6 ms·

capitalism works so much better than any other system: destruction of the preserving institutions is built in to the process. Boy did you pick the wrong decade

by gruseom 17y ago

capitalism works so much better than any other system: destruction of the preserving institutions is built in to the process. Boy did you pick the wrong decade to argue this. (The point being that it's a weakness of capitalism, or at least of the contemporary system everybody calls capitalism, that institutions that would otherwise die off are able to preserve themselves through political influence and other unsavory means.)

lotharbot 17y ago
That's not a weakness of capitalism (an economic system), but a weakness in the way our regulatory agencies and legislatures interact (our political system). People who call themselves "capitalists" typically want to reform the political end of things so it stops distorting the economic system.
- chrischen 17y ago
  Consider if government did not exist. A company can still use it's established might to artificially prolong it's existence. If any thing regulatory measures are actually designed to prevent this. Whether they are effective or not is a different story.
  - lotharbot 17y ago
    What regulation is supposed to do and what regulation actually does are two very different things. Again, people who call themselves "capitalists" would generally like to reform the regulatory/legislative system so that it supports, rather than distorts, the market.
    - dhs 17y ago
      From where I see it, it looks like people who call themselves capitalists would generally like to reform the regulatory/legislative system so that it only supports the capitalists.
- Qz 17y ago
  I think the idea that economic and political "systems" are separate is dangerous, and part of how we got into this mess in the first place.
  - lotharbot 17y ago
    Economic and political systems are conceptually different, though there is a lot of feedback between them. It is dangerous to treat them as entirely separate, and also dangerous to treat them as exactly the same. The specific criticism offered, namely companies retaining power due to legislative or regulatory influence, is at its core a political problem (with political solutions -- changing the way regulations and regulator-business relationships are handled.)
    - exit 17y ago
      the "political problem" is that those enacting the political system are unavoidably susceptible to the same modus operandi which capitalism prescribes for the economic system - the self-interested pursuit of wealth. "Economic and political systems are conceptually different, though there is a lot of feedback between them." this reminds me of wave particle duality. energy/matter qua wave is conceptually distinct from energy/matter qua particle. but there is no question of "feedback between them". "they" are both just analytic vantages on the same singular phenomena.
- gruseom 17y ago
  This, it seems to me, is what ideologues always do: redefine the term so that an existing real-world thing doesn't count as an example of it. Communists did this with the Soviet Union (sure they're bad but a real communist society would never be like that). Ideological proponents of capitalism do it today: the US system isn't really capitalism because the government is too much involved. And extreme-programming software projects that fail weren't really following the process. To me this is an unhelpful line of argument that is preoccupied more with labels and beliefs than with what is actually going on.
  - lotharbot 17y ago
    Nowhere did I argue that our system is not really capitalist. I just noted that the specific criticism given wasn't a criticism of capitalism itself, but of the government system of regulations and legislation that we have tied to capitalism. It would be similar to, for example, criticizing the Soviet Union for corruption and calling it a critique of socialism, or criticizing a software company for stealing another company's code and acting like that was a critique of the extreme-programming process they were using. Valid criticism, sure, but not of the thing it's said to be of. There are plenty of valid criticisms of capitalism, communism, socialism, extreme-programming processes, and so on. But there are also plenty of criticisms that are misattributed to one of those things, which IMO harms our ability to create solutions to the problems.
- exit 17y ago
  http://en.wikipedia.org/wiki/No_true_Scotsman http://en.wikipedia.org/wiki/No_true_Scotsman
  - lotharbot 17y ago
    "My friend is Scottish, and therefore a jerk." "I think his Scottishness is incidental to being a jerk. There are more relevant factors that contribute to his jerkness. He may be both Scottish and a jerk, but that doesn't imply causation." This is not an example of No True Scotsman. Just an example of criticism that should be labelled differently.
lionhearted 17y ago
I vastly prefer "free enterprise" or "free markets" to capitalism for two reasons. First, the word capitalism is antiquated - large amounts of capital are no longer a requirement to succeed in business. Second, you can have arguments about what "capitalism" is - but "free enterprise" and "free market" are a lot more clearly descriptive. > (The point being that it's a weakness of capitalism, or at least of the contemporary system everybody calls capitalism, that institutions that would otherwise die off are able to preserve themselves through political influence and other unsavory means.) Now, this gets to the root of it - sectors like banking and healthcare are explicitly not free enterprise/free market. The entire banking system is a set of regulations, starting with the piece of paper of no inherent value that you're required to accept for all debts public and private in the USA, to the Federal Reserve choosing how much of this new paper to create whenever it likes, and so on. Healthcare, likewise, with its artificially restricted supply of doctors, ridiculous licensing requirements (10-12 years, or more, hundreds of thousands of dollars of fees to become a doctor - I understand it's an important job, but they could get it lower). FDA requirements adding millions of dollars of cost and years of time to new drugs coming to market. Needing to pay $50 to see a doctor to get a prescription for basic antibiotics. The sectors people usually point to as failures of capitalism - banking, healthcare - are not coincidentally the least free market sectors in the United States. People don't talk about this enough when they talk about the banking crash - http://en.wikipedia.org/wiki/Community_Reinvestment_Act http://en.wikipedia.org/wiki/Community_Reinvestment_Act "The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5] The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.). To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions." 80% of the subprime mortgages came from meeting Community Reinvestment Act standards. So when someone says, "The last decade proved free enterprise doesn't work" - I'm always a little amazed if they use banking as an example. It's got to be one of the least free sectors in the United States.

