The morality of capitalism

[Karl]

 

Brilliant and simple. Why the free market trumps government control.

[Basher]

"Limited Government" = Genius !!

[soaring crane]

Load of bollocks, in my opinion. 

[dust]

Well, under a 'perfect' free market, I'd agree that (most of) what he says holds true. But in no modern society is there a 'perfect' free market, and in no society anywhere or at any time is having money in itself proof of anything.

 

Furthermore... most people do not adequately understand the responsibilities placed upon them -- or, if they do, perhaps do not accept the responsibilities placed upon them -- by the freedom of the market, and are very much susceptible to manipulation by those who do. For a free market to work in the way that he claims it does, everyone would have to be raised from the same starting point, educated to the same level, etc. They are not.

[Karl]

Well, under a 'perfect' free market, I'd agree that (most of) what he says holds true. But in no modern society is there a 'perfect' free market, and in no society anywhere or at any time is having money in itself proof of anything.

 

Furthermore... most people do not adequately understand the responsibilities placed upon them -- or, if they do, perhaps do not accept the responsibilities placed upon them -- by the freedom of the market, and are very much susceptible to manipulation by those who do. For a free market to work in the way that he claims it does, everyone would have to be raised from the same starting point, educated to the same level, etc. They are not.

 

Even an 'imperfect' semi-free market works better than a market in which the producers are subsidising the failure of business to satisfy customers, or those who refuse to give value.

 

Money is energy. That's the best way to think of it. Then you give and receive energy according to your ability to provide.

 

It's antithetic to a free market to have everyone raised to the same starting point. It's the very opposite. In a free market those with lower skills charge less for services and still participate in giving service.

[LAOLONG]

There is no way to know if free market capitalism does indeed work. pure capitalism needs a global world without borders ,nations, states, import taxes, immigration limits.

[Perceiver]

A free market definitely works better than government control as in, say, Soviet style communism. Most people would agree with that.

 

That being said, free markets can also create some problems. Most people would probably agree with that too.

 

The question then is; how do we best engage the problems of capitalism without undermining it, or denying its positive effects?

 

That's where the real debate lies, IMO.

[Karl]

The Tao. It's a stream, don't interfere with its flow.

[dust]

Even an 'imperfect' semi-free market works better than a market in which the producers are subsidising the failure of business to satisfy customers, or those who refuse to give value.

 

I did not say that it does not

 

 

... you give and receive energy according to your ability to provide. It's antithetic to a free market to have everyone raised to the same starting point. It's the very opposite. In a free market those with lower skills charge less for services and still participate in giving service.

 

You know what a "starting point" is, I'm sure: it's the point from where one starts. One isn't "raised to" a starting point, one begins there.

 

I clearly wasn't talking about 'making' every person the same -- somehow giving everyone the exact same intelligences and skills and ambitions etc. And I think you know that.

 

I'm talking about everyone having the same opportunity to understand and exploit the (economic) system.

 

I think it's fairly safe to assume that from a young age a person's parental/family situation, economic status, education, location, and various other factors all have an effect on that person's understanding of the political, economic, and cultural systems in which they grow up and the extent to which they are willing and able to become engrossed in and take advantage of these systems. This is not to say that all poor people grow up to be poor, or that all rich people grow up to be rich. Far from it. I don't need any rags-to-riches stories, I'm well aware of them. They are not the norm, though.

 

In the oh-so-fair and moral free market that the video man is talking about, we're to assume that everyone does fair work for fair pay -- that everyone benefits from simply doing their bit, because everyone is honest and content with their lot. There are no selfish, economically-advantaged people capable of manipulating the system or any particular people or groups of people within it. Nobody benefits from war or poverty. There's no knock-on effect from generation to generation. And having money is proof that you're a moral, hard-working citizen...

[Karl]

Everyone has the choice to sell their labour to the highest bidder. It's fair pay because the transaction is voluntary.

 

It doesn't depend on people being honest or content with their lot. There will always be cheats, however, unlike today the cheats aren't back stopped by the state to the tune of trillions of dollars which essentially robs savers, pensioners and wage earners of the buying power of their honestly obtained earnings.

