Someone tell me why Captialism isn't just one really big Ponzi Scheme?

[Taverner]

Take banks, for example. If everyone pulled their money out at once, there wouldn't be enough capital to cover it.

Corporations - if every investor sold all at once, there wouldn't be enough company assets for them to cash out.

All of capitalism exists on the assumption that all the investors don't pull out at once - and that is a ponzi scheme. Just because everybody knows it doesn't make it any less of a ponzi scheme. Many of Madoff's investors knew something was up, but did and said nothing.

[Cal Carpenter]

1. Oh but we can 'regulate' it dontcha know

:sarcasm:

[Taverner]

2. Very true

Although I wonder if its even possible to regulate a Ponzi scheme...

[Cal Carpenter]

14. No, I don't think it is

The thing with capitalism is that it *inevitably* results in concentration of wealth (and therefore power). History shows that it is possible to make tiny dents here and there, but it is impossible to 'reform' or 'regulate' it in any lasting, meaningful way.

Take for example the New Deal - arguably the biggest dent ever made to capitalism in this country. Not much is left of the progress it made for working people and the poor nowadays.

Looking at attempts to regulate/reform capitalism through just about any lens (environment, war, race, workers rights, health care, education), it seems pretty clear to me that it doesn't accomplish much.

[dchill]

57. Only Ponzi can regulate a Ponzi scheme.

And you can take that to the bank.

[defendandprotect]

113. We've already done that and they bought government and elected officials to

uncuff them from those regulations!!

[rcrush]

3. Why do you hate America?

[arcane1]

4. I wish I could tell you it wasn't...

especially considering that the money in question has no value beyond the debt that created it in the first place.

[Taverner]

7. This is why I think (and I'd love to be proved wrong) all Capitalist systems are doomed to failure

[paulsby]

5. because it grows wealth

better than any system ever invented by man

which anti-capitalists can never seem to grok, or purposefully ignore

it is NOT a zero sum game

ponzi schemes ARE

that is the difference

[Taverner]

6. But how much of that wealth that it grows is from inflation, or perceived value?

Basically, how was Madoff's scheme any different than Bank of America's? Or Citi's?

[arcane1]

8. The difference:

Madoff scammed rich people. That's a no-no.

[Oregone]

11. Capitalism isn't about growing wealth

Having private owners of production does not universally generate more wealth by any rule than having alternative ownership; its silly to suggest who *owns* the means of production has any material impact on the process of production and labor.

Capitalism is about distributing wealth, and it does so in such a way that leads to wealth disparity.

[paulsby]

15. in PRACTICE it does

show me examples of alternative systems that grow more wealth

[Oregone]

18. In practice...

Capitalism doesn't allow other systems to significantly develop, as it is a threat to its own existence and purpose (to deliver wealth to uninvolved shareholders). Though it can be said capitalism doesn't even exist in its true form (the US is mixed market due to capitalism's tendency to fuck everyone if left to its owned devices, so socialized services exist that train workers and keep them healthy enough to be used by private industry). Its almost hilarious to tout the universal benefits of capitalism, which cannot even exist without a socialized crutch. Capitalism and nothing but will fail the people, and ultimately the shareholders, miserably.

There is no universal rule and nothing beneficially inherent that makes capitalism generate more wealth though; although alternative systems like employee owned enterprise will not catch fire in a currently capitalistic environment, there is no rule that these private corporations would not be able to generate wealth through production just as efficiently.

If you disagree with me about this, could you explain the value added to production if a private, uninvolved, wealthy shareholder owned stock in a company instead of the actual employees? What fiscal mechanism causes the same amount of production, in such a scenario, to generate more wealth?

[paulsby]

19. nice dodge

again, show me an alternative system that grows more wealth\.

the proof is in the pudding

at the outset of the 20th century, there was hope for other systems.

despite all the eggs broken, they failed.

you say there is no "rule" that it could happen otherwise.

well, again, except for the "Fossil record" so to speak.

i use that analogy because you are sounding like a creationist

there very well may be some as yet undeveloped system that better generates wealth

but thus far, NO SYSTEM has done a better job

if you disagree, then show me the system that's better

lots have been tried. they failed

proof... pudding

[Oregone]

21. As soon as you show me a purely capitalistic system that does

The proof is in the pudding.

Because what you have in the US is capitalistic private industry that exists by having most of its failings shored up by socialized services to keep it from completely imploding.

So if you want to look at the "real world", you should be careful to understand that your examples are anything but pure. While I am surrounded by socialized corporations (which all do a great job), they exist in a mixed-market and stand as no overwhelming example of anything, truth be told.

When the real world is layered, mixed, and not pure, then we talk about the concepts involved in these economic systems. And you cannot even go so far as to point out how there is any universal fiscal mechanism that causes production to produce more wealth if a shareholder is private (rather than public or an employee).

This is all like saying Islam is the universally true religion because IN PRACTICE its spreading to the most people (without arguing any of the tenants of the religion, what it depends upon or its effects)

[paulsby]

69. again, nice dodge

there is no "purely" capitalistic system nor does capitalism require that every single thing be in private hands

you sound like a freeper who is claiming that OMG the USPS is SOCIALIST.

it doesn't work this way

it's a way to avoid the issue.

the VAST majority of the economy/means of production and distribution are in PRIVATE hands in the US

that is a capitalist system.

we can acquire and keep wealth. and use our capital to build more capital (god knows i do)

when you are finished with dodging, let me know

AGAIN, show me a NON capitalist system that grows more wealth

you can't, you know it, so you play the creationist game

[Oregone]

78. "there is no "purely" capitalistic system"

Exactly. Funny how you can say "IN PRACTICE" it does A or B, when it does not even exist in reality in a pure form. All its failings are being addressed by socialized systems to help it flourish. Leave it to produce a healthy and educated working/consumer class, and we will see just how successful this system really is.


"you sound like a freeper who is claiming that OMG the USPS is SOCIALIST"

It is. And thats great. Thats definitely a sector that has done well with a mixed-market system.


"the VAST majority of the economy/means of production and distribution are in PRIVATE hands in the US"

On government infrastructure, labored upon by workers who have been government educated.


"AGAIN, show me a NON capitalist system that grows more wealth"

You haven't yet showed me a capitalistic yet (which the US isn't, but rather, mixed-market).

This isn't a dodge, but the downright reality of the situation.

And capitalism doesn't "grow" wealth. It distributes it. You remember you said it only seems to do so "in practice", though, in practice it doesn't even exists really. Its inability to distribute necessary goods/services to everyone in a population, in order to create stable markets and a strong working class, has been supplemented in America by socialized activity. It hasn't even been given a fair chance to fail on its own, much less succeed, in "growing" wealth.

[defendandprotect]

120. Nothing is in the hands of capitalists which isn't supported by the taxpayer in one way or another..

Capitalism is dependent upon the state/taxpayer - for protection and solvency.

Again -- "wealth" for the few --

and converted to political power over the rest of us.

Again, "wealth" is a meaningless commodity -- especially as a tradeoff with pollution,

destuction of the planet, homelessness -- impoverished children.

How do you see "wealth" in terms other than the yardstick of a dollar bill?

Are people worth anything if they can't be converted and exploited into dollar bills?

Is the planet worth anything if it can't be converted/exploited into dollar bills?

[grahamhgreen]

174. The recent collapse (again) of capitalism and the bailout required by

socializing the losses proves that capitalism is, in fact, a con game, more complex, but including, ponzi schemes.

If you look at where the real wealth is actually generated (the internet by public funds, the Lexus by public funds), we find the the best systems are hybrids of both structures (IMHO).

In fact, the places with the highest quality of life are all social democracies (including ours, which is simply too weak in social welfare, and would be a much better, healthier, happier, and wealthier place if we had guaranteed health care, housing, & food).


http://en.wikipedia.org/wiki/Quality-of-life_index

[Silent3]

84. Who said this was about "purely" capitalistic systems?

Uneven though the distribution of wealth might be, clearly there's more wealth in the world today, not just total wealth but per capita wealth, than one hundred or two hundred or three hundred or four hundred years ago. Temporary boom/bust fluctuations aside, wealth has grown pretty steadily with the rise of national and world market economies based mostly on the principles of capitalism. Pure capitalism? Of course not. But no one here is arguing for the merits of pure capitalism, just against mindless bashing of capitalism in general.

Even with uneven distribution of wealth, you mostly have to look at undeveloped countries today to find widespread poverty of the sort that was commonplace everywhere in the not-too-distant past. In developed countries, the average person has much better shelter, nutrition (yes, even having access to today's prepackaged, processed, industrial-grade food is better than starving from a lack of organic, unrefrigerated food), medical care, clothing, and other creature comforts than people in earlier times, in many ways better than the elites of the past, not just average people of the past.

