Capitalism, The Best Solution to Poverty

[PsychoSerenity]

Bullshit and time, Forty Two, bullshit and time.

[Rum]

(Edit: response to 42's last post)

Here we have the ultimate victory of capitalism - its hegemony if you like. It has even hijacked the term capitalism itself. A more sophisticated understanding of what capitalism really is can be gained in my view through the lens of Marxism. Here, the relationship between groups (classes) of people and their relative levels of wealth come into play. The classic Marxist model also takes into account history. The growth of commerce in feudal society resulted in the accumulation of capital, which, along with the increased debt incurred by the aristocracy, eventually led to the English Revolution of 1640 and the French Revolution. These events opened the way for the establishment of a society structured around commodities and profit (i.e. capitalism). In these societies, the ordinary mug (the proletariat) is fooled into believing they are free because s/he is paid for their labour. Turning labour into an abstract quantity that can be bought and sold on the market leads to the exploitation of the proletariat, benefiting a small percentage of the population in control of capital. Alienation is the result, since the members of this class feel they are not in control of the economic forces around them and the available work.

None of which means necessarily that workers get richer or poorer for that matter. It does depend more or less on the whim of those who control the means of production and of wealth creation. Currently they seem to be pretty keen on keeping a good bit of it to themselves.

[Forty Two]

Bullshit and time, Forty Two, bullshit and time.

You disagree that Capitalism is better than statist planned economies, in terms of the overall wealth and standard of living of the populace?

[Forty Two]

(Edit: response to 42's last post)

Here we have the ultimate victory of capitalism - its hegemony if you like. It has even hijacked the term capitalism itself. A more sophisticated understanding of what capitalism really is can be gained in my view through the lens of Marxism. Here, the relationship between groups (classes) of people and their relative levels of wealth come into play. The classic Marxist model also takes into account history. The growth of commerce in feudal society resulted in the accumulation of capital, which, along with the increased debt incurred by the aristocracy, eventually led to the English Revolution of 1640 and the French Revolution. These events opened the way for the establishment of a society structured around commodities and profit (i.e. capitalism). In these societies, the ordinary mug (the proletariat) is fooled into believing they are free because s/he is paid for their labour. Turning labour into an abstract quantity that can be bought and sold on the market leads to the exploitation of the proletariat, benefiting a small percentage of the population in control of capital. Alienation is the result, since the members of this class feel they are not in control of the economic forces around them and the available work.

None of which means necessarily that workers get richer or poorer for that matter. It does depend more or less on the whim of those who control the means of production and of wealth creation. Currently they seem to be pretty keen on keeping a good bit of it to themselves.

Interesting points. It occurred to me, though, that if the ordinary mug is fooled into believing that he is free because he is paid for his labor, then what is that ordinary mug fooled into believing when he is not paid for his labor? What's the alternative to being paid for one's labor? It seems to me the alternatives are to either (a) work for no payment for one's labor, or (b) don't work. Is there another option?

I am not sure what you mean by capitalism hijacking the word capitalism. I mean, capitalism is a word with a meaning. Does it mean something different "through the lens" of Marxism? In capitalism, private individuals and groups can move about, buying and selling goods and services at prices based on competitive interactions, and the goal of the seller is to make more money than they used in producing their goods and services, and the goal of the buyer is to get something in hand at a price lower than their other options for achieving their ends or obtaining the good/service. Isn't that what capitalism is? The freedom to produce, buy and sell goods and services privately?

The exploitation bit is an interesting aspect. Other than paying someone for their labor, what option is there for people to do the work that someone else needs done? If the State sets up the system of what goods and services are needed, and it needs people to produce and distribute those needed goods and services, how is it going to do that without "exploiting" them (using them to do the work). In the Marxist "lens" the worker is obligated to perform the needed services, and the community decision makers will decide what goods and services are needed and when, and also necessarily what workers are needed to do the job. Under the Marxist lens those workers don't get paid, but, rather, are entitled to their necessities. If someone comes to me from the State or the community and says, "hey, comrade, we need 1,000,000 widgets produced to meet the plan for our people, and you are designate a widget-assembler by the State/community. Go to the factory and work, and at the end of the day your needs will be met." Is that better than what a capitalist market in labor has to offer?

In the capitalist system, the worker would be allowed to say, "I decline your offer to employ me in the widget factory, unless you compensate me X..." in the Marxist system, such dissent would not be permitted, as planning is central, and if people are allowed to individually frustrate the plan, there would be no way to actually centrally plan. The central planners must know how many workers are available, and how many workers it takes to produce various goods and services, and such. If people are allowed to decide for themselves what they want to work on , then the planners can't know years in advance what resources they have available for the plan.

