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It's worth noting that luminary capitalists like Adam Smith were very much concerned with privately enabled rent seekers in addition to government enabled ones.

• coldtea 8y ago
  >There's nothing inherently capitalist about corruption. It's a property of power, not capitalism. That's the same argument that says "USSR/DDR/Cambodia/NK/etc was no real communism". We might excuse a few diversions from a political/economic system, but after some point, like with anything else, capitalism is what capitalism does time and again.
  • maratd 8y ago
    Not sure this makes sense to me? There's corruption in every system, regardless of the ideology behind it. Are you saying there's no corruption in communism? Because I have news for you, if you do. It seems like corruption is simply endemic to the human condition. It has nothing to do with capitalism/communism/etc. Whatever the system happens to be, we will find a way to corrupt it.
    • mAEStro-paNDa 8y ago
      It doesn't appear to be what this person is saying. Rather, that we can't deflect from flaws in ideology having to do with the system in place, and the issues that stem from that. Having said that, I find it to be rather unproductive and pessimistic to assert corruption is endemic to humanity and has nothing to do with ideology. Instead I would argue that the nature of the corruption has everything to do with the ideological foundations of said system.
      • maratd 8y ago
        > Instead I would argue that the nature of the corruption has everything to do with the ideological foundations of said system. How so? Is corruption different somehow depending on the ideological foundations of the system? Corruption is corruption. Every system has rules. When you subvert those rules for personal gain, that's corruption.
        • coldtea 8y ago
          >How so? Is corruption different somehow depending on the ideological foundations of the system? Of course. Different systems enable, empower, and encourage, different types of corruption. (Corruption being an abstract word, in programming terms there's no corruption "class", just corruption instances. So the nature of those corruption instances depend on the classes defined in the program -e.g. capitalism.c- you're running...). (And of course share some basic corruption types, present in all societies/systems, e.g. theft -- the POSIX of corruption).
          • maratd 8y ago
            We're now pretty deep in this thread and you still haven't given a single example?
            • coldtea 8y ago
              We've started the thread with concrete examples... Check the @pjc50, @Traster etc comments at the top. And @humanrebar already put this in abstract form: "It's worth noting that luminary capitalists like Adam Smith were very much concerned with privately enabled rent seekers in addition to government enabled ones"
              • maratd 8y ago
                > Check the @pjc50, @Traster etc comments at the top. Those are specific examples of corruption here in the US. Are you asserting that you wouldn't be able to find the same corruption, for example, in China? Please provide a single example of corruption that can occur under capitalism, but wouldn't occur under another economic system. Because I'm asserting they do not exist. > And @humanrebar already put this in abstract form: "It's worth noting that luminary capitalists like Adam Smith were very much concerned with privately enabled rent seekers in addition to government enabled ones" Yes, he was perfectly right to. There are always private parties. Even under communism.
      • philwelch 8y ago
        > Having said that, I find it to be rather unproductive and pessimistic to assert corruption is endemic to humanity and has nothing to do with ideology. Instead I would argue that the nature of the corruption has everything to do with the ideological foundations of said system. This kind of blank-slate, "New Soviet Man" idea has been tested and found lacking.
    • coldtea 8y ago
      >Not sure this makes sense to me? There's corruption in every system, regardless of the ideology behind it I'm saying that some types of corruption are endemic to certain systems. And if we see these types of corruption time and again on a system, then the system enables that type of corruption. >It seems like corruption is simply endemic to the human condition. It has nothing to do with capitalism/communism/etc. Whatever the system happens to be, we will find a way to corrupt it. My argument wasn't about corruption in general (which we will always have under every system), but about a certain type of enterprise-related corruption, that can't be brushed away by "no true Scotsman/capitalism", as if 'truly adhering' to the ways of capitalism would eliminate it.
      • humanrebar 8y ago
        I wasn't making a no true capitalism argument. I was responding to the implicit straw man that ties capitalism to apathy or complicity about corruption. Capitalists care about private corruption. They always have. That's why there are laws and norms around fraud, nepotism, embezzling, and white collar crime in general. Just because people are creative and invent new ways to be corrupt doesn't mean captilist societies are indifferent. I would expect people skeptical towards corporations to see some common ground here.
        • GoodJokes 8y ago
          To be a capitalist you must exploit labor for profit. It’s astoundung everyone’s face is melting off because they don’t understand this basic tenet. I mean, you can say the person deserves the profit, but you would be sociopathic and wrong.
      • tome 8y ago
        > a certain type of enterprise-related corruption, that can't be brushed away If a system of government promotes X then there will appear X-related corruption. Capitalist governments promote enterprises, thus appears enterprise-related correction. Governments which promote the church will foster church-related corruption, etc. etc.. I don't see how this observation about capitalism is a particularly interesting one. Perhaps you could make some ground with "and capitalism uniquely allows this corruption to flourish on a scale never seen before" but that's not what I've seen in these kind of kneejerk criticisms.