by gruseom 17y ago

lotharbot 17y ago

That's not a weakness of capitalism (an economic system), but a weakness in the way our regulatory agencies and legislatures interact (our political system). People who call themselves "capitalists" typically want to reform the political end of things so it stops distorting the economic system.

chrischen 17y ago
Consider if government did not exist. A company can still use it's established might to artificially prolong it's existence. If any thing regulatory measures are actually designed to prevent this. Whether they are effective or not is a different story.
- lotharbot 17y ago
  What regulation is supposed to do and what regulation actually does are two very different things. Again, people who call themselves "capitalists" would generally like to reform the regulatory/legislative system so that it supports, rather than distorts, the market.
  - dhs 17y ago
    From where I see it, it looks like people who call themselves capitalists would generally like to reform the regulatory/legislative system so that it only supports the capitalists.
Qz 17y ago
I think the idea that economic and political "systems" are separate is dangerous, and part of how we got into this mess in the first place.
- lotharbot 17y ago
  Economic and political systems are conceptually different, though there is a lot of feedback between them. It is dangerous to treat them as entirely separate, and also dangerous to treat them as exactly the same. The specific criticism offered, namely companies retaining power due to legislative or regulatory influence, is at its core a political problem (with political solutions -- changing the way regulations and regulator-business relationships are handled.)
  - exit 17y ago
    the "political problem" is that those enacting the political system are unavoidably susceptible to the same modus operandi which capitalism prescribes for the economic system - the self-interested pursuit of wealth. "Economic and political systems are conceptually different, though there is a lot of feedback between them." this reminds me of wave particle duality. energy/matter qua wave is conceptually distinct from energy/matter qua particle. but there is no question of "feedback between them". "they" are both just analytic vantages on the same singular phenomena.
gruseom 17y ago
This, it seems to me, is what ideologues always do: redefine the term so that an existing real-world thing doesn't count as an example of it. Communists did this with the Soviet Union (sure they're bad but a real communist society would never be like that). Ideological proponents of capitalism do it today: the US system isn't really capitalism because the government is too much involved. And extreme-programming software projects that fail weren't really following the process. To me this is an unhelpful line of argument that is preoccupied more with labels and beliefs than with what is actually going on.
- lotharbot 17y ago
  Nowhere did I argue that our system is not really capitalist. I just noted that the specific criticism given wasn't a criticism of capitalism itself, but of the government system of regulations and legislation that we have tied to capitalism. It would be similar to, for example, criticizing the Soviet Union for corruption and calling it a critique of socialism, or criticizing a software company for stealing another company's code and acting like that was a critique of the extreme-programming process they were using. Valid criticism, sure, but not of the thing it's said to be of. There are plenty of valid criticisms of capitalism, communism, socialism, extreme-programming processes, and so on. But there are also plenty of criticisms that are misattributed to one of those things, which IMO harms our ability to create solutions to the problems.
exit 17y ago
http://en.wikipedia.org/wiki/No_true_Scotsman http://en.wikipedia.org/wiki/No_true_Scotsman
- lotharbot 17y ago
  "My friend is Scottish, and therefore a jerk." "I think his Scottishness is incidental to being a jerk. There are more relevant factors that contribute to his jerkness. He may be both Scottish and a jerk, but that doesn't imply causation." This is not an example of No True Scotsman. Just an example of criticism that should be labelled differently.

lionhearted 17y ago

I vastly prefer "free enterprise" or "free markets" to capitalism for two reasons. First, the word capitalism is antiquated - large amounts of capital are no longer a requirement to succeed in business. Second, you can have arguments about what "capitalism" is - but "free enterprise" and "free market" are a lot more clearly descriptive. > (The point being that it's a weakness of capitalism, or at least of the contemporary system everybody calls capitalism, that institutions that would otherwise die off are able to preserve themselves through political influence and other unsavory means.) Now, this gets to the root of it - sectors like banking and healthcare are explicitly not free enterprise/free market. The entire banking system is a set of regulations, starting with the piece of paper of no inherent value that you're required to accept for all debts public and private in the USA, to the Federal Reserve choosing how much of this new paper to create whenever it likes, and so on. Healthcare, likewise, with its artificially restricted supply of doctors, ridiculous licensing requirements (10-12 years, or more, hundreds of thousands of dollars of fees to become a doctor - I understand it's an important job, but they could get it lower). FDA requirements adding millions of dollars of cost and years of time to new drugs coming to market. Needing to pay $50 to see a doctor to get a prescription for basic antibiotics. The sectors people usually point to as failures of capitalism - banking, healthcare - are not coincidentally the least free market sectors in the United States. People don't talk about this enough when they talk about the banking crash - http://en.wikipedia.org/wiki/Community_Reinvestment_Act http://en.wikipedia.org/wiki/Community_Reinvestment_Act "The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5] The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.). To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions." 80% of the subprime mortgages came from meeting Community Reinvestment Act standards. So when someone says, "The last decade proved free enterprise doesn't work" - I'm always a little amazed if they use banking as an example. It's got to be one of the least free sectors in the United States.