6 ms·

A failure of capitalism? I have to question the premise. Capitalism does not have as a goal some social-utilitarian purpose. Capitalism is practiced by indiv

A failure of capitalism? I have to question the premise. Capitalism does not have as a goal some social-utilitarian purpose. Capitalism is practiced by individuals for their own self-interest. Sometimes they work together for a shared self-interest (e.g. corporations, investor groups) or they work against each other as needed (competition). But you cannot take self-interest out of the equation and still have capitalism. Every trade (be that stock for cash, or work for cash, etc.) is predicated on each of the parties fulfilling their individual needs and wants to the degree that they can. On it's own terms, capitalism hasn't failed at all. What you can say is that capitalism has failed to mollify those that seek non-capitalistic goals. This is true of some so-called capitalists who experience guilt in pursuing their self-interest as well. If your view is that capitalists are "greedy, top-hat-wearing" types that fail to meet your social welfare goals, then my bet is your characterization masks a larger purpose. Primarily at bringing them down, probably in favor of the central planners of old (or some degree thereof). Perhaps the real question should be: why would companies and individuals with captial choose to sit on it, or choose to spend it on relatively worthless start-ups? Why would a capitalist choose to sit on cash or buy-back shares if there are other, more profitable avenues to invest those funds? I think if you take a critical look at it you might find that there's still a fair amount of central planning behind what we'd like to think is a capitalist economy.

cwyers 11y ago
I mean, when Adam Smith says "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest," he's not saying that in support of self-interest, he's saying that in support of OUR DINNER. The point of capitalism as economic system is not that self-interest is inherently good but that self-interest can be yoked to "some social-utilitarian purpose." Of course, Adam Smith's opinion of corporations was "The directors of such [joint-stock] companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own," and he thought they'd all die out unless they were propped up like the East India Company, so it's not like the Wealth of Nations is much of a guide to what we call capitalism nowadays. But still.
- kijin 11y ago
  Well, modern states do "prop up" corporations with all sorts of perks, such as limited liability and tax benefits. So Adam Smith might not have been altogether wrong about that. How many of us would even consider incorporating if the law did not guarantee limited liability?
- sbuttgereit 11y ago
  Adam Smith was wrong with the regard to the moral case for capitalism. He rightfully recognized why people acted, but he failed to recognize any substantive moral basis is such self interested actions; instead he resorted to the precise premise that the post I originally responded to pre-supposed. That argument must fail because one cannot act with self-interest AND altruistic interest consistently. The capitalist must always fail on these terms as there is always someone with a perceived greater need, and perceived greater right, to the capital of the capitalist. If you consider first and foremost your own happiness and life as a moral value worthy of pursuit, you loose the hang-ups that Adam Smith had with capitalism. There's a whole separate discussion that goes down that path about what constitutes self-interest in the large (and no, defrauding innocents is not your best interests); but that's a bit out of scope to what the original poster stated.
  - philwelch 11y ago
    I think the Ayn Rand viewpoint--that self-interest is intrinsically a moral good and that capitalism is justified by this moral good--is not very widely held as a justification for capitalism.
    - eropple 11y ago
      I think modern American political discourse makes this a harder position to take. Which is not to say it's correct, because it's transparently not, but selfishness-as-Godliness is a firm part of the American right wing, self-styled libertarians included. Greed's been good since the eighties, didn't you get the memo? =(
- threatofrain 11y ago
Retra 11y ago
>Capitalism does not have as a goal some social-utilitarian purpose. Not intrinsically, no, but it is justified by it in the face of alternatives. When you present people with an economic system that does have a social-utilitarian purpose, those people will select capitalism over it on the basis that capitalism is better at fulfilling that purpose. And most of the time, the argument is "capitalism self-optimizes for that purpose." Except that it self-optimizes in ways that result in central planning, monopolies, and deception. Capitalism is not convergent on social goals, it is divergent, and we have to keep pushing and prodding, regulating and deregulating in order to get anywhere near our goals. Capitalism fails every day. And we just roll up our sleeves and get to work fixing it because there is no other option. One wouldn't ague that a hole in the boat is a good thing because it keeps the crew fit trying to bail the water out. Especially when there's a whole world of other skills we'd rather have a crew be proficient at.
- kenko 11y ago
  > When you present people with an economic system that does have a social-utilitarian purpose, those people will select capitalism over it on the basis that capitalism is better at fulfilling that purpose. No one has ever offered people that choice, as far as I know, certainly not in a way that wouldn't in many cases be confounded by rational or irrational attachment to the present mode of social organization. (And in fact plenty of people seem to like social democracies just fine. And, for that matter, plenty of people seem to want socialist or communist modes of social organization.)
  - eru 11y ago
    > (And in fact plenty of people seem to like social democracies just fine. And, for that matter, plenty of people seem to want socialist or communist modes of social organization.) Plenty of people seem to want more socialism for the country they live in, but given the choice many move to countries that have less socialism. (Ie richer countries.)
    - Daishiman 11y ago
      This is a non-sequitur. Most wealthy countries have economies that are extremely well regulated, and their effectiveness is much more conditioned to factors beyond regulation. Scandinavia has very high levels of regulation and is one of the wealthies regions in the world and the one with the highest standard of living.
idlewords 11y ago
I think you may have misunderstood my point, which we actually agree on: Our so-called venture capitalists right now are behaving a lot like central planners.
deleted 11y ago
[deleted]
ori_b 11y ago
> A failure of capitalism? I have to question the premise. Capitalism does not have as a goal some social-utilitarian purpose. Yes, I think that's the point. Generally, when you evaluate a means of organizing production for a society, you evaluate it on how society will benefit.
dunkelheit 11y ago
Capitalism (i.e. accumulation of resources in private hands with the goal of employing it for generation of profit) should not be conflated with free market (i.e. roughly equal individuals engaging in voluntary transactions). They are in fact antithetical! For capitalism to work some individuals must be entitled for more resources than others so that these individuals can tell others what to do. Of course you can then argue that everybody is still engaging in voluntary transactions. But is it really so when the balance of power is so skewed?

