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Milton Friedman: Is Capitalism Humane? (1977) [video]

35 points by eigenvalue 7y ago

sharemywin 7y ago
The main argument for Capitalism is choice and competition. Any argument of freedom without choice to me is like throwing the baby out with the bathwater. I'm not sure laissez faire capitalism if there is such a thing has proven it doesn't consolidate into monopolies or cartels. Especially when it comes to distribution, communication and software(with bundling).
- Kaze404 7y ago
  Can you expand please? From my observations the last thing capitalism provides is choice, considering most people I know who aren't fortunate enough to have passions that translate into big money (like software) absolutely despise their jobs.
  - lazyier 7y ago
    Dude. Just open your eyes and look around you. Go to a super market. Look at the shelves. Go to github.com. Look at all the different software languages, operating systems, shells, web servers, and so on and so forth. Tool manufacturers. Housing choices. All that stuff only can possibly exist in a capitalistic system. There is no other way. People have tried. We have massive amount of historical precedent on this sort of thing. At this point it should be self-evident.
    - throwaway2048 7y ago
      So you get a bunch of meaningless choices for consumer goods? Great.
      - yaa_minu 7y ago
        Meaning(value) is subjective, under capitalism, what's demanded by people is what's produced. Sure speculation can mislead people into valuing the wrong thing but that's hardly a problem inherent with capitalism itself. Whenever I analyze arguments against the free market, it almost always seems that the person speaking thinks the market should give people what the person speaking thinks they ought to want.
        wyre 7y ago
        Meaning is subjective no matter the economic system. Trillions of dollars spent in advertising also misleads people into valuing the wrong things. I see this as a problem of capitalism.
        davidivadavid 7y ago
        People valuing different things differently is a result of culture. Advertising influences culture, to some extent, but it only wishes it was as powerful as people assume it to be. Most notably, people are not "misled" into valuing the "wrong" things. You just have a different opinion of what people should value based on your own culture, values, etc. It doesn't mean they're wrong, brainwashed, or anything of the kind.
        Kaze404 7y ago
        No, what's produced is what the system wants people to think they want. Nobody wants 100 slightly different brands of the same thing. That said, I'll concede that sometimes we don't know what we want (the iPhone for example was a net positive).
        oDot 7y ago
        You'd be surprised. I live in a country with only a couple brands per product (talking groceries here) and it is abysmal. Even if they make all the different kinds of, say, cheese (and they don't), the quality is terrible, because they don't have those 99 competitors.
    - valiant55 7y ago
      I think many of your examples are illusions of choice. Most brands in the super market roll up to a handful of players, the "choice" for many items ultimately lines the same pockets. Housing choices? Is that the choice to buy / rent vs live on the street? Capitalism has given us the homeless crisis which was non-existing just 70 years ago.
      - lazyier 7y ago
        > I think many of your examples are illusions of choice. Most brands in the super market roll up to a handful of players, the "choice" for many items ultimately lines the same pockets. So don't buy the big brands. Buy local. Are you telling me that there is no possible way that you can go to a farmers market and buy food? That the only choice you have is one of Conagra's food brands? That you can't go one the one of probably hundreds of grocery stores and restaurants that are probably within driving distance of your house? This is what I mean by 'Open Your Eyes'. Like just go outside and look around! If you live is in a developed western country and you are complaining about lack of choices it's very likely that the problem is you and your own choices. > Housing choices? Is that the choice to buy / rent vs live on the street? Since when in human history has people never had to work for housing? There is only a thin band of habitat in the earth that humans can survive and thrive without housing and technology and work. Too hot and we die. Too cold and we die. Not wet enough and we starve. Not dry enough and we starve. To spread across the rest of the planet we had to work our asses off. If you think life is harder for a 20-something having to deal with the indignity of living in a un-hip part of town because they can't afford a nicer place... then it is for a frontier family that has to grow their own food and build their own house from supplies they had to drag behind mules from hundreds of miles away? If so, I have some bad news for you. "Having to work" is not evidence that capitalism is terrible. You are going to work no matter what. Whether it's socialism or capitalism or if you live in some monastery somewhere. It's not optional. It's never going to be optional.
    - Kaze404 7y ago
      I've gone to a supermarket before. In fact when I was young I was forced by the system to work as a cashier at one, and to this day, a decade and a half later, I can't think of a worse feeling than sitting 8 hours a day doing absolutely nothing. It was a small town, so there weren't many customers, and all I could think while I looked at the shelves full of useless products was that I'd much rather be doing anything even slightly intellectual stimulating. This was around the time when I started getting into programming, so you can imagine how miserable I was that I couldn't spend that time learning / producing. It's easy to see this from the perspective of the customer only, but think of how many lives and brilliant minds are being wasted away in the system.
    - throwanem 7y ago
