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Originally posted by Renegade The best system of economics? In the current world, capitalism, in the ideal world, socialism. Having said that though, I don't think the distinction is that easy.

I disagree, I believe in an ideal world, the best system of economics would be capitlisim. Just think about it for a little, this would mean that people are responsible and capable for their actions and decissions.

Currently, I do side with you after taking about a year worth of econmoic classes, that the current balance of capitilist-socialisim works. I agree with the Brit, Keyens (sp?) that you must have a responsible fiscal and monetary policy to establish a stable economy. The problem with this right now, is I feel their is only a responsible monetary policy in these western and developed countries. But in almost no country (I can't think of any) is their a responsible form of fiscal policy, which I believe contributes greatly to economic instablity.

And last point, I don't believe that the rich are rich at the expense of the poor, especially in the globalized field.. aka developed v. developing countries. Developed countries are rich because they are developed, and the developing ones are poor because they are not. Obviously this is a simplified version, as the develop world does contribute in minor ways (unintentionally I believe) to making the undeveloped world, just that, but in essences they bring it upon their selfs.

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I don't believe that the rich are rich at the expense of the poor, especially in the globalized field.. aka developed v. developing countries. Developed countries are rich because they are developed, and the developing ones are poor because they are not.

Developed countries become rich at the expense of the poorer ones because the poorer countries develop products for the rich countries don't they? I mean, so many of our products are produced in poor countries for way cheaper than they would be produced in America or Canada. This allows us to afford many products and the corporations jack up the prices creating huge profits for themselves do they not? Even though a corporation might set up a factory in a poor country and provide jobs, those jobs are underpaid compared to those in NA and thus allow the products to be cheap for us to afford. So in essence, rich countries indirectly get rich while keeping other ones poorer. The plus side (and this is why I believe in capitalism) is that as through capitalism these other countries gain industrialization and the standard of living in the poorer countries will go up.

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Originally posted by drewfactor Developed countries become rich at the expense of the poorer ones because the poorer countries develop products for the rich countries don't they? I mean, so many of our products are produced in poor countries for way cheaper than they would be produced in America or Canada. This allows us to afford many products and the corporations jack up the prices creating huge profits for themselves do they not? Even though a corporation might set up a factory in a poor country and provide jobs, those jobs are underpaid compared to those in NA and thus allow the products to be cheap for us to afford. So in essence, rich countries indirectly get rich while keeping other ones poorer. The plus side (and this is why I believe in capitalism) is that as through capitalism these other countries gain industrialization and the standard of living in the poorer countries will go up.

that doesnt make any logical sense.... what if the all the developed countries were'nt as developed and thus could not afford to buy products from the developing world. then who would the developing world sell their products, themselves? and how does a foriegn invester cause a country to become less rich when it provides new jobs that otherwise would not have been around? you cant look at the wages they offer compared to the foreiners country but rather how it is relative to the country it is being invested in.

if anything a country that draws in foriegn investors and manages to export more then it imports is on the path to being a developed country, quite contrary to what you have stated

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Originally posted by Izzy that doesnt make any logical sense.... what if the all the developed countries were'nt as developed and thus could not afford to buy products from the developing world. then who would the developing world sell their products, themselves? and how does a foriegn invester cause a country to become less rich when it provides new jobs that otherwise would not have been around? you cant look at the wages they offer compared to the foreiners country but rather how it is relative to the country it is being invested in. if anything a country that draws in foriegn investors and manages to export more then it imports is on the path to being a developed country, quite contrary to what you have stated

You guys got good points here. It was interesting as I am just taking the final exam for my class on International Economics Politics (aka everything you ever wanted to know about Globalisim) this friday.

And you will find out something quiet interesting. Most products we buy don't come from the third world, or the poorest countries of the world. They come from developing nations of the second tier, or second world, such as China and South America.

The proof is that the poorest areas of the world (sub-sharen africa for example) recieved little to no FDI (foriegn direct investment) or MNC (multi-national corporation) money, they are quiet isolated from the globalized community and recieve none of the benifits.