 

It also stops those already on the earnings ladder, or businesses from protectionism-stopping new competitors entering the market and so earning greater profits from customers, whilst reducing opportunity for everyone who wants to get employment or start a competitive business.

 

In a free market there is no 'system' to manipulate. There are honest dealers and dishonest dealers and both market forces and the law take care to irradicate the latter. Bad actors will find themselves out of business, or up before a court.

 

Companies in the current crony system are promoting war and poverty through their control of the Government and revolving door politics. As long as Governments are prepared to use violence against other states and their own people there will be people cashing in. A free market wouldn't make this worse.

 

Poverty will always be with us. Yet in a free market it is relative poverty and not absolute. In other words even the poor get more wealthy as all wealth increases for everyone.

 

Money should represent the value others place on your services. At present this doesn't happen because the state is printing money, subsidising poor actors and zombie companies. The people who are least valuable are making the most money by robbing everyone else.

Edited September 15, 2015 by Karl

[thelerner]

To confuse the free market with the Tao is a mistake.  Is Capitalism moral?  It's an economic model; the people who use it will determine its morality.  Immoral people will certainly make it an immoral system.   Good people can set it up as a moral system, where the strong don't take advantage of the weak. 

 

I'm a fan of capitalism, but I find the majority of comments above to be naive.  Just like a starry eyed communists who thinks ofcourse his side has all the answers plus common sense built in.   From a certain storybook intellectual sense yes, you are right.  In reality, it misreads the human race and condition.  Pure capitalism without some humanistic controls can lead to feudalism.  

 

All to often some people buy up majority shares of resources and take advantage of others.  The assumption of choice, disappears as the model rolls on.  Only through intelligent intervention does it keep from becoming increasingly feudalistic.  In which case there's revolution, heads roll, bad things happen. 

[Karl]

To confuse the free market with the Tao is a mistake.  Is Capitalism moral?  It's an economic model; the people who use it will determine its morality.  Immoral people will certainly make it an immoral system.   Good people can set it up as a moral system, where the strong don't take advantage of the weak. 

 

I'm a fan of capitalism, but I find the majority of comments above to be naive.  Just like a starry eyed communists who thinks ofcourse his side has all the answers plus common sense built in.   From a certain storybook intellectual sense yes, you are right.  In reality, it misreads the human race and condition.  Pure capitalism without some humanistic controls can lead to feudalism.  

 

All to often some people buy up majority shares of resources and take advantage of others.  The assumption of choice, disappears as the model rolls on.  Only through intelligent intervention does it keep from becoming increasingly feudalistic.  In which case there's revolution, heads roll, bad things happen. 

 

It's become feudalistic because we have imposed controls. What applies to the free market applies equally to those we give the authority to apply humanistic control to the market. In other words the market will be entirely dependent on a group of people who are the very types that seek the power to subvert it. The result has been neo feudalism through banks and corporations. The distributed nature of the free market means the lack of centralised authoritarianism means it's easier to eradicate bad actors. The market itself is the best mechanism to control itself, it will grow its own controls and rules because good actors want to gain a reputation in order to maximise income.

 

I think it very much equals the Tao in terms of not trying to apply interventions in order to control it.

[canacan]

When talking enlightment, I never thought of the light from a YouTube PowerPoint...

[dust]

Firstly, I'd like to point out that you left my main point entirely unanswered. Namely,

 

"parental/family situation, economic status, education, location", etc.

 

What laws in this free market prevent nepotism? Give poorer people equal opportunity to have their children educated to a satisfactory level? Make sure that areas do not become economically segregated to the point that people miss out on opportunities because of where they are brought up? etc...

 

 

Everyone has the choice to sell their labour to the highest bidder.

 

Your phrasing makes it sound straightforward, but... it is not.

 

The person with the higher quality service/labour and, importantly, the greater ability to market said service/labour, has the greater opportunity to sell their labour to the highest bidders. That person's choice and quality of labour will, much of the time, have been informed in large part by the factors mentioned above.

 

 

It doesn't depend on people being honest or content with their lot. There will always be cheats, however, unlike today the cheats aren't back stopped by the state to the tune of trillions of dollars which essentially robs savers, pensioners and wage earners of the buying power of their honestly obtained earnings.

