Capitalism at Work

[lucid42day]

There is no ideal ideology... The bolivians must change their system for the better themselves. They have the power to do it. If they just sit back and complain and chew the coca, that's will be the future as well.

Maybe we can lend them a hand once we're done in the Gulf. Not a perfect solution, but as you noted ideologies like self-determination can only take you so far. We're already helping with the coca chewing problem. Props to us.

 

[Lifesaver]

Your equation is of the two-wrongs-make-a-right variety. You assume that the less-desirable individual trait of selfishness, when present in two interacting individuals, will combine to produce cooperation.

No, I said that capitalism doesn't stimulate selfishness at all, as in the market people have to cooperate to reach their objectives. Even the selfish will have to serve the interest of others.
The opposite of that is State intervention. The State does not propose voluntary transactions; it imposes taxes and restrictions, and favours one group at the expense of another; this is called exploitation.
The more socialized an economy, the more selfish it will be. Because once people realize they can solve their problems by lobbying to the State, they gradually cease to try to serve the demand of others, choosing instead to make political pressure for more benefits.
The epitome of this is the government bureaucrat, whose function is completely unnecessary for society and yet fights for increases in his wages; and every new increase is financed by another tax, another imposition.

If your position is that trying to guarantee one's wellbeing and that of their close ones (family, friends), and improving their living condition, is "selfishness", then we disagree completely.
Love is, and should be, like a fire; it gives more warmth to those closer to us, and first of all to us. It is impossible to love our neighbour if we don't love ourselves too. And to love someone you have never met more than your children, or your friends, is also absurd (which is another failing of utilitarian ethics, which do not take this factor into account).
So when an individual works to get some benefit for himself and his family, he is not being selfish according to my definition.

What about that, on average, each man will seek to maximize his own benefit?

Men's concept of benefit varies. For the selfish one, it is to become very wealthy whatever it takes, even at the expense of others.
Someone else may see benefit as helping those around him, making good friendships, teaching others, devoting his life to God, etc.

And the less honorable/more desperate among them will use deceptive tactics to gain an advantage

This is where values enter the story. What are people willing to sacrifice in order to achieve some personal goal they have?
In a socialist or interventionist situation, people have an incentive to exploit others (through the government); in the free market, they have an incentive to serve others.

and those who are more business-smart/educated will have a stronger position from the outset

Every single individual is unique. Each has a different position in life, and may change from one position to another.
When we speak of a "stronger position", we speak basing ourselves on some value. For instance, a rich kid with absent parents is in a "stronger position" to be rich, whereas in a "weak position" to have a good home education.
Surely, some people start in conditions which are below the minimum man's dignity demands (for instance, being born a slave, or in complete poverty); in order to help these, it is important that the free market be allowed to operate, so that people can cooperate with one another in many different ways, and thus increase the benefit for everyone.

and the corporations who can better control information will be able to out-propaganda the individual.

This is very exagerated. Propaganda has its power in convincing the individual to try something out. But it can never override his own voluntary choice, his free will.
No propaganda can make people choose the candle over the lightbulb, or the horse-cart over the car; unless people change the way they value these products, no change will occur, no matter how much propaganda is made.
I have a personal example.
Here in a Brazil there was a recent referendum asking whether guns should be prohibited completely. There have been huge campaigns in favour of disarmament since many years, and the most powerful media group in the country, as well as international NGOs and superpowers (UN, Ford Foundation, George Soros, etc) were all in favour of the prohibition. Their propaganda was visibly technically superior and more well-produced (ironically, they kept talking about the "powerful lobby of the firearms industry", which had sold only some thousand guns to civilians in the previous year), and yet they lost. Even with all the propaganda and marketting, the prohibition lost. That serves to show that propaganda is not all-powerful; it has many limitations.

I may be convinced by propaganda to try a new soft drink. If I don't like it, I will just not buy it anymore. And this is what happens for everyone.
One thing should be banned though: lying, giving false factual information, in an advertizing (for instance, saying a box comes with 5 units when it comes with 4).
But other than that, companies should be allowed to present their products in the best light possible. It is the people who will determine whether it is good or not, and no propaganda alone can convince them to buy and consume stuff they just don't like.

