What's wrong with Capitalism?
 

A few days ago, I was arguing with a friend of mine over the merits of capitalism over socialism. Being a fan of Keynes, I argued that while socialist policies in certain areas can be useful, capitalism was the most efficient and just system for distributing wealth. My friend argued that capitalism unfairly concentrated wealth in the hands of a few, which made capitalism inherent unjust and inefficient. After a few hours, we weren't able to convince each other either way.

This made me wonder: What, in your opinion, is (or isn't) wrong with capitalism?

Well the majority of people would consider capitalism a good thing, especially those here in the US. Technically yes, there are pros....considering that the main reason why the standard of living in the US is better than in most countries is because of capitalism...since it gives everyone a chance to succeed financially...the harder you work, the better your reward, it also encourages competition. But the downside though...is it lets people get left behind to fall through the cracks of life without government assistance, it exploits the underpriviledged, and it promotes greed. Over all I don't really know where I stand on it all...I need to read into it more.

Everything.

You came to the wrong forum.

How so?

Anything more specific?

Virtually everyone on this board holds socialist sentiments of some sort, to varying lengths of extremity, many of us as far left as you can get.

Found this quote...

“If the American people ever allow banks to issue their currency, first by inflation and then by deflation, the banks and corporations which will grow up around them will deprive the people of all property, until their children wake homeless on the continent their fathers conquered.” Thomas Jefferson


Privatized currency which is obvously opposed even to Jefferson^^ is the basis of capitalism...Hmm...I call No bueno!

Good. I want to know why everyone holds socialist views. I figure the best way to learn is by people who hold opposing views to me. This quote, by Nietzsche, best sums up my view: "The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently."

That isn't a quote by Thomas Jefferson, as far as I know. For more information, read this: http://wiki.monticello.org/mediawiki...nks_(Quotation)

The problem with capitalism is its basis upon the flawed idea that, in a system within which the acquisition of currency serves the singular impetus to work, individuals will continue to undertake such work for the benefit of society rather than to secure fiscal assets for themselves. Under capitalism, movies don't have to be good as long as people will watch them, news doesn't have to be true as long as people will read it, no one has to create anything as long as to profit from the labor of others is possible. Though to participate in these socially poisonous enterprises is far from fulfilling, the sole impetus to work, as previously stated, is capital, and so, in order to survive, the average man must toil away, steadily dehumanized, until his intellect atrophies completely and he returns home from an 8 hour work day believing that his brain needs rest rather than resuscitation, cracking open Twilight or turning on Fox.
An ideal capitalism, wherein every person produces and is compensated to a degree proportionate to their product's quality, would rule. Human nature, however, pollutes the system. The only reason for which capitalism generally receives more flak than say, communism, is that a totally compromised communism can no longer really be called communism, whereas a totally compromised capitalism is still fundamentally capitalism.

Some of the posts in this thread infuriate me, by the way. You people have an opportunity to educate someone, and instead you just come off like pricks who subscribe to leftist philosophies for no reason beyond that to do so is rebellious, and allows you to answer questions like "What's wrong with capitalism?" with stoic Clint Eastwood answers.

"[The] Bank of the United States... is one of the most deadly hostility existing, against the principles and form of our Constitution... An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?" --Thomas Jefferson to Albert Gallatin, 1803. ME 10:437

It's not hard to align yourself with socialism - like almost every other form of economic organisation, in theory it sounds appealing, and works. It's easy to poke holes in capitalism, because it's right there in front of us.

Me? I think socialism, when implemented, isn't all that good. I was born in what was the USSR; my family has fully experienced living in a communist state. Yes, there were certain benefits; some things were done right, national pride was at an all-time high... but, as usual, the human element brought with it greed, corruption, lies, unfair distribution of wealth and blatant favouritism which, in the end, brought the country to ruin. Hmm, that sounds somehow familiar...