So, as bad the exploitation under the capitalist system may seem, how can it be worse than what the Marxist lens would offer us?

To me, the Marxist lens is not one that works in western, first world countries. The reason I say that is that Marx was sitting in Europe in the 19th century, where the bulk of the people lived in abject squalor, slaves to monarchs and aristocracies. They didn't live in free market capitalist countries with real republics. I mean, in the UK, they were ahead of the game a bit, but on the continent, like Russia, they had Czars, and the people were serfs. They had nothing, and they had no way to get something. So, Marxism seemed perfect for a country that was populated by servile slaves who had absolutely nothing to lose. Marxism came in there, and offered the people a way to kill their masters, and then be part of what was supposed to be rule from the bottom up -- the dictatorship of the proletariat -- so the former serfs would become the rulers, everyone equal. And, there was no question of the new system causing some new misery, because the serfs already lived at near starvation level. One downturn in agriculture, and they were eating their first born.

What capitalism brought, for the first time in world history, was a common person with extra money - a common person with discretionary income - freedom of movement - and the right to own their own property, and buy and sell for a profit, each acting to further their own interest and the interests of their families, and it resulted in the betterment of all - the lifting up of the bottom to a level never seen in the history of the world. And, to this day, the countries that take the shackles off the individual and allow people to produce, buy, and sell goods and services for a profit, and minimize government planning to certain areas, are the ones where the poor are the least poor, and opportunity for advancement are more available.

[PsychoSerenity]

Bullshit and time, Forty Two, bullshit and time.

You disagree that Capitalism is better than statist planned economies, in terms of the overall wealth and standard of living of the populace?

Back once again with this same old false dichotomy?

But potentially yes, depending on what is planned and how you are measuring the "the overall wealth and standard of living of the populace". For example if you account for the catastrophic loss of natural wealth caused by environmental destruction, or the massive suffering caused by global inequality as millions are priced out of markets because of private resource acquisition at levels greater than entire countries, - capitalism is freewheeling towards a cliff pretending that an invisible hand will save us all. A statist planned economy could be putting your foot on the accelerator or it could be turning around and driving in the other direction.

But I'd never recommend an entirely statist planned economy anyway. Imagine the paperwork.

[Brian Peacock]

Dr Brook, I fear, starts poorly. A free market is not, by definition, a market free of regulation but one in which all participants are equally free to pursue their interests. He unhelpfully confuses and/or conflates 'freedom' for 'licence' here. He goes on to ascribed the amount of freedom and liberty enjoyed by a population as being determined by the sum total of wealth of that population, as if the former is purely a function of the latter - 'more wealth equals more freedom' he says. He does not marry this point to the first one in any way - that markets free of regulation produce more wealth and therefore lead to more freedom - he simply continues upon that assumption. I'd also challenge the point that comes hot on the heels of these assumptions, that those nations who have the freest (least regulated) markets are the wealthiest, and therefore the poor do better in those nations. He's dealing in vaugeness and slight of hand, particularly in comparing heavily economically subsidised protectorates like Hong Kong and West Berlin with the totalitarian states which bordered them. But finally, from his opening remarks, is his claim that the existence of free markets have, single-handedly, raised the living standards of more people globally than, well, than less free market systems. This is spuriously reductive and demonstrably false in the following way. What raises people's living standards is first and foremost stable democratic and governmental systems which in turn secure widespread access to healthcare, birth control, education, housing and utility infrastructure etc. Only when these things are secured by regulating authorities like governments can markets flourish and economies grow, and in that respect well balanced regulatory frameworks are as important to the development of an ordered society as they are to the development of a productive economy. I've only dealt with the first 10mins here, but it doesn't bode well for the rest.

[Rum]

Interesting points. It occurred to me, though, that if the ordinary mug is fooled into believing that he is free because he is paid for his labor, then what is that ordinary mug fooled into believing when he is not paid for his labor? What's the alternative to being paid for one's labor? It seems to me the alternatives are to either (a) work for no payment for one's labor, or (b) don't work. Is there another option?

I am not sure what you mean by capitalism hijacking the word capitalism. I mean, capitalism is a word with a meaning. Does it mean something different "through the lens" of Marxism? In capitalism, private individuals and groups can move about, buying and selling goods and services at prices based on competitive interactions, and the goal of the seller is to make more money than they used in producing their goods and services, and the goal of the buyer is to get something in hand at a price lower than their other options for achieving their ends or obtaining the good/service. Isn't that what capitalism is? The freedom to produce, buy and sell goods and services privately?