 

[Lifesaver]

There also seems to be the belief that capitalism is when there are big corporations involved. This is not true.
Many big corporations actively campaign for socialistic measures; they seek governmental protection in order to avoid competition from others.

In fact, most monopolies only ever form because there was some sort of governmental protection or restriction in their market.

Others don't, and do play by the rules of the market (that is, satisfying the people's demand and not lobbying for more restrictions and protections). But to assume that if a big corporation is involved then we are in a capitalistic society, instead of an interventionist or socialist one, is wrong.

 

[TeddyKGB]

No, I said that capitalism doesn't stimulate selfishness at all, as in the market people have to cooperate to reach their objectives. Even the selfish will have to serve the interest of others.

I know what you said; I was not claiming that capitalism stimulates selfishness so much as it provides avenues to selfishly exploit others.

The opposite of that is State intervention. The State does not propose voluntary transactions; it imposes taxes and restrictions, and favours one group at the expense of another; this is called exploitation.
The more socialized an economy, the more selfish it will be. Because once people realize they can solve their problems by lobbying to the State, they gradually cease to try to serve the demand of others, choosing instead to make political pressure for more benefits.
The epitome of this is the government bureaucrat, whose function is completely unnecessary for society and yet fights for increases in his wages; and every new increase is financed by another tax, another imposition.

I agree that pure socialism is even more idealistic than pure capitalism, but it rarely manifests as a dichotomy, as I am sure you are aware.

If your position is that trying to guarantee one's wellbeing and that of their close ones (family, friends), and improving their living condition, is "selfishness", then we disagree completely.
Love is, and should be, like a fire; it gives more warmth to those closer to us, and first of all to us. It is impossible to love our neighbour if we don't love ourselves too. And to love someone you have never met more than your children, or your friends, is also absurd (which is another failing of utilitarian ethics, which do not take this factor into account).

It is hard for me to accept this as a brute fact. This 'family-first' behavior is well-explained by evolutionary models like Dawkins's "selfish gene." But I fail to see why I should subscribe to your emotional model; I see no reason why love "should be" as you say it should.

So when an individual works to get some benefit for himself and his family, he is not being selfish according to my definition.

Definitions can be fickle things.

This is where values enter the story. What are people willing to sacrifice in order to achieve some personal goal they have?
In a socialist or interventionist situation, people have an incentive to exploit others (through the government); in the free market, they have an incentive to serve others.

It is less absolutist than you make it seem, but again I agree that overall, socialism is less equipped to deal with human shortcomings.

Every single individual is unique. Each has a different position in life, and may change from one position to another.
When we speak of a "stronger position", we speak basing ourselves on some value. For instance, a rich kid with absent parents is in a "stronger position" to be rich, whereas in a "weak position" to have a good home education.
Surely, some people start in conditions which are below the minimum man's dignity demands (for instance, being born a slave, or in complete poverty); in order to help these, it is important that the free market be allowed to operate, so that people can cooperate with one another in many different ways, and thus increase the benefit for everyone.

I agree, for the most part.

This is very exagerated. Propaganda has its power in convincing the individual to try something out. But it can never override his own voluntary choice, his free will.
No propaganda can make people choose the candle over the lightbulb, or the horse-cart over the car; unless people change the way they value these products, no change will occur, no matter how much propaganda is made.

This is where what is meant by "free will" becomes a sticking point. It appears that you believe an individual can make any possible choice at any time, regardless of external influence; I call this 'libertarian' free will.

I, however, deny free will entirely, asserting instead that we are necessarily no more than a product of our influences.