      The only one of these that has anything directly to do with capitalism is tool manufacturers. Fortunately, that's a great example! Let's dig in a little. Go to Home Depot. Lots of tool brands to choose from, right? Ridgid, Milwaukee, Ryobi, Makita, maybe a couple of Hiltis over in the contractor section. Amazing variety thanks to capitalism, right? Wrong. The first three brands I listed all belong to the same company, TTI. The only significant difference among them is in build quality, and it's minor; other than that, all that changes is the injection molds for the shell, and the price - which varies out of all proportion to the quality of the product. That's not a true choice. That's an illusion of choice, deliberately promulgated by a near monopoly in order to gain access to as many market segments as possible, and exploit each to the maximal possible extent - by pretending to compete with itself, TTI makes a lot more money than if it didn't, because that means it can sell three kinds of differently shaped boxes of 18650 cells, and in the modern consumer/prosumer power tool business, that's where all the margin is. That's great for TTI! For everyone else, not so much, because only the Milwaukee line doesn't actively suck, and even then you're better off spending more for Makita, precisely because that's not a zombie brand, and is still competing. So, TTI's a great example of capitalism, sure. Is it a good thing? One of the major complaints about Soviet communism, after all, was precisely the lack of consumer choice that it imposed. If that's really the crux of the problem, then why isn't it a problem when capitalism produces the same outcome? Is it only a failure when the Reds do it, but an example of freedom and apple pie when the same exact thing happens under capitalism? Why?
  - conanbatt 7y ago
    You can try seeing what the known alternative generates in terms of options.
    - throwaway43283 7y ago
      "The alternatives are worse" tends not to be a good refutation of "this option is bad".
      - conanbatt 7y ago
        To find the best option it is enough to weed out all the rest.
      - H_Pylori 7y ago
        So what's your alternative?
    - JackRabbitSlim 7y ago
      Can you? What does China tell us about Republics, given that it is the Peoples Republic of China? What does North Korea tell us about democracy and repulbics, given that it is "The Democratic Peoples Republic of Korea"? No? But we are willing to take at face value oppressive regimes using "socialist" language?
    - Kaze404 7y ago
      I don't see how that changes anything. Sure, the alternatives might be worse (which I disagree), but that doesn't mean the current system is good.
- lazyier 7y ago
  The only monopolies and trusts that existed for any length of time always had the backing of state government. Whether it's the royal crown establishing the east india company or local governments awarding exclusive access to local cable companies monopolies have always depended on state government. The problem with sustainable monopolies in a free market is that there are a hundred thousand ways to skin a cat. Even if a particular business has a lock down on a particular resource it can't control alternatives. The only way a monopoly can be sustained is that businesses price things so low that there isn't any profit in competing against them with alternatives. And that is not really terrible and is not likely sustainable anyways. Most people seem to operate under the misconception that somehow large corporate interests and large governments are opposing and balancing powers. This is untrue. Large businesses and large government are interdependent and complimentary. They feed into each other. They need each other. If you want bigger business you need to have bigger government. The sort of ultra concentration of capital in the hands of a tiny minority of businesses and individuals wouldn't be possible without the government creating a regulatory environment to ensure that it happens first.
  - trentnix 7y ago
    Well said. And it should be noted that even when the monopoly does not exist, regulation and government intervention almost always favors the larger players in the market. In many cases, they are the ones writing the regulations. Those regulations make the barrier of entry more difficult and discourage new competitors from entering a marketplace. Big business and big government are symbiotic.
  - andrepd 7y ago
    It's not about the small/large government dichotomy, it's about plutocratic/democratic. ' >Even if a particular business has a lock down on a particular resource it can't control alternatives. The only way a monopoly can be sustained is that businesses price things so low that there isn't any profit in competing against them with alternatives. This is empirically false, there are many ways a large business can lock down a market/resource, or very nearly so, and prevent competition from smaller upstarts. Look no further than two-billion-dollar-a-day-revenue Walmart, whose signature practice is running competitors out of town by undercutting them and sustaining the losses until they close.
- oDot 7y ago
  The main argument for Capitalism is the NAP and the removal of physical force or threat of it. As for cartels and monopolies, if you take a look at late 19th to early 20th century USA, where business could in fact form cartels and monopolies -- they were formed, but didn't last. They were ruined by both new competition and by "price busters", the cartel equivalent of a "scab". That is one of the origins of "progressive" legislation. It seemed that the most efficient way to preserve monopolies and cartels was to use government. Indeed, the original meaning of the word wasn't a "large share of the market", but "exclusivity given by government". EDIT: Show yourselves, downvoters. Give a rebuttal.
  - throwaway2048 7y ago
    Cartels of the late 19th and early 20th centuries were busted up by the federal government by in large, you are making ahistorical statements.
    - oDot 7y ago
      Government only got in late in the game, and if you take a look, a lot of the policies that look good on the surface actually hurt the same people they claim to help. For example, the minimum wage is clearly helping out skilled workers. Imagine an experienced railroad worked earning $5 an hour laying tracks. To match his productivity, you'd need at least 3 unskilled workers, which are worth it at $1 each. The railroad union, to guarantee long-term work for its members, lobbies for a minimum wage, and now when it's, say, $2 an hour, those 3 unskilled workers are too expensive and no one hires them.
- injb 7y ago
  Can you give an example of a monopoly that has been brought about and maintained by capitalism - i.e. not maintained by organized crime or the power of the government, but by the principles of free market capitalism alone?
  - karatestomp 7y ago
    Got any examples of capitalism that aren't maintained by a government? [EDIT] OK that was a bit glib. My point is things are a lot more complicated than "capitalism does this, government does that" and the two are essentially inseparable. Further this entire thread is full of "markets = capitalism" which is missing the mark—tendencies toward free market policies are a defining feature of capitalism, but free markets per se aren't identical to capitalism.