The problem for many of the poor countries, is not that we use them, but that we don't use them. This is namely their own fault due to their instability.

drewfactor:

You're assuming that capitalism is a zero-sum game, which I don't think is a fair assertion. For those unfamilar with the term "zero sum" it is essentially the assumption that there is only a certain amount of money in the world, and that for one person to get richer another must thus become poorer. It's a fallacy that hard-lefters commit all the time.

While it's hardly my strongest area (this is kinda getting into the morality of certain economic systems which doesn't seem to get taught much in schools / unis) even with my limited knowledge, I can you that capitalism isn't a zero-sum game, so the assumption that one can only become rich by making other poorer isn't quite right. For instance, Credit Creation, while my memory is far too hazy to recall how it works exactly (I could dig out my old Economics text books if anyone wants a more in depth explanation), basically, when someone invests a dollar into a bank, the bank doesn't just keep it there in a huge vault, it gives it back out again - i.e. to people who wants loans and so forth. Again, while I'm not exactly sure how it works, a dollar invested into bank is artificially fudged by what is called "Credit Creation" and the bank can - by accepting this money and then re-distributing it - create an artificial sum of $100 from this original $1 investment. It basically means that people are working with money that doesn't exist. Indeed, if people heard that the bank was about to shut down, and everyone tried to get their money out at, the bank wouldn't be able to give it to them, simply because by this endless sytem of deposits and loans, it's creating money that doesn't really exist. While theoretically Credit Creation could mean that for every $1 invested $99 could be created out of nowhere, I think it's more at the $5/$95 level - i.e. only 5% of the money we own actually exists and could be accounted for if everyone demanded their money at the same time. So, if you hear that a banks going belly-up you'd best get in quick.

What this basically means - getting back to what I was saying before - is that because money is more about digits on a computer than actually paper currency these days - a society can essentially create money out of nowhere. If economies were based on paper currency - and the amount of currency remained static - then becoming rich would obviously mean making someone else poorer, but in this day and age, it doesn't quite work like that. There are other arguments against this perception of "zero-sum capitalism" but I'll be damned if I can remember what they are.....

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Even though a corporation might set up a factory in a poor country and provide jobs, those jobs are underpaid compared to those in NA and thus allow the products to be cheap for us to afford. So in essence, rich countries indirectly get rich while keeping other ones poorer.

If a company decides to produce overseas, it is because the cost of production (even when you include transportation/importation costs - so we're really talking about the cost of labour here) is cheaper there. If people of that country decide to work for this company, it is because their pay for working there is greater than that of any other available alternative. And this is how a balance is reached - companies want to spend as little as possible in production, whereas the workers want to make as much money as possible. Thus, the laws of supply and demand dictate that the two parties reach a compromise: no company will pay its workers more than it needs to, and no worker will work for less than he can get elsewhere, ceterus parabus. That is, obviously we need to include job-satisfaction in this scenario as well (i.e. nearly all people would take job satisfaction into account - not always trying to make as much money as possible, regardless of how much they hated their job) but if we assume that the two job-circumstanes are the same, people will take the higher-paying job every time.

What am I getting at? Basically, if people work for what we consider to be a "low" salary, it is because that is the theoretical "glass-ceiling" of their earning power. If they could earn more than they are being paid currently, then they'd quit and get a job elsewhere. So people working in sweat-shops in Korea for Nike are only doing so because that is better than any other alternative, and Nike are only paying them so little because that is the wage-level they are willing to agree working for.

So if you argue that these "exploits" are making the rich richer and the poor poorer, then there are two things to consider:

1) How much poorer would these people be without this western "exploitation"? If Nike are paying them more than they'd make elsewhere (otherwise why would they work for Nike?) and what Nike is paying is severely "low" by our standards, then what does that say about the next best option these people have? Nike aren't forcing these people to work at their sweat-shops at such low-rates, so why do you think these people are working there?

2) For every person Nike employs overseas, has it crossed your mind that it's - theoretically - one less job opportunity in America? If Nike employs 1000 people to work in a sweat-shop in Korea, wouldn't it seem that it is the Americans who are all the more poorer - due to the reduction in job-availablity - as a result and on the whole?