I have a personal example.
Here in a Brazil there was a recent referendum asking whether guns should be prohibited completely. There have been huge campaigns in favour of disarmament since many years, and the most powerful media group in the country, as well as international NGOs and superpowers (UN, Ford Foundation, George Soros, etc) were all in favour of the prohibition. Their propaganda was visibly technically superior and more well-produced (ironically, they kept talking about the "powerful lobby of the firearms industry", which had sold only some thousand guns to civilians in the previous year), and yet they lost. Even with all the propaganda and marketting, the prohibition lost. That serves to show that propaganda is not all-powerful; it has many limitations.

It's also an anecdote and perhaps memorable for its uncommonness. Advertising/propaganda is a multi-billion dollar industry for a reason; more exposure, while no guarantee of one's goal, is a pretty good strategy.

I may be convinced by propaganda to try a new soft drink. If I don't like it, I will just not buy it anymore. And this is what happens for everyone.

What if it tastes good but is of questionable nutritive value? That is something that might not have effects for some time; should McDonald's have been required to publish nutrition information?

One thing should be banned though: lying, giving false factual information, in an advertizing (for instance, saying a box comes with 5 units when it comes with 4).

Is that caveat only for quantifiable attributes? Should cigarette companies have been required to publicly admit that their products are physically addictive and dangerous?

But other than that, companies should be allowed to present their products in the best light possible. It is the people who will determine whether it is good or not, and no propaganda alone can convince them to buy and consume stuff they just don't like.

Whether or not something is "good" is a much more complex question than you portray it.

 

[Zoot]

No. Capitalism is merely an ideology.

Greed is an expression of the darkness of human nature. Capitalism (or at least the form of capitalism that I believe in) acknowledges the fact that greed is part of human nature, and seeks to channel that greed into non-destructive avenues by acknowledging that it exists.

I believe that capitalism is as a generally rule, the best ideology that there is to follow, simply because it acknowledges greed. Any ideology that denies that people are greedy, is simply doomed to fail.

I regard this as an almost universal misunderstanding about capitalism. "Capitalism doesn't deny greed. It utilises greed for everyone's good, because greed is unavoidable." Capitalism is institutionalised theft. In that sense, yes, it acknowledges greed. It acknowledges that the owners of capital will do their best to get more and those who are being stolen from will do their best to have as little stolen from them as possible (ie., earn high wages). But its nature as institutionalised theft does not change.

The only economic system I can think of that would deny self-interest entirely would be something like complete communism, where everyone "earns" the same amount. Perhaps this is why people say that capitalism is the only economic system that acknowledges greed and self-interest - it seems to me that most people think there are only two possible economic systems at all, state capitalism and state communism.

But it is possible for there to be an economic system that does not institutionalise theft like capitalism does, and also does not deny self-interest like communism does. That's far more ideal than either theft or uniformity.

 

[BrownCoat]

I regard this as an almost universal misunderstanding about capitalism. "Capitalism doesn't deny greed. It utilises greed for everyone's good, because greed is unavoidable." Capitalism is institutionalised theft. In that sense, yes, it acknowledges greed. It acknowledges that the owners of capital will do their best to get more and those who are being stolen from will do their best to have as little stolen from them as possible (ie., earn high wages). But its nature as institutionalised theft does not change.

Capitalism is not instutitionalized theft, because people are not forced to turn over their capital to serve the ends of others. The laborer has to agree to sell his labor.

The only economic system I can think of that would deny self-interest entirely would be something like complete communism, where everyone "earns" the same amount. Perhaps this is why people say that capitalism is the only economic system that acknowledges greed and self-interest - it seems to me that most people think there are only two possible economic systems at all, state capitalism and state communism.

Well, there used to be a commune that actually functioned pretty well, near where I live, but IIRC, in the early 20th century the government shut it down.

It was some type of anarcho-communism.

It worked because of the relative geographic isolation of the area (this was decades before the Narrows bridge) and the fact that everyone who was there pretty much wanted to be there. The had a pact that said they'd live outside the norms of the era too.

But it is possible for there to be an economic system that does not institutionalise theft like capitalism does, and also does not deny self-interest like communism does. That's far more ideal than either theft or uniformity.

Any form of economic system where the government seizes assets for its own use by taxing the income either directly or indirectly of a person that works under that system is a form of institutionalized theft.