While you can't separate out purely social and technological reasons for those improvements from improvement due to capitalism, you can see that along the way countries like the Soviet Union which tried actively to replace capitalistic market mechanisms failed to do anywhere near as well as more capitalistic countries in building wealth. Excesses of capitalism have been shown to not work very well either, of course, like the "robber baron" days of the late 19th century.

You're being asked for proof that something other than capitalism (it's a straw man when you repeat back "purely capitalistic") has ever done as well in creating wealth. Not if something hypothetically might, but if something ever really has. I don't think any examples exist for you to offer up as proof.

[okie]

93. I don't really dispute much of that

Socialists don't argue that capitalism hasn't created wealth. It clearly has. But that's just the surface reality. What's the wealth based on? What are the social relations that make the perpetuation of the system possible? In the case of the United States, the wealth created under capitalism is the result of a legacy of genocide, war, imperialism, slavery, and the collusion of corporation and state that is the military industrial complex. All of these have given us (some more than others) a number of economic benefits. But does that make it good? It can't function without this financial sector that is only growing in influence. It thrives on things like resource wars in the Congo that have killed millions.

As for the Soviet system, though it is not something I support, I'm always struck by how strange it is that we compare it the United States and declare capitalism the winner. Think of Russia's position in the world at the beginning of the 20th century. Think of where it ended that century. Think of where the US and other capitalist powers began the 20th. You say Russia was worse off than the major capitalist powers, and in a lot of ways that's true, but in 1975 would you have rather been a Russian or Mexican? Would you today rather be a Haitian or a Cuban?

And the question of what socialists should point to when they're asked for an alternative to capitalism is an unfair one. There are many reasons a socialist society has never emerged. Capitalist interests are obviously very entrenched, and they don't take kindly to folks with different ideas.

[Oregone]

106. "You're being asked for proof that something other than capitalism..."

There are plenty of socialistic institutions in my life that produce efficiently and "create" wealth, but do they together, in a mixed economy, constitute something other than a mixed-market? They do not exist in my life in a pure form, anymore than capitalistic institutions do, so its not something I think I can use argumentatively as some empirical proof about what systems "creates" more wealth. And being that neither of us can actually name a theoretical mechanism of either system that can account for the difference in wealth generations...well...whats to do?

I mean, this poster has not even proven that ownership itself can account for wealth "creation". All they do is point to a system in practice and say "the proof is in the pudding", without even pointing to a capitalistic system that isn't propped up with a socialistic crutch. If that is winning an argument to you, all the power to you, but its a silly game to play in my opinion.

[defendandprotect]

121. The "wealth" you are talking about is only created by exploition/destruction . . .

We begin with a planet and nature -- and humans - -

We end without a planet, without nature, without animal life and without humans --

hmmm....

what went wrong?

We end up with homelessness -- impoverished children --

That's quite a huge and ugly trade off for capitalist corruption!

You're discussing a dollar bill -- not what is really valuable to us all.

[Silent3]

126. Non-capitalists have also wrought tremendous environmental damage

Chernobyl was a communist/socialist project. The loss of Aral Sea happened (or at least started to happen -- a bit of it is still left) under communist rule. I'll take America's homeless problem over all of those who died during under Stalin's or Pol Pot's leadership, or China's "cultural revolution".

Which is not to say non-capitalist systems haven't done good things too. Just like capitalism hasn't done all evil.

I'd rather take my chances with continued effort to restrain the excesses of capitalism than trying anything like all-government-owed enterprises or command economies.

[defendandprotect]

157. USSR was "TOTALITARIAN" socialism ... not Democratic Socialism ...

That is what FBI Director J. Edgar Hoover always called it to make it perfectly clear!

Also keep in mind that Hitler's "socialist party" was once a real socialist party because

it was co-opted by Hitler. Because "socialism" was prized. Originally that party did work

for women's rights and labor, unions, etal.

And, are you saying we couldn't have a Chernobyl here?


And what do you think US connection may be to the deaths in the world? Pol Pot?

Cambodia?

Unregulated capitalism is merely organized crime --

Capitalism is based purely on exploitation -- of nature, natural resources, animal-life --

and even other human beings according to various myths of inferiority.

MIC is also corporate/capitalism . . . . what "wealth" is created by warmongering and warmaking?

[Silent3]

159. No, I never said the equivalent of Chernobyl couldn't happen here.

In fact, that you even have to ask that shows you're paying no attention at all, or can't get much of anything subtle through your black/white filters on reality.

[defendandprotect]

160. Then what was the point of mentioning it ?

[Silent3]

161. To question the point of mentioning environmental problems...

...that have happened under capitalism. That wasn't clear?

[defendandprotect]

167. You don't understand capitalism's impact on the environment--????

Are you kidding?

We have Global Warming because of capitalism -- and you're that far from understanding

that reality? Pollution of the planet, oceans, whatever ---

Destruction of human life? Look at the Massey Mines, for just one example!

Wow!

Bye --

[Silent3]

169. Yes, I get it that you want me to be thinking...

Capitalism: bad, Bad, BAD!!!!!!

And certainly there are many bad things that have happened under capitalist economies. But if you point out examples of environmental problems produced by capitalist economies, and I'm not supposed to ask "Why did you bring that up?", then why when I counter with examples of environmental problems under communism/socialism, why are you confused about the point I'm making and ask, "Why did you bring that up?"

[defendandprotect]

171. Capitalism and Communism -- "a pox on both their houses" --- George Orwell

Think whatever you wish -- as we all do -- !!

[Taverner]

177. Both of you: put away your clubs!

Seriously, both of you have made great points on both sides.

Focus on the issues, not the namecalling.

Both of you are intelligent enough!

[LanternWaste]

107. I would need to be convinced

"despite all the eggs broken, they failed."

I would need to be convinced each and every alternative economic system failed due to internal and fundamental fallacies in ad of themselves rather than through an interference not part and parcel of that system.

As there is not, and never has been a 100% capitalist society, nor a 100% socialist society, I believe the best we can present is evidence rather than a proof. And as alternative systems still exist, I'm afraid I don't see failure as the only option available.

[defendandprotect]

122. PLUS ... capitalism trades the natural world for the artificial dollar bill . ..

let's simply uninvent that dollar bill!

[defendandprotect]

119. Describe to us what you think "wealth" is . . . . is nature "wealth" ... is having

a viable planet "wealth" . . . ???

Or is it only "wealth" when it is broken down and exploited?

Beach front property/hotels . . . ?

Animal life -- any worth/"wealth" in preserving the web of life -- animal species . . . ?

Or are animals only worthwhile when they can be used to create "wealth" . . . ?

Is the health of citizens "wealth" . . . ???

Labor is exploited by capitalism to create what you call "wealth."

Let's have labor join togethr -- even internationally -- and see what labor alone can

produce, minus the destruction!!

Shall we judge everything by capitalism's yardstick of a dollar bill . . . ?

Studies of this have shown that had we never had capitalism we'd probably still

have a working planet and would have saved nature and ourselves --

not to mention the financial costs involved!!

[HillbillyBob]

187. Yea the wealth 'grows' for some usually those who

Use us for their workhorses so the wealth WE create with out labor is sucked off by some rich bastard to live like a fucking king while we get stuck paying the taxes thay those welfare queen corpses suck up in subsidies or bailouts.

It does not GROW it concentrates..by the way KoolAid is poison dint you ever hear about Jim Jones and his cult?

[anigbrowl]

38. You are partly correct

You ask

"If you disagree with me about this, could you explain the value added to production if a private, uninvolved, wealthy shareholder owned stock in a company instead of the actual employees? What fiscal mechanism causes the same amount of production, in such a scenario, to generate more wealth?"

Well, the answer to your question is 'none'. Equally, there would no direct value added to production if the employees own it (although they might feel more motivated as a result). I think employee ownership in part or in whole is a fine thing, and indeed I often wonder why unions don't put more energy into purchasing the stock of companies or arguing for grants of stock or stock options to employees during collective bargaining. Owning part of a company and being able to influence it via shareholder elections to the board etc. is potentially a powerful economic strategy (BUT it is true that the way shareholding works under American law means this is not always as easy as it sounds...I won't go into that here because it's so complex and I don't want to derail).

So I agree, it is NOT fundamentally better for a company to be owned by non-employees.But I would go further and say it is not even different - in a case of employee ownership, the employees are acting as capitalists, and risking their capital on the possibility that the company might lose money in the future as easily as it might make a profit.

