Why Capitalism Is Failing

[Scataphagos]

Quote from EMRGLOBAL:

Capitalism is failing because the people have figured out it was all a game.
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WRONG. Capitalism is failing because the US moved away from Capitalism a long time ago.

CORRECTAMUNDO!

Extrapolate our political and economic path... and you end up where the former Soviet Union was before its collapse.

Half of America couldn't care less.... they just want "something for nothing"... mostly because greedy, self-serving dumbass politicos promised same in exchange for votes.

 

[piezoe]

Quote from EMRGLOBAL:

Capitalism is failing because the people have figured out it was all a game.
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WRONG. Capitalism is failing because the US moved away from Capitalism a long time ago.

Many think they know capitalism but they have zero clue.

The basic building blocks of CAPITALISM, Land, Labor (The ability to work) and Capital Goods applied to production. ALL THESE PRIMARY FACTORS (STOCKS= Land & Labor) are to create PRODUCTION! Entrepreneurship is sometimes considered a factor of Production.

You can not build a Capitalistic Society if you do not build on these solid principles. THE US HAS DESTROYED THESE VERY PRINCIPLES!!!!!!!!!!!!!!

NO FUCKING WAY a nation that produces DEBT and very little product is a Capitalist Nation. Nor is a nation a Capitalist Nation when their GDP is 70% consumer spending ie:

BANKING SYSTEM, WALL STREET, FED all anti-capitalistic in by nature now a days. These three "Industries" have grown to be SOCIALISTIC BY NATURE!

I happen to be involved in the very last stand in the name of Capitalism-

The Oil Industry
"Manufacturing/Infrastructure

I am on the Capital end of the equation.

The rest of the shit out there is smoke and mirrors and is coming crashing down.

I was just on the phone with one of our Shipping Lines that we funded out of Spain. I was talking to the owner...he said SPAIN has 25% unemployment right now!!!!! that is about 4 Million unemployed Spaniards. SPAIN is a Debtor nation and a Consumer Nation. We are heading down the same path because the FOOLS in this country do not understand the basic building blocks for Capitalism.

This is wrong on so many levels I couldn't even get started. It is nearly 180 degrees out of sync with reality.

 

[StarDust9182]

"Nope, monopolies and cartels are almost always the result of regulatory capture, not laissez faire capitalism. "

A very interesting comment and thought. Is the same concept true for big unions?

I note a serious political divide with one side 100% with one view and the other side 100% an opposite view. Yet the truth is in the middle like most things - grey not black and white.

When I was younger I KNEW a whole lot more than I do now with much more experience and education!

 

[Scataphagos]

Capitalism itself likely hasn't EVER failed. "Capitalism in America" (now an oxymoron, for sure) is a product of government intervention/manipulation/regulation. Resembles Communism more in its current form.

 

[StarDust9182]

Quote from piezoe:

I read your interesting original post once more, and yes, we are essentially in agreement, but there is a fine point which on reflection I would think you might also agree with. ....

....

So my point is this, it is simply incorrect to say that capitalism has failed in the United States. Just the opposite is true! What people perceive as a failure of capitalism is nothing of the sort, rather it is a failure of government to hold the capitalists in check and prevent them from taking over the government. That is what I meant when I said it's not a failure of capitalism, but perhaps a failure of democracy, or better put "a failure of our democratic institutions".

I do agree with you. Democracy doesn't work (IMO) because there is no voter tie to input and output and no consequences for individual voters (Tragedy of the commons again) for voting "wrong". Survival of the fittest works because there is.

Some interesting ideas in this thread.

Suppose the markets (kind of survival of the fittest) ran until there were winners that were too big. Would all of us vote for "let's all re-balance our trading accounts at the end of the year so that everybody started off equal again." Would we all vote for that? Or would we assert individual results for individual efforts? Why are government and general society views different?

Would we take people to court for having a "Politically incorrect" view on a stock we think should be worth more? Would we be offended when a commentator said our position was stupid? Would we organize together to trade as a block - oops skip that one!

Why are there no longer consequences for incorrect actions in the voting system?

 

[Random.Capital]

Quote from piezoe:

What people perceive as a failure of capitalism is nothing of the sort, rather it is a failure of government to hold the capitalists in check and prevent them from taking over the government.

"What people perceive as a failure of capitalism is nothing of the sort, rather it is a failure of science to hold the capitalists in check with their anti-gravity devices."

There is a buried assumption that democracy can, over the long run, actually hold things in check. I do not accept that assumption - on the contrary, all the evidence tells us democracy is in fact incapable of doing so - primarily because individual people are quite willing to sell their souls, and sell their neighbors down the river, as long as they feel like they're getting a decent price.

Since Capitalism (as we're talking about it here) is dependent on democracy for long term survival, then it is Capitalism itself that is fundamentally flawed.

Either way, I think we are in broad agreement, and more or less splitting hairs at this point.

The funny thing is, Adam Smith had it more or less figured out nearly a century and a half ago. "Wealth of Nations" is riddled with comments about"gov't" needing to restrain capitalists or things will inevitably go to shit. The guy was even pro-union...

