Can you think out of the box: show that Capitalism REQUIRES Socialism :D

H

harrytrader

Let's say you are back at school and you have a provocative professor who gives you as exercice to write an essay on this subject :p

"The system makes believe that Capitalism opposes Socialism. Now try to think out of the box by taking into account Human Nature and shows why and how Capitalism needs to promote Socialism and profit from it with the power of Money."
 
There are questions still in the air in economic theory. Does distribution of income affect the country's GDP??

Rich and poors don't have the same consumption habits. Is it better for an equivalent economy to have many rich people buying BMW (with high value added, but priced way higher than marginal cost of production, so economicly innefective)?

Or is it better to have a larger middle class spending money on small houses, small toyota, and sundays night at restaurant (competitive industry, creates lots of not-so-bad jobs, but not wealthy in any means)?

Or just suplying poor people with enought money to eat and not having to comit crime?

Like in the 50's you could visit the Montreal Forum for free. Now it cost 20$ for a visit. Does that make your GDP higher? Does it make your coutry wealthier?

Lots of question in the air and nobody as never been able to give a good scientific anwsers to these questions. Every thing you could hear concerning thses subjects are no more than religious dogma with no foundations to back it up.

If one day we can prove than it is better to have lots of middle class people instead of a few very rich bastards, then capitalism would need socialism.
 
tell the prof he's a bozo and the college that you want your money back. then go start a hedge fund.

the premise is exactly opposite the truth, of course.
 
Quote from chasinfla:

tell the prof he's a bozo and the college that you want your money back. then go start a hedge fund.

the premise is exactly opposite the truth, of course.
More...

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Why invest in hedge funds when an index fund would do nicely.
 
If one day we can prove than it is better to have lots of middle class people instead of a few very rich bastards, then capitalism would need socialism.
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read your history book, particularly the part about the french revolution
 
Quote from hoodooman:

If one day we can prove than it is better to have lots of middle class people instead of a few very rich bastards, then capitalism would need socialism.
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read your history book, particularly the part about the french revolution
More...

explain: the ancient regime was neither socialist nor capitalist afaik.
 
Capitalism needs that the working class produce cheaper than what the products can be sold for. So the working class must loan to buy the new car that they produced or let the majority of money be with someone else. Othewise they lose their jobs.

Don´t know if this was what Harry ment
 
It depends on what you mean by 'socialism'. When referring to a system where (some sector) goods/services are produced by the government, the answer is no. Though public goods, where the free rider problem exists, can not be offered by the market, the government can choose to levy taxes and license the production to a private company.

When referring to equality, or rules that facilitate market action, the answer is yes. The market economy benefits by standardizing actions and reducing uncertainty, through legislation or social norms. Opportunities, like education for the poor, can also help boost the economy.
 
The problem is access to natural resources. When (if) energy becomes bountiful and really really cheap, all economic systems will change and strange hybrids may appear.

I give it to 2100 AD.

nitro
 
Capitalism (private ownership) requires socialism (public ownership) in order to thrive.

Look around you and see how closely information is guarded: patents, trademarks, copyrights, nondisclosure agreements, etc

But can you see the paradox?

Economic actors take free public information and add value to turn it into valuable knowledge which is then kept private.

But capitalism by itself gives no incentive for any actor to contribute to the stockpile of free public knowledge!

The system then becomes short-circuited.
 
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