I like the idea of capitalism. I like the idea that those who work harder, or are more innovative, get paid more. For example, I was never down with the fact that doctors in the USSR were piss-poor despite being maybe just a tiny bit more important than the kid flipping burgers. And as for that whole rich-poor gap, well, that's what the different taxation brackets are for - those who earn more pay more in taxes to help redistribute the wealth. Then there are all the freedoms. Say what you will, but having lived on both sides, I'm rather partial to this one. That said, I try to remain more or less apolitical, because any system is bound to have more than a handful of flaws.

Nice insight...I think its always an eye opener to hear what the opinions are of those who have lived the other way of life....

For starters, almost all cases of socialism in a third-world country have experienced astounding economic production.
So, who would have thought so? The conservative nightmare of "redistributing the wealth" has jack to do with Churchill's claim that it only "shares the misery", but all the contrary, and economic equality and collectivist tendencies DO raise the standard of living in much more efficient ways than capitalism does.
The Soviet Union is actually the greatest example of this, I won't even say "just ignore Russia." Russia was the retarded cousin of the European family, with a predominantly agricultural population that were still serfs. SERFS!
In less than half a century, they became the second power of the world, and the first nation to go to space.

If you were to argue about the human rights issues in the Soviet Union, then I'll just point out the bigger human rights violations all around the free market world. I am NOT justifying Stalinism, but it's pretty stupid to complain about certain human rights violations when we make even bigger ones and don't give a fuck about them. Besides, more humane socialist parties, such as the Sandinistas, have had an even bigger degree of progress in even more little time, so it wouldn't even be true that the Soviet Union HAD to be that brutal to reach that level of production. Socialism just works, plain and simple.

No argument there. Socialism may very well be the best system for nations that are struggling. On the other hand, for advanced, first-world nations, I can see socialism being a proverbial step back rather than a viable alternative.

True. In fact, Stalin may have been nothing short of a psychopath, but he rebuilt a country that was completely devastated by war in under 10 years (and the cult of personality that replaced state religion was pretty amazing, too). That's pretty astounding, even if his methods were highly immoral. However, the monarchic rule of Peter the First, and Catherine the Great, similarly brought Russia out of the Dark Ages, and made her a major player in Europe and Asia in a similarly short term.

What I'm getting at is, so does just about everything else, under the right circumstances. Consider this: any legitimate system of government will work if it has intelligent, organised leadership, and the support of the people. There's a reason the Soviet Union collapsed.

But look at the last things you said. Organization, intelligence, and democracy. None of these are capitalist ideals. Each works out for their own self-interest, completely alienated from anyone else, everyone else seen as a consumer at best and an enemy at worst.

Socialism, on the other hand, has economic and political flexibility based on the needs of the community. So long as production is owned by the workers and the state represents the interests of the producers, whatever government it is, it's socialist. As an anarchosyndicalist I'd wish that this means organization through a state that is nothing but a big trade union, but that's a personal preference to a socialist society.
I think it's sensible to believe that this economic flexibility based on real social demand rather than shallow consumer demand, would be all the better in first-world nations. Hell, remember that Marx thought communism could only happen in an industrialized country.
The only thing that can't be achieved in an industrialized nation if we implemented socialism is centralism. But who wants centralism? It stifles the same flexibility I'm talking about.

I think I understand what you are saying, but I just want to clarify: Are you saying that capitalism is bad because individuals will tend to work for their own benefit as opposed to the benefit of society, and (I'm assuming you're implying this) an economic system should work to the benefit of society?

What's the objective standard for "good", in this case?

I understand that capitalism can suffer from human nature, but what would then make socialism less impervious to this (or is it)?

I'm unfamiliar with socialism in the third world. Could you give me a few examples so I could start researching?

What are the bigger human rights violations in the free market world?

Chile and Nicaragua are both excellent examples of a burgeoning socialist economy that was only stopped through right-wing violence.