So am I justifying capitalism then? Didn't I just say that socialism was the "ideal" system, and yet here I am justifying the slave-labour rates American companies are paying to inhabitants of less-fortunate countries? Allow me to explain:

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Currently, I do side with you after taking about a year worth of econmoic classes, that the current balance of capitilist-socialisim works. I agree with the Brit, Keyens (sp?) that you must have a responsible fiscal and monetary policy to establish a stable economy. The problem with this right now, is I feel their is only a responsible monetary policy in these western and developed countries. But in almost no country (I can't think of any) is their a responsible form of fiscal policy, which I believe contributes greatly to economic instablity.

I can't be bothered typing a massive explanation on Marxist theory again (go read in the "Freedom" topic if you want a piece of that action ) but, just briefly, using a system of logic known as the "dialectic" - pioneered by Plato and Hegel - Marx identified a pattern in the history of economies that suggested a reccuring trend of "class conflict" in every society. Put simply:

An economy is born, everyone is more or less equal. Sooner or later, some people start making money - gaining privilage - and others don't. The bourgeois (those in the upper classes - the "richer" folk) eventually become rich enough to employ the "proletariat" (the working classes) to work for them. The bourgeois, Marx suggested, is able to make money from employing the proletariat by paying them as little as possible, while making as much profit as they possibly can. The system then becomes polarised: the bourgeois become super rich, and the proletariat become disenchanted with working to create wealth for someone else. The proletariat at some point revolt, the system is overthrown, and a new system begins that is more equal - and ensures equality for a more prolongued period - than the system that preceded it. In the current world, capitalism is the current system (the thesis) and Marx declared socialism as the next logical step (the antithesis).

Anyway, with all this in mind, from my perspective and from an economic standpoint, global capitalism - in its current guise - is currently the best system we have. As we have already seen with the domino collapse of a series of communistic states in the past 20 years, pure socialism - while capitalism is still the stronger thesis - cannot work. While America grew into a world super-power, the USSR struggled to feed its own people. You may argue that the USSR simply "misapplied" Marx's vision, or didn't implement it properly, but really, regardless of how they had applied it, I don't think that pure socialism - in this current age - can possibly work. Capitalism ensures that we develop new ways to gain maximum efficiency from production using the finite resources we have, and it has been an invaluable, very necessary stepping block in human development.

Yet, even then, in this system so "perfectly" adapted to our age, we are seeing the beginings of the phenomenon that gives rise to the fatalistic demise of any system of economics: the rich get richer, and the working classes - while they may not be getting poorer - are becoming disenchanted with the state of the bourgeois community. In the past it was the kings, barons or the "royalty" more broadly who attained wealth via privilage and/or being part of an exclusive group and who grew disproportionately powerful and wealthy at the partial expense of the working class. These days it is the CEO's of large companies, who are beginning to become exceedingly wealthy, and there is some degree of public outcry at the wages some of these people are being paid. With regards to "privilage" means of propogating wealth - at its most broad level - we see today that the rich, well-educated folk tend to breed even more rich, better educated offspring, where as the poor, uneducated people invariably tend to breed poor, uneducated children. Returning to what I was saying before about capitalism not being a zero-sum game, while the poor may not be getting poorer, the rich certainly are becoming richer. And if we speak of "privilage" not in the broad sense I spoke of there, but with the more specific subject of CEO's in mind, then we can see just how much of an exclusive club it is. Not just "anyone" can become a CEO (unless they build the company up from scratch) but rather there are certain non-vocational criteria that must be filled. How many ethnic CEO's can you name, for instance? How many CEO's can you name who didn't go to - and network in - exclusive schools or colleges?

And this is where the disquiet is coming from. It's not the fact that we are (i.e. the non-top-elcheon types) are worse off under capitalism, but we still object to the undeserving propogation of obscene wealth. It may be unjustified, but I'm merely saying that there is disquiet about the working conditions we are subject to and about why we - after putting in 60 hour weeks - should be paid so poorly compared to those at the top.

Eventually - and inevitably - capitalism as we know it will be displaced by some other system. Whether it happens violently and quickly - a la the US in 1776 and Russia in 1917 - or whether it's a slow, gradual process - a la the gradual implementation of socialistic policy we are seeing in many parts of the world - capitalism, as we know it, will not exist in 100 years.