It's enough to make a man an anarchist.

 

[Zoot]

Capitalism is not instutitionalized theft, because people are not forced to turn over their capital to serve the ends of others. The laborer has to agree to sell his labor.

For less than it's worth. And he can sell it to someone else, but there is a monopoly on capital in this world, and all the capital owners pay the labourer less than their labour's worth. It's like saying that slaves are free if they can choose who their master's going to be.

Any form of economic system where the government seizes assets for its own use by taxing the income either directly or indirectly of a person that works under that system is a form of institutionalized theft.

It's enough to make a man an anarchist.

Quite. Taxes are institutionalised theft and capitalism are institutionalised theft. Both are maintained through government violence. It's the threat of violence that keeps people paying their taxes, either violence to their person (imprisonment) or violence to their rightful property (that they justly own). It's also the threat of violence that keeps people selling their labour for less than it's worth. Well, that and ignorance with regard to the true value of their labour. If I worked in a shoe factory and wandered off with the product of my labour, sold it for the value the market set, and sent appropriate portions of the money I got for the sale to the people who'd contributed (extracting the rubber, picking the cotton, working the power grid, whatever), I would consider that the just desert for my labour, the value of which was determined by the sales market. Legally, it would be considered theft, and the government would use violence against me to ensure it didn't happen again.

 

[BrownCoat]

For less than it's worth. And he can sell it to someone else, but there is a monopoly on capital in this world, and all the capital owners pay the labourer less than their labour's worth. It's like saying that slaves are free if they can choose who their master's going to be.

Who determines the value of that labor?

Him who does not work, neither shall he eat.

If there's a monopoly on capital, then where do I get my money? It is impossible for someone like Bill Gates to hoard his money like some twisted uncle of Ebener Scrooge, because he does not exist in a vacuum, and cannot produce all of his needs himself. Thus, in order to survive, he must trade his capital for things that he needs.

Quite. Taxes are institutionalised theft and capitalism are institutionalised theft. Both are maintained through government violence. It's the threat of violence that keeps people paying their taxes, either violence to their person (imprisonment) or violence to their rightful property (that they justly own). It's also the threat of violence that keeps people selling their labour for less than it's worth. Well, that and ignorance with regard to the true value of their labour.

Is there an absolute standard for the value of labor?

If I worked in a shoe factory and wandered off with the product of my labour, sold it for the value the market set, and sent appropriate portions of the money I got for the sale to the people who'd contributed (extracting the rubber, picking the cotton, working the power grid, whatever), I would consider that the just desert for my labour, the value of which was determined by the sales market. Legally, it would be considered theft, and the government would use violence against me to ensure it didn't happen again.

If you owned the machinery and had purchased the required materials to manufacture that shoe, it would be no crime. You didn't, that means you are stealing someone else's shoe. That someone else and the government tend to frown on that.

 

[Zoot]

Who determines the value of that labor?

Him who does not work, neither shall he eat.

Unless he "owns" capital. Then he can eat the product of other people's work.

If there's a monopoly on capital, then where do I get my money? It is impossible for someone like Bill Gates to hoard his money like some twisted uncle of Ebener Scrooge, because he does not exist in a vacuum, and cannot produce all of his needs himself. Thus, in order to survive, he must trade his capital for things that he needs.

He trades other people's labour for things that he needs.

Is there an absolute standard for the value of labor?

There is an intersubjective standard for the value of the product of labour: the free market. And there is a basic standard for who deserves the product of labour: "Him who does not work, neither shall he eat." So... why do we live in an economic system that gives most of the wealth to the people who do the least of the work?

If you owned the machinery and had purchased the required materials to manufacture that shoe, it would be no crime. You didn't, that means you are stealing someone else's shoe. That someone else and the government tend to frown on that.

The notion of ownership you here suggest is in contradiction with the idea that people deserve what they have worked for and no more. An "ownership" of means of production that excessively "entitles" one the product of labour using it (in other words, that the government will use violence to enforce one's control of that wealth) is institutionalised theft. The "owner" of the machinery deserves nothing more than their share of the work.