As for human rights violations, it all depends on what context you give them. I'm too used to hearing the words "well that's different" when referring to capitalism, so I'll mention them in parallels.
If you consider communism as responsible for the massive famines in China, then you also have to blame capitalism in India for an average of four million deaths more per year than in China since the fifties to the present.
If you consider Castro's trials against counterrevolutionaries as brutal, then you should wonder why you don't find a problem with the Nuremberg Trials when both were almost identical in praxis.
If you complain about the FMLN's attack on 800 Miskito prisoners, why not raise an eyebrow to Somoza's systematic genocide to these same people?
Hell, why would one even complain about Hitler's concentration camps when we see no problem with the United states having put four and a half million people in strategic hamlets with no sanitation and rations much lower than the absolute minimum to stay alive? They didn't even force them to work; the Vietnamese only became lumbering masses, wasting away until the war ended. Of course, this last one has nothing to do with communist atrocities; it was a fascist atrocity, but America's strategic hamlets are another example of human rights violations by the nations that lead the free market.

In a nut-shell, nothing. It's when a few grow so wealthy and decide to abuse their wealth to gain even more wealth and deprive others of it that it goes wrong. But even then, that's a fault of those few, not of capitalism itself. Any economic system can be similarly abused.

I completely disagree. Blaming individuals instead of the system just perpetuates the system that causes the problems.
Under Stalin, any problem within the Soviet Union was blamed on 'corrupt' administrators and politicians, and they were promptly removed from their position. There was nothing wrong with the system; the system was perfect! You just have to get rid of the bad apples.

This mentality rationalizes the existence of institutionalized injustice and oppression, and makes people disillusioned but merely apathetic of the only logical conclusion to that system.
EVERYTHING is wrong under capitalism because it's based on arbitrary guidelines and proclaims ideals contradictory to their praxis.
EVERYTHING is wrong with centralism because it's based on the distrust of the people it claims are good enough to maintain it.

So if a few use the wealth they have acquired for the good of others, whether it be through expanding and creating more jobs, investing in beneficial technologies and/or medicines, or simply through providing through charities, they are the exception, but when another few use the wealth they have acquired to keep others down and only increase their own wealth, that's the norm of the system? That's bullshit, plain and simple. You can't honestly point at a few bad individuals and say "this is what capitalism is." In this system there are people who use what they have acquired for numerous different things. Some abuse what they gain. Some do not. When those some do abuse it, you can't blame the entire system, because the very existence of those who do not abuse it serve to blatantly contradict the claim that the system is bad.

No BS that isn't what anyone is saying, the norm of the system is working to gain capital. Working to gain capital fosters greed and even in the best of conditions the system does not make it easy to work for the benefit of society because even if you want to make things better you also have to ensure that you are making enough capital to support yourself, which in many cases makes it very difficult, if not impossible to help others.

That's true, but then again, if you're barely making enough to support yourself, then you're not among those few who make so much that they can abuse the system.

I'm not saying that capitalism is a perfect system. There are far too many ways to abuse it and exploit it. But the basis of the system (as you just said, to gain capital, though that is an over-simplified definition) is not inherently bad. There's nothing wrong with wanting to gain capital.

Think of it this way. Some slave owners can be very decent to their slaves. The slaves may have cozy quarters in the manor itself; they may eat at his table; they might not be submitted to physical violence and they might only work ten hours a day. Hell, imagine half of the slave owners are this way.
Does that justify slavery?

I could use the same analogy to argue against socialism. Slavery isn't comparable to either capitalism or socialism.

It's not? The poor either work for the rich's profit or we starve, we are all bound to 'masters', they privatise land, the means to production and have enslaved the workforce as a result. If a rich man uses the profit that poor people have created for him out of their necessity for the scraps that he throws down for good, it doesn't change the fact that his wealth is illegitimate and his workers are slaves to him, having to accept whatever he feels is adequate to give. And you can say things like that we have minimum wage now, but we wouldn't have that if it wasn't for socialism. Everything that makes capitalism approach legitimacy is rooted in socialist reform.