    - hfdh434535 7y ago
      Good point, and we need to recognize that every so-called free market still relies on governments to enforce the rules (to enforce contracts, to issue currency, to protect against fraud, etc). If governments disappeared tomorrow, we would not have a free market utopia spring up in it's place. Instead we'd have a no-rules situation where the powerful could take advantage of the weak. Some other system, potentially worse than what we already have, would fill the power vacuum.
      - injb 7y ago
        Well I agree that governments can do some beneficial things. But there's a few problems with what you're saying here (and I hope I'm not taking you too literally): firstly, all the rules you list can be handled with alternatives. Secondly, the fact that the sudden disappearance of government would not lead to a utopia doesn't mean that governments are fundamentally needed (although they might be). As an analogy: if crude oil disappeared tomorrow, we would not have a renewable energy utopia - we'd have a disaster. Does that mean that there's no alternative to crude oil? Of course not. Finally, a "situation where the powerful could take advantage of the weak" is really just the situation that we have now, and must always have. It's really a tautology.
- clairity 7y ago
  > "I'm not sure laissez faire capitalism if there is such a thing has proven it doesn't consolidate into monopolies or cartels." capitalism isn't uniquely prone to monopolies or cartels. all economic systems face problems of gaming, because humans relentlessly probe weaknesses in systems to gain advantage. and capitalism doesn't attempt to address monopolization head-on and instead relies on competitive dynamics and invisible hands to control the problem. and to be sure, in many cases, it's been enough, but runaway market dynamics like network effects do occasionally overwhelm those mechanisms. we now have enough practical experience to realize that those occasional runaway trains accumulate and we no longer have very free markets across the economy. that's why governments step in with regulation (yes, regulatory capture is a problem too) and laissez faire capitalism simply isn't viable long-term. we should iterate on market-based economies beyond capitalism to reach a more resistant economic system (capitalism =/= market economy, which is a commonly misunderstood). edit: note that you can have a market-based economy featuring choice and competition without it being capitalism, who's defining feature is putting the means of production into the hands of the (moneyed) citizenry.
viburnum 7y ago
The trick with Milton Friedman is to find the one ludicrous assumption his whole analysis hangs on.
- injb 7y ago
  Which is?
  - andrepd 7y ago
    I haven't watched this particular lecture, but I watched (part of) a rather popular series of lectures, and he had such gems as "colonial empires spent more money in the colonies than they got in return", or "the wheel was never invented in Africa until Europeans arrived", which are such ludicrous, patently false statements that you're even at a loss as how to react.
    - conanbatt 7y ago
      Do you have a source for the first claim? Adam smith himself writes about how it is more expensive for the British to provide military defense for Colonial America than what they get from the trade rights.
      - ssivark 7y ago
        Well, presumably that was why they didn’t put up as much of a fight when the American states wanted freedom. Compare with what happened in the other colonies. It is silly to think they would have continued a multi-century high-effort enterprise at a continuing operating loss. EDIT: multi-century. Yes, governments sometimes do stupid things (on shorter timescales), but it’s also a great opportunity for each new government/generation to pin the folly on the old, and do better.
        oDot 7y ago
        Regardless of that specific example, government does this all the time. It is much easier for them to lose money that isn't theirs. If you're at disbelief at that, wait until you take a look as the US national debt
rconti 7y ago
Without watching a 45 minute video, I assume the argument is something like: > whatever system most effectively leverages comparative advantage / generates the most wealth / most efficiently allocates resources is that which is most humane, because it has the possibility to lift the most people from poverty, from inhumane conditions. It is, of course, up to societies to regulate the allocation of those resources to maximize the realization of that possibility.
- oDot 7y ago
  If you agree that capitalism makes for the most efficient allocation of resources, there is no need to regulate that allocation.
  - yogthos 7y ago
    The real question is towards what end those resources are being efficiently allocated. Capitalism is an incredibly efficient system for accumulating resources with a tiny percentage of the population at the expense of everyone else. This is precisely why late stage capitalist societies inevitably turn into oligarchies.
    - oDot 7y ago
      Free markets are NOT a zero sum game. If I buy an iPhone from Apple for $1000, you'd think they "accumulated resources at my expense", but I got something -- an iPhone. That iPhone is worth for me more than $1000, otherwise I'd keep the $1000. For Apple, it's worth less, otherwise it would raise the price or go bankrupt. Both parties are better off. What people call "late stage Capitalism" is not Capitalism at all -- it is Cronyism. It is the private sector buying favors from the government. Capitalism prevents that by definition. True capitalism may as well make people very rich, and although I've not verified it, I am willing to concede that it widens the wealth gap. However, poor people in capitalist countries are far richer than they would have been without it. Why would you care about the gap? Care about how you are doing.
      - 7y ago
cSoze 7y ago
At about 8 minutes he starts talking about looking at the outcomes of the different systems. Specifically he brings up incarceration rates and inequality. It's interesting how poorly the United States currently stacks up on those measures compared to democratic socialist countries.
- yaa_minu 7y ago
  45% of incarcerations in the US are due to the drug war [1]. https://www.bop.gov/about/statistics/statistics_inmate_offenses.jsp https://www.bop.gov/about/statistics/statistics_inmate_offen...
  - cSoze 7y ago
