, would you say that Vietnam is not now better off than it was at the time that the US was supporting the Catholic aristocratic landowning class during their civil war? While undoubtedly their success is rooted in the adoption of market reforms, at their heart they still retain much of their old communist identity. WRT North Korea, much of their problem is adherence to rigid ideology in the face of fact, something that never works -- whether it is communist or capitalist. For examples of the latter, read into IMF and World Bank structural adjustment policies of developing economies.

As for the morals of engineering practices, well smarter people than me, and possibly you, have debated such things for centuries. My own thought is that in a free market, things that are destructive of the general welfare will perish sooner, rather than later, as individuals count the costs. Now, I have no disagreement with the government banning truly harmful products. But, I think the case should be made strongly, not weakly and/or hypothetically, as is so often the case.

I'm a big believer in the caution principle. Namely, you look to err on the side of caution. I personally think that one of the big faults of modern-day humans is our unshakeable faith in technology, a faith that propels us to employ them too quickly without trying to understand the implications.

Furthermore, you speak of the idea that the free market will settle out destructive products. The problem with this idea is that for this to occur, people need to be aware of the destructive products and/or services. How many people out there are really aware of the effects of industrial hog or cattle farms? How many people buy pork and beef in the supermarket? How many people really understand the elimination of biological diversity and introduction of unknown factors into the ecosystem that can result from the use of genetically modified plants and animals? I would bet that only a slight minority of consumers are actually even aware of these things, let alone educated. According to Adam Smith, it is absolutely essential that the consumer is educated in these matters for a free market to function properly.

Look, there can be regulation to prevent the use of harmful products, to provide safety to the worker's and the environment. I have no quarrel with that concept. But the original argument, if you will recall, was about whether capitalism works, or not. It obviously does, very well. It accomplishes its basic objective of creating wealth.

Going back to the definition of economics, the goal of capitalism (as any economic system) is to facilitate the most efficient allocation of scarce resources, NOT to create wealth. Your misconception on this point only serves to highlight the questionable nature of the foundation of all of your thought on this. Creation of wealth is a side effect of capitalism, NOT the main purpose of it. The adoption of the idea of "wealth creation" as the impetus of capitalism is a good part of the free-market fundamentalism that has infiltrated so much of US economic thought over the past 30 years, and represents the source of many of its increasingly glaring shortcomings.

No amount blather about the environment will change that.

Blather? Seeing as how, despite our desire to resist the notion, we depend upon the environment for our very survival and the raw materials necessary to facilitate our economies, I would hardly call concern for the well-being of the environment to be "blather". Without raw materials -- which ultimately depend upon environmental stewardship to ensure their replenishment and the judicious use of non-renewable resources -- our economies will collapse. All this brings us back to the base definition of economics -- the efficient allocation and use of scarce resources.

Capitalism is a tool, like an automobile. The early automobiles worked, but now they work so much better, are so much more comfortable, and will do so much more than Henry Ford ever dreamed of. Because they started with the basics, and keep adding to them.

Capitalism isn't a tool, it's a philosophy. An economy is a tool, and capitalism is simply a theory about how to make that tool. By confusing capitalism with economy, to be quite frank you are exhibiting the kind of ideological rigidity that you are attempting to project onto others. As for your analogy of capitalism to a car, I can only think of a criticism offered by the Austrian Physicist Wolfgang Pauli: "It isn't right. It isn't even wrong."

Marxism, on the other hand, does not, and never did work. Oh, sure, people lived under it, poorly. It that respect it could be said to have "worked". In just the same respect the body of someone dying of cancer can be said to "work", because the patient is still alive.

But Marxism failed as a system, not because it failed to produce, but because it failed in its stated goals, to distribute the wealth, equally. All it did was succeed in destroying the wealth.

Marxism didn't work, but not for the reasons you cited. It didn't work because it was based on a material dialectic, rather than being value-driven. It operated under the false assumption that simply by redistributing income equally, society would transform into a utopia. In fact, it shared many of the problems as exhibited by modern-day free market fundamentalists -- that is, a complete oblivion to the variables of human nature that tend to wreck pure economic models.

Being familiar with some of Marx's earlier work, when he exhibited a strong strain of humanism, I think that he should have quit while he was ahead. Much of his earlier work exhibited a significantly deeper insight -- it was when he moved from this humanist approach to a more scientific one that many of his theories began to fall apart. Additonally, Marxist thought is relatively static, suited only for the age in which Marx lived, and pretty much inapplicable to today's world.

As for the cancer patient analogy, I can only restate the Pauli quote I referenced above.

So, yes, capitalism works. And yes, it can be improved. But until you have something better, why destroy what you have.

Another strawman. I never said capitalism should be destroyed. I offered ideas as to how our economy could be improved, possibly by embracing the positive attributes of capitalism while not being afraid to look at other economic systems (i.e. socialism) for answers as well. Stop assigning statements to me that I never made.

And finally, do you really believe that a Pet Rock is harmful? Only if you knock it against somebody's head!!

I never brought up a pet rock, that was another poster. My post was made to prove that what you perceive to be a "harmless toy" (once again, NOT a pet rock) may very well be not so "harmless".

I've stated my arguments on these subjects several times. You can either take them for what they're worth, or you can continue to disagree. However, if you're interested in a detailed discussion on these issues further, I'd recommend the William Greider book I cited above, The Soul of Capitalism: Opening Paths to a Moral Economy.

[forgethell]

56. Kick

I don't have the time to reply to this right now. I'll get back to you. Please read what I said more carefully.

