Capitalism, The Best Solution to Poverty

[Forty Two]

42 seems to think that pure capitalism is a fair deal when it further from the truth. In pure capitalism it is dog eats dog which leads to monopolies which leads to high prices and exploitation of the work force or is that too advanced thinking?

This is not accurate. In the real world, free market capitalism defeats monopolies, it doesn't create them. The vast majority of monopolies have government/state support to maintain their monopoly status.

What private monopoly has been able to obtain that status and maintain it without government/state assistance?

However, there is nothing wrong with having anti-monopoly and antitrust laws to prevent anticompetitive behavior on the books. Again, free market capitalism does not require anarchy. It requires a legal structure to exist.

"...is that too advanced thinking?" No. It's not advanced at all. It's one sentence about what you think I "seem to think." All totaled your argument is that "pure capitalism" is not a fair deal, because it is "dog eat dog" which leads to monopolies which leads to higher prices and exploitation of the work force. That's it. That's all you said.

One, you did not define "pure" capitalism. You did not explain what you mean by "dog eat dog" and more importantly you did not explain how dog eat dog leads to monopolies. So, while you've made a hypothesis, you've provided not proof, and not even a logical or cohesive argument in support of it. So, it's pretty far from "advanced thinking," as advanced thinking would involve something more than parroting a talking point and essentially declaring it a "given."

[Scot Dutchy]

What a load of bollocks. So you really want controls? Never heard the phrase "dog eats dog". The history of American railroads is a prime example. Capitalism is just that otherwise it is not capitalism.

[Forty Two]

What a load of bollocks. So you really want controls? Never heard the phrase "dog eats dog". The history of American railroads is a prime example. Capitalism is just that otherwise it is not capitalism.

If it's a prime example, it defeats your thesis. The railroad monopoly was created by the Interstate Commerce Commission. The ICC was established ostensibly to protect the consumer from exploitation by monopolistic railroads. In actual effect, the ICC created a tight cartel that was able to keep rates up. The railroad people themselves had been trying to set rates, to establish a cartel, but every time they got an agreement, some chiseler would break it and they’d be back in competition again. So the ICC was created and its initial effect was to enable the railroads to keep rates up and competition out.

Then trucking came along, which would have competed with the railroads. There was no monopoly argument whatsoever for including trucking under government regulations. Nobody ever argued that, because there was an enormous amount of competition in the trucking business. Yet trucking was brought under the ICC on the claim that consumers had to be protected from unscrupulous truckers. Of course, the real reason for bringing trucking under the ICC was to protect the railroads from competition.

The difficulty in this kind of discussion is making a distinction between the real world and the ideal world. For an ideal free market, you want a large number of producers. For an ideal government, you want a saint. In the absence of both, you have three choices: unregulated private monopoly, private monopoly regulated by government and government monopoly. All three are bad, but, in my opinion, the best of the bad lot is unregulated private monopoly. The ICC and the railroads provide a good example of regulated private monopoly; the Postal Service is a good example of public monopoly. Those aren’t really appealing cases.

[Forty Two]

It does not work. It is dog eats dog. Anything else is regulated capitalism that is allowed by social democratic governments in Europe.

Well, right, and it is the capitalism part that is the best solution to poverty. We live in the real world. So, we're not going to have an idealized version of free market capitalism, free of all influence, tax or regulation from politics. But, relatively free market capitalism is best, isn't it?

One difficulty in this discussion is that when I write an argument that capitalism is the best solution we have for poverty, it's taken to mean anarcho-capitalism in a stateless libertarian wonderland, which, of course, can't ever and won't ever exist. Capitalism requires legal frameworks to exist in actual fact. For example, there must be laws defining terms in commercial transactions, and there must be laws defining what property is, what's intellectual property, what're the rights of landlords and tenants, how are real estate transactions recorded and enforced? All that sort of thing, and lots more.

Nobody, not even Milton Friedman who I mention because this thread was started with his thesis for capitalism being an engine for improving the lot of the poor, is arguing for anarchy.