So what do I think then (because I know you're all dying to know )? Personally, I think that so long as the accumulation of wealth is our sole aim, then capitalism as it stands now is the perfect system, and will continue to be the perfect system - albeit in a modified form - for a long time to come. However, as I'm sure we all know, capitalism - certainly in an unmodified, lassaiz faire form - advocates the earning of a dollar at any cost. An unchecked, free-market economy abuses those that form it. If we go back to the industrial revolution (I'm considering this from an English perspective) consider the conditions that workers were subject to. Obscenely long working hours, dangerous working conditions and so on. Yet, because the sole aim of that day and age was to make money (with human rights hardly considered until much later), the system was allowed to progress unchecked. It was the socialistic method in a sense that rescued this sytem from decay - labour laws and unions and so forth we formed, with the help of government intervention (a la Keynsian theory) to ensure that the society - in essense - didn't exploit itself in its unified aim for a quick buck.

Now while I don't think that capitalism as it stands has quite degenerated into the anti-humanistic farce of mid-19th century England, I think that capitalistic theory is progressing far quicker than the laws that contain it. That is, companies are finding legal, viable ways to exploit those they employ, and the society that houses them. Going back to Korean sweat-shops - those I was seemingly justifying before - from an economic standpoint, the people of Korea are better off with Nike there, after-all, as I said, if they weren't then no-one there would work for them. Yet, for all that, while it is easy to rationalize the actions of Nike from this economic angle (both they and the Koreans they employ are just out to make some money), it is just as easy to condemn from a moral standpoint. The sweat-shop workers are forced to work abnormally long hours in poor conditions, and while this situation may be better than any other available to them, it does not mean that Nike should not absolve itself of these issues. While Nike, in an unchecked envirnoment, cares only about profit, it should be forced to commit to a universal standard of humanitarianism by the government it is subservient to, and by the people who buy its products. Otherwise Nike - not a person but a machine - has nothing else to concern itself with but making the bottom line as big as possible. Nike can't be to blame for what it is doing overseas as it is just an imaginery entity, but rather the governments of the places that Nike bases itself in and the consumers who fund the existence of this entity should be held responsible, and should be the ones who make a stand.

I advocate socialism, in short, because it stays truer to humanitarian ideals than any other system of economics. If everyone in a socialistic society were a socialist, then exploitation could not exist. If, however, we were to just quickly rush in socialism in the west - a place that still holds less advanced captitalistic desires - then it would fail. Exploitation would still exist unchecked, only the benfits of capitalism (efficieny etc.) would be lost.

I think my thoughts were getting a bit cloudy there towards the end, but I hope you all get what I'm trying to say.

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firstly, i wanna say that i appreciate the time you put into your posts. you really have great writting skills and can communicate your point of view excellently.

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Originally posted by Renegade drewfactor: An economy is born, everyone is more or less equal. Sooner or later, some people start making money - gaining privilage - and others don't.

although i have no solution to this, i just wanted to point out in essense why communisim or even socialism to an extent wont work. it is the nature of the world that people arent created equal to each other. i know its political incorrect to say but some people are just wiser, more intellegent, more ambitious or simply harder workers then others and so would succeed in a society better (do however belive in equal opprotunity and freedom based on choice as you said in the freedom thread). in a way socialism/communism trys to put an artificial limit to that, and to me, this feels un-natural, or in otherwords doomed to failure. If however the 'talented' people are all aware that they are more inclined to succeed and feel that they have a responsibility to help out those less furtunite then maybe there is a chance but i dont see this happening being as i said not natural to the basic way humans act. why thats kinda like saying the 100 meter olympic champion should help teach or give part of his gold medal to a velocity challenged individual. you just dont see that happening, the olympic champion might end up coaching future olympic champions but not your average joe... Unless there is an evolutionary change in the way we act so that we can be self-motivated to help others i see capitilism as the natural force of how society works.

i think there was something else i wanted to quote you about but now i forgot

___________________
If God is the answer, it must have been a very stupid question.

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Originally posted by Renegade ... I advocate socialism, in short, because it stays truer to humanitarian ideals than any other system of economics. If everyone in a socialistic society were a socialist, then exploitation could not exist. If, however, we were to just quickly rush in socialism in the west - a place that still holds less advanced captitalistic desires - then it would fail. Exploitation would still exist unchecked, only the benfits of capitalism (efficieny etc.) would be lost. ...

thank you for saying that...

socialism is often given a 'bad' moniker because it isnt capitalism, or from is Communistic associations. the above reason is an excellent point you make tho.

and holy shit...i think that was the longest post i have ever seen on TA|

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thanks guys for your comments. I totally agree. I was throwing out arguments that I've heard against capitalism and now I have rebuttals I can use. As I said before, I'm totally a capitalist and right winger. It helps to learn by playing devils advocate.