Why have external capital all, then? Because sometimes the founders or employees don't have enough. Let's look at an example.



A is an entrepreneur who sees a market opportunity - that is, something the public would buy because it's better or cheaper than what's available now. Doesn't really matter what...let's say rocket-powered roller skates in honor of Wile E. coyote. So, A needs some rockets, some roller skates, and a factory with some tools. With 10 employees, the factory will turn out 100 pairs a week to an eager public.

Does he need the employees? Well, sort of. By himself, A might only be able to construct and sell 5 pairs per week. His employees might have better engineering or manufacturing skills, and by specializing they could be much more efficient than if he tries to do everything himself. So A decides to hire them and concentrate on the job of selling the skates and managing the factory accounts.

But A is missing one thing - the money, aka capital. He goes to B, a banker, and asks for a loan, but the banker just laughs at his crazy idea and says he'll only lend money if A is prepared to pay 20% interest. That would be expensive to pay back, and push up the price of the rocket skates so much that they wouldn't sell. Damn!

Enter C, a capitalist. C agrees there is great potential for the rocket skates and is willing to risk money on the idea. He offers to put up the money to build the factory and hire the workers. A and C set up a joint stock company, AC Skates, with 100 shares and get 50 shares each - A for his brilliant(?) idea, and C for the necessary cash. C could just leave his money in a bank and collect 5% interest at no risk to himself. He could also lend A the money at, say, 10% interest - and A would be obliged to pay it back whether he succeeds or fails. But unlike B, C thinks A's idea has great potential and will yield a much greater return - 15% or maybe even more.

By investing, rather than lending, C accepts the risk that his judgment might be wrong. He knows there is a chance the public will reject the rocket skates and he might lose everything he invested, just as A might lose his time and reputation. Furthermore, he is willing to wait for that return, because he agrees with A that the rocket skates must be affordable in order to sell. He is speculating that A understands the buying public better than the banker does. By going 50-50 with A, C is saying that he considers A's plan just as valuable as his cold hard cash.

So now AC Skates is set up, managed by A and financed by C. AC Skates rents factory space, buys rockets and skates and the machinery to put them together, and hires 10 people to build and package the rocket skates. We will assume for this example that A is very honest and always pays his suppliers and employees on time and in full. If nobody buys the rocket skates, well too bad so sad - the factory is repossessed, the employees are paid for the work they did but are let go, A and C lose everything except what they can get for the sale of the equipment and the scrap value of their inventory (which might be nothing), and move on to other things.

but if the skates prove popular, then AC skates makes a profit after all the materials and labor have been paid for. hooray! They put some of it into buying more raw materials and keeping the workers on payroll for another month of production, so they can do it again, and they still have some money left over - which they pay themselves in the form of a dividend. This money is their risk premium - the reward for the risk they took before they knew whether they would succeed or not.

Eventually, if their success continues, C will have made back the whole sum of his initial investment, and more. He still owns 50% of AC Skates, and will keep sharing in the rewards. Plus he has all his original cash back, and could invest in some other business too. Is he now twice as rich? sort of. He has the cash, but he could still lose the money he invested if the public tires of rocket skates or D, a competitor, starts making an even better product than AC skates. If C decides to retire and choose financial security over further risk, he can sell his 50% stake to A and give up his interest in AC Skates' future success. Then he really will be twice as rich as when he began - he'll have double the money, with no risk at all. A will not have any cash at that point (because he gave his cash to B in exchange for the rest of the shares), but he will own 100% of a successful company and keep 100% of the profits.


So capitalists do not collect money for nothing. They collect money as a reward for risking their money on an uncertain outcome. It is not a Ponzi scheme as the OP suggests, because in addition to making a profit, AC Skates has also produced many pairs of rocket-powered skates and sold them to people who wanted such things. In a Ponzi scheme, nothing is ever produced - the founder just keeps asking more and more people to invest, and uses the investment money to pay off those who invested earlier. No raw materials or tools were bought, no workers employed or paid, and nothing was produced. Eventually someone will observe that a Ponzi scheme is not creating any actual value, and then the scheme is declared worthless and collapses, because no future investment will take place.

Also, it's not a casino. Certainly, investors are making a bet on the economic future of a company they invest in. But in a casino, nothing of value is created when the dice are rolled or the roulette wheel is spun. The gamblers and the casino operators have a private contract between themselves to risk money on a random outcome, over which neither of them have any control. If you pick up a dice and throw it right now, you might guess correctly at the result. But you win nothing because nobody is willing to bet with you. Gambling goes on because throwing a dice is free once two people have agreed to bet on the number that comes up. There is no cost to throwing the dice repeatedly, just as there is no inherent value to the result.

It is a zero-sum game, because for one person to win the other must lose, and the total of their profit (+$1) and loss (-$1) is $0. With investment it's not a zero-sum game because something new has been created. The employees put in time, but received a guaranteed paycheck. The customers spent money, but got a working pair of rocket skates. the inventor gave up sole ownership of his idea, but received the investment required to turn the idea into an actual product. The investor put his money at risk, but was rewarded for his patience. Everyone exchanged something of value for something else of similar value, and in the process something new was created which did not exist before.

What about the employees of AC Skates? why don't they share in the profits? Well, they have not taken on any risk. They were hired with a guarantee of payment for work done, they did the work and received their pay, and a fair exchange has taken place. If the business had never made money, they would still have been paid for the work they did even though A and C ended up with nothing.

Now suppose C was only half as confident at the beginning, and was willing to put up only 50% of the setup cost - but that the 10 employees all felt confident about A's plan and agreed to take some of their pay in the form of stock, up to the limit of C's proposed investment. In other words, they were willing to collectively take on the same amount of risk as C. Then they, too, would share in the profits, and would have the option of continuing to profit in the future, or sell their interest in the company to A or C later, or even buy out C's interest and end up as joint owners of the company with A. If things had not worked out, then the part of their pay that was given in stock would have lost value, just as it did for A or C.

[Oregone]

53. "They collect money as a reward for risking their money on an uncertain outcome."

Yes, but let it also be noted, the return on such an initial investment is infinite as time becomes arbitrarily close to infinity. There is nothing that deems such a concept to be universally true and righteous. In fact, it is rather downright alien. It becomes stranger that these owners can perpetually give such ownership to their offspring, over and over, until the person gaining capital from the labor is generations removed from the initial investment (which eventually leads to massive wealth disparity and entrenched classes). All that is left is continuous reward, but any concept of "risk" is entirely removed from the process. I think this is a bitter pill for some to swallow, and takes somewhat of a faithful belief in the system before one can even justify it (much like one must first believe in the Bible prior to it being used to justify irrational beliefs)

[anigbrowl]

67. Yes, but that outcome isn't assured

'Yes, but let it also be noted, the return on such an initial investment is infinite as time becomes arbitrarily close to infinity.'

The potential return increases over time - but only as long as the investment remains at risk. It halts as soon as you exchange the future potential for present certainty by cashing out your investment. So let's say my great-grandfather owned many shares in the Acme Buggy Corporation in 1900 and was enjoying a handsome dividend reward every year.

But if the shares sat in a drawer, and today ABC's only customers are the Amish who reject new-fangled things like automobiles and trucks, then those shares are probably not worth very much by now. Success in the present can not guarantee success in the future, because either demand or supply may change.

'...the person gaining capital from the labor...'

But capital gains do not only come from labor. They come from a combination of capital-at-risk, labor, and inputs which successfully supply a demand.

[Oregone]

73. If the return on such investments was significantly at risk

Then the empirical rates of social mobility would reveal a much more fluid society in America. In practice, it is quite observable how such risk doesn't actually manifest in radical mobility in the uppermost class. And when considering that the risk is quite small, if even existent among those who own so much they can diversify to combat all risk, then one must wonder if such a minimal risk justifies infinite, inheritable return on an investment.

[anigbrowl]

86. I think social mobility changes a lot over time

It has been much higher here in the past than it is now. But a fall in social mobility is balanced by an increase in pressure for political or economic change (and that this is taking place now, to an extent), so I don't think the trend is inexorably in one direction or the other.

[immoderate]

185. Social mobility seems better in countries where education is free.

That's not the trend here.

--imm

[defendandprotect]

191. Excellent point -- in America everyone is being forced to buy a piece of paper

which continues to rise in price obscenely as colleges/universities are

moved into the corporate realm of doing business!!

And, this protects only elites -- and does harm to society as a whole.

