Alternatives to capitalism

[Narkos]

I'm kind of stuck trying to figure out where I fit in the economic ideologic spectrum. For a long time I have obsessed over the failures and inadequacies of our current financial system. From the brief reading I've done, I guess I support a highly regulated market system (ie.market socialism), but I'm not sure what that really means. Is society ready for something beyond "enlightened self-interest", or is that really a pipe dream? Do we need to fix the economy as it is, and ensure that it serves the common good? Or will we always have these cycles of wealth destruction, and should we then look for alternatives? What do you guys think?

[dbonds]

1. I don't know the answer, but...

it just seems wrong to have a system that rewards greed, and those that want everyone to share and be happy are considered losers.

[TBF]

2. Here's a Marxist perspective - I found it

very instructive: http://socialistworker.org/2008/12/05/the-great-crash-of-2008

[napoleon_in_rags]

6. That's excellent. I wish I could recommend responses. nt

[Narkos]

8. Great article. Thanks for the link

[readmoreoften]

20. Great link. Highly rec'd.

[napoleon_in_rags]

3. Great post. In response, there is a spectre haunting America....

...nobody has a name for it yet, but here's what it looks like: Information systems to eliminate planned obsolescence throug informed consumer choices. Standardized input output analysis procedures for evaluating efficiency of agencies and businesses. Basically economic awareness systems to look at net effect of endeavours as they effect all other sectors of economy.

The more I look at this, the more I see this is an information game. My dream is that Mister Obama becomes the first great president of the information age, that is to say, he leads us into the age of transparency.

[Genghis]

4. Cycles rule the world

When driving in heavy highway traffic, the speed of traffic is usually cyclical, speed up, slow down, speed up, slow down. From above, you would see pulses of accelerating automobiles roll down the highway. This would happen even if there were no exits, tolls, or accidents to slow traffic. It's a natural phenomenon. Animal populations without predators have cycles of population spikes and die-offs as they exhaust their food supply, growing again after the die-off allows the food source to expand. The economy is the same. Economic cycles are natural and unavoidable.

Or unavoidable in practice anyway. If all the cars on a highway were controlled by a massive computer, the annoying traffic cycles could be avoided. It would set the cars to run at a constant speed that would eliminate the jams. Likewise, some all-powerful super-genius could centrally manage an economy efficiently to avoid the cycles. But there are no all-powerful super-geniuses, and all attempts to centrally manage economies have failed completely.

So we have to live with cycles, but we can manage them. Well designed and maintained roads suffer from fewer jams than roads with bad exits, large potholes, sudden lane merges, etc. That's where market regulation comes in. Good regulation keeps the economy running relatively smoothly, limiting massive bubbles and spectacular crashes. But allowing regulation to lapse, the Bush administration allowed the economy to grow too quickly. Like cars gunning their engines as soon as the traffic began to move, the economy grew quickly but then came to a sudden halt at the next cycle, rather than a gradual acceleration and deceleration.

BTW, here's my somewhat less reasoned but more emotional response to the Bush administration's incompetence: http://www.youtube.com/watch?v=EVWcK9aWhqs

[endersdragon34]

5. From my perspective...

Every single European market that relies heavily on socialist polices are poor. Germany and France are two perfect examples of this. While you might say they make a good deal, the average wage there is made by well over half of Americans. While total capitalism doesn't seem to work all that well, there is a concept of equally poor... do we really want to go there.

[eridani]

7. Can we have some definitions of "poor" here?

I've ridden my bike around northern and southern Germany and haven't seen serious poverty.

[Narkos]

9. Either you've never been to Europe

or you're just talking out of your ass. Europeans enjoy a very high standard of living with very little poverty. Equally poor? No, just middle class. WHy do conservatives all believe that everyone can be a millionaire? You guys have been fooled to believe that by the aristocrats, and it's very sad.