And, as you recall, I'm the one who has been pointing out, repeatedly, that western european countries are capitalist countries. When socialists point to western european countries like Norway or whatever and say "see we need to be socialist like them..." or words to that effect, they are missing the fact that Norway is capitalist, and has a working competitive free market. Now, some would argue that its government influence has rendered it a State Capitalist nation, with a generous welfare state too, but nobody is arguing that Norway is a socialist or non-capitalist country.

Where in Europe are situations worse than in the upscale western capitalistic democracies? In the formerly communist eastern bloc countries. But, with the injection of free market reforms into those formerly Second World countries, they have very much improved, and life gets better for the poor, not worse, as the free market does its work. Same thing in China - sure, it's far from a "free" market, but it injected capitalism after it watched Hong Kong rise under British control from a fishing village to a poster child for western capitalism.

[rainbow]

I'm not wrong.

Explain to me how a system which puts control of the market into the hands of a small minority, the Capitalists, can be describes as a 'free market'.

You can't.

...so you lose once again.

One way to state it is that a free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are relatively free from intervention by a government, price-setting monopoly, or other central authority.

That means it is only free to those who wish to dominate the market, and by doing so, create oligopolies.
Only in La-la Land do Capitalists allow free competition.

You know this yet keep on repeating the mythology.

No, that's incorrect. Supply and demand works best in a market not dominated by monopoly or oligopoly. So, when you have a market with a lot of participants, the law of supply and demand works irrespective of what participants want.

... which is why Capitalists do everything in their power to destroy their competition and to make the barriers to entry as high as possible.

Capitalism leads to reduced competition, not free competition.

Therefore Free Market and Capitalism are incompatible.

[Forty Two]

I'm not wrong.

Explain to me how a system which puts control of the market into the hands of a small minority, the Capitalists, can be describes as a 'free market'.

You can't.

...so you lose once again.

One way to state it is that a free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are relatively free from intervention by a government, price-setting monopoly, or other central authority.

That means it is only free to those who wish to dominate the market, and by doing so, create oligopolies.
Only in La-la Land do Capitalists allow free competition.

You know this yet keep on repeating the mythology.

No, that's incorrect. Supply and demand works best in a market not dominated by monopoly or oligopoly. So, when you have a market with a lot of participants, the law of supply and demand works irrespective of what participants want.

... which is why Capitalists do everything in their power to destroy their competition and to make the barriers to entry as high as possible.

Yes, they do, but in actual effect, they are general unable to dominate the market and they are generally unable to maintain a monopoly or even oligopoly. The State, too, acts to destroy competition and increase barriers to entry, and it does so with the power and authority of the state to do it, with the force of law. A free market private company can defeat its competitors by lowering prices, or putting out better products, or engaging in better marketing, etc. But its competitors are working likewise, and it's that interaction that prevents monopoly and oligopoly from happening.

Again, look at the railroads - the railroad companies were trying to form a cartel for many years, and they couldn't because the market forces always forced one or more to break the cartel when it made economic sense to do so. However, they were able to form an effective monopoly when the ICC eliminated competition, and allowed them to legally set prices and barriers to entry.

Capitalism leads to reduced competition, not free competition.

What economic system increases competition?

Therefore Free Market and Capitalism are incompatible.

Well, you need to establish that capitalism leads to reduced competition. Other than your own declaration, do you have any support for that assertion? Is there an economist or economic theory that suggests that such is the case? Is there an economic system other than capitalism which leads to increased competition?

[pErvinalia]

42 seems to think that pure capitalism is a fair deal when it further from the truth. In pure capitalism it is dog eats dog which leads to monopolies which leads to high prices and exploitation of the work force or is that too advanced thinking?

This is not accurate. In the real world, free market capitalism defeats monopolies, it doesn't create them.

Absolute nonsense.

[pErvinalia]

And, as you recall, I'm the one who has been pointing out, repeatedly, that western european countries are capitalist countries.

You also said Brazil is socialist? Brazil is a mixed economy just like western European countries.

[Svartalf]

42 seems to think that pure capitalism is a fair deal when it further from the truth. In pure capitalism it is dog eats dog which leads to monopolies which leads to high prices and exploitation of the work force or is that too advanced thinking?

This is not accurate. In the real world, free market capitalism defeats monopolies, it doesn't create them.