[defendandprotect]

117. Not to mention the necessary involvement of our military in protecting capitalism...

-- and intelligence --

[defendandprotect]

116. No -- not when measured against what it destroys . . . . labor, for one....

nature, animal-life -- and exploitation of humanity.

Further, the wealth it creates is for the few and is then translated into power for the few

which leads to more corruption and criminal behavior.

And, as there is no honesty among thieves, as these corporations grow they also seek to kill

one another off!

Capitalism isn't only inane, its totally destructive -- and suicidal!

[amborin]

108. ?

what do you mean?

the owners of the means or production DO have a material impact on the process of production and on labor...

the owners have management perrogatives, b/c u.s. labor gave these up, so they control the organization of production, including the labor process and how the work is subdivided, etc.....

[Oregone]

110. Here is what I mean...

Take any capitalistic corporation, and lets imagine that on a slow day when no one was paying attention, some government entity negotiated a deal for ownership. They let the executives remain and everything stay 100% the same, but the only difference from one day to the next was ownership went from private to public. By what universal mechanism would production instantly drop or instantly become inefficient now?

Well, there is none. Especially if the public ownership kept the same executives and goals in place. There just isn't some mechanism we can point to that would account for any measurable change in wealth generation that would occur due to who owned the means of production.

It comes more down to management. But then there is also no universal reason that a public owned institution cannot run almost exactly the same as a private one (minus corruption). Though, many do not because they provide essential services, but a socialized company competing against private ones in a retail industry have no such philosophy that would make them non-profit or operate at a disadvantage. One company I frequent often, which is a Crown Corporation, fits this type of model quite well; its called BC Liquor and its a very profitable and very competitive company which is owned provincially. Because it is not interested in providing a needed service for the people, but instead retailing products, it operates just like any other private liquor store and really illustrates that ownership alone doesn't determine the ability of a company to make money/provide services/sell goods/generate wealth (though I understand ownership can influence philosophy about what a company's priorities really are)

[amborin]

111. i agree with what you wrote

but it's different from what you had said previously....about affecting production and labor....

i have no argument with your proposal....

[defendandprotect]

123. Capitalism exploits labor . . . exploits nature ... exploits animal-life ... exploits the planet ...

and in return a dollar bill is made!!

An artificial entity ... the dollar bill --

which they then translate into power over others!

Ridiculous King-of-the-Hill System which should be ended!

[defendandprotect]

115. True -- and you can't discuss capitalism without seeing the basis of it in exploitation....

[jgraz]

50. Bullshit. Capitalism just allows a few to get rich off of those who grow wealth.

Intellect, education and creativity grow wealth. Capitalism just funnels that wealth up to a very lucky few.

[dchill]

61. Right on the "money."

And Capitalism doesn't just allow a few to get rich off of those who grow wealth - it requires that result. Even to the point of government subsidy (bailout.) Capitalism is so great that it works even when it doesn't!

:thumbsup:

[anigbrowl]

87. There's quite a few people who have got very rich off growing wealth

Look at the guys who started Google, for example. Their investors got very rich, and so did they. Working there also pays pretty well; I've met some people who made fat money as a reward for ideas they came up with during the course of their employment, which they might not have been able to get off the ground by themselves.

[defendandprotect]

124. Exactly -- labor makes the wealth, and is kept powerless . . . however. . .

what "wealth"?

The tradeoffs for running capitalism are enormously destructive --

destructive of humans, nature, animal-life --

certainly involves the pounding down of natural resources!

Why? For what? So a few among us can be rich and we can lose nature and the planet?

What is "wealth" -- ???

Let's have someone describe how necessary it is to have an armful of dollar bills and

a sick and polluted planet!!

[jgraz]

125. Exactly right.

I just thought the poster I was responding to wasn't quite ready for the whole truth.

[defendandprotect]

114. It builds wealth for the few based on exploitation of humans, animal-life and the planet--!!!

Have you noticed Global Warming at all?

Slavery?

Oppression of women?

Oppression of minorities?

Sex Slavery growing?

And while these capitalist criminals go free our jails are being filled

with ordinary citizens who smoke pot and the homeless!!!

[Greyhound]

134. You are right, it is not a Ponzi Scheme. It is however, a scam.

The heart of what we call capitalism is interest, and the charging of interest ensures that an ever-increasing portion of value goes to the "creators" of the currency.

But then, you know this.

[KittyWampus]

9. you don't seem to understand liquidity & assets. Nor do you understand capitalism or ponzi scheme.

You might want to get a basic Economics 101 book.

For starters I just quickly pulled the definition of Capitalism off Wiki page:

Capitalism is an economic and social system in which capital and land, the non-labor factors of production (also known as the means of production), are privately owned; labor, goods and resources are traded in markets; and profit, is distributed to the owners or invested in technologies and industries

[cbdo2007]

72. This was going to be my response also.

The explanation from "capitalism" to "ponzi scheme" was going to be a long one with the OP's grasp on economic reality.

[defendandprotect]

129. Nonsense . . . an economy is what the people construct ... it can be based on sea shells/trading . .

or it can be 24/7 exploitation of all that exists via capitalism.

Start dealing with the true value of an armful of artificial dollar bills vs

our oceans, air, environment, planet -- animal life!

Throw away the yardstick of the fake dollar bill and do some real thinking!

[defendandprotect]

127. You might want to try to understand what true "wealth" is . . .

Is "wealth" trading dollar bills for pollution of our environment, the oceans, the planet?

Because that's the price of capitalism -- exploitation - pounding down of natural resources.

How much animal-life are you willing to sell off for dollar bills?

How much meaningful "wealth" is created for chemical companies vs the cost to humanity of

losing bees?

How much "wealth" is created by our corporate MIC gone wild on war?

What's the cost of 2 million Muslim lives -- 5,000 of our own soldiers?

Do we divide the deaths into the yearly budget and come up with a figure?

Or do we agree that the given yardstick of a dollar bill has nothing to do with rationality

or reality?

[KittyWampus]

165. Oh please. The opening post is gibberish. It's like a question that would come from someone stoned

who thinks their muddled question makes them seem profound but in reality displays an appalling lack of knowledge regarding basic economics

That this thread has gone on all day today and so many DU'ers actually replied to it, as if the opening post actually meant something, is sad.

It clearly demonstrates that as long as you post something that does nothing more than generally sound like it's attacking something unpopular, it'll get positive replies.

I understand what wealth is. I studied Economies as part of the social science of Cross Cultural Anthropology.

The opening poster apparently hasn't even read "Economics For Dummies".

[defendandprotect]

188. The very fact that we have anti-trust/anti-monopoly laws points to the reality

of the question . . .

Monopoly is faked "free enterprise" -- and creates power to knock out competition,

before it even rises.

Generally, the OP is pointing to the corruption and fakery involved in capitalism.

If you think "wealth" is a dollar bill, then you need a course in Humanity, not economics!

"Humanity for Dummies"?

[Ozymanithrax]

10. A Ponzi scheme requires an intent to defraud...Banks and Corporations provides return for investment

An investor buys stock, and that money is invested, grows, and a return of part of the profits is taken as either profit when the stock is sold or directly as dividends. If you can afford to invest, on average you will make more than your investment in return.

A Ponzi scheme is entered with an intent to defraud an investor of funds. Your analogy doesn't work.

[jgraz]

52. Only someone who's never worked in finance could think there is no intent to defraud here.

Capitalism is, in fact, completely rooted in fraud. They just call it "marketing".

[Ozymanithrax]

55. There is no intent to defraud investors...customers is another matter.

Besides, we do not use a Capitalist Economic System. We use Consumerism.

[jgraz]

90. Incorrect. The entire financial industry is built around defrauding investors

Even with our current toothless system of regulation, a government with actual spine would be throwing people in jail right now.

[defendandprotect]

131. Enron employees weren't "investors" . . . . ?

[Greyhound]

136. Please look up the history of convictions of Merril Lynch over the last 30 - 40 years.

That is only one example, virtually the entire "investment industry" is rife with corruption and theft*.

*Not necessarily unlawful, that's the advantage of owning the lawmakers.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

[SOS]

175. Goldman Sachs CDOs...

Goldman created mortgage-backed CDOs and purposely loaded them with subprime loans which they knew would collapse.
Then they purchased credit default swaps on the garbage they were selling.
The AAA CDOs eventually became "toxic assets" which the Fed purchased for a total of $1.25 trillion.

If that's not fraud, it's hard to imagine what would qualify.

[defendandprotect]

130. Thank you -- and I'm still laughing at how naive that comment is . . .

And unregulated capitalism is merely organized crime!