[endersdragon34]

12. Not exactly my ass

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita Not exactly my ass. PPP adjusts for what you can actually buy. GDP per capita is 47,000 in America, 34,000 in France, 35,000 in Germany. Yes that could be said to be a high standard of living, but when the average person makes 12,000 less there, and in recent years the US has been growing faster (and Germany and France are going through recessions too so please don't go there lol). Now I think what the Government did to give the big businesses money was horrible, but then again, it was mostly Democrats voting for it and Republicans voting against it. Bush was the only big name Republican for all the bailouts. Beyond that according to http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States (which uses the Census data, so don't Cristie me for using wikipedia) the average American (50th percentile) still makes 43,000... 8,000 more then the average German (which is probably still top heavy). Beyond that the average person with a Bachelors degree who is employed full time makes 50,000 (and that includes all the low wage college graduate salaries), 15,000 more then Germany. Even "some" college employed full time makes more then the average German, which Obama wants to pus everyone closer to get that. So unless you want to say numbers lie, you have to face facts.

[idlisambar]

13. Purchasing power parity is not a precise metric

Those are not hard numbers -- not to the point that they consistute "facts". They are really the product of numerous assumptions in combination with the underlying data (which itself is reported inconsistently among nations). The choice of the "basket of goods and services" used is critical and necessarily arbitrary as are the assumptions about their relative quality and so on. Differences in economic structures and priorities across nations make cross country comparisons even more fuzzy -- differences in the tax code, availability of credit, government vs private expenditures, etc.

All things considered GDP (PPP) is really only a rough metric at best, meaningful when the there is an order of magnitude difference but not so meaningful when the differences are as small as this. The precision you want (we would all want if it was possible to be had) is just not there.

It should also be mentioned that GDP as calculated by individual nations is also not standardized. Differences in methods can accumulate over the years to further distort comparisons. That goes for GDP calculated by the exchange rate method as well.

[endersdragon34]

15. I agree its not percise

But I don't think it has a 25% measure of error. Its a pretty close to accurate measurement, much closer then "well they all looked wealthy".

[idlisambar]

23. The notion of "error" doesn't aply here

First off, welcome to DU :hi:

On your reply...

Speaking in terms of error implies that there is some actual number out there that is correct, but that is not the case here. Depending on your assumptions the numbers could vary considerably.

What we have is a discrepency given the assumptions. What could account for that 25%? Forget the PPP calculation for a second and just consider GDP. If for the last 15 years or so the US had been using relatively more 'optimistic' assumptions to measure inflation than Europe did, by say 1% a year, that could account for much of the difference right there -- the discrepency then narrows to about 10%. That 1% figure I just pulled out of thin air, it could be less or as Bill Gross or the ShadowStats guy argues it could be substantially more....

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm
http://www.shadowstats.com/article/56

To lend credence to the idea that inflation is not calculated uniformly across the world. It is interesting to note that Dale Jorgenson was able to conjure up an additional 0.75% gdp growth in Japan during the late 90's mostly by bringing assumptions regarding the effects of IT more in line with US assumptions. The effect on the GDP deflator was substantial -- driving it down markedly and hence increasing GDP.

Dale Jorgenson, is not some contrarian outsider, he is basically the guy who is responsible for putting the IT assumptions/methods in place in the US in the mid 90's, so this is rather revealing to say the least.

http://www.rieti.go.jp/jp/publications/dp/03e015.pdf


Table 7: Comparison of output with official GDP in Japan

1975-90 1990-95 1995-00
Official Statistics (93SNA) 4.19 1.49 1.39
(68SNA GDP series) (4.13) (1.44) (1.02)
+Software Adjustment 0.11 -0.01 0.02
+IT consumer durables 0.01 0.02 0.06
+Non-IT consumer durables 0.24 0.17 0.10
Adjusted by national statistics 4.54 1.67 1.58
+price adjustment (Computer) 0.14 0.16 0.42
+price adjustment (Software) 0.04 0.04 0.06
+price adjustment (Comm. Equip) -0.02 0.00 0.01
+price adjustment (IT services) 0.00 0.02 0.09
Adjusted by harmonized price 4.70 1.89 2.15

[Narkos]

14. Are you serious?

Using average GDP per capita is not a true measure of economic health. And just because people here may keep more of their income doesn't mean they can buy the things they need, like, oh, health insurance. As for inequality, the US ranks 3rd, just below Turkey and Mexico .... http://ocde.p4.siteinternet.com/publications/doifiles/812008051P1G001.xls .....Poverty is higher in the US .... http://en.wikipedia.org/wiki/Poverty#Governance ... so while you quote some interesting numbers, they of course don't tell the whole story. You're the one who brought up the poverty issue, and you got owned my friend. There will be other chances though.

