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This just isn't true. No firm wants to enter a perfectly competitive market, because the expected long-run profit margin is zero. If a firm loves competition,

This just isn't true. No firm wants to enter a perfectly competitive market, because the expected long-run profit margin is zero. If a firm loves competition, they are free to increase competition in their market at any time by giving away their patents, copyrights, tech, etc. They don't do these things because they don't want competition. Just because a bunch of people claim to love competition doesn't make it true. Regarding the rule of law, some pretty disgusting things have been done for private investment (i.e. capitalism.) Banana republics come to mind. This "broken capitalism" claim is essentially a no-true-Scotsman fallacy. Real-world capitalism didn't play out like the perfect scenario in our heads, so blame it on "broken capitalism" or "crony capitalism". In truth, the system yields flawed results like everything else.

reissbaker 6y ago
> private investment (i.e. capitalism) I think this definition is the root of our disagreement. Private investment doesn't necessarily equate to capitalism. Even feudal lords spent their own money on their own property, but that doesn't mean they were operating in capitalist economies. It stretches the definition of capitalism to the point of basically irrelevance to use it to refer to literally anything done for personal profit. Wikipedia has a pretty good definition of capitalism: "Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor." https://en.m.wikipedia.org/wiki/Capitalism https://en.m.wikipedia.org/wiki/Capitalism Notably, "competitive markets" and "recognition of property rights" are exactly the issues the article brings up with Amazon: there is little competition, and Amazon has (thus far) been able to steal intellectual property with impunity. This article is not exactly a takedown of capitalism! Its complaint is that Amazon is violating central characteristics of capitalism, and that it would prefer Amazon to not violate them. I think your other point re: firms requiring profit motive and thus competition being impossible, is a little bit of a strawman. No one said perfect competition is something that markets have at a single point in time: just that monopolies without any option for competition are antithetical to a functional capitalist economy, and that capitalist markets are defined by the ability for firms to compete with each other. I think most economists would agree with me on that point.
- SantalBlush 6y ago
  I wasn't using an overly broad definition of capitalism; I was using the definition you bring up here. Moreover, whether or not a market is perfectly competitive is irrelevant. The point is that no firm wants any competition, and in order to maximize profit they must actively fight competition, the very thing they claim to value. What we have here is a fallacy of definition. If we define capitalism to be a system with no negative consequences (such as monopoly), then any real-world system with these negative consequences is, by definition, not capitalism. Thus we've protected the system that is precious to us. People do the same thing with communism ("That isn't real communism because..."). Economists don't really weigh in on what capitalism is very often; they discuss things in terms of markets, and any intro microecon class will tell you that monopolies occur in markets pretty frequently, with or without government intervention. Monopolies, competitive monopolies, natural monopolies.... These are all discussed early on in an econ program. Your capitalism definition is designed to make it infallible, and economists don't really use it. Source: I have an MA in econ.
  - reissbaker 6y ago
    Yeah, I think we're debating the difference between "markets" and "capitalism." Capitalism, as opposed to other systems that also have markets, relies on property rights and competition. Feudalism also had markets; you can't just say anything with a market is capitalist. It doesn't meaningfully define anything — I guess, other than not being communism. Econ does concern itself more with "markets" as opposed to "capitalism" (and hey, I've taken plenty of college econ classes, thanks), but that's because economics is the study of markets, not the study of capitalism. "Your capitalism definition is designed to make it infallible" *Wikipedia's capitalism definition, FTFY. I don't think their definition is designed to make capitalism seem "infallible." It's the consensus view of capitalism designed to distinguish it from other systems that also include markets. There are plenty of scholarly references for the definition linked in the page, written by notable economists (who have PhDs in economics).

reissbaker 6y ago

> private investment (i.e. capitalism) I think this definition is the root of our disagreement. Private investment doesn't necessarily equate to capitalism. Even feudal lords spent their own money on their own property, but that doesn't mean they were operating in capitalist economies. It stretches the definition of capitalism to the point of basically irrelevance to use it to refer to literally anything done for personal profit. Wikipedia has a pretty good definition of capitalism: "Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor." https://en.m.wikipedia.org/wiki/Capitalism https://en.m.wikipedia.org/wiki/Capitalism Notably, "competitive markets" and "recognition of property rights" are exactly the issues the article brings up with Amazon: there is little competition, and Amazon has (thus far) been able to steal intellectual property with impunity. This article is not exactly a takedown of capitalism! Its complaint is that Amazon is violating central characteristics of capitalism, and that it would prefer Amazon to not violate them. I think your other point re: firms requiring profit motive and thus competition being impossible, is a little bit of a strawman. No one said perfect competition is something that markets have at a single point in time: just that monopolies without any option for competition are antithetical to a functional capitalist economy, and that capitalist markets are defined by the ability for firms to compete with each other. I think most economists would agree with me on that point.

SantalBlush 6y ago
I wasn't using an overly broad definition of capitalism; I was using the definition you bring up here. Moreover, whether or not a market is perfectly competitive is irrelevant. The point is that no firm wants any competition, and in order to maximize profit they must actively fight competition, the very thing they claim to value. What we have here is a fallacy of definition. If we define capitalism to be a system with no negative consequences (such as monopoly), then any real-world system with these negative consequences is, by definition, not capitalism. Thus we've protected the system that is precious to us. People do the same thing with communism ("That isn't real communism because..."). Economists don't really weigh in on what capitalism is very often; they discuss things in terms of markets, and any intro microecon class will tell you that monopolies occur in markets pretty frequently, with or without government intervention. Monopolies, competitive monopolies, natural monopolies.... These are all discussed early on in an econ program. Your capitalism definition is designed to make it infallible, and economists don't really use it. Source: I have an MA in econ.
- reissbaker 6y ago
  Yeah, I think we're debating the difference between "markets" and "capitalism." Capitalism, as opposed to other systems that also have markets, relies on property rights and competition. Feudalism also had markets; you can't just say anything with a market is capitalist. It doesn't meaningfully define anything — I guess, other than not being communism. Econ does concern itself more with "markets" as opposed to "capitalism" (and hey, I've taken plenty of college econ classes, thanks), but that's because economics is the study of markets, not the study of capitalism. "Your capitalism definition is designed to make it infallible" *Wikipedia's capitalism definition, FTFY. I don't think their definition is designed to make capitalism seem "infallible." It's the consensus view of capitalism designed to distinguish it from other systems that also include markets. There are plenty of scholarly references for the definition linked in the page, written by notable economists (who have PhDs in economics).