[IrateCitizen]

57. I already read it carefully, hence my detailed reply

Your argument remains unconvincing, filled with many glaring misconceptions and contradictions.

[forgethell]

59. As I said,

I'll get back to it. naturally, if the argument was unconvincing to begin with, as I also consider yours, by the way, then with nothing added to it, it would remain so. Inertia, that would be called in physics.

[myopic4141]

93. This is somewhat interesting.

Economics is the field of study for resource distribution where capitalism would be one method of such distribution. There are others beyond Marxism (an extreme form of socialism); but, they are no longer included in the field as viable. Engineering, simply stated, is about making choices in implementation towards accomplishing a goal. Neither pure capitalism nor pure socialism will survive very long because neither system takes into consideration peripheral effects addressed by the other in resource distribution or societal stagnation. Factors of each are needed to create a viable economy. Capitalism needs to be tempered by socialism to prevent over consolidation of wealth along with maintaining a viable and adaptable work force for production, distribution, and consumption. Socialism needs capitalism to prevent societal stagnation. The engineering in this instance would be the choices made towards a stable sustainable economy.
Can a proper balance be found. I have no idea; however the policy's formulated by this Administration in particular and today's conservatism towards economics are not going to work for very long for the trend is tending towards pure capitalism. I also find it quite humorous when attempts are made to apply the laws of thermodynamics to concepts outside of thermodynamics. The humor arises out of the fact that there is no aspect in the field of thermodynamics that takes into consideration the human side of the equation.
Another factor not being taken into consideration in the current model is the overall debt incurred through the pure capitalist approach. The concentration of debt observation has been limited to Federal regarding both deficit and debt in relation to GDP (there may be some considerations on state and local government debt; but, not very much). Little or no attention is being paid to corporate and private debt. The combined nations debt as a function of GDP/GNP (which ever is greater being determined by the trade deficit) has climbed from 148% as a function of GDP in 1960 to 303% in 2002. The greatest amount of growth came during the Reagan/Bush I years where it went from 173.5% in 1980 to 255.1% in 1992 (1995 publication of the "Statistical Abstract of the US").

[forgethell]

95. kick

this weekend, I promise

[forgethell]

87. Kick

I have still not had time to adequately address your post, but I have not forgotten and will respond shortly.

[forgethell]

88. kick, n/t/

[forgethell]

89. kick n/t

[forgethell]

94. kick n/t

[forgethell]

104. kick

[forgethell]

105. Sorry for the delay, I had a major computer crash this weekend

From the Merriam-Webster’s Collegiate Dictionary, 11th Edition:
eco-nom-ics 1a: a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services b: economic theory principles, or practices.

Like most educated people, I take my definitions from dictionaries, not course descriptions on the web-sites of even the most prestgious universites. Here’s some more, on-line, so that you won’t have to go to any trouble.

ec·o·nom·ics
n.
1. (used with a sing. verb) The social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems
from http://dictionary.reference.com/search?q=economics

Main Entry: eco·nom·ics
Pronunciation: "e-k&-'nä-miks, "E-k&-
Function: noun plural but singular or plural in construction
1 : a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services
From http://www.m-w.com/cgi-bin/dictionary?book=Dictionary&va=economics&x=14&y=15


As you can see, there is nothing that can be construed as “the allocation of scant resources in the most efficient way possible” (#45,, see also #50). In fact, read your own definition again, from, not a dictionary, but your good old alma mater. There is no mention of “efficient” in there. To add “efficient” is to include an ideology, that is, that the distribution of goods and services should be efficient, rather than any other way, for instance, what people want.

To quote you (#50), “your misconception on this point only serves to highlight the questionable nature of the foundation of all your thought on this”. One further comment on this, I admitted (#49) that I might have expressed myself a little unclearly in my original comment. You seem to have completely overlooked this. Now, really, how do you expect to make your arguments when you do not read your sources carefully, nor correctly understand the aragument of your opponent?

What capitalistic societies am I referring to? Well, almost any of them. Until the communist government of China took over, Hong Kong had a very vibrant economy. The countries of Western Europe are sickly old men, economically, compared to the United States. Why should that be? They are older, more sophisticated, more co-operative with each other. Don’t take my word for it. Ask them. Truly, now, you do not believe that the European societies are free from ideology? Do you?

No, I don’t think that the Vietnamese are better off today than they were before they kicked the French out. Not economically. True, they are at peace rather than war. They are independent Both are worth a hell of a lot. Still, a lot of people disliked their new system enough to risk their lives fleeing from it. How many people do that from the United States? Or, Western Europe?

Capitalist societies of Columbia, Gautemala, etc.? These have historically been more like the aristocratic societies that you rightly disparage. Some are in the throes of fighting Marxist guerillas. Some were ruled for years by Marxists. So even if a capitalist system were installed today, would you expect any of them to match the United States by Wednesday next week?

I won’t try to defend the IMF, or World Bank. I agree that these institutions are indefensible.

Now, I am sorry that you did not understand my analogy. Again, from the Merriam-Webster, philosophy (1a1). All learning exclusive of technical precepts and practical arts, (1a2). the sciences and liberal arts exclusive of medicine, law, and theology (2a) a discipline comprising at it core logic, aesthetics, ethics, metaphysics, and epistemology (2b) a search for general understanding of values and reality by chiefly speculative rather than observational means (3a) a system if philosophical concepts (3b) a theory underlying or regarding a sphere of activity or thought. (4a) the most basic beliefs, concepts, and attitudes of an individual or group.

And tool (2c) a means to an end I have abridged some, but changed the meaning of nothing. Nor did I invent these definitions myself.