The exploitation bit is an interesting aspect. Other than paying someone for their labor, what option is there for people to do the work that someone else needs done? If the State sets up the system of what goods and services are needed, and it needs people to produce and distribute those needed goods and services, how is it going to do that without "exploiting" them (using them to do the work). In the Marxist "lens" the worker is obligated to perform the needed services, and the community decision makers will decide what goods and services are needed and when, and also necessarily what workers are needed to do the job. Under the Marxist lens those workers don't get paid, but, rather, are entitled to their necessities. If someone comes to me from the State or the community and says, "hey, comrade, we need 1,000,000 widgets produced to meet the plan for our people, and you are designate a widget-assembler by the State/community. Go to the factory and work, and at the end of the day your needs will be met." Is that better than what a capitalist market in labor has to offer?

In the capitalist system, the worker would be allowed to say, "I decline your offer to employ me in the widget factory, unless you compensate me X..." in the Marxist system, such dissent would not be permitted, as planning is central, and if people are allowed to individually frustrate the plan, there would be no way to actually centrally plan. The central planners must know how many workers are available, and how many workers it takes to produce various goods and services, and such. If people are allowed to decide for themselves what they want to work on , then the planners can't know years in advance what resources they have available for the plan.

So, as bad the exploitation under the capitalist system may seem, how can it be worse than what the Marxist lens would offer us?

To me, the Marxist lens is not one that works in western, first world countries. The reason I say that is that Marx was sitting in Europe in the 19th century, where the bulk of the people lived in abject squalor, slaves to monarchs and aristocracies. They didn't live in free market capitalist countries with real republics. I mean, in the UK, they were ahead of the game a bit, but on the continent, like Russia, they had Czars, and the people were serfs. They had nothing, and they had no way to get something. So, Marxism seemed perfect for a country that was populated by servile slaves who had absolutely nothing to lose. Marxism came in there, and offered the people a way to kill their masters, and then be part of what was supposed to be rule from the bottom up -- the dictatorship of the proletariat -- so the former serfs would become the rulers, everyone equal. And, there was no question of the new system causing some new misery, because the serfs already lived at near starvation level. One downturn in agriculture, and they were eating their first born.

What capitalism brought, for the first time in world history, was a common person with extra money - a common person with discretionary income - freedom of movement - and the right to own their own property, and buy and sell for a profit, each acting to further their own interest and the interests of their families, and it resulted in the betterment of all - the lifting up of the bottom to a level never seen in the history of the world. And, to this day, the countries that take the shackles off the individual and allow people to produce, buy, and sell goods and services for a profit, and minimize government planning to certain areas, are the ones where the poor are the least poor, and opportunity for advancement are more available.

I don't go in for long exchanges on forums these days. Ephemera/life it too short etc.. however to pick up and respond to a few of your points..

The word 'capitalism' can mean different things depending on what frame of reference one is using. As with so many words. You know this.

The alternative to being paid for labour? Well I think you miss the essential point about Marxism. It tried to describe economic, social and political history in a grand all encompassing way. It saw (sees?) human history, past and future as a process with certain inevitabilities built into it - outcomes arising from processes in a rational almost scientific way. Some of the outcomes Marx predicted he readily admitted created 'imponderables', but essentially he saw eventually the need to sell one's labour as becoming a redundant process/relationship and capital would no longer be buying labour to profit from it and exploit it as it would no longer exist. When the means of production were owned by everyone and true egalitarianism was achieved all bets were off. How people would organise themselves was another matter. He saw this as another stage, just as feudalism and capitalism were stages in human progress to a more ideal and fair world. Socialism was seen as a transition to true egalitarianism. It was and is highly idealistic and of course that is one reason it appealed to so many downtrodden people - or more accurately the intellectuals who chose to 'side' with them in the first instance. In this model (to answer another of your points) even the 'state' would become redundant.

To address your point about the right of workers to withdraw their labour. Well that is a recent 'right' in Capitalist countries. Hard won and fought for by (often) very left leaning unions. One of the reasons that Communist countries were totalitarian as a rule (in this connection), was that the belief that 'the end justifies the means' won the day. At its height state socialism, such as that which was established in Russia and Mao's China believed absolutely that one day true Communism would be achieved and the ideal state (small 's') would arise in due course. This allowed for atrocities in the name of that progress to be committed on a huge scale and for tyrants to exploit that belief.