    At 13:42 Milton Friendman questions whether "socialism failed because it's good qualities were perverted by evil men" and goes on to claim that the both socialism and capitalism have failed or succeeded by each system being true to its own values. By that same argument, capitalism has failed by being true to its own values regardless of what the precise reason for the current high incarceration rates are. His argument and his positions are horribly simplistic. Neither capitalist nor socialist structures can meet all of the needs of a society.
    - yaa_minu 7y ago
      How does this relate to the incarceration rate which is what this thread is all about?
      - cSoze 7y ago
        This thread is not about the incarceration rate. At least my initial comment (the one you responded to) was not specifically about that. The point was that Milton Friedman threw out two metrics to measure the success of capitalism in the United States compared to socialist countries. The United States is now worse in both those metrics than democratic socialist countries. Therefore, by MILTON's metrics, the economic / social systems that those countries use are better than ours.
JohnFen 7y ago
As practiced in the US, anyway, capitalism is plainly inhumane.
- mettamage 7y ago
  When I went to SF for a short trip and saw a homeless person screaming against a bus or tram station, it frankly shocked me. I've seen quite some gritty stuff in The Netherlands (family members not on wellfare, too mentally unstable to work, passing out from hunger etc.) but the US always takes the cake and takes it 10 steps further. In The Netherlands the darkside of capitalism is subtle. If I didn't have personal family members being in this situation, I would honestly not know where to look. A casual stroll in Amsterdam doesn't betray much. A casual stroll in downtown San Francisco does. Here is how capitalism contributes: it makes us focus on ourselves. In such a society it is possible for people to take pause and institutionalize help for other people, but there is a tendency that this doesn't happen. Capitalism nudges towards focusing on the enrichment of the individual. While there is nothing wrong with that, it leaves less focus for helping others (there's only a limited amount of focus) and it's an extra barrier. The Netherlands is an example of a country that mostly overcame that barrier, the US is an example in which such a barrier poses serious problems.
  - conanbatt 7y ago
    SF is the most "progressive", most regulated and highly taxed place in America. It's an example of the exact opposite.
    - pathartl 7y ago
      It's also one of the top cities in America with a homeless problem. I believe Hawaii would give plane tickets to their homeless because they too have massive problems.
    - mettamage 7y ago
      Then why do I see so many homeless people who are clearly in need of help in SF? Why do I see people being kicked out and shouted at? Why do I see people publicly shouting at bus stations? Or people randomly saying "fuck you". I was there for 2 days, out on the street for at most 2 hours during my whole trip. I'm also simply minding my own business. And it wasn't my first experience like that there. The other time I was there a guy followed me banging a cane on the street, talking about Satan and Jesus while rhyming. I walked into a hotel with security in order to get away from him. Or a woman screaming at me while she wasn't looking at me. It's frankly ludicrous. I'm simply reporting what I saw there and it sounds crazy while I'm rereading my comment. In Amsterdam I've experienced a lot things, but nothing like this and definitely not in such a short amount of time.
yogthos 7y ago
Betteridge's law of headlines applies here
AlgorithmicTime 7y ago
The answer is yes. Capitalism is the only humane system. All others are terrifically violent and oppressive.
throwanem 7y ago
"Capitalism prevents concentrations of power" was a pretty wild take even for 1977! Here in 2020, it's arrantly ludicrous.
- yogthos 7y ago
  I love how you're getting downvoted for stating basic facts. 3 people in America own more wealth than bottom 50% of the population. Similar situation in Canada where fewer than 90 the richest families own more wealth than 3 provinces combined. https://www.forbes.com/sites/noahkirsch/2017/11/09/the-3-richest-americans-hold-more-wealth-than-bottom-50-of-country-study-finds/#1a9eb78a3cf8 https://www.forbes.com/sites/noahkirsch/2017/11/09/the-3-ric... https://globalnews.ca/news/4360299/wealth-inequality-canada/ https://globalnews.ca/news/4360299/wealth-inequality-canada/
- cSoze 7y ago
  Towards the end of the video he also calls up 1900s America as the period of time that best exemplifies capitalism, not surprisingly an era marked by extreme inequality.
- yaa_minu 7y ago
  The concentration of power, in this case, refers to political power not market(economic) power. If you think about it carefully, economic power often is very weak and vulnerable as they often derive them from consumers which means they can only maintain it by giving consumers what they want. People like Bezos, Bill Gates are far less powerful than say, Putin, Erdogan, Xi, etc. As an example, how far did Bloomberg's billions take him in the democratic nomination?
  - throwanem 7y ago
    In what way does capitalism act to prevent concentration of political power, then?
tothrowaway 7y ago
Anyone looking for a challenging read should consider Milton Friedman's book "Capitalism and Freedom". It's short, but very dense. He covers topics like a negative income tax (which you've heard of) and ideas you've probably never considered (like school vouchers, elimination of occupational licensure, and elimination of tariffs). The downside is, if you find his arguments convincing, it will leave you feeling even more angry about the current role of government in society.
JackRabbitSlim 7y ago
"Where do you have the greatest degree in equality?" The answer to that looks very different in 2020 than it did in 1970. "Look at the wage rate between the foreman and the worker in Iussia" - I have, a foreman in the US today makes twice the hourly rate of the worker and that's before benefits packages and other compensations low level hourly workers do not get. So it can be more than double. In fact, the OECD's own data the US is now has a wider inequality gap than Russia. https://data.oecd.org/inequality/income-inequality.htm https://data.oecd.org/inequality/income-inequality.htm Only in economics could someone be so provably wrong yet considered a luminary...
- yaa_minu 7y ago
  The talk was given in 1977 when at the time Russia was socialist. This is no more the case. A better comparison can be made today with say Venezuela.