Now, let’s get to Pauli’s quote, “It isn’t right. It isn’t even wrong.” Boy, I wish I could make clever statements like that. I guess you do, too. Let’s see if I can deconstruct this one. You are trying, in someone else’s words, to say that my comment was irrelevant. And that is why I wonder whether you either cannot, or do not, reason using analogies. By the way, Pauli is wrong, too. Irrrelevant is alos wrong.

Regardless if whether the goal, the end, of capitalism is to distribute resources efficiently or to create wealth, it is the means chosen, by some societies, to do so. That makes it a tool. An automobile is also a tool, the end of which is transportation from point A to point B. Both are also systems (1a) A regularly interacting or interdependent group of items forming a unified whole. (1f) a form of social, economic, or political organization or practice <the capitalist ~>

Again, I left out some of the definitions, but nothing that would have contradicted my argument. I'll let you look up capitalist yourself, but it does not include the word “philosophy” and does include the word “system” Capitalism is a tool, a far more complex system than an automobile, and not a philosophy. You and Pauli are wrong.

But that is not to say that there aren’t philosophies about economics to include capitalism. There are philosophies about Man, too. But none of the philosophies are a man, or a woman, either. Whoops, another analogy. Let me express it plainly,: the philosophy of a thing is not the thing itself. Let me recommend to you Modern Philosophy by Roger Scruton. I found it to be a little bit to the right, but with a real attempt to be balanced in the approach, and very informative.

As you say, you argument is extremely unconvincing. It would have helped if you knew the definitions of the words that you were using.

[myopic4141]

106. I like the New World definition better

philosophy: 1) (orig.) Love of or the search for wisdom or knowledge; 2) Theory or logical analysis of the principles underlying conduct, thought, knowledge, and the nature of the universe (included are ethics, aesthetics, logic, epistemology, metaphysics, and etc); 3) The general principles or laws of a field of knowledge, activity, and etc (i.e.: the philosophy of economics); 4a) A particular system of principles for the conduct of life; b) A treatise covering such a system; 5) A study of human morals, character, and behavior; 6) Mental balance or composure thought of as resulting from the study of philosophy.
economics: 1) The science that deals with the production, distribution, and consumption of wealth, and the various related problems of labor, finance, taxation, and etc; 2) Economic factors.
capitalism: 1) The economic system in which all or most of the means of production and distribution, as land, factories, railroads, and etc. are privately owned and operated for profit, originally under fully competitive conditions - it has been generally characterized by a tendency toward concentration of wealth and, in its later phase, by the growth of great corporations, increased governmental control, and etc.; 2) The principles, methods, interests, power, influence, and etc. of capitalists, especially those with large holdings.
socialism: 1) Any of various theories or systems of the ownership and operation of the means of production and distribution by society or community rather than by private individuals with all the members of the society or community sharing in the work and the products; 2a) Political movement for establishing such a system; b) The doctrines,, methods, and etc. of the Socialist parties; 3) The stage of society, in Marxist doctrine coming between the capitalist stage and the Communist stage in which private ownership of the means of production and distribution has been eliminated.
In philosophizing about economic systems, many have come to the conclusion that neither the pure capitalist nor the pure socialist system is viable for any great length of time. It has been determined that the path of viability lays somewhere in between the two extremes. Exactly where has yet to be determined.

[Sirveri]

37. You missed the point to attack the letter.

The idea was to say that money by its nature can not be contained in one space without deliterious effects. To say that the divide between rich and poor in this country has not grown to epic perportions would be... wrong. If anything it is begining to tear at the very fabric of our society. Soon the schism between the rich will prove one side to be correct, that of the democrats. Going into the specifics of the laws of thermodynamics does nothing to adress the points trying to be made. The second law is only being used to set up a background to present a theory that is similiar to the second law.

[forgethell]

39. Sorry,

I didn't miss the point at all. I totally disagree with it. This is not to say that unregulated capitalism is a good thing. Only that capitalism has produced more goods (and money), for more people than any other system in the world today. Now, provisions must be made for those that cannot compete in modern society. But, on the other hand, you do not want to kill the goose that lays the golden eggs, which onerous taxation will.

[Sirveri]

40. What did the 40's and 90's have in common?

A bunch of rich people were seperated from their money. In the 90's a bunch of rich pyscho VC's went in and bought stock in nothing and basically gave their money away, spurring the greatest boom in our economy since the 40's. The 40's was also boomed by the greatest outlay of cash and public construction ever. Then there was the 50's, which saw another huge boom due to all those GI's getting free college educations, the rise of unions, and other things that distributed the wealth from the top down to the people.

But the basic idea that a person should go into business to make more money for himself will in the long run, if that person is successfull enough have deliterious effects on civilization. Why aren't we taxing all these corporate profits? Why are we cutting taxes on the rich? I'll go out on a limb and say that the democrats and republicans are merely a schism of the same people. Both with a differant set of ideas how the economy should run. The rich pluto-republicrats all think that they can squeeze out as much money from the lower classes and then if need be protect their power thru force. Whereas the Liberal Democrans believe that they should win the hearts and minds, keep them in their comfortable little self absorbed world. Stocked constantly with canned laughs and trashy game shows and pills.

I think they're BOTH wrong. If I had to choose, I would rather live under a Liberal government. But if I wanted to tear the whole system down, I'd vote for the republicrats. Yes, capitalism produces more goods and money than any other system, but it's goods we don't need and the real money doesn't go to us. I suppose we'll just have to wait and see what happens. But my prediction is that the current excesses will cause the current system to be torn down.

[forgethell]

43. We'll just agree to disagree,then

because I think you are wrong, for more reasons than I can go into one a forum like this one.

