Thread: Capitalism isn't working ?

Now that I've got your attention....I came across this article recently and it's quite eloquent.
I'm not saying I agree with the authors premise, but it's guaranteed to stimulate debate

Capitalism simply isn't working and here are the reasons why | Will Hutton | Comment is free | The Observer

Lol... My friends are going around in circles because of this book lol! I am going to reserve judgment until his data is verified by sources I trust, and after reading it myself. I'll say this though, Bloomberg seems to not like it - which depending on how you lean, gives it more or less validity .

The Most Important Book Ever Is All Wrong - Bloomberg View

Thanks for posting this. Mr Piketty just may be onto something, at least he fleshes out what I have been feeling has been happening for a good while now. It will be interesting to see if what he espouses is independently verified. People are certainly intuitively feeling what he is saying. How else would you explain things like the Occupy Movement happening. Certainly all the tinkering with the current model of Capitalism by the usual economic experts is not working satisfactorily for the majority as it did in the early post WWII years.

Bob

I didn't read the article, and I'm an ignorant fellow, but it's clear to me that capitalism isn't working and can't work. It's based on the idea that you sell more and more or sell it cheaper and cheaper to maximise profits. So, as we see, companies 'invent' things and tell us we 'need' them (my favorites are stripey toothpaste, products to disinfect your floor, products to get rid of the flies OUTside your house (where are they SUPPOSED to live?) avocado in a container (it already comes in one), bottled water (saves you precious time filling a water bottle from the tap) and other interesting concepts. Of course, then they need to make them cheaper and cheaper and guess what's one of the things easiest to change (i.e. not a fixed expense)? Human labour, of course. So then they exploit the workers or ship the manufacturing off shore to an Asian country, pay them 10c a day and say "Well, yes, it's not much, but at least they get SOME money...".

I think maybe I'm possibly a socialist, or a marxist or, probably more likely, an idealistic idiot..., but I TRY not to be a capitalist, consumerist pig...

I think Mr Marx covered all that was wrong with capitalism a long time ago and he was right. The only problem was his alternative was worse.

Well it is not that Capitalism does not work, it is more like what it has evolved into in today's form doesn't. In today's virulent and short sighted form it is or will eat it's young alive. It is unsustainable in it's current form in the long term. Capitalism can and has in the past benefited a much broader population base than it does now.

Bob

I would play the devils advocate and say that of course Capitalism works... it's still here and hasn't been replaced by another system... yet.

Just to throw a wrench in the works a couple of professors at Princeton have published an article on what the true system of goverment in the USA is. Wasn't to big of a suprise when they pretty much say Article Here that elite economic entities (corporations) pretty much dictate the course of the goverment. So capalism works, but I'm not sure I like how it's doing.

I haven't read the article.

However, it should be obivous that absolutes never work. Pure caitalism is as bad as pure socialism.
It's only when the extremes are tempered by compomise that things seem to work.

Originally Posted by BobH

Well it is not that Capitalism does not work, it is more like what it has evolved into in today's form doesn't. In today's virulent and short sighted form it is or will eat it's young alive. It is unsustainable in it's current form in the long term. Capitalism can and has in the past benefited a much broader population base than it does now.


Bob

Agreed; people (such as the aforementioned Occupy movement) misunderstand the meaning of "Capitalism" and instead focus on things like central banking and corporatism, labeling those "capitalism" and decrying "capitalism" as a result. THOSE things have indeed failed us.


Capitalism is really a simple concept:


I invent something (let's just call it widget for now) but I lack the wherewithal to actually produce my widget. I can think of a very good example near and dear to me and I'll outline that example below. But first, the basic definition of capitalism:


I need money to actually manufacture my widget in a profitable scale. I don't have money. Mister A has money but no ideas for putting it to good use. Mr. A learns of my predicament and puts up the money to help me manufacture widget in return for a share of the profits on widget.


That's it. Capital exchanged for the production of goods. I get widget produced, Mr. A gets a return on investment. EVERYTHING else we add to this (companies, loans, debt economy et cetera) is NOT capitalism per se, but rather things which are used -- for various reasons -- to actually implement capitalism. Capitalism has nothing to do with money supplies or CEOs or Wall Street -- in fact, those things have almost NOTHING to do with capitalism: if I buy a bunch of stocks on the Wall Street exchange NONE OF IT IS ACTUALLY INVESTED IN THE COMPANY! It's nothing more than Mr. A's legacy being passed around by people who think it's still worthwhile after interest in widget subsides and Mr. A goes elsewhere.


On to a real world example. I'm a computer programmer; I currently "work for the man"; but that was never what I wanted. I got into programming because I want to make video games. Because I LIKE video games and they are fun to me and I want others to have fun with something I've created.


However, a modern video game is a VERY complex beast that requires several people with a range of skills -- let's say that it only takes twenty people. Now, those twenty people are (as I implied) skilled technology workers making a modest (for their skillsets and demand and the time they invested in learning those skills) $60K a year each. So that's 1.2 MILLION dollars in labor alone to produce a game that takes ONLY a year to produce. And that's not counting things like social security, taxes and health care, vacation and benefits for those employees... in the end, just for labor I'm spending over 2 million dollars for one year of development (and that's a rush job...think about how long EA goes between Call of Duty releases! ).


I don't have two million dollars.


In short I need my Mr. A or my dream I've nurtured since childhood doesn't happen.


But hey, who needs video games, right? And there's no way this problem happens in other sectors....

Originally Posted by DarthLord

Agreed; people (such as the aforementioned Occupy movement) misunderstand the meaning of "Capitalism" and instead focus on things like central banking and corporatism, labeling those "capitalism" and decrying "capitalism" as a result. THOSE things have indeed failed us.

Exactly and that is what Capitalism is today, it is defined by those that have perverted it.

Bob