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There seems to be an almost religious belief that capitalism has to work in all circumstances. But you can't just keep pumping credit into an economy with the h

There seems to be an almost religious belief that capitalism has to work in all circumstances. But you can't just keep pumping credit into an economy with the hope that it will continue to expand. People only have so many needs. After a while there is no real point in building either new factories or houses. Why isn't that fact that interest rates are zero not interpreted to mean that we are simply at capacity? Capitalism isn't broken, it's just full...

deong 12y ago
Because a simple walk down an average street nearly anywhere in the country strongly indicates otherwise. In science, we like to imagine that we'll begrudgingly discard our theories in the face of a single contradictory fact. Economists don't even seem to pretend that's a thing they'd ever do. There are some 50-60 million people living in poverty in the US. Schools don't have books or desks. People are quite literally fighting insurance companies for their lives on a daily basis. That's quite a lot of demand out there for pretty basic things. There are staggering numbers of unemployed and underemployed people out there as well, so we're not hurting for supply-side capacity either. There's simply more profit to be made by "investing" capital in playing financial games than there is in meeting actual demand. We can quibble about whether this is a failure of capitalist theory or a failure caused by too much regulation, or probably a dozen other claims. But whatever the case, it's a pretty cut and dried case of the bleeding obvious that we're not at capacity in our economic system.
- upofadown 12y ago
  I think you misunderstood my point. I am claiming that credit driven capitalism is incapable of providing any particular benefit under current conditions. In other words; capitalism is entirely ineffective... From my perspective "playing financial games" is caused by the simple desperation of people who have large amounts of money and are having trouble coming to terms with the current reality. They face the horror of actually having to spend their capital...

deong 12y ago

Because a simple walk down an average street nearly anywhere in the country strongly indicates otherwise. In science, we like to imagine that we'll begrudgingly discard our theories in the face of a single contradictory fact. Economists don't even seem to pretend that's a thing they'd ever do. There are some 50-60 million people living in poverty in the US. Schools don't have books or desks. People are quite literally fighting insurance companies for their lives on a daily basis. That's quite a lot of demand out there for pretty basic things. There are staggering numbers of unemployed and underemployed people out there as well, so we're not hurting for supply-side capacity either. There's simply more profit to be made by "investing" capital in playing financial games than there is in meeting actual demand. We can quibble about whether this is a failure of capitalist theory or a failure caused by too much regulation, or probably a dozen other claims. But whatever the case, it's a pretty cut and dried case of the bleeding obvious that we're not at capacity in our economic system.

upofadown 12y ago
I think you misunderstood my point. I am claiming that credit driven capitalism is incapable of providing any particular benefit under current conditions. In other words; capitalism is entirely ineffective... From my perspective "playing financial games" is caused by the simple desperation of people who have large amounts of money and are having trouble coming to terms with the current reality. They face the horror of actually having to spend their capital...