Money doesn't necessarily make people work harder: http://www.ted.com/talks/dan_pink_on_motivation.html

Also, I can name a number of Western European countries with quite a higher average standard of living than the US and are quite socialist.

I'd actually disagree quite strongly that capitalism gives people an equal motivation to succeed. It certainly doesn't give people an equal opportunity to do so. Under capitalism untempered by socialism, the children of the rich will always have better health, better access to education and more opportunities.

There's a kind of naive belief that, in a completely free market system, people would be rewarded according to the work they put in. They wouldn't; how they succeed would depend on their social backgrounds, the wealth of their parents, their genetic inheritance and pure blind chance.

As an extreme example, I have a cousin with Down's Syndrome and in no way could she thrive without help in a system that didn't have the safeguards won by socialism.

Versus everyone being a slave to everyone else. Unless you decide not to work, in which case you'll be poor but everyone else will still be your slave as they'll be working to support you.

Work harder, bitch. Millions of people on welfare depend on you.

Any other bullshit rhetoric you want to throw out there, or did you work that out of your system?

I hate this quip so damn much and people use it so frequently.

You hate socialism then fine, stop benefiting from it.

As if welfare fraud doesn't exist in capitalism? Don't be such a bellend.

In true capitalism there wouldn't be any welfare

Yeah, but with Beneath the Shadows bemoaning the greed of capitalist individuals I have a feeling that he prefers the mixed economy approach. If he genuinely supports unfettered capitalism and is against benefits and so on then he really is a twat.

Am I a slave to my father because I have responsibilities in the house?
SEriously, what a fucking hyperbole.

But let's work with your definition of slavery. So because in socialism everyone is 'a slave' to everyone else, it is better that billions are 'slaves' in much, much shittier conditions so that a handful in the whole world aren't 'slaves' to anyone, in a society of the type of 1984 where this obsession with hierarchy (the handful of free capitalists being better than the billions of working slaves) comes with the sacrifice of net material wealth?

Why is it when some people argue they resort to spiking instead of going for a more reliable score? Socialism is fine, it's just that people are lazy and expect the more fortunate to spot them a bit of rope. The less fortunate just need to work harder, like their "superiors" did.

The producers', for the most part. I'm not bemoaning the fact that I personally don't enjoy every single film ever created, I'm addressing the fact that, under capitalism, movie studios often very deliberately prefer their pictures to be optimally profitable rather than optimally well-made, e.g. "That writer is too expensive, the cheaper script won't make the trailer any worse", "You need something for the teenage boys", "No one will see a three hour western, Mr. Leone."

Do you mean "less susceptible" to this? Assuming you do, it isn't, it's simply susceptible in different ways, the nature of which depends on that of the socialist state.

From a scientific standpoint, Socialist economics is much more natural than capitalist economics. Look at wolf packs, colonies of apes, or even ant colonies. The whole society benefits when the whole society is fed.

By the way, another answer to why capitalism is bad. It's theft.

Profit is exploitation of someone by someone who isn't as useful.

An overly simplified example just to give you the concept.

A factory produces good A.
In order to produce good A they need materials 1 and 2, machine Z, and X man hours, which are provided by the factory worker.

The owner of the factory will then take the good and set the price so that it covers the costs of materials 1 and 2, machine z, and x man hours. Where is his capital coming from? He gets it by removing a share of it from one of the costs. He can't do it from machine z, as without it he won't be able to make more. He can't take it from material 1 or 2 for the same reason. So he takes his cut from the only remaining source. The factory worker and his X man hours. The factory worker gets payed a fraction of what he should have received and the remainder goes to the boss. For actual situations, simply take this, and add thousands upon thousands of overhead costs, including fees, licenses, and so on and so forth. After all those costs, figure how much the worker is being cheated.

Apparently you didn't catch on to the fact that I was using it ironically. Responding to bullshit rhetoric with bullshit rhetoric.

