Don’t Be Scared About The End Of Capitalism—Be Excited To Build What Comes Next
This is one of the more disturbing articles I have read recently. The lack of economic understanding displayed in the article is stupefying. The most basic concept that they seem to misunderstand is that in capitalism, money is a measure of value.
"Capitalism ... relies on endless, indeed exponential GDP growth." GDP is a measure of the total value created by the economy, So somehow they seem to believe they can have increases in standard of living without GDP growth.
Other parts of the article are just plain wrong. "The system is doing little now to improve the lives of the majority of humans: by some estimates, 4.3 billion of us are living in poverty, and that number has risen significantly over the past few decades" The truth is the percentage of people living in poverty has continually declined over the last 200 years, from 94% to now less than 10%. [ See https://ourworldindata.org/extreme-po... ] Even the absolute number of people living in extreme poverty has dropped from its high in 1970. All this due to the benefits of capitalism.
"Capitalism ... relies on endless, indeed exponential GDP growth." GDP is a measure of the total value created by the economy, So somehow they seem to believe they can have increases in standard of living without GDP growth.
Other parts of the article are just plain wrong. "The system is doing little now to improve the lives of the majority of humans: by some estimates, 4.3 billion of us are living in poverty, and that number has risen significantly over the past few decades" The truth is the percentage of people living in poverty has continually declined over the last 200 years, from 94% to now less than 10%. [ See https://ourworldindata.org/extreme-po... ] Even the absolute number of people living in extreme poverty has dropped from its high in 1970. All this due to the benefits of capitalism.
They say they don't want soviet-style communism but still cling to the same collectivism, looking for yet another political variation imposing the same premise and which leads to the same results. The Marxists promised prosperity for all, which failed dramatically. The viros want to keep the collectivism while rejecting prosperity as a goal.
They are worse than the Marxists, who at least claimed to want human prosperity. The viros don't want "increases in standard of living without GDP growth"; they don't want "increases in standard of living".
Nowhere does this article define capitalism or try to describe it. Instead capitalism is misrepresented through emotional evaluation alone in terms of "plunder" and "dogma", and blamed by implication to be the statist, tribalist systems that we know dominate the world: "the system [sic] is doing little now to improve the lives of the majority of humans: by some estimates, 4.3 billion of us are living in poverty."
But they don't want capitalism or anything else to address that. More important to them is their inflammatory denunciation: "capitalism’s endless need for resources is already driving us over the cliff-edge of climate change and ecological collapse."
They want the production stopped. It is all typical of the same rhetoric we have seen from the viros for decades.
They reject the ideal of human prosperity sought by any method -- in favor of a mystical value of the earth as such, apart from value to man. It's the earth that they do not want "plundered": "The two systems may disagree about how best to distribute the yields of a plundered earth, but they do not question the process of plunder itself."
Nowhere do they mention the rights and freedom of individuals, or the value of production and prosperity, or human value at all. They want to constrain people to "ecological boundaries".
They want you to follow what they call an allegedly new "hugely diverse community of thinkers, innovators, and practitioners" who "think more holistically about how to live well within ecological boundaries; some of them draw on indigenous knowledge and lore about how to stay in balance with nature; others confront the contradictions of endless growth head on."
That return to primitivism, not prosperity, is their aim. It's not that they don't understand that money measures value in the economy and GDP measures (though technically dubiously) the total value of an economy. Whether they understand it or not they don't want growth and don't want the human value. With that mentality there is nothing left to measure.
Think of what that would do to the global population. They are man-hating killers on a global scale. This second hand mediocre website is not the source of it, it only echoes the viro "ecology movement" that is well underway.
Ayn Rand identified this movement in the early stages of its modern form as it appeared with the rise of the violent New Left in the late 1960s. Read the title essay in her anthology Return of the Primitive: The Anti Industrial Revolution.
The viros ARE killers. There is plenty of explicit evidence.
Thanks for explaining things.
It is Earth first before humans. The brain washing continues and the greater good will be decided by the most charismatic liar money can buy.
The best thing that ever happened to humanity
Is Capitalism.