 

Blame it all on the government?

 

If there were no (or less) government, all the corporations would start behaving well? It's government that corrupts people, not people that corrupt business and government?

 

 

It also stops those already on the earnings ladder, or businesses from protectionism-stopping new competitors entering the market and so earning greater profits from customers, whilst reducing opportunity for everyone who wants to get employment or start a competitive business.

 

How?

 

 

In a free market there is no 'system' to manipulate. There are honest dealers and dishonest dealers and both market forces and the law take care to irradicate the latter. Bad actors will find themselves out of business, or up before a court.

 

Well, there is... it's called "the economy". It is a system ("a set of connected things or parts* forming a complex whole"), and of course it is manipulable.

 

* the parts being people/their labour

 

Maybe there's a set of laws that would eradicate dishonesty... if there is I would love for you to let us in on the secret..?

 

 

Companies in the current crony system are promoting war and poverty through their control of the Government and revolving door politics. As long as Governments are prepared to use violence against other states and their own people there will be people cashing in. A free market wouldn't make this worse.

 

It "wouldn't make this worse."

 

I at least appreciate your honesty in not claiming that it would make things better in this regard.

[Karl]

There is a lot to answer DB and I'm going to struggle to include every connection, but I will try my best within the limits of a short piece of writing.

 

There are no laws to prevent nepotism why would there be ?

 

Education doesn't determine success. Many entrepreneurs, inventors and scientists had no formal education at all. There needs to be equal opportunity without a requirement for state sanctioned qualifications. It's noteable that a poem written by a six year old girl working down the coal mines prior to the start of state education in the UK, and the daughter of a poor mine worker, was able to produce a written piece of work with perfect spelling and grammar.

 

Rich families regularly become poor one generation after being blindingly succesful. The number of companies that go to the wall due to the sons or daughters taking charge is very high. Those businesses were quite likely started by people who had nothing to begin with.

 

Modern state education systems have recreated caste systems. Unless the free market is applied to education with equal enthusiasm then we are stuck with this system which will channel people into positions.

 

A less educated/skilled worker has at least the option of selling his labour for less and thereby undercutting the more skilled worker. That's how markets work, we don't all buy Rolls Royces do we. This gives the less skilled worker a competetive advantage to gain employment and then improve his skill set to obtain a higher price for his labour. He will of course have to compete with the same undercutting by the less skilled.

 

Governments have the power and if the people in those governments are corrupt, then this will result in a corrupt market place. The less opportunity men have to utilise the Government to gain special privileges, the less corruption there will be. So, absolutely, governments in the market are purely corrupting. They have no function in that space, their sole reason for existence was to protect the country from foreign attack and internal strife.

 

Protectionism was covered on the video. The creation of licensing, regulations, examination boards, unionisation etc are all used to specifically prevent competition. The state grants privileges to one group or another by requiring traders to hold licences or other confetti- the taxi medallions in New York are an easy example and the current effort to use the government to kill Uber Taxi competition. This also benefits the state which extracts a fee to keep those with privileges safe from competition. There are many firms of this state sponsored exclusion which are more subtle such as zero percent cost of money for Wall Street gamblers. You and I can't borrow money at zero percent and so we are locked out of that market.

 

Actually an 'economy' is a state manipulated system, there is no such thing in a totally free market. Only the state talks about 'its economy' if the state didn't exist we would only talk about economics and the market. People have tried manipulating semi free markets and come unstuck. Standard oil is a good example. The company tried to create and control a Cartel but someone always tried side dealing. This is what's funny in a free market, those that try and firm monopolies in a corrupt sense soon discover that the same corruption they had employed to try and create the monopoly eventually destroys it. The only way to keep a monopoly going is with the consent of a Government which will force the actors to remain loyal through the coercive application of force. Indeed this is precisely how Nazi Germany and Soviet Rissia worked. The businesses were run by the state completely and the owners, managers and workers told what, where and how. No competition arose in these states.

 

I did not say we could eradicate dishonesty, we have dishonesty on a grand scale right now and no one is going to prison. Fraud and bad dealing is now an acceptable part of the economy by decree of the state. Manipulation of interest rates, capital controls, insider trading bail outs, bail ins, TARP programmes etc. A free market could not eradicate bad actors, but it wouldn't be capable of allowing the wholesale crime spree we currently have. The market would break bad actors and normal law/courts/compensation would deal with those who kept on breaking laws.

