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Capitalism does not need to be fixed. We need to ACTUALLY have capitalism. The above article seems to claim that we can fix capitalism by adding socialism to

by bcheung 16y ago

Capitalism does not need to be fixed. We need to ACTUALLY have capitalism. The above article seems to claim that we can fix capitalism by adding socialism to capitalism. socialism != capitalism They are mutually exclusive for the most part. First it is important to note that we do not live in a pure capitalist system. I would estimate it as 25% capitalism, 25% socialism, and 50% kleptocracy (special interests / corruption). To blame capitalism for all the problems is akin to taking an Olympic gold metalist, tying him up in iron chains, throwing him in a pool and then blaming swimming as the cause of drowning. Capitalism is by far the most efficient system for increasing the wealth of an ENTIRE society. History has shown that societies prosper in direct proportion to how much they embrace capitalism. We are currently moving from capitalism towards socialism and kleptocracy (think klepto as in stealing). The common complaints against capitalism are not actually complaints against capitalism; they are usually against corporatism (regulation that favors corporations) or kleptocracy. Why do corporations have tax breaks employees can't take even though their situations are similar? Bank bailouts were not a failure of capitalism. Capitalism would say that no company can get money for free. All money must be traded from other individuals wishing to purchase from you. The fact that the banks knew they were most likely to be bailed out created a moral hazard that encouraged them to take risks. "Privitized gains, socialized losses". Under pure capitalism a bank would not take such foolish action because they would know they would have a high probability of going out of business. Monopolies are often created by government policy, not by free markets. For instance, why do lots of communities only have 1 ISP even though there are competitors that would love to do business there? It is because the city grants a license to that one company for a long period of time. DNS registration was granted a monopoly by the government. Why can't we have other DNS authorities? Surely the vast majority of people on here can still make a profit and charge cheaper for domain names. Why does GoDaddy have to pay a fee to another company that doesn't actually provide any real value? In capitalism, if I was able to invest at 30% each year I could open my own bank and give out 10% in interest to all my depositors. Instead we are stuck with abusive banks. The only semi-rational (emphasis on semi) argument that I have heard against capitalism is that those with capital have a higher chance of getting more capital and that this would lead to a concentration of power. It may in fact do this, but the moment the power is abused, others with capital will combine their resources to take the place of the exploitative company, or there will be revolts and people will boycott that company. The system is set up so that businesses are fettered with regulations such as minimum wage and hiring ethnically diverse people (as opposed to the most qualified). Under global capitalism, the companies in countries that do not have those laws will drive the US companies out of business. Businesses that can will be forced to move to those countries if they wish to survive. It is no shock to me that unemployment is on the rise.

relic17 16y ago
I agree with many of your points. However, note that Professor Porter does not technically propose socialism. Socialism would imply seizing private property, such as part of a company's assets, for the alleged purpose of using them to further the "public good" or satisfy "social needs", something a company would not do by itself. Note that prof. Porter does not even advocate increasing government regulation to channel more resources into social purposes. Actually, he does not even say that companies must of should take losses in order to help societal needs. His argument is that businessmen should look for opportunities in markets he chooses to call socially useful. In essence, he urges managers to make decisions that would make proper business sense anyways. Therefore, I can only speculate as to why he formulates the empty concept of "shared value." It is possible that he wants to create another framework to fill business schools' curricula (they have to teach something that sounds scientific) or to reassure himself that he is still relevant by taking a safe undefined middle-ground between "big business" and "society." I can only guess. The sad thing, however, is that the major premise of his philosophy will prove more damaging to capitalism (which he so passionately professes to defend) than most socialist ideas would. That premise is the notion that capitalism, or whatever remains from it in the mixed world economy of today, is fundamentally broken. That even those businessmen who thrive (or survive) by their own ability and productive effort are fundamentally guilty of looking after their own interest. They are guilty by popular opinion and have to find a way to exonerate themselves. I urge all HN readers who have read the article carefully and understand that there is something wrong about it, to also read Ayn Rand's "Capitalism: The Unknown Ideal" (http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/0451147952/ref=sr_1_1?ie=UTF8&qid=1294615803&sr=8-1 http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/045114795...) and judge for themselves dispassionately. Just because I happened to be reading the book today, I quote a couple of paragraphs, with which I agree: "I [Ayn Rand] want to stress that our [objectivists'] primary interest is not politics or economics as such, but "man's nature and man's relationship to existence" - and that we advocate capitalism because it is the only system geared to the life of a rational being. In this respect, there is fundamental difference between our approach and that of capitalism's classical defenders and modern apologists. With very few exceptions, they are responsible - by default - for capitalism's destruction. The default consisted of their inability to fight the battle where it had to be fought: on moral-philosophical grounds." "There are the businessmen who spend fortunes on ideological ads, allegedly in defense of capitalism, which assure the public that all but a tiny fraction of an industry's income goes to labor (wages), to government (taxes), etc., with these shares represented as big chunks in full-color process, and, lost among them, an apologetic little sliver is marked "2 1/2 percent" and labelled "profits." "There is the display of charts and models, in a hallway of the New York Stock Exchange, presenting the achievements of free enterprise and captioned: "The People's Capitalism." "Since none of these attempts can succeed in disguising the nature of capitalism nor in degrading it to the level of an altruistic stockyard, their sole result is to convince the public that capitalism hides some evil secret which imbues its alleged defenders with such an aura of abject guilt and hypocrisy. But, in fact, the secret they are struggling to hide is capitalism's essence and greatest virtue: that it is a system based on the recognition of individual rights - on man's rights to exist (and to work) for his own sake - not for the altruistic view of man as a sacrificial animal. Thus it is capitalism's virtue that the public is urged - by such defenders - to regard as evil, and it is altruism that all their efforts help to reinforce and reaffirm as the standard of the good."

