4 ms·

I should define my terms better. For this discussion, I'll initially restrict it to just "value subjectivity", i.e. a person's desires are dependent on their s

I should define my terms better. For this discussion, I'll initially restrict it to just "value subjectivity", i.e. a person's desires are dependent on their state of mind and that state of mind is personal and varying. For example, ranking your preference for a cool glass of water and a delicious sandwich depends on how thirsty you are. Scale this up to millions of people and you find that there is no objective ordering of "things" that can satisfy everybody bhttp://en.wikipedia.org/wiki/Arrow%27s_impossibility_theorem http://en.wikipedia.org/wiki/Arrow%27s_impossibility_theorem Capitalism, as a system, recognises this and is effectively a distributed consensus mechanism. Allocating "points" to people who provide the most value to the system. BUT like any system, it has winners and losers (not necessarily evil, just benefitting) and without checks and balances would lead to a state of the world that I'm unhappy with. Which is why taxation and welfare. For any proposed alternative/update, I'm interested in the new winners and losers as well as how this distributed consensus is achieved.

danbruc 11y ago
I am fine with the market mechanism to establish prices and production volumes, it is a pretty efficient mechanism for this. But I also see no fundamental difference to say a planned economy. Whenever the Soviet Union created their five-year plan they still tried - at least to some extend - to align demand and production, but this is of course hugely inefficient compared to a market because of the long planning interval and because it is impossible to capture the demand in detail or predict what it will be in five years. There are also some advantages in a planned economy, you can for example penalize environmentally unfriendly products directly in the plan while controlling a market is only possible indirectly via laws and regulations and their enforcement which might be less efficient. But all in all market and price mechanism with some added planning, i.e. regulations where market forces are not aligned with goals agreed on by the society, seems at the very least a reasonable choice for an economy. I take issues with capitalism in other places, for example with the ownership of the means of production. Let's again take an example. You found a company, your workers produce goods or services sold for 10 millions per year. You pay 8 millions for consumed raw materials and in salaries and invest 2 millions into the growth of the company, say a new offices, a new production floors or new machines. For the moment this is all good and even necessary for the growth of the company. But when you decide to sell your company you alone get all the money your workers worked for. This is of course unfair and leads to inequality because one or a few owners are able to capture a share of the value created by a lot of workers.
- grinnbearit 11y ago
  > But I also see no fundamental difference to say a planned economy Unfortunately from Arrow's impossibility theorem (linked above), there is no objectively "best" ranking for allocating resources so all plans will be sub optimal (provided values are subjective). Because of this, any system/allocation will always produce winners and losers, the only difference being who they are. In a planned economy you can prevent those products from being made entirely or at least kept to a minimum but again, who decides the trade off. Subjective morality is always an issue. Democracy, btw, is based on a principle of subjective morality, if a majority of voters feel that their plastic toy is more important than an endangered fish then isn't that the way it should be? If not, why not? Of course, the real issue is that people have a hard time predicting the consequences of their decisions. (see http://en.wikipedia.org/wiki/Futarchy http://en.wikipedia.org/wiki/Futarchy for a possible fix). ----- As far as the means of production go, I'd like to set aside the moral argument (for now) and just talk about incentives. A country (with any political structure you choose) has a natural gold source somewhere in an area, they don't know exactly where. 0. Who predicts a market for gold and how are they incentivised? 1. Who searches for the mine and how are they incentivised? 2. Who develops the mine and how are they incentivised? 3. Who discovers and researches new mining tech and how are they incentivised? 4. Who organises and hires miners, craftsmen, support and how are they incentivised? 5. Who pays these employees and other operating costs and how are they incentivised? 6. Who markets, ships, advertises the finished gold and how are they incentivised? And the big question, what if the venture fails? does everyone above get paid? If any loans are taken to start this venture and can't be paid back who takes the liability? It is not that I don't believe there isn't an alternative but capitalism, as a system, has answers to all of these questions and the list isn't exhaustive by any means. Any upgrade/fix/replacement should have answers to questions like this before it can be seriously considered. edit: formatting

danbruc 11y ago

I am fine with the market mechanism to establish prices and production volumes, it is a pretty efficient mechanism for this. But I also see no fundamental difference to say a planned economy. Whenever the Soviet Union created their five-year plan they still tried - at least to some extend - to align demand and production, but this is of course hugely inefficient compared to a market because of the long planning interval and because it is impossible to capture the demand in detail or predict what it will be in five years. There are also some advantages in a planned economy, you can for example penalize environmentally unfriendly products directly in the plan while controlling a market is only possible indirectly via laws and regulations and their enforcement which might be less efficient. But all in all market and price mechanism with some added planning, i.e. regulations where market forces are not aligned with goals agreed on by the society, seems at the very least a reasonable choice for an economy. I take issues with capitalism in other places, for example with the ownership of the means of production. Let's again take an example. You found a company, your workers produce goods or services sold for 10 millions per year. You pay 8 millions for consumed raw materials and in salaries and invest 2 millions into the growth of the company, say a new offices, a new production floors or new machines. For the moment this is all good and even necessary for the growth of the company. But when you decide to sell your company you alone get all the money your workers worked for. This is of course unfair and leads to inequality because one or a few owners are able to capture a share of the value created by a lot of workers.

grinnbearit 11y ago
> But I also see no fundamental difference to say a planned economy Unfortunately from Arrow's impossibility theorem (linked above), there is no objectively "best" ranking for allocating resources so all plans will be sub optimal (provided values are subjective). Because of this, any system/allocation will always produce winners and losers, the only difference being who they are. In a planned economy you can prevent those products from being made entirely or at least kept to a minimum but again, who decides the trade off. Subjective morality is always an issue. Democracy, btw, is based on a principle of subjective morality, if a majority of voters feel that their plastic toy is more important than an endangered fish then isn't that the way it should be? If not, why not? Of course, the real issue is that people have a hard time predicting the consequences of their decisions. (see http://en.wikipedia.org/wiki/Futarchy http://en.wikipedia.org/wiki/Futarchy for a possible fix). ----- As far as the means of production go, I'd like to set aside the moral argument (for now) and just talk about incentives. A country (with any political structure you choose) has a natural gold source somewhere in an area, they don't know exactly where. 0. Who predicts a market for gold and how are they incentivised? 1. Who searches for the mine and how are they incentivised? 2. Who develops the mine and how are they incentivised? 3. Who discovers and researches new mining tech and how are they incentivised? 4. Who organises and hires miners, craftsmen, support and how are they incentivised? 5. Who pays these employees and other operating costs and how are they incentivised? 6. Who markets, ships, advertises the finished gold and how are they incentivised? And the big question, what if the venture fails? does everyone above get paid? If any loans are taken to start this venture and can't be paid back who takes the liability? It is not that I don't believe there isn't an alternative but capitalism, as a system, has answers to all of these questions and the list isn't exhaustive by any means. Any upgrade/fix/replacement should have answers to questions like this before it can be seriously considered. edit: formatting