 

Yes, governments and their crony warfare, welfare providers like wars and poverty. The only option is to get rid, or minimise the state in such a way as it could not engage in these pursuits. This was the idea of the U.S. Constitution which stated 'no foreign entanglements'. Now the U.S. President- since 9/11-has had a deep state second Government (CoG) which is in a state of continuous emergency allowing foreign intervention without the need to debate the requirement for war through Congress. Obama can declare a war unilaterally on anything, but worse, the CoG has the power to enact any laws or actions it chooses without consultation with the constitutionally elected Government.

 

I don't imagine this answers everything to your satisfaction, it's easier to tackle one part of the subject at a time and devote space to discussing it more fully.

Edited September 15, 2015 by Karl

[thelerner]

I think 'Pure' Capitalism is good at producing extreme wealth and sweat shops.  In many ways China is closer to it then Westernized countries are.  Much less regulation.  They have millions and millions in sweat shops.  A few years ago when it was a bit less regulated and extreme, they had to put suicide nets under some of them to catch those who'd given up hope and wanted to send a signal on how horrible there lives were. 

 

Those millions are free to go to another sweat shop, If they're black balled.  A main reason there has been progress is Western countries demanding conditions improve.  In pure capitalism maybe there's impetus for that, maybe not. 

 

I think its fanciful thinking that Pure capitalism would produce better people or better government.  I know we do this dance each time you bring up your god, but can you point to a country that's a good example of pure capitalism and how there people and government are better.  I bring up China, as an example with less regulation.  In the past people brought up Somalia and a couple other failed states as examples of where there is pure capitalism or at least no government rules. 

 

What country would you say is an example of pure capitalism or is it a little more like Neverland, second star to the right? 

 

I only try to nail down this point so there'd be a hope you'd get the point that the problems of nepotism (war etc.,)  are human problems not really due to economic models. 

 

Also, you mentions banks and corporations like they were bad things.  In your imaginary world you'd outlaw them?  No borrowing money.  No company bigger then .. 50 people??

 

I disagree with your writing on monopolies.  There's no magic reason why they fail, matter of fact a monopoly can grow very strong.  At least in the U.S the government will often take them down when they become too powerful.  Its important and allows the free market breathing room.  In your system, taking a monopoly is based on ?? hope??

Edited September 15, 2015 by thelerner

[Karl]

I think 'Pure' Capitalism is good at producing extreme wealth and sweat shops. In many ways China is closer to it then Westernized countries are. Much less regulation. They have millions and millions in sweat shops. A few years ago when it was a bit less regulated and extreme, they had to put suicide nets under some of them to catch those who'd given up hope and wanted to send a signal on how horrible there lives were.

 

Those millions are free to go to another sweat shop, If they're black balled. A main reason there has been progress is Western countries demanding conditions improve. In pure capitalism maybe there's impetus for that, maybe not.

 

I think its fanciful thinking that Pure capitalism would produce better people or better government. I know we do this dance each time you bring up your god, but can you point to a country that's a good example of pure capitalism and how there people and government are better. I bring up China, as an example with less regulation. In the past people brought up Somalia and a couple other failed states as examples of where there is pure capitalism or at least no government rules.

 

What country would you say is an example of pure capitalism or is it a little more like Neverland, second star to the right?

 

I only try to nail down this point so there'd be a hope you'd get the point that the problems of nepotism (war etc.,) are human problems not really due to economic models.

 

Also, you mentions banks and corporations like they were bad things. In your imaginary world you'd outlaw them? No borrowing money. No company bigger then .. 50 people??

Let me answer your first question last as it's easiest.

 

Banks and corporations are just examples of businesses. They would form in the free market but would not be privileged by the state. There is no requirement to limit size or any other thing. The market sorts it out just as a field of flowers, a river or a forest grows and changes.

 

Yes, they are human problems. That's exactly the point. There are no Government solutions to social problems. In other words man is fallible no matter if he is in an institution called 'government' or a lone operator in the market. However, put a monopoly of violence and law making in the hands of one small group of men and you inject a blanket of whatever morality those men have into the entire market place. The well becomes poisoned.