35 points by eigenvalue 7y ago

The main argument for Capitalism is choice and competition. Any argument of freedom without choice to me is like throwing the baby out with the bathwater. I'm not sure laissez faire capitalism if there is such a thing has proven it doesn't consolidate into monopolies or cartels. Especially when it comes to distribution, communication and software(with bundling).

Kaze404 7y ago
Can you expand please? From my observations the last thing capitalism provides is choice, considering most people I know who aren't fortunate enough to have passions that translate into big money (like software) absolutely despise their jobs.
- lazyier 7y ago
  Dude. Just open your eyes and look around you. Go to a super market. Look at the shelves. Go to github.com. Look at all the different software languages, operating systems, shells, web servers, and so on and so forth. Tool manufacturers. Housing choices. All that stuff only can possibly exist in a capitalistic system. There is no other way. People have tried. We have massive amount of historical precedent on this sort of thing. At this point it should be self-evident.
  - throwaway2048 7y ago
    So you get a bunch of meaningless choices for consumer goods? Great.
    - yaa_minu 7y ago
      Meaning(value) is subjective, under capitalism, what's demanded by people is what's produced. Sure speculation can mislead people into valuing the wrong thing but that's hardly a problem inherent with capitalism itself. Whenever I analyze arguments against the free market, it almost always seems that the person speaking thinks the market should give people what the person speaking thinks they ought to want.
      - wyre 7y ago
        Meaning is subjective no matter the economic system. Trillions of dollars spent in advertising also misleads people into valuing the wrong things. I see this as a problem of capitalism.
        davidivadavid 7y ago
        People valuing different things differently is a result of culture. Advertising influences culture, to some extent, but it only wishes it was as powerful as people assume it to be. Most notably, people are not "misled" into valuing the "wrong" things. You just have a different opinion of what people should value based on your own culture, values, etc. It doesn't mean they're wrong, brainwashed, or anything of the kind.
      - Kaze404 7y ago
        No, what's produced is what the system wants people to think they want. Nobody wants 100 slightly different brands of the same thing. That said, I'll concede that sometimes we don't know what we want (the iPhone for example was a net positive).
        oDot 7y ago
        You'd be surprised. I live in a country with only a couple brands per product (talking groceries here) and it is abysmal. Even if they make all the different kinds of, say, cheese (and they don't), the quality is terrible, because they don't have those 99 competitors.
  - valiant55 7y ago
    I think many of your examples are illusions of choice. Most brands in the super market roll up to a handful of players, the "choice" for many items ultimately lines the same pockets. Housing choices? Is that the choice to buy / rent vs live on the street? Capitalism has given us the homeless crisis which was non-existing just 70 years ago.
    - lazyier 7y ago
      > I think many of your examples are illusions of choice. Most brands in the super market roll up to a handful of players, the "choice" for many items ultimately lines the same pockets. So don't buy the big brands. Buy local. Are you telling me that there is no possible way that you can go to a farmers market and buy food? That the only choice you have is one of Conagra's food brands? That you can't go one the one of probably hundreds of grocery stores and restaurants that are probably within driving distance of your house? This is what I mean by 'Open Your Eyes'. Like just go outside and look around! If you live is in a developed western country and you are complaining about lack of choices it's very likely that the problem is you and your own choices. > Housing choices? Is that the choice to buy / rent vs live on the street? Since when in human history has people never had to work for housing? There is only a thin band of habitat in the earth that humans can survive and thrive without housing and technology and work. Too hot and we die. Too cold and we die. Not wet enough and we starve. Not dry enough and we starve. To spread across the rest of the planet we had to work our asses off. If you think life is harder for a 20-something having to deal with the indignity of living in a un-hip part of town because they can't afford a nicer place... then it is for a frontier family that has to grow their own food and build their own house from supplies they had to drag behind mules from hundreds of miles away? If so, I have some bad news for you. "Having to work" is not evidence that capitalism is terrible. You are going to work no matter what. Whether it's socialism or capitalism or if you live in some monastery somewhere. It's not optional. It's never going to be optional.
  - Kaze404 7y ago
    I've gone to a supermarket before. In fact when I was young I was forced by the system to work as a cashier at one, and to this day, a decade and a half later, I can't think of a worse feeling than sitting 8 hours a day doing absolutely nothing. It was a small town, so there weren't many customers, and all I could think while I looked at the shelves full of useless products was that I'd much rather be doing anything even slightly intellectual stimulating. This was around the time when I started getting into programming, so you can imagine how miserable I was that I couldn't spend that time learning / producing. It's easy to see this from the perspective of the customer only, but think of how many lives and brilliant minds are being wasted away in the system.
  - throwanem 7y ago
    The only one of these that has anything directly to do with capitalism is tool manufacturers. Fortunately, that's a great example! Let's dig in a little. Go to Home Depot. Lots of tool brands to choose from, right? Ridgid, Milwaukee, Ryobi, Makita, maybe a couple of Hiltis over in the contractor section. Amazing variety thanks to capitalism, right? Wrong. The first three brands I listed all belong to the same company, TTI. The only significant difference among them is in build quality, and it's minor; other than that, all that changes is the injection molds for the shell, and the price - which varies out of all proportion to the quality of the product. That's not a true choice. That's an illusion of choice, deliberately promulgated by a near monopoly in order to gain access to as many market segments as possible, and exploit each to the maximal possible extent - by pretending to compete with itself, TTI makes a lot more money than if it didn't, because that means it can sell three kinds of differently shaped boxes of 18650 cells, and in the modern consumer/prosumer power tool business, that's where all the margin is. That's great for TTI! For everyone else, not so much, because only the Milwaukee line doesn't actively suck, and even then you're better off spending more for Makita, precisely because that's not a zombie brand, and is still competing. So, TTI's a great example of capitalism, sure. Is it a good thing? One of the major complaints about Soviet communism, after all, was precisely the lack of consumer choice that it imposed. If that's really the crux of the problem, then why isn't it a problem when capitalism produces the same outcome? Is it only a failure when the Reds do it, but an example of freedom and apple pie when the same exact thing happens under capitalism? Why?
- conanbatt 7y ago
  You can try seeing what the known alternative generates in terms of options.
  - throwaway43283 7y ago
    "The alternatives are worse" tends not to be a good refutation of "this option is bad".