Renegade, become a professor, write a book, go into politics.
Nothing sadder than wasted talent.

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"Those are my principles, if you don't like them... well, I have others.”

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it is the nature of the world that people arent created equal to each other. i know its political incorrect to say but some people are just wiser, more intellegent, more ambitious or simply harder workers then others and so would succeed in a society better

I agree with that, and I agree that more capable people should be allowed to succeed. But the problem then is that those people's children have a much better starting point in life than children from the incapable dumb guy who wasted all his money. And in a few generations you might have an incapable guy from a rich family who gets through college because his parents pay large sums of money for him, and the poor guy might be very smart and capable, but end up at best as some lower middle class average guy. So without control you soon get a situatiion like 19th century Britain, which is on a verge of workers uprising. While in communism, people get very lazy because it doesn't matter how much they work, so soon, they start to behave irresponsible, be late for work, do nothing at work, and so on. That's why neither radical capitalism or communism are good because they are both extremes. The solution is in my opinion somwhere in between, in a society that allows the individual to succeed, but has good welfare and offers benefits to the poor people, so that the starting conditions of all people are more or less equal. Most of you relate socialism with communism, but the systems are very different, because socialism allows for private enterprise to exist, and only controls the big and strategic businessess. Some of the richest countries have mild socialist system. Sweden, for example with longer life expectancy and BDP than US, and France also every once in a while gets a socialist government, to name a few.
Also, I don't think that the pure capitalism is a good long-term solution, because there are some big projects which are unprofitable, and noone would do them except the government. It was not a private company that has put a man on the moon, and when private companies got in charge of californian power supply, it all went down, because the old power plants weren't profitable to maintain. All in all, I'm in favor of a mild socialism with capitalist elements.

Don't have time for a huge response, but:

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although i have no solution to this, i just wanted to point out in essense why communisim or even socialism to an extent wont work. it is the nature of the world that people arent created equal to each other.

I agree entirely, but I think DrUg_Tit0 sums it up pretty well:

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the problem then is that those people's children have a much better starting point in life than children from the incapable dumb guy who wasted all his money. And in a few generations you might have an incapable guy from a rich family who gets through college because his parents pay large sums of money for him, and the poor guy might be very smart and capable, but end up at best as some lower middle class average guy. So without control you soon get a situatiion like 19th century Britain, which is on a verge of workers uprising.

People do have entirely unequal qualities. If they didn't then there would be no point to sports etc, because they'd always end up as draws. However, there is a difference between equality (all people are entitled to the same rights) and homogenousness (all people are exactly the same). Political correctness gets the two mixed up all the time, so it should be said that we should do everything we can to preserve equality (all be people should be entitled to the same treatement, regardless of background) but nurture heterogeniety, that is, a world where everyone is not afraid to be different or individual.

With regards to socialism, it should be said that we should strive to make everyone equal (that is, even a poor child from an uneducated family gets the same privilages as a rich, well-educated family) but, at the same time, nurture heterogeneity (that is, ensure that those who are naturally smarter, or harder-working get the rewards).

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Also, I don't think that the pure capitalism is a good long-term solution, because there are some big projects which are unprofitable, and noone would do them except the government. It was not a private company that has put a man on the moon, and when private companies got in charge of californian power supply, it all went down, because the old power plants weren't profitable to maintain.

One need only look at what happened world-wide in the 1930's (the US especially) to see observe the dangers of an unchecked free-market economy.

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Renegade, become a professor, write a book, go into politics. Nothing sadder than wasted talent.

Who's to say I'm wasting my talent?

*pours another beer*

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