And where, pray tell, did I ever claim to hate socialism?

Did anyone claim that it doesn't? After reviewing the topic... no. No one made any such claim.

No more than I'm a slave to my boss because I chose to accept the job I have.

Oh, and JCC's little spiel wasn't?

I love how you say "let's work with your definition of slavery," and then you don't.

The United States and Japan are the epitome of capitalism in this world. We are what anti-capitalist complain about. (The US more-so, of course.) Oh, yes, our poor have such shitty living conditions. Flat-screen TVs, LCD monitors, iPhones, Blu-ray, enough food to throw away a large portion of it uneaten. Even our homeless have cellphones, MP3 players, and laptops. Oh, those poor things.

You know, at least in my experience, people from former Soviet Block countries have a very idealised concept of capitalism. While it may be nice to believe that, under capitalism, the harder you work the better you will do, it just isn't true. In fact, the opposite is true to a huge extent. The people who brown nose the most/best are the ones who get ahead and that takes time away from being productive. Hell, I've been told before that the reason I wasn't receiving a promotion is because I was so good at the job I was doing that they'd have to hire two people to replace me and then gave the manager promotion to one of the biggest slackers. Of course I promptly quit and they had to hire three people instead of two but that isn't the point. Sure, in a perfect world hard work would equate to success but this world is far from perfect and, the harder your work is, the less you get paid because, in a capitalist system, you're just labour. You bust your ass for eight hours a day while the person kicking back in their office all day, your "manager", gets paid twice as much as you do.

As for doctors making little more than burger flippers in the USSR, you want to know why doctors make so much more than burger flippers in the US? You could say because of superior educational needs to be a doctor. More time and money invested into readying themselves for their career, more important job function or whatever else you can think of. Sure, any job that requires years of educational investment is going to be paid more than someone who invests nothing in it past high school.

But there's one huge difference between doctors and burger flippers. Doctors get paid in a fee for service manner, which is actually pretty socialistic. Something like 56% of every health care dollar goes to the doctor. At least to me this equates pretty well to socialism because the doctor has a lot of control over the means of production. Though, at least in the US, this leads to spending $100 for ten minutes of the doctor's time. I wonder how much a burger flipper would make if they got paid a decent portion of the profit on each burger they produced.

Now look at doctors in Europe. Yes, they do work under a more socialist system, however, their means of pay is salaried and, at least in some countries, bonuses for better outcomes. Which is exactly like the capitalist model that most of us work under and they make half of what a US doctor does.

As for your different tax brackets, the progressive income tax structure is a socialist reform on capitalism and isn't even the reality of the situation. First of all, when people think of higher tax brackets they tend to think that these people pay that x% on their entire income. That isn't the case. For example, if the lowest income bracket is taxed at nothing, up to say $6,700, and the next income bracket gets taxed at 15%. Say I make $10,000 this year then, rather than paying 15% of $10,000, I really only pay 15% of the $3,300 over the untaxed $6,700. And that's how it works on up the tax brackets. First $6,700 is tax free, I pay 15% on everything over that up to the next tax bracket and so on.

Another big problem is that this only takes into account income taxes. The most wealthy in the US don't tend to have incomes that get taxed as income like the rest of us. All their money comes from investments and our capital gains tax rate is only 15%. This includes people like hedge fund managers and people like Warrent Buffet, who pay a lower portion of their income than all but the lowest, untaxed, income earners.

And you forgot the an-caps still floating around here. =P

BtS - Dunno what sort of homeless people you know, but even some people *with* homes that I know don't have iPhones, laptops and MP3 players.
I'd go so far as to say that the flatscreen TV and iphone owning populace is the minority.

And, of course, there's the concept of relative poverty, often ignored by the sort of people who say "well, you have food and a roof so stop bitching".