My only beef is with the way it is practiced, [besides cronyism-goes without saying] like: programed obsolescence, the 'Invention' of needs, [as opposed to solving real needs and when solved...move on to the next.] and what I observed is a total lack of concern for the health and well being of the end user.
The latter takes a conscience and Wide Scope Accountability but the other points just may be solved with 3D printing on demand.
Say, everyone has product A, which we have all come to rely upon, like a refrigerator, then that factory should go on to produce something else we truly need that benefits human kind, in the mean time, the next generation will need refrigerators or product A also, and yes, the company may have learned something, innovated something new with product A and now can just print up the new models to solve that need.
It won't be the constant growth companies think they need now, but companies will still grow, compete and in any event, they will still exist and be profitable.
I think this idea of unlimited growth has more to do with the power structures, in governments and the private sectors. That growth, which the free markets, enhancements of individual liberties, capabilities, and 3D printing; not to mention, Hopefully, more dependence upon self, evolution of the human mind and the ability to more and more, take care of one's own needs increasingly; should naturally, reduce and disperse those 'power structures' to individuals making the need for government and these power structures unnecessary.
3D printing might just be the end of the status quo and the over dependence upon bureaucratic regulators and companies with no conscience, if individuals can simply print what they need or want...but it's going to be one hell of a fight.
Marketing practices are not a kind of capitalism; they are what companies do in different ways, though sometimes obnoxiously, to sell what they produce. The consumers have a responsibility to know what their own needs and desires are and to rationally evaluate any suggestions if they care to pay attention at all. "Obsolescence" is a function of new developments and of the level of quality, which in turn becomes part of reputation. There can go good or bad trends depending on the culture, but that is within the political freedom, not a kind of capitalism. Capitalism is the kind of social system, not the ethics of what people do within it. But the "cronyism" with politicians is not capitalism at all.
They will move to regulate 3D printing like everything else. For decades the computer industry was left alone and thrived because politicians didn't understand it. They have caught on to the significance.
The goal is to control the people who understand and work with reality. Dont steal the fish a man catches; control the man who catches them and you get more fish.
That is correct and the bedrock of looters/moochers.
It is not the province of "the system" to improve the lives of anyone. It is the province of the individual.
In the first place, capitalism has been more and more restricted, and often prohibited from operating. To speak of it as "orthodox", as if it were being imposed on everybody, is glaringly hypocritical.
But what I believe in, basically, whether it is called "capitalism" or not, is individual rights. And a man's right to trade with another man on terms they both agree on. (As long as no third party's right is violated; for instance, two do not have a right to sell a third into slavery). And that one purpose of government is to protect such a right. And the end result of such, if practiced without contradiction, is, necessarily: capitalism.
Of course, people who choose have a right to go together and live together in a hippie commune, but ultimately I believe that that cannot work.
It is a senseless argument to try and offer any sort of socialist compromise. it is CAPITALISM or it is nothing!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The other thing that just made me shake my head was phrases such as "barter economies of Detroit" and "ecological feedback loops". It's clear that the author has no idea of what capitalism really is, because a barter economy is capitalism in its most basic form and all capitalistic economies rely on direct feedback as both a stabilization system and price-adjustment system. In short, the author is either a complete moron to be writing this, or he is directly appealing to a host of morons to agree with him on it.
My concern after reading this was the extreme ignorance of matter economic and the thinking that their ideas are new. It goes back to the old adage, "Those who refuse to learn from history are doomed to repeat it." I just hope that I or my sons do not have to live through a repeat of this foolishness in this country in our lifetimes, but I have learned not to underestimate the stupidity of people.
learning in school. I don't mean in politics primarily,
but the way they are taught (or not taught) to use
their minds. It looks to me like if this country is to be
saved, it will have to be by the homeschool movement.
The banks, on the other hand, profit massively from Inflation. Think about this. If you get a 100K mortgage on your house, and your house is worth 500K, the BANK has the write to use the other 400K to back their endless loans. So, by having inflation, and loaning money, banks benefit, and, in fact, drive inflation...