Absolute nonsense.

have to agree with pErvin, in an unrestricted market, powerful operator will pull their weight and work to maximise their market shares, leading ultimately to mono or at best oligo polies, and once a powerful actor is entrenched, no natural market force short of total obsolescence of its product/business model (like happened to kodak and argentic photography) will destroy that dominant position.

[rainbow]

42 seems to think that pure capitalism is a fair deal when it further from the truth. In pure capitalism it is dog eats dog which leads to monopolies which leads to high prices and exploitation of the work force or is that too advanced thinking?

This is not accurate. In the real world, free market capitalism defeats monopolies, it doesn't create them.

Like Microsoft?

...utterly defeated.

Do you actually believe the drivel you post?

[pErvinalia]

No, no, rainbow, that was because of governments, you see? If Microsoft was even more free to do what they want, they would never have reached a monopoly position.

[Forty Two]

Economist Roberto Campos has said that “[in Brazil,] private companies are controlled by the State …and State-owned companies are controlled by nobody.” In Brazil, the State controls the means of production in about the same proportion as socialist countries like Zimbabwe and Mozambique. It is pretty safe to say that Brazil looks like a socialist country, swims like a socialist country, and quacks like a socialist country. One might argue that it is not a totalitarian one-party State such as the USSR, which is correct, but nevertheless Brazil’s political representation, policies and laws are overwhelmingly socialist in nature, intent and influence.

The plight of the poor in Brazil is horrific. They live like we first worlders have never even seen, much less experienced. The kind of poverty they have there does not exist in Australia, or the United States.

https://panampost.com/editor/2017/05/05 ... l-save-it/

In the 1990s, Brazil’s economy appeared to be one of the most promising in the southern hemisphere. The fifth largest country in the world in both area and population, and blessed with abundant natural resources, Brazil seemed to have put its earlier inflations, economic crises and political turmoil behind it. Then the socialists hijacked the future.

Fifteen years ago, when Luiz Inácio Lula da Silva (nicknamed “Lula”) was elected President, Brazil embraced the socialism of the Worker’s Party. Not the full-dose variety Venezuelans got with rampant expropriations and Castro-inspired goon squads, but socialism-lite: mountains of new regulations and massive increases in government spending for everything from “infrastructure” to civil service salaries to welfare programs to those ridiculous pensions that allow many government employees to retire at full salary in their mid-50s.

After four years of Lula, according to the Index of Economic Freedom, Brazil fell from “moderately free” to “mostly unfree.” Out of 190 countries, it’s now ranked #140 in economic freedom, stuck right between Burundi (#139) and Pakistan (#141). As a place to be enterprising, Brazil can be downright inhospitable; the World Bank says it’s easier to do business in 122 other countries of the world than in Brazil.

Four years of Lula was 10 years ago, and it's only gotten worse.

In 2016, Lula’s hand-picked presidential successor, Dilma Rousseff, was impeached and removed from office, largely for falsifying budget data and covering up corruption at the state-owned oil company. The current president, Michael Temer, is under investigation for bribery, as are many members of his administration, the National Congress and their business and political cronies. All told, the various probes into official malfeasance and favor-granting have uncovered the most widespread corruption in Brazilian political history, and it may yet have a long way to go.

The corruption engulfing the Brazilian political system is the predictable consequence of the monstrous size and scope of government. Brazilians are beginning to realize that socialism isn’t just abstract happy talk about doing good things for people; in practice, it concentrates power and money as it lines the pockets of the political class and shafts everybody else.

“After millions decided to take to the streets in Brazil, calling for the end of a socialist, corrupt and incompetent government,” Van Hattem told me, “we were finally able to impeach the former president Dilma Rousseff in 2016. Later on, in October 2016, her party, the Workers Party, suffered its all-time greatest defeat in the local elections for mayors and councilmen, falling from third place to tenth among all political parties in Brazil.”

“With the 2018 elections coming up, we have a good opportunity to elect federal and state representatives, senators, governors and, who knows, even a President of the country with ideas more open to a free-market, to democracy and prosperity.”

Van Hattem frequently asserts, “I do not want to live in another country. I want to live in another Brazil, and I am sure that voters will make this come true.”

[Brian Peacock]

https://en.wikipedia.org/wiki/Operation_Car_Wash

[Forty Two]

42 seems to think that pure capitalism is a fair deal when it further from the truth. In pure capitalism it is dog eats dog which leads to monopolies which leads to high prices and exploitation of the work force or is that too advanced thinking?