[anarch]

12. I think it's mostly the coercive enforcement

in a classic Ponzi scheme, the guy at the top relies on the ability to trick the rubes into buying into it.

in capitalism, if you don't cooperate, eventually a bunch of guys with guns will come and make you cooperate. You can try living off the grid, but they'll probably find you eventually.

[kctim]

30. Sure thats "capitalism?"

"if you don't cooperate, eventually a bunch of guys with guns will come and make you cooperate"


There is only ONE body which has the power to 'legally' do that. Government.

[defendandprotect]

133. And our government is in service to capitalism . . . FBI is there to protect property, not people!

Internationally -- and every which way -- our govenrment is dedicated to protecting

capitalism. So are our intelligence services at this point!

Dealt with any creditors lately?

Heard of anyone being moved out of their homes?

Maybe you imagine all the homeless are on the streets? No, many are in jails!

[kctim]

166. Interesting way of looking at it

Government is the only thing that can forcefully make us do something we do not want to do. But, if we choose to do something with a private business, government is now used more and more to protect that private business.
Very interesting angle, thanks.

[defendandprotect]

168. We have not chosen corporatism . . . corporations have BOUGHT our government and elected officials..

Corporatism is fascism -- it is not democracy, nor self-determination.

Corporations in controlling government also control our government agencies -- FDA -

or "Monsanto's FDA" as many call it.

Corporation for Public Broadcasting, which is a private corporation set up by GOP to

control Public Broadcasting TV!

Two parties also set up a private corporation to control the political presidential

debates!

GOP politic's under Nixon controlled IRS and used it to do harm to their criticis or

"enemies" as they called them -- they had an "enemies' list."

GOP politics under Bush controlled our DOJ -- doing harm to Don Siegelman, for one --

and many others! Valerie Plame, a CIA covert operator, outed. On and on.

EPA -- Christie Whitman as head of the EPA lied to Americans and specifically New Yorkers

and rescue workers saying there were no environmental dangers at "Ground Zero" immediately

after 9/11.

Look at the Massey Mine disasters . . . what's our government been doing to protect workers there?

What about Toyota and government officials looking the other way?

What about our Deptartment of Education swinging taxpayer money out of public schools now and

more and more into Charter schools?

What about the corporate control of MIC? Privatization of the military?

Everything is now under the control and rule of corporations --

Including, it seems, our right wing corporate Supreme Court!





:)

[defendandprotect]

132. Right . . . under today's predatory capitalism even homelessness is illegal -- !!!

[kestrel91316]

13. I won't, because it IS. The entire purpose of corporations is to provide a vehicle for

the board of directors to steal from the corporation's customers AND employees AND shareholders. They throw the shareholders just barely enough ROI to ensure they shut up about the billions paid to the BOD.

[anigbrowl]

54. It's not theft if everyone agrees in advance

I say: give me $10, because I can make money with it, and I'll give you $11 tomorrow.

OK, you say.

I take your $10, and buy blue and yellow paint for $4 each. The paint store makes $1 profit on each pot, and now I have $2.

I offer Joe $2 to mix paint. He accepts because he has nothing better to do, so I pay Joe $2 and now I have $0, but 2 pots of green paint.

Dave wants 2 pots of paint but doesn't like blue or yellow, and neither he nor the paint store like mixing paint. I offer to sell him the green paint for $7 per pot. He loves the color and accepts my rather high price because he can't find green paint anywhere else and doesn't want to waste time tracking down Joe, who has already gone home.

I give you $11, exactly as promised. I gave Joe $2, exactly as promised. I gave Dave the green paint he wanted.

Now I have $3, and you say that I'm a thief because I made more than anyone else.

But everyone got what they were offered. You made a loan and got $1 in return for the risk you took. The paint store made a sale and got $2. Joe did some work and got $2. Dave got the paint he was unable to find elsewhere, and has the color scheme he always dreamed of. I made $3 because I went to the effort of conducting 3 transactions - a purchase, a hire and a sale.


Now, if you say that boards of directors aren't honest and misinform people about what they're getting into, that's another question - it's definitely true in some cases. But when an honest exchange takes place, there is nothing fundamentally wrong with one person profiting more than another.

[defendandprotect]

135. And, after that, they destroy one another...capitalism is about killing the competition . . .!!

Capitalism is certainly NOT about creating competition!!

[Xenotime]

16. It is. The only reason why it is allowed to continue is that those who buy into it...

get a little kick back to buy a steak dinner, new car or a night with a hooker. It's just enough to keep them thinking, "maybe if I put more into this system, I can get a bigger steak, have somebody drive me around or a better call girl." There is an internal mental greed that keeps the momentum moving forward. And it has to stop.

[Indi Guy]

17. Since the (private central bank) Fed took over printing our money in 1913...

...our form of capitalism has indeed been a Ponzi scheme.

[Taverner]

64. Are you talking about going off the Gold Standard?

For me, that's when it became Ponzi - because its all based on projected growth now, not a solid anchor

Might I add, however, that was when Progressivism came into play, which was (and is) Capitalism's answer to the inequities of the system itself. And that's a good thing - saved many lives.

[defendandprotect]

137. No -- gold standard is different . . . JFK moved printing of money back to Treasury --!!

There have still been some dollar bills around that reflected that --

Further, the 1960 Dem platform which JFK ran on called for NATIONALIZING the oil industry.

JFK was also ending the oil depletion allowance!


Gold Standard ... as you can see here . . .

http://search.yahoo.com/search;_ylt=AplPGlcpAPHmap62ggCMdEObvZx4?p=When+did+America+go+off+gold+standard+%3F&toggle=1&cop=mss&ei=UTF-8&fr=fp-yie8

there are a few different opinions on that -- Fed took us off, not US in some minds.

Nixon, of course took us off! And, other opinions.

NIXON, however, did end the Brettonwoods Accords which kept capital from flying from country

to country. Capital shouldn't be able to do what labor can't do!

[Cleita]

20. Not only that it's based on growth. If you don't grow the economy you

enter into a recession. I mean there has to be a bottoming out sometime and that's how pyramid schemes collapse. I think we need a new economic model.

[Taverner]

36. Exact-a-fucking-lutely!

[Toucano]

22. Risk management

A well run bank doesn't overextend it's liabilities beyond it's capital.

Without the safety blanket of a bailout, the Capitalist bankers would not have an incentive to engage in risky practices.

Theoretically, they would also not require regulations to prevent them from engaging in risky practices because their own self-interests (short-term gain v. long-term solvency) would inhibit it. In capitalist theory, those who take risks that don't pay off will sink to the bottom.

But when the government engages in a 30 year campaign to privatize the profit and subsidize the risk, it introduces an incentive to make riskier and riskier decisions.

The greed that capitalism engenders is supposed to be naturally held in check by the risk of failure.


DISCLOSURE:

I am not arguing in favor of capitalism, simply explaining my understanding of their beliefs.

[branders seine]

23. it is

ignore the apologists. they are either delusional or part of the scheme.

[Swede]

24. A ponzi scheme has no service at it's core.

It is designed to benefit the designers of the scheme.

[Toucano]

29. And mortgage backed derivatives were designed to benefit whom?

Homeowners?

Investors?

Or the designers of the scheme?

[ManiacJoe]

25. Wrong word maybe?

"Capitalism" is not the stock market nor the banking industry.

[defendandprotect]

138. Capitalism is a concept of exploitation . . . including stock market, banking industry.

Capitalism is about moving the wealth and natural resources from the many to the few --

It's based on exploitation of the planet, humanity, animal-life and is a suicidal concept!

It's also the invention of the Vatican . . . when Feudalism became insufficient to run their

Papal states!

Patriarchy/Organized Patriarchal Religion/Capitalism are one --

all based on exploitation -- all suicidal.

[protocol rv]

26. Ponzi schemes are a scam, capitalism is an economic system

I thought that would be self evident. You are comparing quite different things. I also notice you seem to have an agenda. What do you propose as an alternative, communism? :-)

[leftstreet]

27. Asking what one proposes as an alternative is classic FAIL

If I told you my eye was being gouged out by an icepick, would you ask 'well what eye-gouging instrument would you suggest as an alternative?'

:eyes:

[NoPasaran]

48. Under socialism, your eye would be gouged out with an enucleator

Under socialism, your eye would be gouged out with an enucleator wielded in the interests of the working class for the benefit of all society.

[Taverner]

99. What? When did Sweden or the UK ever do that?

[protocol rv]

163. Sweden doesn't practice socialism

I suggest you look up the 20 largest Swedish corporations. None of them are owned by the state. All are privately owned. Swedish "socialism" is what I call welfare state capitalism. They have private everything, then they tax the dickens out of everybody.