by bcheung 16y ago

relic17 16y ago

I agree with many of your points. However, note that Professor Porter does not technically propose socialism. Socialism would imply seizing private property, such as part of a company's assets, for the alleged purpose of using them to further the "public good" or satisfy "social needs", something a company would not do by itself. Note that prof. Porter does not even advocate increasing government regulation to channel more resources into social purposes. Actually, he does not even say that companies must of should take losses in order to help societal needs. His argument is that businessmen should look for opportunities in markets he chooses to call socially useful. In essence, he urges managers to make decisions that would make proper business sense anyways. Therefore, I can only speculate as to why he formulates the empty concept of "shared value." It is possible that he wants to create another framework to fill business schools' curricula (they have to teach something that sounds scientific) or to reassure himself that he is still relevant by taking a safe undefined middle-ground between "big business" and "society." I can only guess. The sad thing, however, is that the major premise of his philosophy will prove more damaging to capitalism (which he so passionately professes to defend) than most socialist ideas would. That premise is the notion that capitalism, or whatever remains from it in the mixed world economy of today, is fundamentally broken. That even those businessmen who thrive (or survive) by their own ability and productive effort are fundamentally guilty of looking after their own interest. They are guilty by popular opinion and have to find a way to exonerate themselves. I urge all HN readers who have read the article carefully and understand that there is something wrong about it, to also read Ayn Rand's "Capitalism: The Unknown Ideal" (http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/0451147952/ref=sr_1_1?ie=UTF8&qid=1294615803&sr=8-1 http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/045114795...) and judge for themselves dispassionately. Just because I happened to be reading the book today, I quote a couple of paragraphs, with which I agree: "I [Ayn Rand] want to stress that our [objectivists'] primary interest is not politics or economics as such, but "man's nature and man's relationship to existence" - and that we advocate capitalism because it is the only system geared to the life of a rational being. In this respect, there is fundamental difference between our approach and that of capitalism's classical defenders and modern apologists. With very few exceptions, they are responsible - by default - for capitalism's destruction. The default consisted of their inability to fight the battle where it had to be fought: on moral-philosophical grounds." "There are the businessmen who spend fortunes on ideological ads, allegedly in defense of capitalism, which assure the public that all but a tiny fraction of an industry's income goes to labor (wages), to government (taxes), etc., with these shares represented as big chunks in full-color process, and, lost among them, an apologetic little sliver is marked "2 1/2 percent" and labelled "profits." "There is the display of charts and models, in a hallway of the New York Stock Exchange, presenting the achievements of free enterprise and captioned: "The People's Capitalism." "Since none of these attempts can succeed in disguising the nature of capitalism nor in degrading it to the level of an altruistic stockyard, their sole result is to convince the public that capitalism hides some evil secret which imbues its alleged defenders with such an aura of abject guilt and hypocrisy. But, in fact, the secret they are struggling to hide is capitalism's essence and greatest virtue: that it is a system based on the recognition of individual rights - on man's rights to exist (and to work) for his own sake - not for the altruistic view of man as a sacrificial animal. Thus it is capitalism's virtue that the public is urged - by such defenders - to regard as evil, and it is altruism that all their efforts help to reinforce and reaffirm as the standard of the good."