[Led Revel]

48. ok

fine

[huellewig]

72. Are goods and money how we measure happiness?

That's great I can get the TV, I just don't have time to watch it. Me and my Friend did a unscientific study about work. When we met someone the first thing they asked about was our work. Our friends were included.. 90 percent of the time the first thing out of their mouth was employment. My job their job. I thought it was indicative of our love of employment. Fuck, my kid has cancer, but I just got a cube with three windows. I can see the river. Let's focus on the important stuff.. I CAN SEE THE RIVER.

[forgethell]

90. No, but I

can be just as happy rich as I could be poor. Like anything else, a balance must be struck between competing interests or desires. I would be damn unhappy if I lived in a 3rd world hell-hole and was unable to feed my children each night.

[myopic4141]

54. Consolidation of wealth.

To put it in terms of the second law, consolidation of wealth is not the most probable state, so the economic system will evolve from consolidation of wealth to the most probable state which would be a balance somewhere between unregulated laissez-faire and fully regulated socialism. That is assuming of course, economic systems act according to the rules of thermodynamics which is unlikely. Even then, capitalism would not be inherently doomed to fail. What makes it difficult to apply second law thermodynamics is that economic systems are not closed systems. Nor does thermodynamics contain anything remotely like phantom wealth where as economic systems do.

[renaldo]

51. Repukes are parasites

The analog in nature to runaway capitalism is the parasite. The parasite does not produce anything useful but it gains control over the productive efforts of another, expropriating that "wealth" for itself. This deprives the host of the energy it needs for survival, and makes it work even harder. This is not unlike the situation we find ourselves in today - we work and produce, they take and contribute nothing. We save for retirement, they steal it. They pollute, we pay for cleanup. They borrow and spend, they exempt themselves from the debt and saddle us with it. The end result for parasitism is death to the host, but the parasite usually survives by sucking the last dregs of life out of the host and moving on. But Repukes are too greedy, too morally reprehensible to grasp this simple fact. They will kill us all.

[Karenina]

53. Good analogy!

:thumbsup:

[BraveMan]

63. Who is your "host"?

Is it the "evil" corporation you work for? If so, then you are the parasite, sucking the life out of the host. If you consider yourself the "host", then exactly who is the parasite? Your employees? The government?

Your line - "we work and produce, they take and contribute nothing", seems to describe the welfare recipients that sit on their ass all day watching Jerry Springer, comfortable with their meager slice of your tax dollars. Oh, but the poor and downtrodden can't help it, can they? They're victims. We'll just have to carry them on our shoulders as we march towards utopia (or nirvana, or wherever you think we're headed).

Do you imagine jobs are created out of the air? What would you do, punish the evil job creators for taking in your estimation too big a slice of the pie, ensuring that those nasty entrepreneurs take their evil schemes elsewhere?

[Sirveri]

64. I'd punish them for their excesses.

Lets face it, corporate CEO's have been getting a raise of 192% a year since the 80's, while average income has increased by what, 2-3% annually. They make something like 513 times the ammount one of their average workers makes. Then they cut jobs to go overseas and cut health care, because, golly gee, it's just too expensive!

I have no problem with capitalism when it recognises that it is based upon its workers, but the corporations are designed with only one purpose, to benefit their stock holders above and to the utmost exclusion of all others. That's their job, their job is not to do good in the world. It's not to create jobs. It's to make the people who invest in them richer. And those people are generally already rich.

My boss had a great business ethic. Your company should when possible attempt to benefit the community and provide value to it. Does it benefit a community when you pack up shop and outsource to Nicaragua? No. Why did you outsource to Nicaragua? Simple, it's cheaper on all fronts, and that's all you care about, because you're a giant corporation.

Who's the parasite? It's not the worker, the worker makes the company more money than he costs them, otherwise they would fire him. It's the company getting more money out of the employee than the employee himself gets. The Worker is the one who buys the products. The worker always gets the short end of the stick. Without the worker, the company would not function, it would wither and die.

[davidavisok]

52. hey read my stuff.... I'm going to poist it pretty soon

I gotta wait until I reply to more stupid posts.

[BraveMan]

58. M C Escher would be proud of this post . . .

Your money and/or wealth was subject to entropy during the Carter administration, to be sure. Thankfully, that period is past us.

Your assertion that there is only so much "wealth" available is a false one. Individuals create wealth by adding value to a product or service, or by creating products or services that individuals perceive as having value. There is no arbitrary limit imposed that limits the wealth an individual can create. The limit is set by marketplace; if a product or service no longer has value to the purchaser, then the limit is set, not by some metaphorical "wall" that nobody can see or define.

Pure capitalism provides the most honest measure of worth of the efforts of an individual (or corporation). Companies (or individuals)which do not turn a profit fail to do so because their product or service either lost it's worth in the eyes of the consumer or never had it to begin with.

The act of the government taking money from the rich and giving it to the poor like some Robin Hood leviathan does not support capitalism, it impedes it. The salient fact that capitalism can survive this onslaught is testament to it viability and strength as a societal foundation.

Its pretty obvious Marxism doesn't work. Socialism doesn't work either. One needs only a passing look at the socialist countries to figure that out.

Pretzel logic . . .

[blindpig]

61. your faith is touching

and apparently blinding. I'll not recite the laundry list of capitalism's failings as I expect it will fall on deaf ears. See my post above.

[BraveMan]

62. Yea, I read your post . . .

If I believed that education/propaganda of the masses towards an ecosocialist ethic is the only hope for the continuance of civilization, I'd be pessimistic too.