 

All labour produces some form of sweat shop in an early industrial market. In China the peasants lived a very hard life on the land. Millions died of starvation. There is enormous competition for jobs in the new factories. The life and wages are better than working the land and so people flock to find work. From our privileged point of view- in a much more free capitalist country-we see awful sweatshops and a reminder of output own past, but things didn't stay that way. The capitalist countries became far more wealthy and as they did so, the competition to recruit and keep the best people became a competition between businesses-this is why Henry Ford paid his workers such a high wage. It stopped them taking their new skills to a higher bidder. Labour is a scarce resource and so business has to compete to get it.

 

The simple fact is that non capitalist countries are many times poorer than capitalist countries- even those that are only marginally capitalist such as China ( it's still a heavily state regulated command and control economy ). As soon as there is even minimal laissez faire the standard of living explodes upwards. Instead of donkeys on dirt roads there are streets full of Ferrari's. This happened to China in the space of a few decades. Imagine what would happen if we lifted the restrictor of state completely !

 

In the West we are beginning to circle the drain. We have been systematically killing off the free market and the result is stagnation of innovation, competition, education and a steady decline in living standards despite what remains of the free market. The debt burden is enormous and employment of the young is going backwards, whilst those that had retired have had to come back into the labour market. Unless the state gets its boot off all our necks we are going to witness an ever more rapid decline whilst the state grows to strip us of any remaining wealth and dignity. You don't need an example of a country that is totally free market, you only need to see the difference between one which is free market and one that isn't. Our current situation is that of one which is sliding towards a neo feudal oligarchy of bankers and corporations and what we are currently witnessing as a shallow decline, will rapidly turn into a rapid decent.

Edited September 15, 2015 by Karl

[soaring crane]

Imagine what would happen if we lifted the restrictor of state completely !

 

How would you educate the population?

[Karl]

How would you educate the population?

 

We were better educated prior to state education. The cost of education privately in a competitive free market is far lower and offers more choice. Current state education has been a failure-largely because the model is not designed to educate, but to create a vocationally skilled and obedient population happy to fit into their allotted caste. Secondly it is too expensive because it generates self serving interests through effective monopoly.

 

Today, in the West, it's easily possible to educate yourself or obtain skills virtually free of cost. The internet is packed with free resource that is available to anyone who cares to bother to look. What's ridiculous is the belly aching about there never being sufficient educational facilities and yet hardly anyone bothers to partake in the online, low cost and often free courses. Indeed many people I know won't even pick up a book and some are proud that they don't read.

 

In the modern West an education is really just a method of obtaining a ticket of conformity. Young people are emerging from over priced universities with worthless pieces of paper and low employment prospects coupled with public backed debts of thousands of pounds they will likely never repay. The jobs they do get are often poor quality, low paid occupations which they end up staying in to avoid paying back the debts that hang over them. It's another subprime market with inflated education costs created by zero risk finance creating too much demand in a monopolistic market.

 

I would happily educate willing pupils for a very low fee, because I see education as a vocation and not a career in itself. I'm betting I'm not the only one. Today we have highly paid, over stressed teachers fastened into long days in school, they are supposed to be filling empty heads with facts, but that isn't a rewarding occupation. It's treating children and young adults as no more than components and it has become the teachers job to force the components to comply instead of children doing the work to educate themselves.

[canacan]

We were better educated prior to state education. The cost of education privately in a competitive free market is far lower and offers more choice. Current state education has been a failure-largely because the model is not designed to educate, but to create a vocationally skilled and obedient population happy to fit into their allotted caste. Secondly it is too expensive because it generates self serving interests through effective monopoly.

 

I usually avoid talking right and wrong, but this is well beyond wrong. If you wish to study it with an open mind in different areas and eras and taking into account the relationships between the different emanations of power and state, you'd inevitably come to the opposite conclusion... Well, unless, maybe you wish top education only for a few and none (or twisted and shallow propaganda) for the rest... Which is narrow sighted too, as it is very possible that more educated people can also create and environment in which more brilliant minds appear.