[leftstreet]

105. I had to look that up

:rofl:

[defendandprotect]

141. You're talking about "TOLITARIAN" socialism as practiced by USSR . . .

We are talking about democratic socialism --

[protocol rv]

182. What is "democratic socialism"???

I'm not sure I understand the nuances. After all, socialism is an economic system, not a political system. it is usually associated with dictatorships, but that isn't necessarily the case. Socialism, defined as the state owning the means of production (ie industry, agriculture and commerce become nationalized) has a tendency to degenerate and becomes a dictatorship, usually ruled by oligarchs at the top of the "Party", although sometimes to avoid the embarrassment they create a couple of puppet parties which follow the main party line as trained seals.

[defendandprotect]

193. "Totalitarian" means it's kept in place by force -- intimidation -- murder ...

as in USSR -- and needless to say, not really socialism.

Therefore, not what the world really thinks of "socialism" which is well respected

around the world.

First, understand that economies are man-made -- so is the dollar bill -- we can

change anything we want and have any economic system we want.

Certainly, we all want democracy . . . then if that's so, you need economic democracy, as well.

Capitalism is far removed from any concept of economic democracy.

It's a ridiculous "King-of-the-Hill" system --

Unregulated capitalism is merely organized crime.


You might look to Sen. Bernie Sanders for more of an idea of what "Democratic Socialism" is --

Economics are both "social" and "political" --

MEDICARE FOR ALL -- a social system of concern --

Social Security -- same

Medicare -- same

Do you see Social Security as a political system?


Unfortunately, Congress has surrendered too much control over economics to corporations/banks/

Federal Reserve, etal. Economy is a POLITICAL issue and should be debated and voted upon by

our elected officials -- not CEO's and Directors whom we don't vote for!


Socialism is NOT usually "associated with dictatorships." It is well-respected around the world.

If you're thinking of Hitler's socialist party, you should know that it was an active social party

before being taking over by Hitler! It was concerned with women's rights/abortion -- labor and

unions, health care and many other social issues. Hitler co-opted the party and overturned all

of those issues.


And, yes, T-baggers seem to have the same confusion you have about these "dictatorships."

Trust someone will eventually explain it all to them!


Any one who lives on the planet has a stake in the planet, natural resources, animal-life,

whatever. Nothing belongs to the few. It's a commonwealth.

Republics, which many claim America is, would be ruled by a few "oligarchs"!

Check the dictionary.

From what I see it is America which has created and supported "Dictatorships" all over the world

and "puppet governments" and "puppet leaders."


Meanwhile, if you want more privately run military -- like Blackwater, Bechtel, KGB --

If you want more privately run schools -- Charter schools -- religiously-affiliated schools --

If you want more private ownership of our natural resources -- vs commonwealth --

If you want more private owenrship of our national parks -- vs commonwealth --

you might get it soon.


It used to be -- before our government and agencies were taken over by corporations -- that

when America went into court to fight for the environment or to deal with a corrupt corporation

that we had the lawyers -- the best lawyers and the most lawyers. Now it's the other way around.

Is that what you want? Weak people's government -- strong corporations?

[protocol rv]

162. You eyes aren't being gouged, but....

if you find the idea of strangers making a profit feels like getting your eyes gouged, then yes, I would like for you to tell me if you prefer something else I can use to gouge your eyes with. For example, I could use molten lead, sulfuric acid, or the old favorite, sandpaper.

Now that we got the melodrama out of the way...capitalism has been shown to be a lot more economically efficient than alternatives tried thus far. There are degrees of capitalism, of course. But the evidence shows it beats marxism hands down. And most socialist economies around are a mess. Look at North Korea and Cuba, for example.

[Toucano]

28. You don't consider selling mortgage backed derivatives a scam?

When you know that laws were broken (and in some cases, rewritten) in executing the mortgages that back the derivatives?

When an entire industry comes out against a whistle blower to prevent the light of day from spoiling their party, it's a scam.

[Taverner]

35. Backdating Mortgages, predatory lending, the S&L scandal - US Capitalism is more like the Mafia

and less an economic system...

[Toucano]

45. Hell, even ancient Rome had usury laws.

People who entertained themselves by watching people be eaten by lions did not permit what we have permitted.

[defendandprotect]

142. So true . . . people are paying off student loans now for 30 years!!!

That's enslavement by debt!

[Taverner]

34. Ricardian Socialism

That is, socialism from capitalism

[anigbrowl]

58. I wouldn't call Ricardo a socialist

Rather, Ricardo championed trade and thought everyone should be able to benefit on an equal basis. When you say 'socialism' in an economic context I take it to mean that workers are supposed to get partial ownership of the place they work by virtue of working there. But I think what should happen is that they have to choice of getting paid in cash or in stock, so they can choose whether or not they wish to take on the risk that the value of their stock might fall in the future.

[Taverner]

60. This would be a step in the right direction

And like I said (actually, I think I forgot to) You can't get there with revolution. You can't get there overnight. Capitalism must work itself into Socialism if we want to stay alove - in a 1000 years, we will have milked this planet dry, and the old rules won't apply anymore.

Socialism is not a possibility, it is an inevitability.

[Taverner]

65. Ricardian Socialism

http://en.wikipedia.org/wiki/Ricardian_socialism

Ricardian socialism refers to a branch of socialist economic thought based upon the work of economist David Ricardo. The Ricardian socialists reasoned that the free-market was the route to socialism, and that rent, profit and interest were not natural outgrowths of the free-market. The central beliefs of Ricardian socialism are that all exchange value is created from labor, and that labor is entitled to all it produces.

Really interesting idea.

[Odin2005]

75. WOW, that is exactly my own view! Thanks!

:yourock:

[anigbrowl]

79. I'm down with the aim, but dispute the mechanism slightly

As often before, the bit I take issue with is the concept that all exchange value is created from the labor going into its production.

But I hold that the design of production (whether for efficiency, or in the selection of what is produced) also has an economic value, and that this is where much socialist economic theory falls apart.

Example: three companies make striped shirts. Each uses a different dye and the manufacture of their dye is a closely-guarded trade secret, but otherwise their shirts are of similar quality. Red, green and blue striped shirts are about equally popular in this market. The firms compete by offering shirts with wider or narrower stripes each year, and their fortunes rise and fall somewhat in line with the public's fashion preferences, but no single shirtmaker ever gets more than about a 10% advantage in market share (40:30:30).

One day someone at the Red Shirt company proposes a bold innovation - instead of stripes, how about...check? Hot damn! It costs nothing more to produce, but nobody has ever tried this before. Red Shirt Company offers a radical new fashion option.

Perhaps they will fail: their share of the market drops to 20%, they give up on the idea, and the Blue and Green Shirt companies laugh all the way to the bank, with 40% market share each. Or, perhaps, they will succeed - the public goes mad for check, even if it only comes in one color, and Red Shirt company gains a whopping 50% market share, while their competitors weep bitterly for their lack of innovation.

My point is that the labor involved is pretty much the same, but a single innovation can drastically alter the return. In this case it seems highly appropriate to me that the person who invented the new pattern should either get fired or receive a fat bonus, depending on how the innovation changes demand for the product.

[Taverner]

85. Good example - however, what happens in US Capitalism is they all get together

And settle on an idea. Whether this happens in the fashion mags of the day, or on the floor at Macy's is irrelevant.

And even if they never "get together" - they do virtually, with the market being the market. If Maunfacturer B creates a shirt that uses diaganol stripes, and that's the rage - the others follow suit.

[anigbrowl]

89. Well, that's competition for you

Innovation has a fairly short half-life; the trick is to derive as much benefit as you can from being the first to introduce it and then attempt further innovation before your competitors catch up or pass you out. But that's natural - after all, evolution is simply the working-out of the same process in nature.

[Taverner]

92. Socialism affects the markets better

[anigbrowl]

94. That's an overly broad statement

I can think of lots of examples of market failure in socialist systems and/or command economies.

Normally I'd take time to back that up with examples, but this interesting conversation has caused me to fall behind on some other stuff that needs doing :-)

Briefly, I'd suggest you take a look at the market for software and internet services, where European and other regional companies are competitive but lag behind the US in part because capital formation is so much easier here by comparison. In more general terms, you like to look into the economic theories of Alfred Marshall, particularly where he parts company with thinkers such as Marx about the inputs of production and factors of capital gain.

[Taverner]

95. The Soviets did a FAIL with COMECON

In fact, that's what really brought them down. Not Saint Reagan.