You ad-homenim attack regarding my faith notwithstanding, I'd be delighted to peruse your "laundry list", as it were. Please, regale me . . .

But consider this; how are you going to eliminate man's inherent laziness as you "educate" them concerning the values of your ecosocialist ethic? I find it ironic you champion a system that would only work in Heaven, where everything and everyone is perfect. After all, you don't believe in such religeous nonsense, do you?

[Jim Warren]

79. Quite an article of faith there

"how are you going to eliminate man's inherent laziness"

That's the basis of the "welfare queen" sentiment is it not?

I find freeps to be the most cynical of anyone. Seems to be much self-loathing involved there since often one detests in others that which they find inherent in themselves.

[blindpig]

83. religious nonsense?

Nope, don't partake, though I'm a Deist on good days. Judging from your post I get the impression that you worship at the temple of Rand. Libertarianism is a fine intellectual system if one dispenses with morality and ignores the planet, its lifeforms and resources.
My point is that our civilization will fall if we do not get a handle on how we treat this planet. The balls to the wall greed and exploitation which have marked the modern era can end sooner while something worth having is left or we can run it into the ground and make due with what little is left. A rational person would prefer the former. Given the shrinking resource base only some sort of socialism will provide justice and stability. Socialism is a relatively new form of social organization that needs work. That work might be further along if the elites of competing forms of social organization hadn't fought it tooth and nail. We are improvable, we are not simply grab monkeys. History and anthropology have shown this abundantly. We must continue our ethical advance, slow though it is, else civilization collapses due to environmental derangement and takes a large part of higher plants and animals with it.

[Sirveri]

66. Bashing Carter, how blazè.

It's not 'pretty obvious' that Marxism doesn't work. No economic system works when it is crushed and crippled by massive trade sanctions. Marxism does however have one major defeceit, it does not encourage efficiency because it removes the base desire of greed. What's the point in excelling when you won't get anything from it?

This deficiency could be corrected. The problem with capitalism is that it believes eternal growth is possible. Eternal growth is not possible, the resources on earth are finite. Pure and simple.

As for my assertion that there is only so much wealth, there is, it's called GDP.(All figures are circa 2002) There is 32.3(=/-.1) Trillion dollars in the world. The US has 10.4 Trillion. That's a little under 1/3 of the worlds wealth. Now imagine you are a company. You go out and pay somebody 1$ for a hour of work in Equitorial New Guinea. You then turn a profit of 50$ on that product. That's 50$ of potential that you've basically just taken from this person. Sure that 1$ will probably go pretty far in his home country, it might even improve his standard of living, but imagine if he had gotten 45$ for that nike shoe.

No, like any system that has flaws, the flaws and excesses will eventually, once exploited, drag the whole thing down. And on that day, I will be a very happy man.

[BraveMan]

68. Inflation = Entropy of Wealth

However, you are correct regarding the Carter bashing; way too easy. Apologies if you were offended by that flippant remark . . .

I'd would like you to promote a single example of Marxism as a successful economic system. If there is one, I'd love to hear about it.

Some of the resources on earth are finite; not all. I can recall being taught in school (long ago) the world's oil supply would run out by the year 2000. Perhaps though for the sake of discussion it would be best if I did not belabor that point and concede that at some point in the future we will run out of resources. Be that as it may, when the "resources" run out, capitalism is not the only economic model in trouble.

Your assertion regarding limit of wealth assumes the GDP is locked at a certain value beyond which it is impossible to venture. This is also untrue; the GDP has been increasing our entire lives and will continue to grow long after we're gone.

If your beef with capitalism is that it allows Americans to exploit cobblers in New Guinea, my suggestion would be to NOT SUPPORT THE COMPANY DOING THE EXPLOITING! If the product loses its value in your eyes because of this, then by all means do not use your purchasing power as a consumer to aid and abet these companies. That is your God-given right as a capitalist in a free society. I feel the same way regarding products from China (and France) albeit for different reasons (I'm presuming).

Regarding your avowed happiness on the day of the Ultimate Depression, I can't help you with that one. I don't understand the motivation behind that at all . . .

[Sirveri]

71. Best be careful

If the mods spot a RW on the board they will ban you. Most dem's don't bash Carter, for a variety of reasons. They also don't tend to boycot France. I however could care less, I would rather have more freepers as I believe it fosters good discussion.

Lets get off marxism, since in my original post I already stated that it doesn't work. But it doesn't work because it does not provide the incentive to excell by eliminating the potential for greed. In addition it has generally been dominated by huge despotic governments which simply used communism as a reason to take personal property for their own gain.

Could a addapted form of socialism work. Yes, it could. That is obvious to me. Certain things are flat out too important to be left to the free market. They either need to be outright owned by the state, or so heavily regulated that it is as though they are owned by the state. Generally in America, when a industry starts to brutally screw over and exploit people, we regulate them to protect the people. Because in theory, that's what our government is suppossed to do. Look at the rising cost of health care, compare that to the ammount we've raised the military budget and it's quite obvious that we could have provided health care for free for every American. Especially pre-tax cuts.

Yes, GDP does grow. At a rate somewhere between -3% up to 10%. It does NOT grow at 192% every year since 1980. Yet CEO salaries have. And that is at the expense of the public at large.

As for exports, I do not support WalMart for those very reasons. But it doesn't really matter if I am the only one. Because once everything is made outside of America we won't really have a choice where we shop or what we buy. Not like we'll get that far.