[endersdragon34]

16. Equally poor is not a good thing

Income equally means very little. In America we have the most major businesses in the world (though who knows about what will come after this, #2 on Forbes 500 was GE... and they have been going downhill for a while now), so it makes sense we have a large income inequality. But as I showed with those numbers the average person with some college working full time, makes several 1,000 more in 2003, then the average German. And the average person with a bachleors degree makes WAY more then the average German.

Now do I think that national healthcare will ruin us, nope, if we do it right (ala not the Canadian model and certainly not the French model). Do I think that putting 50% of our wages into taxes like they do in Germany and Frace will ruin us, probably. So I think permentally nationalizing the banks will ruin us, maybe. Do I think "nationalizing" schools will ruin us (in both Germany and France they have almost all control over all school systems, think NCLB is bad, you haven't seen nothing yet), possibly. We need to find our own system, and not even worry about theres. Otherwise we might stop seeing profits and therefore private job creation.

So can you tell me how I got owned when I compared stats and figures to traveling around a country. You take a tour of North Korea it will look fine to you, you have to dig a bit deeper then that to actually find the poverty. I myself went to Serbia, and you would never guess looking at much of the country that most people living there would be in poverty if they moved to America. But they were. Same thing when I lived in South Korea. A public face isn't neccessary the real face.

P.S. I am not a socialist when I am surrounded by them, so I figure I will always get owned, then again your not an impartial observer.

[Narkos]

21. Income inequality means very little?

Find me the economist (other than a libertarian psycho from the Cato) who thinks that vast differences in wealth aren't a big deal. You're making lots of assertions without a lot of evidence.

1."we have the most major businesses in the world" exactly how would that lead to income disparity? That makes absolutely no sense at all.

2. "the average person with a bachleors degree makes WAY more then the average German." yeah, and as stated previously, that income has to cover lots of social services that Europe already provides.

3. "Do I think that putting 50% of our wages into taxes like they do in Germany and Frace will ruin us, probably", excuse me, but I didn't realize that higher taxation in Europe "ruined" those countries. What the hell are you talking about?

4. "e. Do I think "nationalizing" schools will ruin us (in both Germany and France they have almost all control over all school systems, think NCLB is bad, you haven't seen nothing yet), possibly." Exactly how would "nationalizing" the school system ruin us? And what the hell does NCLB have to do with anything? Non sequitur after non sequitur. Do you just pull this shit out of your ass?

Tell you what son, YOU are the one who brought up the issue of poverty, not me. And when I called you on your bullshit, you automatically changed the subject and gave me wikipedia entries about GDP relative to other countries. This is what you guys do, bring up a subject without any evidence, and when contrary evidence is presented, all of a sudden you shift gears thinking your opponent won't notice. I saw the numbers, and they have nothing to do with poverty rates. Understand? Prime example....you changed the subject again by bringing up North Korea and Serbia...I thought we were talking about Europe? Ahhh, yes, desperate to prove your already discredited argument, you point to a tyrannical regime led by a despot and a war torn wasteland as a last resort.

Look, most of us here are quite familiar with the tired old libertarian arguments before. If you want to have a real discussion, stay on topic and at least try to be intellectually honest. Of course I'm partisan, as are you.

[endersdragon34]

24. So let me ask you this?

Would you rather live in a country where you would only make 10,000 but everyone made that much. Or a country where you would make 50,000 but you were near the bottom of the wealth chain that goes on up to trillions of dollars a year. Of course you would prefer the later. But isn't that the country with more income inequality.