cwyers 11y ago

I mean, when Adam Smith says "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest," he's not saying that in support of self-interest, he's saying that in support of OUR DINNER. The point of capitalism as economic system is not that self-interest is inherently good but that self-interest can be yoked to "some social-utilitarian purpose." Of course, Adam Smith's opinion of corporations was "The directors of such [joint-stock] companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own," and he thought they'd all die out unless they were propped up like the East India Company, so it's not like the Wealth of Nations is much of a guide to what we call capitalism nowadays. But still.

kijin 11y ago
Well, modern states do "prop up" corporations with all sorts of perks, such as limited liability and tax benefits. So Adam Smith might not have been altogether wrong about that. How many of us would even consider incorporating if the law did not guarantee limited liability?
sbuttgereit 11y ago
Adam Smith was wrong with the regard to the moral case for capitalism. He rightfully recognized why people acted, but he failed to recognize any substantive moral basis is such self interested actions; instead he resorted to the precise premise that the post I originally responded to pre-supposed. That argument must fail because one cannot act with self-interest AND altruistic interest consistently. The capitalist must always fail on these terms as there is always someone with a perceived greater need, and perceived greater right, to the capital of the capitalist. If you consider first and foremost your own happiness and life as a moral value worthy of pursuit, you loose the hang-ups that Adam Smith had with capitalism. There's a whole separate discussion that goes down that path about what constitutes self-interest in the large (and no, defrauding innocents is not your best interests); but that's a bit out of scope to what the original poster stated.
- philwelch 11y ago
  I think the Ayn Rand viewpoint--that self-interest is intrinsically a moral good and that capitalism is justified by this moral good--is not very widely held as a justification for capitalism.
  - eropple 11y ago
    I think modern American political discourse makes this a harder position to take. Which is not to say it's correct, because it's transparently not, but selfishness-as-Godliness is a firm part of the American right wing, self-styled libertarians included. Greed's been good since the eighties, didn't you get the memo? =(
threatofrain 11y ago

Retra 11y ago

>Capitalism does not have as a goal some social-utilitarian purpose. Not intrinsically, no, but it is justified by it in the face of alternatives. When you present people with an economic system that does have a social-utilitarian purpose, those people will select capitalism over it on the basis that capitalism is better at fulfilling that purpose. And most of the time, the argument is "capitalism self-optimizes for that purpose." Except that it self-optimizes in ways that result in central planning, monopolies, and deception. Capitalism is not convergent on social goals, it is divergent, and we have to keep pushing and prodding, regulating and deregulating in order to get anywhere near our goals. Capitalism fails every day. And we just roll up our sleeves and get to work fixing it because there is no other option. One wouldn't ague that a hole in the boat is a good thing because it keeps the crew fit trying to bail the water out. Especially when there's a whole world of other skills we'd rather have a crew be proficient at.

kenko 11y ago
> When you present people with an economic system that does have a social-utilitarian purpose, those people will select capitalism over it on the basis that capitalism is better at fulfilling that purpose. No one has ever offered people that choice, as far as I know, certainly not in a way that wouldn't in many cases be confounded by rational or irrational attachment to the present mode of social organization. (And in fact plenty of people seem to like social democracies just fine. And, for that matter, plenty of people seem to want socialist or communist modes of social organization.)
- eru 11y ago
  > (And in fact plenty of people seem to like social democracies just fine. And, for that matter, plenty of people seem to want socialist or communist modes of social organization.) Plenty of people seem to want more socialism for the country they live in, but given the choice many move to countries that have less socialism. (Ie richer countries.)
  - Daishiman 11y ago
    This is a non-sequitur. Most wealthy countries have economies that are extremely well regulated, and their effectiveness is much more conditioned to factors beyond regulation. Scandinavia has very high levels of regulation and is one of the wealthies regions in the world and the one with the highest standard of living.

idlewords 11y ago

I think you may have misunderstood my point, which we actually agree on: Our so-called venture capitalists right now are behaving a lot like central planners.

deleted 11y ago

[deleted]

ori_b 11y ago

> A failure of capitalism? I have to question the premise. Capitalism does not have as a goal some social-utilitarian purpose. Yes, I think that's the point. Generally, when you evaluate a means of organizing production for a society, you evaluate it on how society will benefit.

dunkelheit 11y ago

Capitalism (i.e. accumulation of resources in private hands with the goal of employing it for generation of profit) should not be conflated with free market (i.e. roughly equal individuals engaging in voluntary transactions). They are in fact antithetical! For capitalism to work some individuals must be entitled for more resources than others so that these individuals can tell others what to do. Of course you can then argue that everybody is still engaging in voluntary transactions. But is it really so when the balance of power is so skewed?