    - conanbatt 7y ago
      To find the best option it is enough to weed out all the rest.
    - H_Pylori 7y ago
      So what's your alternative?
  - JackRabbitSlim 7y ago
    Can you? What does China tell us about Republics, given that it is the Peoples Republic of China? What does North Korea tell us about democracy and repulbics, given that it is "The Democratic Peoples Republic of Korea"? No? But we are willing to take at face value oppressive regimes using "socialist" language?
  - Kaze404 7y ago
    I don't see how that changes anything. Sure, the alternatives might be worse (which I disagree), but that doesn't mean the current system is good.
lazyier 7y ago
The only monopolies and trusts that existed for any length of time always had the backing of state government. Whether it's the royal crown establishing the east india company or local governments awarding exclusive access to local cable companies monopolies have always depended on state government. The problem with sustainable monopolies in a free market is that there are a hundred thousand ways to skin a cat. Even if a particular business has a lock down on a particular resource it can't control alternatives. The only way a monopoly can be sustained is that businesses price things so low that there isn't any profit in competing against them with alternatives. And that is not really terrible and is not likely sustainable anyways. Most people seem to operate under the misconception that somehow large corporate interests and large governments are opposing and balancing powers. This is untrue. Large businesses and large government are interdependent and complimentary. They feed into each other. They need each other. If you want bigger business you need to have bigger government. The sort of ultra concentration of capital in the hands of a tiny minority of businesses and individuals wouldn't be possible without the government creating a regulatory environment to ensure that it happens first.
- trentnix 7y ago
  Well said. And it should be noted that even when the monopoly does not exist, regulation and government intervention almost always favors the larger players in the market. In many cases, they are the ones writing the regulations. Those regulations make the barrier of entry more difficult and discourage new competitors from entering a marketplace. Big business and big government are symbiotic.
- andrepd 7y ago
  It's not about the small/large government dichotomy, it's about plutocratic/democratic. ' >Even if a particular business has a lock down on a particular resource it can't control alternatives. The only way a monopoly can be sustained is that businesses price things so low that there isn't any profit in competing against them with alternatives. This is empirically false, there are many ways a large business can lock down a market/resource, or very nearly so, and prevent competition from smaller upstarts. Look no further than two-billion-dollar-a-day-revenue Walmart, whose signature practice is running competitors out of town by undercutting them and sustaining the losses until they close.
oDot 7y ago
The main argument for Capitalism is the NAP and the removal of physical force or threat of it. As for cartels and monopolies, if you take a look at late 19th to early 20th century USA, where business could in fact form cartels and monopolies -- they were formed, but didn't last. They were ruined by both new competition and by "price busters", the cartel equivalent of a "scab". That is one of the origins of "progressive" legislation. It seemed that the most efficient way to preserve monopolies and cartels was to use government. Indeed, the original meaning of the word wasn't a "large share of the market", but "exclusivity given by government". EDIT: Show yourselves, downvoters. Give a rebuttal.
- throwaway2048 7y ago
  Cartels of the late 19th and early 20th centuries were busted up by the federal government by in large, you are making ahistorical statements.
  - oDot 7y ago
    Government only got in late in the game, and if you take a look, a lot of the policies that look good on the surface actually hurt the same people they claim to help. For example, the minimum wage is clearly helping out skilled workers. Imagine an experienced railroad worked earning $5 an hour laying tracks. To match his productivity, you'd need at least 3 unskilled workers, which are worth it at $1 each. The railroad union, to guarantee long-term work for its members, lobbies for a minimum wage, and now when it's, say, $2 an hour, those 3 unskilled workers are too expensive and no one hires them.
injb 7y ago
Can you give an example of a monopoly that has been brought about and maintained by capitalism - i.e. not maintained by organized crime or the power of the government, but by the principles of free market capitalism alone?
- karatestomp 7y ago
  Got any examples of capitalism that aren't maintained by a government? [EDIT] OK that was a bit glib. My point is things are a lot more complicated than "capitalism does this, government does that" and the two are essentially inseparable. Further this entire thread is full of "markets = capitalism" which is missing the mark—tendencies toward free market policies are a defining feature of capitalism, but free markets per se aren't identical to capitalism.
  - hfdh434535 7y ago
    Good point, and we need to recognize that every so-called free market still relies on governments to enforce the rules (to enforce contracts, to issue currency, to protect against fraud, etc). If governments disappeared tomorrow, we would not have a free market utopia spring up in it's place. Instead we'd have a no-rules situation where the powerful could take advantage of the weak. Some other system, potentially worse than what we already have, would fill the power vacuum.
    - injb 7y ago
      Well I agree that governments can do some beneficial things. But there's a few problems with what you're saying here (and I hope I'm not taking you too literally): firstly, all the rules you list can be handled with alternatives. Secondly, the fact that the sudden disappearance of government would not lead to a utopia doesn't mean that governments are fundamentally needed (although they might be). As an analogy: if crude oil disappeared tomorrow, we would not have a renewable energy utopia - we'd have a disaster. Does that mean that there's no alternative to crude oil? Of course not. Finally, a "situation where the powerful could take advantage of the weak" is really just the situation that we have now, and must always have. It's really a tautology.
clairity 7y ago
> "I'm not sure laissez faire capitalism if there is such a thing has proven it doesn't consolidate into monopolies or cartels." capitalism isn't uniquely prone to monopolies or cartels. all economic systems face problems of gaming, because humans relentlessly probe weaknesses in systems to gain advantage. and capitalism doesn't attempt to address monopolization head-on and instead relies on competitive dynamics and invisible hands to control the problem. and to be sure, in many cases, it's been enough, but runaway market dynamics like network effects do occasionally overwhelm those mechanisms. we now have enough practical experience to realize that those occasional runaway trains accumulate and we no longer have very free markets across the economy. that's why governments step in with regulation (yes, regulatory capture is a problem too) and laissez faire capitalism simply isn't viable long-term. we should iterate on market-based economies beyond capitalism to reach a more resistant economic system (capitalism =/= market economy, which is a commonly misunderstood). edit: note that you can have a market-based economy featuring choice and competition without it being capitalism, who's defining feature is putting the means of production into the hands of the (moneyed) citizenry.