More big businesses lead to more big wage earners. Its true in just about any country. That in turn leads to income inequality.

And 15,000 for social services. I don't think so.

And I suppose ruin is the wrong world. But when they are making 3/4 as much as we are, thats not a good thing. When the average person with a bachleors makes FAR FAR FAR more then they do thats not a good thing.

And from what I have learned of European education from my highly liberal teachers, it is incredibly centrally controlled. Basically think of how Texas learns. Everyone from the same text book, everyone takes the same tests, everyone does the same fun stuff, etc. Being an asperger's kid who doesn't learn like others, that sounds like a scary concept to me. Beyond that I would be willing to bet that someone in Chicago, IL doesn't learn the exact same way as someone 200 miles away in Clear-creek Amana, Iowa.

And check a map sometime, Serbia is Europe dumdum :-p. Socialist not to long ago, not really seeing many of them longing to go back (no matter how much some of them loved the concept of Yugoslavia). And I try to provide evidence. I am so sorry for that. Feel free to just provide your qualiative assessment all you want. But see heres the thing, you are trying to make the entire arguement about how much the the richest and poorest make. Yes I get theres poverty in America but you can't totally ignore what the middle class makes. You can't totally ignore what that 50th percentile makes. O

[Narkos]

26. The fact that you would use North Korea and Serbia

to support your contention that socialism is a failure says it all. You lost the argument bud. Get over it.

Good day to you sir.

[endersdragon34]

27. LOL and your an impartial observer?

Would you ever say a nonsocialist won a debate? I mostly used the example of Germany and France and showed how much poorer the average person is over there then over here. Yes the bottom forth are probably poorer over here, but do you judge an entire country based on 1/4 of the population of said country? I suppose you can, but that doesn't make it right. Do you have a computer, car, TV, etc, that was made in Germany or France (or Europe in general). I would doubt it, you either have American things, or you export jobes to Japan/Korea/China, I highly doubt you have anything other then a possibly a car (you seem like you would have a European car) that was made anywhere besides those countries. But how many products do they have that were made in America, computers and many electronics are made in America. Though can I ask you, what is the reason South Korea was so successful when North Korea hasn't been other then being capitalist and having capitalist allies.

[readmoreoften]

19. Um. They have NO DEBT. You're only looking at our "income" not our costs.

I'd rather make $8000 less a year and not have to pay $4000 out of pocket for health insurance yearly--not including massive medical debts--as well as $50K in student loans at interest with fees, plus car loan and insurance.

The quality of life in Europe is simply far beyond the quality of life in the US.

[endersdragon34]

25. By what measurement?

And 13,000 does not equal 8,000. I don't even know where you got that # from. Quality of Life Index has us 12 spots ahead of France, 13 ahead of Germany (funny that they are right next to each other.) http://en.wikipedia.org/wiki/Worldwide_quality-of-life_index

[TBF]

10. Yes, we most certainly want to go there. We definitely want to discuss

why there are billionaires getting massive bonuses through taxpayer bailouts while 48 million have no health care, nearly 10% of this country is unemployed or under-employed, and people are living in tents. Cite: http://www.msnbc.msn.com/id/26776283/

You may wish to hold on to your fairy tale of an "american dream", but for many people this is their worst nightmare.

[readmoreoften]

18. You're insane. Having lived in Europe, I have to say access to free health care,

free schooling, and good food gives people a quality of life that only the very richest people have here. No medical debt, no student loan debt, not even the need for a car loan in most places. The quality of life is insurmountably better. People were absolutely horrified by the way I live in the US.

Yes, their richest people aren't as rich as our richest people. That means zero to most Americans.

[endersdragon34]

22. Way to not pay attention

I said 50th percentile here is far richer then the average wage here. In case you didn't know that means its what the most average person makes in a year going equally from top as from bottom. Its not just the richest making a lot more, its the average person also making a lot more. Its just the poorest that make a lot less.