Now, we no longer have true capitalism, we have the Crony kind. That's why Military equipment always costs more. Furthermore, due to inflation, everyone needs cost of living raises. Driving future inflation.
Deflation is GREAT for everyone. things will cost less. A Dollar saved could be 1.20 in a couple of years, without interest (by virtue of deflationary pressures).
Finally, as we look at the population, you have a bell curve. 1.5% will be insanely wealthy, and 1.5% will be really poor. WE NEED THAT. Mistakes should have consequences, and so should successes. When you protect from one, you remove the other. And we are getting there. The difference in recent years is that people in these 2 extremes can trade places. Something unheard of for EONS.
Oh, and America has created something almost NEVER heard of before: Overweight POOR people. Let that sink in. Imagine trying to explain it to someone from 200 years ago!
Deflation happens as a correction to the value of money which has been inflated over its real value. It is a reaction and symptom of a manipulated market, but it causes real problems with valuations and results in market upheavals which don't generally result in that dollar to dollar-twenty increase you're talking about.
Inflation is also a systemic problem caused by intervention in the markets to artificially raise the value of money. But it doesn't help the banks at all. Inflation benefits borrowers at the expense of lenders by devaluing the loans. That's why our government likes it: it makes their borrowing binges cheaper over time. Inflation is bad because it encourages spending rather than saving and eventually brings on systemic collapse (like that $20 trillion debt).
When you have a sound money supply and the value in the economy rises faster than the money supply you get deflation. Imagine a simple economy that had 1000 units of money. The economy produces 100 widgets at a cost of 10 units per widget. If the economy grows and produces 110 widgets but the money supply remains constant, then the price of widgets will deflate to 9.09 units.
This deflation benefits anyone who has capital because they can now purchase ore with the same amount of capital.
Your example is overly simplistic, however. It doesn't matter how many widgets I produce, but how many I sell. It is not merely production, but consumption that determines the total value of the economy (see China's ghost cities). But is money a representation of the economy, or of the value used in the exchange of goods and services?
The better example is that a population expands and demand for widgets increases to 110 units per year. That population's labor efforts receive remuneration for their efforts which they then turn around and use to purchase widgets. Because there is an artificially constrained monetary supply, wages decrease, in turn forcing a corresponding decrease in "cost" (only comparative to the prior year) of widgets (and all other consumer goods). But if you look at the matter not in terms of the money supply but in terms of absolute labor, you have zero inflation and zero deflation - the money itself as a good must then reflect the new market realities.
As you stated, thinking of money itself as a good that adjusts itself to the market is probably the best way to think about it.
When you say,"Artificially constrained monetary supply," it bothers me a bit. Sound money like something based on gold standard will always be constrained. The amount of available gold can increase but it is limited and has cost associated with the increase.
The real danger is the unconstrained increase in money supply which happens with fiat money whose only constraint is the will power of the government (always moves towards zero over time).
"The real danger is the unconstrained increase in money supply which happens with fiat money whose only constraint is the will power of the government"
Absolutely. This is why the abandonment of the Gold Standard in 1964 was so bad. It has led to our currency inflation problems and our astronomical debt.
Yes, in a normal: I loan you money, inflation hurts me, but if I am loaning you LENT money at high leverage... Then I am 10-30x the borrower you are... I benefit.
Of course, things pop... The high leverage becomes fatal (or should have)...
That being said, banks use rate arbitrage to make their money - not the rates themselves. Yes, they borrow from central banks when necessary to prop up their balance sheets when their required holdings drop below the statutory amounts, but they do so at a penalty - not a premium. And it is much easier to pad a 1/4% on an 8% loan than on a 3% loan. And of the two, the banks definitely want to be able to offer the loan at 8% rather than 3% because they make more money on precisely the same transaction.
In an economy being fueled by artificially-low interest rates and borrowing - rather than the economically-stable savings-backed investment - banks can't make as much money and have to rely on volume of transactions rather than quality. Thus they, too, can get sucked into the morass caused by the monetary policy of the central banks which are primarily political instruments and not monetary ones.
