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I wish it was more commonly understood that capitalism's success lies precisely in the fact that it's a decentralized, self-regulating system robust against the
by Llamamoe 4y ago
I wish it was more commonly understood that capitalism's success lies precisely in the fact that it's a decentralized, self-regulating system robust against the failure of individual nodes, and has very little to do with the "capital" part of it, which if anything appears to drive wealth inequality more than anything else.
- Jensson 4y agoWealth inequality is the overhead cost of running capitalism. It isn't a very large cost given the cost of all alternative systems we have tried, especially since regulations can greatly reduce the wealth inequality without losing the benefits of capitalism.
- pharmakom 4y agoUnless you have a UBI or negative income tax.
- rs999gti 4y agoYou're always going to have inequality regardless of what social system you apply to redistribute wealth. See North Korea, Cuba, Soviet Union, and China as examples. With the exception of China those example countries have either rich or poor people. There is no middle class. At least in capitalist driven societies like western nations there can be a middle class that lives relatively well off and cheap options of consumption that also allow poor to have the basics in life.
- revertmean 4y agoThe Soviet Union hasn't existed for nearly 32 years. That's practically a third of a century. It's not a good example country for today.
- Akronymus 4y agoAnd while capitalism has increased inequality, by quite a lot, it also elevated the poor in the process. Living standards are better across the board.
- ianai 4y agoYou have to credit it with its achievements if you’re going to point out its faults. A world where the Nazis won might have less inequality after they succeeded in killing everyone without blonde hair and blue eyes. But more likely they would have gone on to look like a brutal dictatorship with very few among the top class living lives remotely similar to what we know today. I doubt they would have had a Moores Law let alone chip manufacturing. We do know the Soviets bankrupted themselves and did have greater inequality than the capitalist system they were competing against while benefiting from its existence. China of course benefitting similarly to modernizing with the modern worlds free market thriving outside its borders. Heck, that tale is a victory story of capitalism over communism as the CCP very much had to capitulate and allow the market to function in increasing scope over time, reluctantly. If we’re talking about which economic system would have greater inequality than we have to take the thought experiment out much farther than your initial quip. There certainly is inequality in the modern free market. It’s certainly far better and equitable than any system tried before or “on offer” in WWII. That war seeing the victor rebuilding the losers over several decades instead of rubbing sand in their wounds as every war saw in the last to that point. Modern day Japan and Germany.
- bumby 4y ago>thought experiment If economics is to be treated as a legitimate science, it needs to move away from thought-based theory into evidence-based testing.
- ianai 4y agoLike the ever ongoing empirical work being published in peer reviewed journals? Those two words were taken so far out of context it’s hard to think you’re being charitable.
- jojobas 4y agoIn fact failure of individual nodes is almost required, just as the slowest antelope needs to feed the lions so that the antelopes as a whole become faster.
- pbhjpbhj 4y agoIsn't that market-based finance? It appears that can be entirely divorced from capitalism. Just because we have demand driven resource exploitation doesn't mean that all of the profit has to be provided to a small over-class. Indeed, wouldn't it create a greater ability to follow demand if the wealth were evenly distributed? (We might ask if making the human race into the perfect resource-exploiting parasite is going to work well for us long term, but that is a very obvious limitation that diverges from the current discussion.)
- aetherson 4y agoThe reason that markets work is that people can expect to profit from them. There is no separating "people have different wealths" from functioning markets.
- pbhjpbhj 4y agoSo if 1000 people profit, that's not motivation, but if 1 person profits that is? Do companies with more shareholders seek profit less than single-owner entities? It seems the contrary that when founder-owned companies become more widely owned they become far more profit led.
- koheripbal 4y agoWhat's important is that people who make good investment decisions make more money than the people who make poor or no investment decisions. That is required for capital markets to work.
- jojobas 4y agoThe initial distribution of shares doesn't really matter, wealth will concentrate anyway.
- nicoburns 4y agoNot if the system itself is actively redistributive (such as via a basic income)
- xwdv 4y agoIs central planning the only alternative to capitalist decentralized systems? How could you have some other decentralized system without capital?
- koheripbal 4y agoWithout capital? What does that even mean? "Capital" is just a proxy word for resources. How can you develop anything without resources?
- wahnfrieden 4y agoThat’s not what it means within a sentence that uses it in terms of "capitalism"
- 7sidedmarble 4y agoWhat you're describing is the modern definition, but Marxists use the word to refer to what we would call capitalism: https://en.m.wikipedia.org/wiki/Capital_(Marxism)#:~:text=Capital%20is%20a%20central%20concept,specific%20forms%20of%20social%20relations https://en.m.wikipedia.org/wiki/Capital_(Marxism)#:~:text=Ca....
- PaulDavisThe1st 4y agoAs others are noting, "capital" in this context refers not just to resources, but to a particular pattern of distributing risk & reward among those who supply capital, labor and IP to some human venture. Given that the people doing these 3 things frequently do not overlap, the way in "capital" is preferentially treated when it comes to risk & reward makes it preferable for there to be a term to describe not just the resources, but that whole phenomenon.
- zeckalpha 4y agoDistributism, mutualism, anarcho-socialism, etc. are less capitalized models but retail decentralization.
- Kamq 4y ago
- pharmakom 4y agoThis is basically what Hayek is all about.
- pastacacioepepe 4y agoThat's not capitalism you're talking about then. Capitalism has everything to do with capital.
- johnnymorgan 4y agoLove this comment, I'm listening to wealth of Nations audiobook and this is a main point that jumps out. He uses the phrase "perfect liberty" to describe the ideal version of a market and also understands this will never be equally applied or possible with all markets. It's an amazing piece of work and I'm really enjoying the audio book as it reads more like a lecture and is very pleasant to listen too.
- nicoburns 4y agoIndeed concentration of wealth/capital constitutes the very same centralisation of power that planned economies have.
- tdehnel 4y agoTrue, but in capitalist systems anyone is free to start a new business without the government’s approval. Airbnb’s founders sold parody cereal to hustle up the money to keep their business afloat.