Lets talk oil since you mentioned it. We did run out of oil. We ran out in the 70's. By we I of course mean the USA. Our fields peaked, one year after hubert predicted. And OPEC saw that and took advantage of it to show us who was boss. When will oil production peak? My guess is that we're getting really damned close. Especially since no nation can meet the comming upsurge in demand from China and India as they come online. 80 Million Barrels a day and 82 Surplus production. Production growth rate of 1% and Demand growth of 2.5%. You do the math. Leaves us about 2 years. Are we going to magically find a new untapped field to drill in that would actually make a noticeable dent in those numbers? Well the good money is betting that we're going to hit a supply problem, regardless of if peak oil is real or not.

Ghawar oil field is Saudi Arabias largest oil field. They call it the King of Kings. It was discovered in 1948 and started production soon after. Hubbert generally predicts that a oil field will peak after 40 years. This one has been running for 56 years. But probably not non-stop and full bore. Either way if it's not nearly ready to peak or hasn't peaked already it soon will if history repeats itself. Even if it doesn't peak it has numerous other risks.

Here is a very informative link about risks and problems facing the worlds oil supply

As for the 'ultimate depression'. That's a bit drastic, it will be bad, but only thru the destruction of the nightmare that we have now will we be able to see a much brighter future. A future where hope can become reality, and we can leave behind the shit of this current system. A system that has been exploited once again by the rich to jack the poor. Unless of course we all nuke each other into oblivion.

[BraveMan]

73. Thank you for the informative link

Regarding the meteoric rise in CEO salaries as of late, that trend is reversing as of late, albeit slowly. Recently there has been a greater emphasis placed on bringing some of these criminals to justice. I expect that trend to continue. Regarding government regulation, I submit your fair state of California is in quite an economic mess over this very issue via the heavy hand of Gray Davis quite literally chasing businesses out of the state.

Still, abuses notwithstanding, I feel that scrapping the capitalist model in favor of a socialist model would be a grave mistake. Every socialist system I studied to date has been fraught with problems that pale in comparison to the ones we are currently facing.

The socialized health care found in Canada and Great Britain is a nightmare of inefficiency and bureaucracy. I am intimately familiar with Canada's system, having spent a number of years there with my family on assignment. Not too many people are aware of the myriad of restrictions placed on Canadians regarding their "free" health care (which is in all honesty merely pre-paid health care; Canadians pay for it whether they need it or not). For example, if you are injured at work your Workman's Compensation insurance is expected to pick up the tab. If you are injured in a auto accident, your auto insurance is expected to cover your losses. Canada's socialized heath care does not cover either of these situations. Dental coverage ceases altogether at age 18. Add to that the Canadian taxation rate of around 55% . . .

There is also something to be said for the difference in quality of health care between the U.S. and Canada. You will never hear of Americans travelling to Canada to get the heath care they need. Add to that the meddling of the Canadian government - did you know you cannot even get authentic Mountain Dew in Canada? (The version sold in Canada is revised to remove much of the caffeine and sugar, and it sucks. We used to "smuggle" in the American version.)

I recently read an article where a Canadian teenager died of appendicitis. He was initially refused treatment at the chosen clinic because he didn't have his ID card with him. He died on his way home to retrieve same. The callous statements made by the staff who refused his entry were appalling. They considered themselves blameless because they were "following the rules".

[dumpster_baby]

86. why do over 90% of Canadians prefer their healthcare system to ours?

Recent polls show that 92% of Canadians prefer their system to ours. End of debate....

Not that I am really debating you. I can hardly debate a preprogramemd automaton, and you are like most Americans. And I used to be one, too.

[ArkDem]

92. This is why wealthy people come to Canada from all over the

world when they have medical problems!

[BraveMan]

74. Correction . . .

My second paragraph didn't get phrased correctly. I meant to say the problems we are facing pale in comparison to the ones faced by socialist countries . . .

[BraveMan]

75. Might as well go for the Trifecta

Might I suggest reading "Eat The Rich", by P. J. O'Rourke. It is both entertaining and eye-opening. And yes, Mr. O'Rourke is conservative; that doesn't automatically make him wrong . . .

[BraveMan]

69. . . .

"No economic system works when it is crushed and crippled by massive trade sanctions. "




America is not the sole proprietor of trade sanctions, my friend.


http://www.buyusa.gov/france/en/263.html

[Sirveri]

70. yay, a irrelevant link.

Give me a break, you're comparing a sanction which JUST started and that will be listed once we repeal a law. A law that was against what the WTO, which we created and are a member of. Yes, that small increase of duty's is so VERY comprable to completly banning imports from the old CCCP.

[indigobusiness]

67. Interesting analysis of capitalism.

Your point is well taken by me. Healthy capitalism also requires an honest an honorable arena in order flourish. Corruption kills the promise of capitalism, as it does most others.


typo edit

[Right Makes Might]

76. It's an interesting analogy

but politics and physics are two different systems, each has to be analyzed in it's unique particularity.

Capitalism is certainly an anarchistic system driven to excesses beyond sense and what's good for us for the simple reason that capitalists have no other choice - it's either eat or be eaten. If you don't ruthlessly and continuously (and continuously increasingly) exploit the earth and the workers, someone else will... and you'll end up one of the exploited.

Also, the verdict is still out as to whether Communism would work, although if it doesn't it's not because of "human nature"... after all, humans lived in (primitive) communist societies for tens of thousands of years just fine.