 

[BrownCoat]

There is an intersubjective standard for the value of the product of labour: the free market. And there is a basic standard for who deserves the product of labour: "Him who does not work, neither shall he eat." So... why do we live in an economic system that gives most of the wealth to the people who do the least of the work?

But what happens if the free market determines that the value of their labor is higher for some reason?

Different forms of labor are going to have different values to different people.

The notion of ownership you here suggest is in contradiction with the idea that people deserve what they have worked for and no more. An "ownership" of means of production that excessively "entitles" one the product of labour using it (in other words, that the government will use violence to enforce one's control of that wealth) is institutionalised theft. The "owner" of the machinery deserves nothing more than their share of the work.

But why is it excessive? After all, someone had for spend the capital to build the means of production. If I were to somehow gather the capital, for a shoe factory that requires five hundred people to operate it, and then I hire those people, how is it excessive that I am entitled to some of the profits, because I risked the initial startup capital of that shoe factory? All the employees do is manufacture shoes. If they show up for work on time, and produce decent shoes, they have not risked anything.

How does your system compensate risk?

He trades other people's labour for things that he needs.

How so?

Unless he "owns" capital. Then he can eat the product of other people's work.

But who ran the risks inherent in initially starting up the company? If Bill Gates took a gamble, a couple of decades ago, and sold a product that enough people want, he took a risk. Now, he's still reaping the benefits of that risk. What did a software engineer of a janitor at microsoft risk?

 

[TheReasoner]

You seem to feel that the US is an all-powerful entity and if the US has any influence in the way things are then nothing can be done. I really don't know the exact situation in Bolivia. But I do know that people can make a change no matter who is in control.

Even totalitarian governments can be overthrown if the people so desire. It is the people that must want change bad enough to make it happen.

I am not saying that things are perfect in Bolivia or anywhere else. But, I do get a little tired of people complaining/blaming without taking action. If you don't like capitalism, change things.

I live in one of the exceptionally few countries where the USA has not taken action (that I know of) to overthrow a socialistic government. Like Scottish John mentioned with Chile as an example, plenty of nations have wanted to change from one system to another, only to be stopped by the USA.
Chile is one example. Ecuador has attempted so too, as has Nicaragua. Nicaragua and Chile both had terrible consequences follow free elections because of wha the US government thought about the elections´ outcome.
I am particularly fond of Ecuador as a nation as I spent a lot of my childhood there. And it grieves me to see such a nation forced in to capitalism induced poverty because of US oppression through extensive abuse of debt the nation has to the US. US intervention in Ecuador has caused so much problems a Norwegian was assasinated in cold blood in the coast, and his killer was caught because he bragged about killing a *swearword* gringo... He had believed the Norwegian was an American - tired of the oppression the man had grabbed a gun and shot him in fury because of what the USA has done to Ecuador. While it does not justify murder, I believe this and many episodes like it demonstrate that as many African nations - like the Ivory Coast - hold a lot of hatred towards France and other former masters - so does South America hold more than a slight grudge - for mighty good reasons I might add, to the USA.

So it is not for failing to take action. Nicaragua fought in a bloody civil war for many years trying to defend the results of their elections. Attempting to get rid of a dictator. But this was utterly futile. The USA pumped money into the Somoza friendly forces. The result was over 50 000 dead. And a nation with an oppressive government they did not elect.

So it is not from failure of attempting to better their own situation. Unless you call 50 000 dead in a prolonged civil war the result of an apathic approach to the situation they are in...

Because of US intervention on several occasions, the Nicaraguans have given up hope, and accepted what government they have, even though they still want their own government. Why? Everyone or virtually everyone knows someone who died fighting for the cause of liberty. The blood shed has ben more than just a few drops. The story is similar all over the South American continent. You can´t say they have a hard time because of their own laziness or failure to act. They have acted, and it has been proven futile. Because when they act, Uncle Sam is there - with guns - to stop them. Just like European nations have done in Africa.