 

As for virtual education online, try to learn taiji boxing alone in your bedroom for some good laughs.

[Karl]

I usually avoid talking right and wrong, but this is well beyond wrong. If you wish to study it with an open mind in different areas and eras and taking into account the relationships between the different emanations of power and state, you'd inevitably come to the opposite conclusion... Well, unless, maybe you wish top education only for a few and none (or twisted and shallow propaganda) for the rest... Which is narrow sighted too, as it is very possible that more educated people can also create and environment in which more brilliant minds appear.

 

As for virtual education online, try to learn taiji boxing alone in your bedroom for some good laughs.

 

Education wasn't for 'the very few' prior to the state sticking it's nose in and coercively extracting taxes to fund it. That's why I mentioned the poem by the six year old mine worker. She was able to read and write to a high standard despite having a level of poverty in which she had to work as a child labourer 12 hours a day.

 

In India the state is trying to impose 'free' state education on its people but it has proved unsuccessful. The reason being that the ordinary Indian people would rather pay for the better quality education their children are receiving. It's considered a bad thing to push your precious children into the hands of mass, state education. There are lots of competing schools that cater for very ones pockets. Children want to go to school they aren't forced. Often these schools will have fewer than half a dozen children.

 

Now 'training' is a different thing to education. All that is needed for education is to ensure children can read, write and do basic arithmetic. It doesn't require a specialised school, with state licensed teachers to manage that. The second stage is to get children to be able to educate themselves and to find those who can provide more depth in the subjects they wish to study. Amazingly teachers just use text books which pupils could obtain for themselves. Anyone can teach themselves anything. If they require further direct training it's easy to find people willing to help and that's the way in which people learn best and gain the experience to flourish.

[canacan]

@Karl

2000 years ago up to today, that is covering some eras. On another note, the availability and attractivity of private education on the side of public education by no means proves anything about how it would be with private alone.

 

Education wasn't for 'the very few' prior to the state sticking it's nose in and coercively extracting taxes to fund it.

When and where was that, please ? Edited September 16, 2015 by canacan

[Karl]

@Karl

2000 years ago up to today, that is covering some eras. On another note, the availability and attractivity of private education on the side of public education by no means proves anything about how it would be with private alone.When and where was that, please ?

Right up to the beginning of the 20th century in the UK. There is a good body of research supporting the history of education up to that time. I shall dig it out if you want. There is probably even more evidence in the USA and currently the situation in India.

 

Public schools in the UK were only supposed to be introduced into areas where there were 'gaps'-although there is no evidence to show there were any gaps. These first public schools charged a minimal amount which was below that of the traditional private schools. Despite that they were ill attended and the state had to reduce the prices of attendance to zero to attract any real numbers.

 

This was at a time when economic wealth was growing across all classes and this wealth was producing ever greater numbers who wanted good private education-this is mirrored currently in India-and avoided the state schools like the plague.

 

What should be understood is that the state was looking across at the Prussian model for education. They were looking to create citizens who would take their place in the kind of society that was determined by a group of intellectuals who believed in social engineering- cybernetics. They didn't want groups of adults thinking for themselves and challenging the status quo. This is the reason that states such as USSR/China/pol pot put their educated people to death to prevent revolution. Introducing mass state education was primarily designed to do this by a soft method-effectively mind control through Pavlovian/military ( Spartan style) institutional control. It's only a by product that young adults receive schooling in order that they can understand and correctly respond to the states messages, soldier and perform the jobs the industrialists wanted.

 

Again, plenty of evidence of this if you need it.

 

The EG west website of Newcastle university is a good place to start:

 

 

http://egwestcentre.com/

 

 

Sent from my iPad

Edited September 16, 2015 by Karl

[canacan]

@Karl

Voluntary blindness goes well beyond natural blindness.

 

You keep disproving your own point.

Edited September 16, 2015 by canacan

[Karl]

@Karl

Voluntary blindness goes well beyond natural blindness.

You keep disproving your own point.

 

Then it's up to you to point out the error. I've said many times that offering a persuasive, elequent and logical counter argument is something to be applauded.

 

If you simply offer up an ad hominem you appear to be as a person that is an empty vessel. Surely then, I cannot believe that is your intention ?