I'm not a communist - I was once. But I know how Marxist theory works and how the Marxist mind works - or did. It is important to remember that many people, either explicitly Marxist or living under those state systems, believed they were 'on the road' to true socialism. Idealism and the belief in human progress was what motivated them. Marxism is/was a mind set for many - sometimes blinkered but it offers a frame of reference to make sense of economic and social relations which the atomised individualism that capitalism tends to offer up does not.

Capitalism is doomed as an enduring economic and social system, at least as it works these days. It is based essentially on greed and it is eating up the world with its hunger. There is no rational reason to suppose a better or more humane and equal system will replace it in my book. Models of the way humans organise themselves are just that - models - and have little relationship with the hugely complex web of human endeavour and frantic activity. Capitalism may morph into something less destructive or it may not. China might take over the world and in a hundred years time establish a true world communist society. Who knows. I certainly don't.

[Seabass]

There should be a category called "mixed economy-ist". Socialist vs. capitalist fights would be a thing of the past.

[pErvinalia]

[JimC]

Bear in mind that the third world poverty issues spring from a horrible colonial legacy and current endemic corruption, and the US is toxic capitalism on steroids. If there was a European-style mixed economy with a free market and socially responsible governments over most of the world, much of the downside in the poster above would vanish.

[pErvinalia]

He says that where we've seen the most wealth creation, the highest standard of living

"creation"... Um ok. Stealing from the colonies in the old days, and from the developing world these days via the IMF and World Bank, and from stupendous amounts of borrowed (and potentially stolen) financial and natural capital, is not sustainable wealth creation or prosperity. If I somehow managed to convince the bank to loan me 10 million dollars, I could have a very high standard of living. For a short amount of time. Borrowing/stealing isn't 'creating' anything, and it's not sustainable prosperity.

[pErvinalia]

(Edit: response to 42's last post)

Here we have the ultimate victory of capitalism - its hegemony if you like. It has even hijacked the term capitalism itself. A more sophisticated understanding of what capitalism really is can be gained in my view through the lens of Marxism. Here, the relationship between groups (classes) of people and their relative levels of wealth come into play. The classic Marxist model also takes into account history. The growth of commerce in feudal society resulted in the accumulation of capital, which, along with the increased debt incurred by the aristocracy, eventually led to the English Revolution of 1640 and the French Revolution. These events opened the way for the establishment of a society structured around commodities and profit (i.e. capitalism). In these societies, the ordinary mug (the proletariat) is fooled into believing they are free because s/he is paid for their labour. Turning labour into an abstract quantity that can be bought and sold on the market leads to the exploitation of the proletariat, benefiting a small percentage of the population in control of capital. Alienation is the result, since the members of this class feel they are not in control of the economic forces around them and the available work.

None of which means necessarily that workers get richer or poorer for that matter. It does depend more or less on the whim of those who control the means of production and of wealth creation. Currently they seem to be pretty keen on keeping a good bit of it to themselves.

Interesting points. It occurred to me, though, that if the ordinary mug is fooled into believing that he is free because he is paid for his labor, then what is that ordinary mug fooled into believing when he is not paid for his labor? What's the alternative to being paid for one's labor? It seems to me the alternatives are to either (a) work for no payment for one's labor, or (b) don't work. Is there another option?

Being paid a share of the production. Essentially workers as shareholders.

[pErvinalia]

There should be a category called "mixed economy-ist". Socialist vs. capitalist fights would be a thing of the past.

Yep. It makes no sense to me to call anything that isn't full blown socialism (no private ownership of the means of production), capitalism. With such a false dichotomy, it's no wonder "capitalism" seems better than "socialism". But reduced private ownership of the means of production is a trend towards socialism and away from capitalism, so it makes no sense to still call it capitalism. It's a mixed economy, and usually run by a social democratic political system that has some level of redistribution from the richer to the poorer.

[Scot Dutchy]

We have never had pure capitalism here. We have a mixed economy based on a certain degree of capitalism but securely anchored in a social democratic base. Sometimes it is called European Capitalism. Most European countries operate under this system but there are exceptions which is why the UK decided to leave the EU and also why the US and Russia want to destroy it. As a bastion of social justice it is an example for the rest of the world. Of course the 1% of various countries hate it vehemently. They had hoped that Brexit would have destroyed it but the air heads are so removed from reality that is has failed badly.

Of course all these old systems are no match for the future. We are faced with a far greater problem; automatonism.

[pErvinalia]

Otherwise known as automation.