There is no question about the historical record. No economic/political system has performed anywhere close. It has lifted more people out of poverty, improved life expectancy, and innovated well beyond any other system. This is indisputable.
But just because it worked in the past is not necessarily proof it is the best path forward. For all its achievements, it has some faults. And those faults are becoming more and more difficult to ignore. It’s rapid growth rates are in some measure due to its ability to rapidly extract the wealth of the Earth - its minerals, its forests, its animal life. Those have created potentially catastrophic challenges like mass extinctions, climate change, and lack of fresh water, not to mention troublesome income inequality.
Political tensions around the globe are palpable. Authoritarianism is on the rise. Mass migrations seem commonplace today. Religions seem unable to reconcile winner take all capitalism with long held moral codes. It’s all very troubling.
So my question is: how long do we ride this wave? Are there any workable alternatives? I think we are at some sort of historic crossroad.
Have you tried doing economic math after removing the assumption of private property? I wonder what Soviet textbooks were like. You wouldn’t even be able to start with the PPF which is the first thing we learn in the US.
To a degree. It’s okay if Steph Curry makes bundles. Carl Icahn making 100x bundles, not so much.
It really is a function of general conditions as well. It appears the planet is warming. It also seems the supply of fresh water is shrinking. This is going to make for an awful lot of thirsty, angry people on the move. Will you be opening up your neighborhood to them? That’s the instability I am talking about.
And how would you outline the capitalist approach to dealing with these?
I am a capitalist. I believe the economic system that best allocates resources is based on private ownership with the private owners selfishly working toward profit. This economic system harnesses a powerful aspect of human nature self preservation and pursuit of happiness. To provide for oneself and ones family is instinctual. Capitalism does not interject a “higher cause” between that instinct and individual behavior.
Capitalism like most economic systems is amoral. The tragedy of the commons is consistently a threat. Conflict between individual owners and the disregard for those individuals that do not own are problems not addressed by capitalism. A system of government must be adopted to address these inadequacies. Unfettered capitalism will destroy the commons, allow large owners to crush small owners, and let the individuals without means of production die in the streets. It is up to the people to institute a government that allows this powerful economic system to run while controlling its unintended consequences.
Government must balance power to avoid abuse. Capitalism measures power by ownership of the means of production. For example, government must balance the power between the owner of a factory, the workers with their labor, and societies need for clean air. A government demonstrates its morals, the principles it believes are important by how it controls power. The failures we are seeing are a failures of government control not capitalism.
It’s like democracy “Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time”
It seems that Xi thinks he has a better idea. Some publicly owned, some private, technocrats do the balancing. The state steps on wealthy individuals who get “too big for social stability”.
It doesn’t seem that they have a stellar record on environment, and of course they are already authoritarian.
So, no, I’ve got no workable alternatives that don’t involve a lot of capitalism.
I assume the textbooks said that their are limits on production – workers, land, mines, existing transportation networks, … They can be used to make different goods, but it becomes inefficient if you try to make too much of any one good. Central planners balance those factors of production to produce the most value for society.
Not income, ownership inequality. Some inequality is a good thing, a natural distribution within a healthy system, extreme inequality reduces diversity and innovation and is more prone toward abuse. A large spread of ownership means the active system has a large number of trial and errors taking place simultaneously leading to innovation. Concentrating ownership means concentrating power which decreases the power of smaller owners leaving their means of production wasted or inefficient.
A matter of time reference. Your quote about democracy.
In 1375, anyone could have substituted in Monarchy for Democracy, and then pointed to 500+ years of history. Common sense.
I think the Xi model is out there for testing in China - like it or not. There are others which blend socialism with capitalism as well. Which model will be best suited for the environment of the next 150 years tho is an open debate.
This is all fine f you do not care about the health of the planet. I stipulated up front that no system can extract resources as efficiently as capitalism. You start with the " low hanging fruit" strip mine when possible. Clear cut is fastest. Burn the coal,it’s cheapest.
I am unconvinced that is sustainable.
I removed a post because I thought it wasn’t adding anything. You may have typed a response before I deleted it.
I’ll say In a government modulated capitalist system, the gov’t recognizes the negative externality and regulates or taxes the activity. But you already know that. So your point is that successful capitalists capture gov’t and prevent that?
I certainly agree it’s easier to argue ownership inequality is bad vs income inequality (although would note the OP said income, not ownership).
That said I think we’re going down a path of pure capitalism vs more present day / normal capitalism. Capitalism has failings, like monopolies. I’m all for busting up monopolies. We’re at the place where Capitalism is the least bad system.
I like to differentiate capitalism and “corporate capitalism”. In the US, we have the latter today. The laws and regulations are not designed to aid the type of small business entrepreneurs envisioned by Adam Smith. The policies have been captured by large corporations, often international in scope. This can make governance problematic.
The clearest evidence of how the political system has been perverted in this way is the R party. It has virtually no policies, certainly none that are designed to improve the lives of their voters. They win election by appealing to raw emotions, fueled by big donors like Koch. The result is there for all to see.
I am not sure what the path is to correct this. Improving regulation of monopolies, just administration of taxes, and taxing for externalities seem politically dead on arrival today.