But the UK used a Ricardian plan, albeit one with many loopholes, but you have to expect this.

Yes, in the Late 70's, the system had big problems - but with Thatcher's lurch to the Right the system would never again solve itself.

[defendandprotect]

143. Capitalism is based on keeping labor powerless . . . .

[Greyhound]

170. Yes, it is. n/t

:kick:

[protocol rv]

184. Interesting, but very impractical and full of fallacies

If labor is entitled to all it produces, then there is no profit. And without profit, there isn't commerce. And so on and so forth. Ricardo was wrong. So was Marx. Go dig a hole in your backyard, make it very deep, then try to sell it. You may have put a lot of labor into it, yet it's worth nothing. This was Marx's fallacy, he felt that the value of things was derived from the labor input. That's baloney. The value of things is that which the market sets. Or at least that's the way it is in a rational society. In societies run by irrational individuals, anything goes. This is why "socialist" economies gave us the Lada, the Trabi, Chernobyl, and other wonderful pieces of junk.

[Taverner]

76. At the same time, let me say that I want State Provided Health Care, among other things

As well as day care, assistance to the unemployed and all kinds of welfare programs. Honestly, LBJ and FDR were on to something by taking care of the 'least of those among us'

[anigbrowl]

82. Oh yes, I'm down with all of that

From an economic point of view, I see those kinds of things as infrastructural investments which improve the supply and capability of the labor force and respectively lower risk and increase opportunity, just like a transit system can.

[defendandprotect]

140. Capitalism is a scam . . .

wake up!

[Dappleganger]

31. Regulated capitalism tends to work rather well.

It's the unregulated, unchecked, kind which eats society from the inside, out. This is why Glass-Stegall, other government regulations and consumer oversight is so important.

[Taverner]

37. For a while

And its a great launch pad for a Socialist transition

But like Cleita pointed out earlier, its based on growth, and eventually we will run out of resources, or bottom out. Or both.

[defendandprotect]

144. Yes -- but unregulated capitalism is merely organized crime . . .

Right wing has overturned most of New Deal at this point -- and unless we get

very lucky it's not coming back!

The right wing are murderous and they never stop -- we have right wing political

violence to thank for their gains. That's the only way the right wing can rise!

Obama has to get serious about job creation -- superfunds for homeless and unemployed --

Reregulating capitalism, overturning the trade agreements -- and Glass-Steagall!

:)

[Dr Morbius]

32. I would suggest that what we have in America isn't really pure

capitalism. It's a series of scams disguised as capitalism. Further, America has always been a mixture; capitalism mostly, with some government investment (any government investment would technically have to be called socialism). Roads, rails, the Erie Canal: these were American investments. Socialism has been part of this nation since the first Homestead Act.

The corporate model has been taken way too far in America, but this does not mean a failure of capitalism. It's a failure of government to regulate capitalism. Unregulated capitalism is one really big Ponzi scheme, if you like, but regulated capitalism - capitalism with some reasonable restrictions - works, and works damn well in my opinion.

[Taverner]

39. With a cash-only system, capitalism could be saved

But who wants that?

[RedCloud]

33. We fail to see what it does to a lot of the rest of the world. It kills them!

[Taverner]

42. It kills us

Our brand of Capitalism is driving the amount of wealth to the top 2%. Even millionares are seeing the writing on the wall, and pleading congress for higher taxes. Well, intelligent millionares at least.

[defendandprotect]

146. Yes, we've long ignored that or been confused by capitalist propaganda ...

in fact, capitalist propaganda taught in our schools!

Last decades, tho, I think it has become more obvious as this insanity has been

visited upon the folks at home!

[AngryAmish]

40. Unlike what system of allocation of resources?

[Taverner]

41. Lots of ways to skin that cat

I happen to think Capitalism is the perfect launch pad for Socialism. No, not Marxism. Marx was wrong on too many things to be taken seriously as a whole.

Facilitate employees to own the companies they work for. Make a goal of 100% ownership of 99% of the economies by a certain date.

Socialism isn't all about gulags and slavery (* on edit: ) not that you ever said that

[AngryAmish]

44. mmmmmm

http://sfgospel.typepad.com/.a/6a00d8341ce22f53ef011168c500d4970c-800wi

[Taverner]

46. Care to elaborate?

[AngryAmish]

49. like this

[Taverner]

59. Oh yeah? Well...

[defendandprotect]

147. Let's be clear: USSR practiced "TOTALITARIAN" socialism . . .

J. Edgar Hoover/FBI always made a point of calling it that to make it clear!!

[Duer 157099]

43. A Ponzi scheme requires a fresh influx of $$$ to maintain

While a bank or corporation *could* in theory--with appropriate time, as they exchange capital for time--produce the assets if people all wanted to cash out. In other words, the bank/corp have their assets laterally distributed and could recover them if needed, whereas the Ponzi scheme is predicated on a continual source of new and larger layers of support.

[Taverner]

47. People took money out of Madoff's 'bank'

[defendandprotect]

148. Do you recall the bail-outs, by any chance?

[nadinbrzezinski]

51. If this was capitalism (as envisioned by Smith)

you'd have my agreement.

IN fact I want real capitalism to flourish. It includes silly shit like ... busting of monopolies, and small businesses flourishing on main stream, not this crazy system that we have these days.

SO yes, bring capitalism back!

[defendandprotect]

149. You have capitalism now . . . basically organized crime in its unregulated form...

What FDR/New Deal did was to regulate it -- socialize it!

Most of the New Deal has been knocked out now by the right wing --

and it's not coming back.

[KonaKane]

56. "Wealth is made by moving money around"

That's how a pal of mine, who is a stock consultant, put it when I asked him what really goes on in the world of high finance. His opinion was that very, very little is actually "produced" in this arena. Apparently all of the activity, and money "made" at any time comes from vast and complex ways of moving someone else's money around.

Weird concept.

[Taverner]

63. Bonfire of the Vanities - book and movie - described it pretty well

About the pie, and how daddy runs around picking up the crumbs...

[KonaKane]

66. Perfect.

And it appears the teabaggers an country conservatives are still running around thinking those crumbs are going to fall in their gaping mouths if they just prostrate themselves long enough to the altar of the GOP.

[Taverner]

70. Modern Day Cargo Cults

[defendandprotect]

150. First, describe to me what you think "wealth" is . . .

If it's your family and everyone's health - then it has nothing to do with the

capitalist yardstick of a dollar bill.

If you'd like to see an end to pollution by corporations -- exploitation of nature --

then you'd prefer nature over a dollar bill?

If you want everyone to have health care, then a dollar bill may be less important to you?

If you have regard for the web of life and animal-life on the planet, you may prefer to not

see that completely exploited by capitalism in a trade for a dollar bill?

Capitalism is about exploitation -- of nature, natural resources, animal-life and even other

human beings according to various myths of inferiority.



Old Russian saying --

Question: What's the difference between Capitalism and Communism?

Answer: Under Capitalism man exploits man --

Under Communism it's just the reverse --

[Cessna Invesco Palin]

62. Someone tell me why wombats aren't just really big furry apples. n/t

[dorkulon]

68. America is to capitalism what the USSR was to communism.

Corrupt, oligarchic, and almost entirely not what it claims to be.

[Taverner]

71. Yes but there were enough bad ideas from Marx in there

Great Leap Forward, Five Year Plan, Angkha - all were built on solid Marxist theory and Lysenko 'Science'

[okie]

80. I think that's incorrect

Marx's project was simply a radical study of certain social relations under capitalism. 'Marxism', therefore, is just a method of inquiry, not a system we compare to capitalism. People don't read Marx to figure out how to run a socialist society, we read him to better understand capitalism. There's nothing in his writings prescribing great leaps forward or the biology of Lysenko.

[Taverner]

81. Very good point

And in many ways Marx is misread.

But Marxist-Leninism was based on Marx's writings, and Lenin's interpretations of them. Granted, Marx said society will evolve into Socialism, then Communism. And Lenin said "Let's force it!"

[defendandprotect]

151. No -- what USSR practiced was "TOTALITARIAN" socialism . . .

What we are discussing is Democratic Socialism . . .

PLUS, an economy is created by the people -- we can have whatever we want --

When we talk about ending capitalism, what we are saying is that we have to stop

judging everything -- planet, oceans, food, water, children, schools, health care --

by the yardstick of a dollar bill!!

What is indeed "wealth"?

Are healthy American children "wealth"?

Is your family's health "wealth"?

Is preserving animal-life on the planet "wealth"?