This is not accurate. In the real world, free market capitalism defeats monopolies, it doesn't create them.

Like Microsoft?

...utterly defeated.

Do you actually believe the drivel you post?

You're very difficult to talk to when you constantly spew nonsense like "do you actually believe the drivel you post?" I post complete thoughts, with support from leading economists, defining my terms and explaining what I'm talking about. You post quips and blurbs, making declarations and pretending to have established a point.

Microsoft is a large company, but they have a major competitor in Apple with OSx and there are other PC operating systems that can be installed if a person wants them. Many people install Linux, and that's not the only one. FreeBSD and others.

Look what happened with microsoft and internet explorer. It defeated Netscape only to be outperformed by other browser providers.

Microsoft has their own PC stores now, copying Apple, but many companies make PCs.

Critical even to the most rudimentary definition of monopoly is the concept of the market in which Microsoft is presumed to operate. Even if the “market” is restricted to firms selling computer operating systems, Microsoft is clearly not the only seller, but it surely is a dominant one, given its 80 percent (or greater) share of sales. However, if the relevant market is defined more broadly, Microsoft’s dominance is not nearly so great. The company’s sales represent only 5 percent of total dollar sales in the software market and, of course, a much smaller percentage of total dollar sales in the computer market as a whole.).

A key economic point needs to be kept in mind: a firm may have a dominant market share, even be the sole seller, of a product not because it has acted monopolistically (i.e. garnered monopoly profits by restricting sales and raising price) but because it has done just the opposite, namely lowered its price in order to expand its customer base to encompass a large fraction of all buyers.

The original dominance of Microsoft in the operating-system market can be attributed at least partially to the pricing blunders of its competitors, most notably Apple, which adopted a strategy of restricting the sales of its operating system and then tying the operating system to the purchase of Apple computers. Microsoft licensed its operating systems to other manufacturers.

One cannot know from the observation that Microsoft has an 80 percent market share whether Microsoft is acting monopolistically or competitively, and it is altogether understandable that those who accuse Microsoft of being a monopolist also accuse it of being “brutally competitive.” The firm can be either, and the latter form of behavior could have resulted in its becoming a dominant seller without necessarily being a monopolist. It cannot be stressed enough that a firm that is a single seller, or just a dominant producer, is not necessarily a monopolist, as the term is generally defined by economists, because all definitions of monopoly presume that the firm is capable of using its market position to restrict output and increase its prices and profits, in the process creating “market inefficiency."

A firm can become large either by using resources efficiently and remaining attuned to its customers’ wants or by behaving, well, as a monopolist. But in order for a firm to act successfully as a monopolist, genuine barriers to the entry of new rivals must exist. Otherwise, any firm that seeks greater profits by reducing output and raising price can expect to attract new market entrants who seek to make the sales that the established firm has not made, and which the new entrants can make by undercutting the monopolist’s price. Without barriers to entry, the price charged by the would-be monopolist will not hold, given that the market supply is not restricted. The output of the new market entrants can be expected to neutralize, partially if not completely, the hopeful monopolist’s attempt to restrict output.

Microsoft was not a monopoly (engaged in monopolistic behavior). It had an 80% market share in operating systems. But, 20% of the market was owned by a slew of competitors. Microsoft was not able to restrict production to raise prices and distort the market or create market inefficiencies. Had Microsoft tried to raise prices, then the competitors would swoop in to reduce the price. That's why Microsoft's OS was always cheap - came installed on computers/laptops costing a few hundred dollars.

And, what did the government do about it anyway? Microsoft still has 80% market share now, even though people are free to easily use another OS system.

Neither Microsoft nor Brazil is making the anti-Capitalism-as-best-remedy-for-capitalism point.

Is anyone here actually arguing in favor of something other than Capitalism, except rainbow (who is arguing that there is no such thing as free market capitalism and that "free market" and "Capitalism" can never exist together as they are contradictions in terms)?

[Forty Two]

https://en.wikipedia.org/wiki/Operation_Car_Wash

...the wrong socialists were in power. If only we can find the virtuous socialists, then it would work...