 

[scalp100]

Quote from Lucias:

Just playing with some ideas here..

Capitalism is failing because the people have figured out it was all a game. The people have learned that the rich aren't generally smarter and harder working then the average working man but only "smarter at working the system'. All the while, the filthy rich have grown tired of "stealing honest". It seems that many of the greatest downfalls have came because someone decided they should get to be the bank -- Enron, FullTilt Poker, and Mf Global all come to mind.

Why does everyone want to be the bank? Ah, because its a license to print money. The filthy rich have said to themselves, "We're stealing money left and right. But we have to follow these stupid rules -- why can't we just steal outright? -- after all its just a game!". The masses also are growing angry, "Why do we have to work when money is just a game !! Why don't we just take the rich mans money?".

The reasons for these attitudes indeed originates from fiat money but it also comes from capitalism's success. The modern man no longer has to work on the farm to survive. He had time to pursue other activities -- made up activities.

While the ethical and moral pinning of capitalism have been laid hollow, more importantly large numbers of people are unemployed and without a system that enables them to use their productivity to maximum extent in the arts and sciences -- the net result is that capitalism isn't pushing us toward our primary goal as a species which is the development of useful technology whether that technology be a piece of art, clothing, drugs, or new computers.

The end result is that we see the endings of capitalism. Man always has found a way to serve his ultimate purpose though and the next form that will develop will likely be a technology based society where man's real purpose is presented without the dogmatism of previous generation: Create. Make useful technology.

And this will have been made possible by technology and by capitalism.. a stepping stone toward the technological society.

Nice post, I have been feeling similarly. It seems to me the reason capitalism works is hope. People's brains are physically and emotionally structured to have hope and capitalism is built upon this foundation. Capitalism encourages conspicuous consumption because it knows this will strengthen hope in the masses. With a heighten sense of hope(call it hope, the dream, your personal fantasy world in your mind whatever) people will work very hard.

They are not working for their survival they are working for the dream. Everyone believes they can achieve their personal dream because they have heard about someone else that did it and "if they can do it why can't I." The truth is 99% of the people can't and never will achieve their dream, but by the time they come to this realization if they ever do they have put in there 30 years of 9-5 and the system has got what it wanted out of them.

The harsh truth is even if you do achieve your dream it never turns out like you envisioned it in your fantasy. The real world always comes with difficulties and complications. It might even be 'better' to not fully achieve your dream because you will always be able to mentally fall back into your fantasy world when times are tough and find comfort there. If you smash thru your goals and achieve your dreams and don't quickly create new ones you loose hope and that is a dangerous thing.

A system based on technology seems like a good alternative and may have a way to foster hope and motivation. Communism is not an option because hope is the secret ingredient that communism did not have and the exact reason it failed. It's simply a fact that people will work harder for a dream in their head then carrots like money and security.

 

[Random.Capital]

Quote from StarDust9182:

Why are there no longer consequences for incorrect actions in the voting system?

I would argue that there are. Historically, if voters made bad choices, the outcome of those choices was reflected within a typical human life span.

IMO what happened in the 20th century is we got tons of nearly-free energy, which enabled the perception of perpetual growth, which enabled insane amounts of leverage, for insane periods of time (truly, a 30 year fixed rate mortgage is the walking talking definition of fiscal insanity!)

So in the most recent decades, voters could kick the can far enough down the road that things looked "sustainable".

A very simple way to get a tighter feedback loop between votes and outcomes is to move to a mandatory balanced budget. I'm not saying that's the *best* way - just *a* way that is very quick and easy to understand.

But the problem is voters won't allow it...circumstances will have to force it onto them...

 

[maxpi]

Mandatory balanced budget coupled with all taxes being on consumption would restore some sanity.. If voters could see that they have to pay for government excesses they would not vote for them, would not tolerate them, and would not allow them.

 

[piezoe]

Quote from StarDust9182:

"Nope, monopolies and cartels are almost always the result of regulatory capture, not laissez faire capitalism. "

A very interesting comment and thought. Is the same concept true for big unions?

I note a serious political divide with one side 100% with one view and the other side 100% an opposite view. Yet the truth is in the middle like most things - grey not black and white.

When I was younger I KNEW a whole lot more than I do now with much more experience and education!

I think it has been shown to be true for both regulatory capture and a laissez faire business climate. The only alternative is to have some regulatory body, a referee, a court, etc., to step in and say "No, this is not allowed."

It certainly would be true for big unions if they could control as much capital and use it to influence regulation. They do that to a degree, but they are outspent, and they have to live with a severe restraint, i.e., you can only take so much times a large number before there is no more to take. Whereas capital does not have the same restraint, they can take a gigantic amount because it is times a very small number. Because capital controls the media their message is more effective, and they are better marketers of propaganda overall. (It's interesting to me that in most of the world, and many other languages outside of English, the word "propaganda" simply means "advertising".

As you say, the truth is in the middle. We need folks in government that can understand both sides of an argument.