Can the banks temporarily lend borrowed money? Yes, but when the market corrects they'll take it in the shorts when the interest rates on those loans necessarily skyrocket. Its a massive game of financial chicken, except that once you go down that path there is only an accelerator and no brake. Eventually, you will hit that wall and wreck. See Bear-Stearns.
I still think (hope?) for a Libertarian resurgence.
Until/unless we remove the Rulers, it's all an exercise in futility.
I hope this is wrong.
“While these systems clearly produce more positive social outcomes than laissez-faire systems do”
I question this claim. I wonder if they might produce less growth, which compounded over time means worse social outcomes. I also think the claim rests on the country being close off from the rest of the world, where worse poverty exists, and closing off a country is a recipe for poverty.
“Right now we are overshooting Earth’s carrying capacity by a crushing 64% each year, in terms of our resource use and greenhouse gas emissions.”
This is unfortunate but true.
"[Capitalism and socialism rely] on endless, indeed exponential GDP growth, ever-increasing levels of extraction and production and consumption.”
Capitalism and socialism aim for increased goods and service b/c people want them. Capitalism actually delivers increase production. This does not mean ever increasing extraction and activities that contribute to global warming. If you told someone 50 years ago, we’d like the economy to grow so that everyone could keep keep a huge library of books and movies to watch on a screen in their basement in their home, she might think the resources would be staggering. New technology increases efficiency, increases value per unit work and per unit raw material.
“Still, resistance to innovation is strong. One reason is surely that our culture has been stewed in capitalist logic for so long that it feels impregnable.”
This is a straw man. There are better arguments for capitalism. Besides, the beginning of the article say 55% of Americans think capitalism is “unfair”.
“The first is that the system is doing little now to improve the lives of the majority of humans“
I think levels of poverty compared to a given standard have gone down because of capitalism.
“capitalism’s endless need for resources is already driving us over the cliff-edge of climate change and ecological collapse.”
If the radio of goods and services provide to ecological damage is constant, then capitalism would be horrible for the environment because increases GDP. But it’s not constant. Denmark’s ratio GDP to greenhouse gases is a tenth of the US’s. It’s not a fair comparison b/c US is more spread out, BUT it shows the ratio is not constant. People will find ways to produce the things we want without incurring hidden costs to others in the form of global warming and hastening the current mass-extinction event. The answer is not simply to stop getting people goods and services they want!
We’re moving into a post-industrial economy, and I anticipate there will be more people like the authors calling the end of the industrial age the end of capitalism. Maybe capitalism will be different, but it doesn’t change the fundamental right of people to be free to produce stuff and take the profits in investing in more means of production that they own and enjoy the profits from.
On the one hand they say that 4.3 billion people live in poverty. The World Bank doesn't give that kind of number. It says that 10.7% of the world's population live on less than $1.90 per day (down from 35% in 1990). Is that the "world poverty line? Who knows. I suppose it all comes down to what the definition of poverty is.
On the other hand, the authors say, correctly in my view, that our economic system demands greater and greater resources which are becoming more and more scarce. If mankind is to reach a place where real poverty is minimal, something must, indeed, change. However, it seems to me that many of the alternatives to capitalism, or socialism or communism, idealist and sometimes silly, that are proffered in this piece may be great concepts, but I fail to see how anything mentioned does not suffer from the same fatal flaw as capitalism, socialism or communism: namely the demand for greater yet limited resources.
Mankind has been exceptionally good at creating one thing. More people. Actually, too many people. If the authors of this piece, and the idealist types who agree with them are to create the Nirvana of "shared prosperity", with everyone having enough, of no one left out, with no one living in poverty or "at the bottom" of any economic scale, then I believe it can only be accomplished by having a much smaller human population - substantially smaller. Maybe only 2 Billion, and maybe even that is too big.
The bad news is that given our current population growth rate, and consumer economies, and the increasing demands by egalitarians for "economic justice" (I.e. Equality of incomes) we are ultimately doomed to failure, and the world of Soilent Green may, in reality, be our real future.
Socialism is what exists almost everywhere, and that is what is "dogma and dangerous".
Note that the Dem. party is fighting for the same mysterious thing; and that "thing" is pure socialism.