    • uberdru 8y ago
      It is. That's the whole point of having systems to regulate it. When those systems are overridden by, in effect, collective freeloaders, any system breaks down.
  • booblik 8y ago
    The USSR never had communism. The official party line always was that it is a socialist state, on the way to communism. And once they reach full communism things will be really good.
    • tome 8y ago
      Yes, that is indeed the argument that coldtea is talking about.
      • booblik 8y ago
        I don’t know why I am downvoted, I only stated a fact. At least USSR were honest about it.
        • mercutio2 8y ago
          Coldtea was referencing the very protestation you cited uncritically, so your comment added little to the conversation and appeared to be missing the point.
      • richardknop 8y ago
        It was offical party line and tought in schools though. It was in school curriculum that USSR was a socialist system which should eventually lead to a communist society but it was not yet communism but more of a staging area which should lead there in the end.
    • anth_anm 8y ago
      Right, but the argument from the other side is that "real communism" can't be reached. It's a myth. What you get with the Soviets is the real communism. That sort of ignores the actual theory of communism, but so far it's a pretty accurate assessment.
  • entity345 8y ago
    The point is that exploitation (of the people, the system, etc) for personal gain has nothing to do with capitalism, or socialism, or any other system. Some people will do that in any system, it's human nature. Now, in a system that has the rule of law you cannot be prevented to do something that isn't illegal. This is actually the best (or least bad) system we've come up with. It's childish to blame capitalism.
    • door5 8y ago
      Capitalism cannot function without people exploiting the system for personal gain. If some CEO decided to stop trying to make as much money as possible but rather commit their resources to providing some sort of public good, they would be succinctly ousted by the board. Or their firm would tank, because companies that don't put profit first can't survive on the market. Jeff Bezos can amass $100 billion in wealth and donate it to philanthropic causes, but if he decided to open source AWS or pay his workers a living wage, or pay publishers a reasonable price for books, etc, he wouldn't have $100 billion in the first place.
      • tome 8y ago
        > Capitalism cannot function without people exploiting the system for personal gain. What national economic system can function without people exploiting the system for personal gain?
        • door5 8y ago
          Socialism, ie a system whereby resources are allocated according to some sort of public good as opposed to mere expansion of capital
          • tome 8y ago
            Are you suggesting that in practice under a socialist system corruption doesn't take place, or just in theory?
  • philwelch 8y ago
    > We might excuse a few diversions from a political/economic system, but after some point, like with anything else, capitalism is what capitalism does time and again. And by that standard, I'll take capitalism every day of the week: https://ourworldindata.org/grapher/world-population-in-extreme-poverty-absolute https://ourworldindata.org/grapher/world-population-in-extre...
    • claudiawerner 8y ago
      It's worth noting that almost no traditional anti-capitalist or Communist argument relies on doubting the extensive evidence that widespread lifting from poverty is the result of capitalism and even fewer would disagree with the fact that such development has occured under capitalism. Marx famously declared that workers must be "doubly free": firstly free to sell their labour how they like, and secondly freed from the means of production and the products they make. A good deal of research justifiably focuses on what life is actually like and the nature of exploitation in capitalist societies, and especially under neoliberalism. I'd point you to the work of D.K. Foley, Dumenil and Levy, Roberto Veneziani, Naoki Yoshihara, G.A. Cohen and John Roemer on those points.
      • philwelch 8y ago
        Yes, perhaps Marxism was done a disservice by trying to impose it on agrarian, aristocratic civilizations like Russia and China instead of industrialized, capitalist civilizations like Germany and the United States. The history of Soviet industrialization under Stalin almost reads more like a Marxist caricature of industrial capitalism. And it was probably also done a disservice by the fact that when it was imposed on industrialized countries, it was done so at force and after significant devastation and confiscation of any remaining valuable industrial equipment (e.g. East Germany). However, it's also clear that 19th century industrial capitalism never really led to Marxist revolution.
• praptak 8y ago
  "Capitalism produces corruption" is not the same as "there's something inherently capitalist about corruption".
  • humanrebar 8y ago
    I was responding that power produces corruption. There's no incorruptible alternative to capitalism because any alternative still gives people power to abuse.
    • reggieband 8y ago
      I think there is still room to explore "less corruptible" alternatives. It is easy to fall into the "law of excluded middle" trap. If we are only willing to accept an incorruptible alternative to a current system then we are not likely to make progress.
      • dnautics 8y ago
        If it's a matter of degree, it generally seems like alternatives to capitalism perform worse (world wars, Stalin murdering 16 million, Mao's five year plan). Capital is a rather decentralized form of power, and typically to make any of it, you must put your own assets, resources, or time at risk. Except in edge cases which might not really be capitalism (slavery, central banking e.g.) you also can't accrue more capital without at least exchanging for something someone else wants, making it non-zero-sum and distributive, which is not the case for say political power.