That's not called slavery, it's called society. Unless, of course, you're a capitalist. This happens to be one of my biggest complaints about capitalism is that it not only divorces people from societal duty, it tells people that it is wrong to think of others and, instead, one should only think of themselves.

I know all sorts. My point is that in America, even the lowest rungs of society has the means to acquire nicer things, such as the above examples. How can capitalism be so bad if it provides our poor with the means to raise their quality of life in such a way? How can it bad when some of our homeless even have vans and Winnebagos to live in and drive around in?

Like I've said previously, it's only bad when individuals exploit it.

As I indicated before, I was referring to the United States. I'm well aware that in many other places of the world, "poverty" truly means just that. But since America is often the example used to describe the downfalls of capitalism, America is the example I use to describe the opposite.

I'd also like to know where all these Iphone and flatscreen owning poor people live so I can move there. Our income, at a little over $30k a year, is considered lower middle class, we have no children and yet I'm typing this on a computer built last century and don't have any flatscreen TVs.

As for homeless with cell phones, yeah they exist. I've been one of them. Then again, I had the cell phone before I was homeless. It was a prepaid model and I kept a few bucks on it so that I had a phone number to put down on job applications and calling friends to see if I could take a shower or crash at their place for the night. You should also know that not everyone who is friends with someone homeless is homeless themselves. Some are pretty young or, for the most part, broke themselves. Being as poor people are generally pretty helpful to others in need, they tend to give their friends things like that old pre-paid cell phone that they don't need any more because they or, especially among the younger ones, their parents purchased them a new one.

And lets not forget that there's organisations in existence that take cell phones as donations and get them rigged up so they can only dial 911. These phones are then given to vulnerable populations like the homeless and battered women to try and ensure they have a means of calling for emergency assistance. It started out as for battered women but, as cell phones became common, pay phones have become rare and people saw the need for the homeless. I've also seen organisations that helped the homeless have functional cell phones in order to receive call backs for jobs.

All this is assuming the cell phone is functional for calls at all. Making calls isn't the only reason to have a cell phone. Even with no minutes that hand me down or found cell phone makes a nice, portable, alarm clock.

For the record, I lived on the streets for five years straight, and on and off for a couple years prior to that.

I don't know if you're lying or just have a skewed perspective on who the poor are, but your comments reek of Reagan's Cadillac driving welfare queens. Either way, as someone who spent a good chunk of their life poor, with mostly poor friends, I call bullshit on your claim that you "know all sorts" of poor people with luxury electronics. Those that do probably either had them given as Christmas gifts or they don't really own the items. There's a whole wonderful world of exploitation out there called rent to own that will allow a poorer person the ability to make low payments on TVs and computers for the low low price of 3X market value. Plenty of people are stupid enough to be taken advantage of in this market but, given that they're poor, they tend to lapse in the ability to pay at some point and lose the item. That's how these companies make their money. They let you use the item for a period and either make 300% profit on it or, after you've probably already paid enough for the item if you bought it at a store, they get take repossess it and then use the same item to do the exact same thing to the next person.

Call bullshit all you like. What I said is the truth, and saying "bullshit" won't change anything.

In some cases, yes. But I wasn't thinking of those cases.

Most of the homeless people I know wouldn't choose that option simply because being homeless they're discriminated against. A homeless person walks into a store wanting to pent-to-own any piece of electronics, and the cashier and/or manager will instantly assume that that person just wants to pay a small amount for the item, turn around and sell it for more, and then disappear without paying the item off. No, if we wanted something like that, we'd save until we had enough money, and we'd lay our money on the table. (And I say "we" because once upon a time that included me.)

So what was the point of what you said? A socialist community wouldn't give someone welfare if they just said "RIGHT, I AM NOT GOING TO WORK, PAMPER ME", so the only opportunity for someone to sponge off the labour off the rest of the community is through fraud, and welfare fraud exists now as much as it would in socialism, so what's your point?

You painted a ridiculously exaggerated picture of capitalism. I replied in kind.