okra wrote:We are heading towards a turbulent period in history - will capitalism survive?
Depends on how you're defining "capitalism". Pure capitalism is practically instinctive, it's the barter-and-swap that you see any time or place where people aren't simply handed something they want, from the boardroom to the schoolyard. Money just provides a convenient medium of exchange.
However, that's no longer what most people think of when they hear the word "capitalism".
What defines capitalism from 'barter and swap' or a 'convenient medium of excahnge' is the accumulation of capital in the hands of a relatively small number of people. With this accumulated money they can (bizarrely) make more money.
Now as MKG has pointed out the work of growing a cabbage or making a chair out of a piece of wood is producing things, but making money out of money it's not really possible. But this is at the heart of capitalism, capitalists believe they have the right to make money out of owning capital, they don't have to work, they can simply make money out of the ownership of money.
Capitalism is far more than a conveinent medium of exchange.You could describe the 'lets scheme' in that way, that's the antithesis of Western capitalism.
Capitalism is more than just a system of exchange. Our economy is extremely productive. It churns out enormous quantities of goods, many of them luxuries. But at the same time there is huge unsatisfied need. Thousands of people want basic housing. We need more and better hospitals. Millions of live under or just above the poverty line, going without things most people regard as basic. One billion people in the world are extremely poor.
The answer is, because it is not an economy in which we ask what needs producing and then organise our productive capacity to meet the need. It is an economy in which the productive machinery is owned by a very few people and they decide what to produce by asking what will make most money for themselves. They can always make most money producing relatively luxurious or more expensive things to sell to people who have higher incomes than they could by producing the cheapest possible necessities for the most needy people, or by developing the industries that are best for the society and the enviroment as a whole.
It cannot be overemphasised that the thing which motivates our economy is the drive to accumulate capital, a determination of those with capital to invest in whatever will make most profit, in order to have even more capital next year to again invest where it will make as much money as possible, in a never-ending spiral. Sometimes this process generates benefits for all, but it is an economic system based on this principle will in time work less and less well for people in general and will lead us into catastrophic problems.
I think I see just a little paranoia creeping into the discussion. Capitalism is not a problem - certainly not THE problem. To bring it all down to a purely personal level, I will do what I like with my money, and that includes the reservation of the right to use it in simple circular patterns to make even more money for me. Any political system which prevents me from doing that is restrictive - not one I would choose to live in. Capitalism is an expansive philosophy - it is predicated upon economic growth. Any non-growth economic system can work only within a non-growth population and it is impossible to achieve one of those without Draconian laws governing the number of children each of us is allowed to have. However, there is no reason why a responsible government should not use capitalism to better the lives of its people by, as Okra suggests they're NOT doing, addressing basic needs. Food production and distribution, for instance, is a daft thing to leave in the hands of private capitalists for obvious reasons - they'll go for the best immediate advantage for themselves, and rightly so. Public transport, for exactly the same reasons, is an idiotic thing to hand over to a PLC because, at this moment in time, the law states that it is the primary duty of such a body to maximise profits for its shareholders. We can't have it both ways - a public service cannot be run to the greater benefit of society and the greater benefit of its owners at the same time, unless the owners and society are one and the same thing.
So, capitalism is not necessarily a dirty word and it's actually difficult to avoid it because, with one or two minor blips, it's how the world has worked since the feudal system ended (and we don't really want to go back to that, I hope). The dirty words are privatisation, cartel, price-fixing, futures market, etc. etc. - all things which are by-products of capitalism but also things which are so easily controllable (or preventable) by any responsible government. And then the biggest one of all - efficiency. We got rid of British Rail because it was inefficient. The rail companies nowadays are more efficient - but only if you look at the books. Hands up those who'd go back to British Rail tomorrow? Me for one.
It is this governmental abdication of social responsibility, rather than capitalism itself, which underlies a lot of our problems.
Mike
The secret of life is to aim below the head (With thanks to MMM)
MKG wrote:
So, capitalism is not necessarily a dirty word and it's actually difficult to avoid it because, with one or two minor blips, it's how the world has worked since the feudal system ended (and we don't really want to go back to that, I hope). The dirty words are privatisation, cartel, price-fixing, futures market, etc. etc. - all things which are by-products of capitalism but also things which are so easily controllable (or preventable) by any responsible government. And then the biggest one of all - efficiency. We got rid of British Rail because it was inefficient. The rail companies nowadays are more efficient - but only if you look at the books. Hands up those who'd go back to British Rail tomorrow? Me for one.
It is this governmental abdication of social responsibility, rather than capitalism itself, which underlies a lot of our problems.
Mike
Agreed 100%.
The point about efficiency is a very sound one. This is something that has come to be discussed only in monitary terms - cheaper = more efficient.
The old BR was efficient in ways far more subtle than that. In particular it provided a great deal of employment. It was, in fact, highly efficient in doing this. In industrialised societies (in which we find ourselves, and will for some time to come), employment is a great social binder. It acts as a reason for and a source of education and innovation; it gives people a sense of worth; it provides a reason to get up in the morning. Some people are happy to be self employed. I know I am. But many others value the stability and structure that comes with a job. Or ought to, in a properly ordered society.
I'm not saying that the world's ills could be cured by full employment - far from it - but I believe wholeheartedly that a lot of misery can be laid at the door of "efficiency" depriving people of jobs.
The earth and its resources are finite thus so is growth. Many scientists agree that we have exceed these limits to growth through the use of fossil fuels. As the hydrocarbon suply chain fails, so, inevitably will capitalism, at least in the form that we know it as now.
Jeremy Daniel Meadows. (Jed).
Those who walk in truth and love grow in honour and strength
So, capitalism is not necessarily a dirty word and it's actually difficult to avoid it because, with one or two minor blips, it's how the world has worked since the feudal system ended (and we don't really want to go back to that, I hope). The dirty words are privatisation, cartel, price-fixing, futures market, etc. etc. - all things which are by-products of capitalism but also things which are so easily controllable (or preventable) by any responsible government. And then the biggest one of all - efficiency. We got rid of British Rail because it was inefficient. The rail companies nowadays are more efficient - but only if you look at the books. Hands up those who'd go back to British Rail tomorrow? Me for one.
It is this governmental abdication of social responsibility, rather than capitalism itself, which underlies a lot of our problems.
Mike[/quote]
Hard to disagree with your analysis,though it's ironic that it's infrastructure that always get hit first in a downturn,when that's what the freemarket economy needs most of all.Modern capitalism and the way it distributes wealth ,creates power without responsibility,a somewhat different situation to a feudal system(which I wouldn't support).I cant help thinking that things would have turned out more benignly if there had been a bit less of Adam Smith,and a bit more of Henry George.Anyhow,as everyone's pointed out continued 'growth ' is an illusion.
MKG wrote:It is this governmental abdication of social responsibility, rather than capitalism itself, which underlies a lot of our problems.
Mike
This sums it up nicely, Mike.
The woes of the poster child for this policy (Ireland) are not primarily due to greedy bankers and developers, nor (again primarily) the light touch regulation - but the craven political culture which allowed those factors to flourish and then the disastrous 'pluto-socialism' which is the logical next step in those minds.