viburnum 7y ago

The trick with Milton Friedman is to find the one ludicrous assumption his whole analysis hangs on.

injb 7y ago
Which is?
- andrepd 7y ago
  I haven't watched this particular lecture, but I watched (part of) a rather popular series of lectures, and he had such gems as "colonial empires spent more money in the colonies than they got in return", or "the wheel was never invented in Africa until Europeans arrived", which are such ludicrous, patently false statements that you're even at a loss as how to react.
  - conanbatt 7y ago
    Do you have a source for the first claim? Adam smith himself writes about how it is more expensive for the British to provide military defense for Colonial America than what they get from the trade rights.
    - ssivark 7y ago
      Well, presumably that was why they didn’t put up as much of a fight when the American states wanted freedom. Compare with what happened in the other colonies. It is silly to think they would have continued a multi-century high-effort enterprise at a continuing operating loss. EDIT: multi-century. Yes, governments sometimes do stupid things (on shorter timescales), but it’s also a great opportunity for each new government/generation to pin the folly on the old, and do better.
      - oDot 7y ago
        Regardless of that specific example, government does this all the time. It is much easier for them to lose money that isn't theirs. If you're at disbelief at that, wait until you take a look as the US national debt

rconti 7y ago

Without watching a 45 minute video, I assume the argument is something like: > whatever system most effectively leverages comparative advantage / generates the most wealth / most efficiently allocates resources is that which is most humane, because it has the possibility to lift the most people from poverty, from inhumane conditions. It is, of course, up to societies to regulate the allocation of those resources to maximize the realization of that possibility.

oDot 7y ago
If you agree that capitalism makes for the most efficient allocation of resources, there is no need to regulate that allocation.
- yogthos 7y ago
  The real question is towards what end those resources are being efficiently allocated. Capitalism is an incredibly efficient system for accumulating resources with a tiny percentage of the population at the expense of everyone else. This is precisely why late stage capitalist societies inevitably turn into oligarchies.
  - oDot 7y ago
    Free markets are NOT a zero sum game. If I buy an iPhone from Apple for $1000, you'd think they "accumulated resources at my expense", but I got something -- an iPhone. That iPhone is worth for me more than $1000, otherwise I'd keep the $1000. For Apple, it's worth less, otherwise it would raise the price or go bankrupt. Both parties are better off. What people call "late stage Capitalism" is not Capitalism at all -- it is Cronyism. It is the private sector buying favors from the government. Capitalism prevents that by definition. True capitalism may as well make people very rich, and although I've not verified it, I am willing to concede that it widens the wealth gap. However, poor people in capitalist countries are far richer than they would have been without it. Why would you care about the gap? Care about how you are doing.
    - 7y ago

cSoze 7y ago

At about 8 minutes he starts talking about looking at the outcomes of the different systems. Specifically he brings up incarceration rates and inequality. It's interesting how poorly the United States currently stacks up on those measures compared to democratic socialist countries.

yaa_minu 7y ago
45% of incarcerations in the US are due to the drug war [1]. https://www.bop.gov/about/statistics/statistics_inmate_offenses.jsp https://www.bop.gov/about/statistics/statistics_inmate_offen...
- cSoze 7y ago
  At 13:42 Milton Friendman questions whether "socialism failed because it's good qualities were perverted by evil men" and goes on to claim that the both socialism and capitalism have failed or succeeded by each system being true to its own values. By that same argument, capitalism has failed by being true to its own values regardless of what the precise reason for the current high incarceration rates are. His argument and his positions are horribly simplistic. Neither capitalist nor socialist structures can meet all of the needs of a society.
  - yaa_minu 7y ago
    How does this relate to the incarceration rate which is what this thread is all about?
    - cSoze 7y ago
      This thread is not about the incarceration rate. At least my initial comment (the one you responded to) was not specifically about that. The point was that Milton Friedman threw out two metrics to measure the success of capitalism in the United States compared to socialist countries. The United States is now worse in both those metrics than democratic socialist countries. Therefore, by MILTON's metrics, the economic / social systems that those countries use are better than ours.