[Dan Rider]

80. Capitalism means freedom

There are only three ways in this world to get somebody else's stuff. You can steal it (clearly wrong), you can beg for it (well, not so much wrong as sort of futureless, how long can you keep begging other people for their stuff;); or you can trade for it. If you trade for it, both parties make their own decisions and if they both agree its to their advantage, the trade happens. Now, its hard to carry around twenty horses or two tons of wheat, so money developed as a method of exchanging value conveniently. Gold, due it durability, uniformity, scarcity, etc, came to be the usual standard for this. So you can go buy some wheat with a gold piece. That's capitalism. Why freedom? Because property rights are maintained. Your stuff is actually your stuff in capitalism and you can give or trade it away at your own discression. You really want to work your 40 hours a week and have some government stooge with a gun tell you the state knows better than you where this "energy" should go? Only capitalistic societies have individual freedom rather than dictatorial statism. I'm really liberal socially, but economically, I want my freedom to keep what I earn. I think we pay too much in taxes already. Anyway, because there's a lot of freedom, there's the potential for a lot of crime, like Enron, which was a criminal act, not the fault of capitalism, and Halliburton, another criminal act.

Well, people aren't perfect by any means, but communism appears to always mean a totalitarian regime with rigid information control. Can you see having a site like this democraticunderground in China? Or North Korea? Or the USSR if it hadn't crashed and burned? If you don't have the rights to the fruits of your own productive labor, then the goverment owns you. And has to suppress any objections.

[dumpster_baby]

81. you are confusing economics with politics

try expanding your reading list. Start with chomsky....

[Sirveri]

84. I'm not advocating Socialism either.

If anything I'm advocating something in between. Pure capitalism works about as well as pure socialism. Both exploit and screw over the workers for the benefit of those in power. It's just that that power base comes from a differant area.

I don't have a problem with property rights, my problem is with the pooling of wealth and the breakdown into class systems. Does anyone really NEED to make more than 1 Million dollars a year? How about 16 Million, or 30? What's the point of earning that much wealth, what good are they doing with it? Tax every penny that goes above the 1M mark 90-95% and be done with it. Close any loopholes that would allow them to take it as stock options, don't let them throw it into 'retirment' either. Oh but the government is so inefficient. So what, we can fix that if we would actually try. Whatever I'm really tired, it's 5AM here and I need to go to sleep.

[dumpster_baby]

85. literature! Great Post!

You wrote:
"If anything I'm advocating something in between. Pure capitalism works about as well as pure socialism. Both exploit and screw over the workers for the benefit of those in power. It's just that that power base comes from a differant area.



Exactly! Government is a machine, and it may be complex, and it needs to be engineered like a machine. And of couse we have all the wealth and power in this world making sure that this machine is crippled. And all that wealth and power is churning out propaganda making sure that the American people think the right thoughts.

What we need are new forms of govt that inhibit the aggregation of wealth and power, except in certain important areas, such as medicine and pharmaceuticals, and manufacturing of complex machines (autombiles, machinery etc.). Otherwise, I think that benefits of corporate power in many other areas are less than the negative side effects. WHat I would like to see is high prices for many services and products. These prices would be high because of the ineffciencies caused by having only small comparies and sole proprieters servicing this sectors of the economy. But that is a Good Thing!

Very small, one or two person companies show be very easy to start and run, but restraints should be put on corporate growth except in certain managed sectors.

We already see this in the social democracies of Scandanavia.

And taxes should be high on personal income, but low on low income earners and high on high income earners.

[Karenina]

82. Unlimited growth

is the "mentality" of a cancer cell.

[Sigi]

96. OMG

I think I am going to be sick. Socialism and Communism will only do one thing for the future of this country: Bankrupt it!!

[dumpster_baby]

97. bankruptcy is not associated with socialism

It is only a feature of capitalism.

Besides, I think that you will find most lefty Dems are in favor of social democracy, a la Scandanavia. Anyhoo.....I dunno why I bother answering. You are really not ready to investigate these concepts, if I read you correctly.

[Sigi]

98. Why would you say that?

I am not against learning and discovery.

Just because I have a particular view does not mean I am not completely open minded.

It may be that I have not been on many forums before. Please don't get the impression that I know it all.

Sigi.

[Sirveri]

99. If you read the last statement

it clearly says that marxism (pure socialism) may not work.

The post was about the excesses and problems of the rich poor divide obfuscated as a essay on the flaws of capitalism.

Either way, we have no way to know what would happen in this country if we turned to socialism. Because we've never done it. We could likely do a democratic version of socialism, or even communism, and do better than most. The main problem with socialism is that it discourages rich foreign nations from investing in your infastructure. It also tends to require a large scale use of Heavy Industry to succeed, something that can not happen when all the democratic capitalist nations of the world bind together to crush it. Finally the biggest drawback would likely be that it does not encourage people to excel and productivity suffers. That is one area that would be the hardest to overcome. Mainly because we're either too stupid to figure out how to get people to work hard and to their full potential with little to no benefit or humans are simply too greedy to do so. I tend to prefer the former, but I must admit that the latter is easily capable of being true.

Let us not forget also, that the communism practiced in other nations was primarily used as a way to remove wealth from the rich and give it to a new party in order to make THEM rich. With little interest being paid to the people they were suppossed to benefit.

[Jim__]

100. I don't think people will work hard without a reward

Mainly because we're either too stupid to figure out how to get people to work hard and to their full potential with little to no benefit or humans are simply too greedy to do so.

I think it is a part of human nature that we want to be rewarded for hard work. That said, the question remains how much of a reward is necessary; and can we give the people at the bottom enough so that they can survive. People who work hard at WalMart should not be denied basic medical benefits; if providing these people with these benefits means Bill Gates has a few less billion dollars; I have no problem with that. Gates is the richest man in the world. But, what is it that he provided that we would not have had without him? The technology he sells was developed by other people, mainly by other companies - point and click was developed at Xerox, ultimately Gates stole it from Apple. So, give Gates his reward for his marketing abilities that essentially forced a standardization of the product. But, his reward should not be so extensive that hard working people are denied basic necessities - e.g. medical care.