        • mAEStro-paNDa 8y ago
          It's interesting you mention World Wars in reference to alternative systems. "Merchants of Death", in the case of the US and capitalism, instantly comes to mind. Otherwise, there are many contemporary examples of concentration of capital. Whether it is distributive isn't the question, but more the trends of distribution. It's also quite interesting you mention central banks here, considering the substantial evidence of bulge bracket banks acting as an antithesis to your statement about risk (i.e "too big to fail").
• TheColorYellow 8y ago
  Thought this was fascinating when I read WON. Worth mentioning, Smith was primarily concerned when anyone had an unfair market advantage that would ruin the state of equilibrium.
  • rcMgD2BwE72F 8y ago
    And in reality, when/where can we find an actual state of equilibrium where no one has an unfair market advantage? Here's an anecdote: I've received hundreds of thousands of euros from my parents (in my early 30's), they fully paid my education in a well-known private lycée, a nice "classe prépa", an expensive French business school. They paid everything until I get a highly paid job in a European startup, incl. some student exchange programmes abroad. I'm getting dozens of €K a year as gifts (with absolutely zero taxes). I own a big flat in one of the most expensive city in the world (where prices keep rising), and tones of shares on the stock market (4x in a few years, thank you Wall Street). My gains on the sale of these stocks are taxed far below my salary, so I'm not working too much (I'm already saving 2/3 your yearly revenues, and own ~6x the median wealth in my country). etc. You probably get the point. I'd be glad if anyone can explain how I'm not taking advantage of an extremely unfair advantage, and what Smith (or any other liberal economist) suggests to reach a state of equilibrium where I have to compete fairly with my fellow citizens.
    • anongraddebt 8y ago
      There may have been more actual equilibrium in Smith's time. Mayer-Schonberger (Oxford) pointed out that, "...price is compromised by the very fact that it abridges the information available to the market." The conclusion, of his interesting but incomplete argument, is that price (traditionally understood) becomes increasingly untethered to reality as the digital economy overtakes the physical.
    • logifail 8y ago
      One could argue that looking far enough back, certain types of unfair advantage might only get reset by mobs with torches and pitchforks (or, more recently, yellow jackets).
• ouid 8y ago
  Capitalism, as a class, is only meaningful in the sense that it provides some sort of constraint on free enterprise, otherwise capitalism doesn't mean anything at all. If it fails to apply a constraint on free enterprise that fails to address some fundamental corruption, then yes, that is a failure of the constraint.
• patrickbuckley 8y ago
  I agree with you. Another way of saying this is that corruption is a property of human nature. It seems that the most persistent problems we face often are. We can change our system of economic organization and politics but in the end the system is made up of individuals. Individuals who have all the same sort of flaws and who struggle with their human nature. It takes a lot of will and effort for a person to behave honestly and ethically. The interaction of peoples behaviors and the system they are in is a two way street. I guess what I am saying is that we need to do the hard work of behaving better ourselves if we want to make our industry, community etc a better place.
  • logfromblammo 8y ago
    It is not a property of human nature. It is endemic in human societies. That hair splits easily, if your knife is sharp enough. We tolerate the corruption that comes with certain societal structures, because we gain more by having them than we lose from the corruption. You can't scale anything to national or international size without introducing a principal-agent problem.
    • dvtrn 8y ago
      It is not a property of human nature. It is endemic in human societies. Pardon me, but I'm not immediately seeing the distinction, maybe I've read the statement wrong and found the wrong conclusion. Can you clarify/unpack that statement a bit? If it's not a property of human nature, how is it then endemic in human societies? Does not the second sentence you're offering here completely betray the first?
      • Retra 8y ago
        The moral constraints on a human person are not the same as those on a human society. To say corruption is a property of human nature is to suggest that everyone is willing to be a source of corruption, rather than to suggest that everyone can be made to support the corruption of others under certain conditions.
      • logfromblammo 8y ago
• anth_anm 8y ago
  Wouldn't the argument be the other way around, that capitalism is inherently corrupt? Same as any other system which allows largely unchecked power.
• MatekCopatek 8y ago
  Isn't this the "no true Scotsman" fallacy? Socialism would also have worked, we just didn't implement the _true_ kind. I think it's only fair to judge the entire reality surrounding an economic system.
  • dmix 8y ago
    The OP didn't say that it has to work perfectly to work. Capitalism just has to be better than the alternatives and society needs to do its best to fight back against the corruption and cronyism which corrupts it. Too often people want to abandon markets and replace it with something that solves some of the problems but introduce tons of their own, instead of fixing obvious problems within the current system that was otherwise working well. The better solution is a bunch of smaller experiments being run simultaneously in large economies (Ala at the state level) to see what works best. Instead of pretending we can have a one-size-fits-all best solution for the entire world.