Is the only "wealth" something gained by capitalistic exploitation which results in

raking in a dollar bill?

[leftstreet]

173. +1

Welcome to DU!

[Odin2005]

74. The Investor Class is a bunch of useless parasites who should be destroyed.

Corporate Profit is the theft of wealth from the people that actually did the work.

[cbdo2007]

77. Uh oh....not this again....

[Odin2005]

91. The truth of Profit as Theft disturbs you, eh?

[Taverner]

83. Not destroyed - retrained

I honestly think very few people, rich, poor or middle class, go into finance to "Fuck over the little guy" - yet it happens.

[defendandprotect]

152. Yes . . . the purpose of capitalism is to move the wealth and natural resources

of a nation from the many to the few --

And that is absolutely dependent upon keeping labor powerless!!!

And, you certainly need the cooperation of elected officials to do that!!

:)

[4lbs]

88. Capitalism done properly spurs competition among companies.

Competition spurs innovation, technological advances, and new products, along with new jobs.

However, done improperly, it just creates greed, phantom wealth, and more attention paid to the profit margin than creating products and jobs.

Capitalism created the competition that initiated the computer wars of the 1980s and 1990s. These computer wars caused the various computer companies to create ever faster and more powerful computers to entice customers. Customers that will buy their new products and thus create profit. Companies hired many new workers back then to produce this hardware.

Companies that don't innovate and create new technology to market and sell fall by the wayside. Their products become just average, they lose sales, they go bankrupt and cease to exist. They are essentially punished for not innovating and competing.

Without capitalism, do you really think internet access and computer technology would be as far advanced as it has come? Without capitalism, and the competition that results from it, there wouldn't have been as great an incentive to make it stronger, faster, cheaper. They could have just sold average performing computers for decades without making anything new.

However, the down side is that now these same computer companies have decided to transfer many of these jobs overseas to maintain or enhance profits, while creating little new technology or product. That's because the technological advance curve for computers is reaching a level where next year's computer isn't that much more powerful than this year's. You only need so much computing power to browse the internet, watch a movie, play a game, or listen to music.

Then you have all the technological advances in automobiles the last 60 years as another example of capitalism and competition. You have cable/satellite TV, DVR/Tivo, computer printers, digital cameras, as other examples of capitalism and competition.

[Taverner]

97. Look at the waste the last 60 years has produced

Big floating plastic island in the Pacific, African and Chinese Villages literally poisoned from the lead from old electronics.

[4lbs]

100. You have the choice not to buy or use any of those products you blame for causing this waste.

Don't buy any computers or use them.

Don't buy any iPods, digital cameras, DVRs, cell phones or use them.

[Taverner]

104. You sort of prove my point

Under capitalism, that will never work

However, under a centrally planned system, in which waste is taken care of in in an efficient way...we could make a difference

[defendandprotect]

155. Nonsense... we can have computers made in factories owned by labor ...

but capitalism isn't about competition -- it's about killing the competition --

and keeping labor powerless.

And, in the end one company rises having killed all their competitors!

It's a ridiculous "King-of-the-Hill" system --

intended to move the wealth and natural resources from the many to the few --

in every nation!

Also, recall, that the MIC is corporate/capitalism.

[defendandprotect]

154. Corporate MIC -- that's capitalism . . . don't forget that --

Ah, all those weapons . . . what shall we do with them?

Anyone up for a little intimidation and imperialism?

[okie]

101. That's one way of looking at it

But we have to look at the good with the bad. The internet, and the computers we have today are also a result of that vast system we call the military industrial complex - Technology the public paid for, then allowed private companies to profit from. Technology also developed by the military for war-making.

[4lbs]

103. True the current web, internet, and online access originated from the U.S. military.

DARPA (Defense Advanced Research Projects Agency), part of the Pentagon, originally created DARPAnet (the prototype of the Internet) in the 1970s.

They did it to maintain some level of basic communication in the case a nuclear attack from the USSR knocked out all the radio, telephone, and TV stations.

DARPAnet originally connected just 6 places in America.

Then, Senator Al Gore in the 1980s as part of a committee approved funding for the expansion into a larger INTERconnected NETwork, which became the Internet.

Private companies were soon allowed to help build and benefit from the construction and use of the Internet.

[defendandprotect]

156. Exactly... we pay for the research then it's turned over to private interests ....

PLUS, whatever the product it can be made in labor-owned shops --

And, what "wealth" does war-making provide . . . it creates chaos, murder, homicide,

destruction of nature.

:)

[defendandprotect]

153. BS: Capitalism is not about competition ... it's about killing the competition...!!

[deaniac21]

96. The dog would have caught the rabbit if it hadn't stopped to pee.

[Taverner]

98. Capitalism is destroying our environment, our middle class and our poor

It's a little more than that

[deaniac21]

102. Wake me when it's over.

[LanternWaste]

109. I think because because the end resul

I think because because the end result of unregulated capitalism is simply a series of monopolies which are not Ponzi schemes.

[defendandprotect]

112. Capitalism is corruption . . . you're right. And, check what the bank is paying you on any savings

for $1,000 vs what it would cost you to borrow a thou from a credit card company

or bank!

Should depositors be charging a bank for an interview for an account?

Should we know some particulars about CEO/officials connected with the bank --

how much drug money they're laundering, perhaps?

And on top of that Ponzi Scheme, we have elected officials who are guarding and

protecting that pile of capitalism crap!

[Generic Brad]

118. It's the law of supply and demand

Wall Street demands we keep supplying them with money. That's not a Ponzi scheme by definition. I believe that is what is referred to as a "shake down".

[Greyhound]

179. Fair distinction.

:kick:

[jdp349]

128. That isn't capitalism, it's fractional reserve banking

Fractional reserve banking =/= Capitalism

QED

[Greyhound]

145. True but, so few people that don't profit from it understand that, that it is nearly

impossible to have a conversation about it.

I guess that what I'm saying is that for practical purposes of discussion, it does.

[Naturalist111]

139. Nope I can not

[MellowDem]

158. They have nothing to do with each other.... so no nt

[salguine]

164. Which is why I think everyone should stop paying their health insurance premiums all at once.

[harun]

172. It doesn't crash like a Ponzi Scheme because of the Universal Constant.

Man's distrust of his fellow man.

You say "All at once". This won't happen because we never do anything all at once, we all distrust each other too much to organize. Another poster stated we should all stop paying our Health Insurance premiums "all at once", not one person will stop paying. They don't trust anyone else will.

Capitalism can work well if it isn't based on phony uncovered loans all the time. As you stated the banks and corporations CANNOT cover their investors.

When discussing financial regulations what is the one thing Tim Geithner told Congress they must not do? Put a limit on how much they can leverage:

5:40 of
http://www.youtube.com/user/TheYoungTurks#p/u/31/1VmfcRmDsdI

So what Geithner is effectively doing is ensuring it stays a Ponzi Scheme. We could put an end to that with real regulation. We won't get real regulation under this administration.

[Taverner]

176. We won't get regulation under ANY administration

So might as well write it off, and call a spade a spade

[harun]

178. Agree.

[blindpig]

180. The crash of every business cycle gets worse.

Eventually it will bring down the whole shebang. Of course the environment will collapse first because of capitalist deprivations. Or mebbe that's the same thing.

Things like the current bubble are not anomalies, this is how capitalism works, they are maximizing profit, and that is all that capitalism is about.

[Taverner]

181. Yes - and this should be broadcast wide and far

Unfortunately its not...

[harun]

186. I don't think we have had 8 straight years in the last 80 that didn't involve

massive failure in the banking system. I don't know how anyone considers this a workable and maintainable system in even the loosest definition of either.

We let people loot and pillage for a couple years, shit hits the fan, gov't works to bail out the system to keep it from collapse. Go back to start, cycle starts again.

[defendandprotect]

189. Agree . . . wholeheartedly and sadly!!

Capitalism has repeated failed, over and again -- left to its own devices.

If any real competition is to occur, we need to remove capitalism from the arena.

"Tucker's" story is very interesting in that regard --

How many lives could have been saved with his cars?

And, a quarter century of oil industry/gas keeping green alternatives sidelined!

[defendandprotect]

190. Well, when W couldn't get them the Social Security money . . .

for Wall Street, it became harder to cover their crimes/corruptions --

End result: bailouts!!

Same thing either way!!

[alfredo]

183. Give me $1,000 and I will give my answer.

[kgnu_fan]

192. ponzi scheme depends on people investing in an illusion ...

When our make-belief fantasy is broken, it disappears into thin air and you will see the real world....real people working hard....making a living by their own labor