[IrateCitizen]

101. I don't think you realize it, but you're advocating a degree of socialism

People who work hard at WalMart should not be denied basic medical benefits; if providing these people with these benefits means Bill Gates has a few less billion dollars; I have no problem with that.

If it is necessary to take from the "haves" in order to provide basic necessities to the "have-nots", then you are enforcing a basic reduction of inequalities principle inherent in democratic socialism.

Contrary to what you may believe, most modern-day, thinking socialists are not averse to the idea of people being rewarded for hard work. In reality, we are very much for it -- probably much more so than the free-marketeers and devotees of the Chicago School. After all, could it really be said that a CEO who knowingly pollutes the air and water while slashing jobs all in the search of higher quarterly profits contributes significantly more to society than your average health care worker struggling to make ends meet?

The answer lies not in pure socialism nor pure capitalism. Rather, it lies in adopting the better features of both systems in an effort to both increase efficiency and decrease gross inequality. Attention also needs to be paid to the worst excesses reinforced by our current system of crony capitalism, namely wanton wastefulness of natural resources and excessive pollution.

You may not realize it, Jim_, but you're already on your way to endorsing such a hybrid system, if I read your remarks in the above post correctly. ;-)

I'd suggest you check out http://www.dsausa.org to see a brand of socialism that might be a bit different from the Marxism that conventional wisdom tells us is socialism. It might be a bit more compatible with your belief system, even if you don't fully accept it, based alone on its proponency for a market system.

[Jim__]

102. My concern is with what works; not with how we label it.

I have no particular aversion to the label "socialism." I probably would object to certain policies advocated by some people who are socialists. I am definitely opposed to the ideological belief in the market that is the predominant policy today.

[dumpster_baby]

103. great thread!

I really like some of the responses here. I only wish I could be as graceful and teacherly as some of the leftist posters on this thread have been.....

[Tsiyu]

107. Well, we are verbose, aren't we?

Think of an economy as you would the circulatory system. Some organs will use more than their "fair" share of oxygenated blood. If all of the body's blood is forced into those organs, they explode. If the feet or hands or intestines stop receiving adequate blood flow, they die. The circulatory system functions efficiently - and miraculously- when there is free, unimpeded flow to even the tiniest capillary. And this flow is sent back as venous blood recirculated through the heart and lungs to be reoxygenated.

Capitalism didn't fail, because we do not have true capitalism operating in America any more than jesus is in the White House
(shrub's delusions notwithstanding.)

[Francine Frensky]

108. You make a mistake in saying capitalism requires growth

I've studied economics and never heard that capitalism requires growth to be successful, although with immigration and births > deaths there is some inherent growth there. Also, I know a physics professor who says you can't take laws of physics and apply them in other areas, tempting as that may be.

Here's my take: Every econ 101 class starts with this simple fact and subsequent basic question: The world consists of limited resources and unlimited wants. How best to allocate the resources to the wants? The answer is to find an economic system that is most the most efficient and most effective at allocating resources. Feudalism, the 18th and 19th century european system (and OT -- continued in the deep south longer than anywhere else -- which is why the south is still behind the rest of the country economically) of a few wealthy landowners and everyone else is a serf/slave, is a failure of a system, both in efficiency (eventually, the "family money" gets passed down to a drunkard or idiot and it's all wasted) and certainly in effectiveness (majority of people are unhappy with distribution). Communism, putting the state in charge of allocations to be fair to everyone, works in a small-scale, isolated setting (on an island, before modern transportation) but becomes unwieldy when applied to massive groups of people. Capitalism, "survival of the fittest", has clearly shown to be the most EFFICIENT way to allocate resources. It is also fairly effective, in that it rewards the hard working, and I think anyone could look around america and say that the majority of americans today live better than the kings of old europe.

BUT, pure capitalism, without strong government, is a cruel, cruel system and we haven't seen anything like pure capitalism in this country and I hope and pray we never do. Pure capitalism, without the constraints of a reasonable and strong gov't would, for example, have no use for the elderly, for the handicapped, for the mentally ill, for weak or sick children. It would see a poor drug addict as beyond hope and consider rehab a wasted resource. It would see no use in preserving the environment and would just let various industries and companies fight that out, which would mean the depletion of most natural resources eventually. Capitalism would have no use for a military except individual ones to protect companies that could afford it. If the military was in the hands of true capitalists, it would look much different, IMO.

We're so very lucky in this country to have a mostly free market, but also a strong government (thanks to democrats like FDR) that can protect us and some of our values from the strict consequences of capitalism. I always vote democrat just for economic reasons alone: corporations and capitalism will take care of themselves, it's the underdogs that need the government.

[sbreen]

111. you're right

you can't apply physics to everything...

another note I would like to point out is that you say the fundamental problem the world faces (as far as economics is concerned) is limited resources and unlimited wants. Furthermore, because of this contrast, pure capitalism (survival of the fittest type) would be ruthless...destroying the environment with the weak, old, and sick.

This assumption may be true, but i would argue that humans have wants outside the bounds of "economics" in its purest sense. Therefore, without a large powerful intrusive government, we could still have care for the sick, old, and weak...as well as a clean environment because these needs (wants) would be incorporated in with everything else. Capitalism is about future growth. If building an environmentally efficient product will be more sustainable and produce more consistent growth in the future (which is most cases it will) than corporations would learn (on their own perhaps) to do just that.

Just some food for thought.