Beyond that, my dad never made much money and has had to support me and my two brothers. We have ALWAYS been insured, we have always had "good food" (how do you quantify food anyway), and we had a great K-12 education. But beyond that I have no problem for giving insurance help to kids in familys making under say 60,000 and individual people making less then 40,000. So a good deal of Americans would qualify, based on need, for at least some assistance. Does that sound good to you?

College is a bit more expensive, but thats largely because me and my oldest bro went to :gasp: private schools (my youngest bro is still in High School and will probably go to a Div 1 public school because he is likely to get a free ride somewhere for basketball). Had we chosen to go public, we would have gotten enough grant money (at least up until this year) to cover a good deal of our costs. Yes, we would still have some student loans, but I have no problem with putting more money into Pel Grants for needy students. I would have loved it back then. We can do that without putting 50% of our GDP into taxes. Some states already have free college education if you go to a public school, and many other states could do that easily. Beyond that we as a nation could do that easily as well.

And you really do have to explain the "food" comment.

[Warpy]

11. I tend to think that only mixed systems

can be humane and competitive while remaining stable over long periods of time.

The problem with any pure system is that it relies on pure people to keep it running. Nobody really takes laziness or greed into account.

The only system I can see as having a possibility of surviving long term is heavily regulated capitalism ameliorated by socialism. Capitalism is great at supplying things but is terrible at supplying service. Socialism is great at supplying service but terrible at responding to rapid market changes and supplying things. They complement each other, in other words.

The only debate should be what belongs in the public, socialist sphere and what belongs in the private, capitalist sphere. Obviously, as things fail in one or the other they can be moved back and forth.

[readmoreoften]

17. I would be for a "mixed system" if I thought it was possible. But I don't think capital will ever

allow it. For a mixed system to work, there needs to be a real power that can keep it in check, a democracy that is not beholden to corporate interests. This, to me, is really utopian. Capital will buy media to promote its agenda. It will fund candidates (openly or behind closed doors if there were "regulation") who support its interests. It just doesn't seem feasible. What government could control capitalism when capitalists control all the wealth?

While I wouldn't mind a mixed economy--where, say, the means of production (factories, oil, water, food etc.) were socialized and other industries were marketized (arts, entertainment, technologies) I simply don't see how major conglomerates wouldn't amass wealth and use propaganda to conspire to overturn the socialized means of production. I fear that we have three real possibilities: (1) "best case scenario" capitalism, where things continue on relatively as they are with 1 billion people living on less than a dollar a day. (2) "worst case scenario" capitalism where we're dealing with a totalitarian sort of Chinese-style gulag capitalism backed by global military machines and non-stop "propaganda entertainment" or (3) a sequence that ends capitalism, a sequence that may or may not be pretty, and one that probably wouldn't begin in the US; such a systemic change couldn't possibly exist "in one country"--it would have to be global because localizing socialism into one geographic body would do nothing more than identify a magnet for the ire of the multinational military-industrial complex.

As I see it, capitalism has to be ended, as obsolete as monarchy (although monarchy is tolerable because it is such a localized problem). It would have to be international. It would have to be an ENDING of capitalism-- period-- and a movement into something new. My hope is that it would be democratic. My guess is that it would be democratic in locations with a history of democracy and authoritarian in locations with histories of authoritarianism.

I would really be quite content if there were some "global liberal" revolution, where everyone agreed to nice labor practices, and things were governed by "rational self-interest" and leaders were elected honestly and they didn't take bribes and media wasn't pure propaganda. But I think if this sort of world were possible, we would have made at least SOME OF IT happen. What we have is a spiraling global abomination.

One more thing: I believe that the check on capitalism until the 1980s was the continual threat of the Soviet system (which I admit became horribly bleak after Stalin). Capitalism wasn't quite global yet. Capitalist nations had to provide a good life for its citizens because if things got too bad, they could become communist! But after the fall of communism, the constant refrain has been: we'll crush your union--what're ya gonna do? Communism failed asshole (guffaw)... now you get what we give you. Now it has shown its true potential openly. And now, like Soviet socialism, it might collapse from within.