JohnFen 7y ago

As practiced in the US, anyway, capitalism is plainly inhumane.

mettamage 7y ago
When I went to SF for a short trip and saw a homeless person screaming against a bus or tram station, it frankly shocked me. I've seen quite some gritty stuff in The Netherlands (family members not on wellfare, too mentally unstable to work, passing out from hunger etc.) but the US always takes the cake and takes it 10 steps further. In The Netherlands the darkside of capitalism is subtle. If I didn't have personal family members being in this situation, I would honestly not know where to look. A casual stroll in Amsterdam doesn't betray much. A casual stroll in downtown San Francisco does. Here is how capitalism contributes: it makes us focus on ourselves. In such a society it is possible for people to take pause and institutionalize help for other people, but there is a tendency that this doesn't happen. Capitalism nudges towards focusing on the enrichment of the individual. While there is nothing wrong with that, it leaves less focus for helping others (there's only a limited amount of focus) and it's an extra barrier. The Netherlands is an example of a country that mostly overcame that barrier, the US is an example in which such a barrier poses serious problems.
- conanbatt 7y ago
  SF is the most "progressive", most regulated and highly taxed place in America. It's an example of the exact opposite.
  - pathartl 7y ago
    It's also one of the top cities in America with a homeless problem. I believe Hawaii would give plane tickets to their homeless because they too have massive problems.
  - mettamage 7y ago
    Then why do I see so many homeless people who are clearly in need of help in SF? Why do I see people being kicked out and shouted at? Why do I see people publicly shouting at bus stations? Or people randomly saying "fuck you". I was there for 2 days, out on the street for at most 2 hours during my whole trip. I'm also simply minding my own business. And it wasn't my first experience like that there. The other time I was there a guy followed me banging a cane on the street, talking about Satan and Jesus while rhyming. I walked into a hotel with security in order to get away from him. Or a woman screaming at me while she wasn't looking at me. It's frankly ludicrous. I'm simply reporting what I saw there and it sounds crazy while I'm rereading my comment. In Amsterdam I've experienced a lot things, but nothing like this and definitely not in such a short amount of time.

yogthos 7y ago

Betteridge's law of headlines applies here

AlgorithmicTime 7y ago

The answer is yes. Capitalism is the only humane system. All others are terrifically violent and oppressive.

throwanem 7y ago

"Capitalism prevents concentrations of power" was a pretty wild take even for 1977! Here in 2020, it's arrantly ludicrous.

yogthos 7y ago
I love how you're getting downvoted for stating basic facts. 3 people in America own more wealth than bottom 50% of the population. Similar situation in Canada where fewer than 90 the richest families own more wealth than 3 provinces combined. https://www.forbes.com/sites/noahkirsch/2017/11/09/the-3-richest-americans-hold-more-wealth-than-bottom-50-of-country-study-finds/#1a9eb78a3cf8 https://www.forbes.com/sites/noahkirsch/2017/11/09/the-3-ric... https://globalnews.ca/news/4360299/wealth-inequality-canada/ https://globalnews.ca/news/4360299/wealth-inequality-canada/
cSoze 7y ago
Towards the end of the video he also calls up 1900s America as the period of time that best exemplifies capitalism, not surprisingly an era marked by extreme inequality.
yaa_minu 7y ago
The concentration of power, in this case, refers to political power not market(economic) power. If you think about it carefully, economic power often is very weak and vulnerable as they often derive them from consumers which means they can only maintain it by giving consumers what they want. People like Bezos, Bill Gates are far less powerful than say, Putin, Erdogan, Xi, etc. As an example, how far did Bloomberg's billions take him in the democratic nomination?
- throwanem 7y ago
  In what way does capitalism act to prevent concentration of political power, then?

tothrowaway 7y ago

Anyone looking for a challenging read should consider Milton Friedman's book "Capitalism and Freedom". It's short, but very dense. He covers topics like a negative income tax (which you've heard of) and ideas you've probably never considered (like school vouchers, elimination of occupational licensure, and elimination of tariffs). The downside is, if you find his arguments convincing, it will leave you feeling even more angry about the current role of government in society.

JackRabbitSlim 7y ago

"Where do you have the greatest degree in equality?" The answer to that looks very different in 2020 than it did in 1970. "Look at the wage rate between the foreman and the worker in Iussia" - I have, a foreman in the US today makes twice the hourly rate of the worker and that's before benefits packages and other compensations low level hourly workers do not get. So it can be more than double. In fact, the OECD's own data the US is now has a wider inequality gap than Russia. https://data.oecd.org/inequality/income-inequality.htm https://data.oecd.org/inequality/income-inequality.htm Only in economics could someone be so provably wrong yet considered a luminary...

yaa_minu 7y ago
The talk was given in 1977 when at the time Russia was socialist. This is no more the case. A better comparison can be made today with say Venezuela.