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tathi
wanderlust

Registered: Jan 2003
Location:
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Apr-13-2004 06:37
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Yoepus
Neo-condimist

Registered: Jan 2002
Location: Ketchup fields, Texas
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Apr-13-2004 14:27
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NYCTrancefan
Destination Everywhere!

Registered: Jul 2003
Location: New York City in a Café del Mar mood
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Re: Re: Re: Re: capitalism vs communism
| quote: | Originally posted by George Smiley
Er...I'm not sure how you came to that conclusion from my earlier comments but anyway...
I do not think communism will work. However, I do agree with the Marxist perspective of the world (which incidently is almost identicle to the conservative/realist perspective)
The form of government/political system I support is a blend of socialism with capitalism, like most western systems, including USA are, its just that I would like to see it lean a lot more to the socialist side (what the UK used to be like before Margret Thatcher took over and killed our country by modelling it on the USA) |
Mr. Smiley is there anything that the U.S. did not do to the world, every commentary you post has some derogatory overtone on American society, people, politics when speaking on the subject matter. You started off your first post by insinuating that most Americans have no clue about communism, only what has been fed to them by American government propoganda and Fox News.
I ask you this question, what great understanding does Europe have of Communism that would differ from the American point of view? When you make such commentaries please demonstrate the differing viewpoints that Europeans and Americans would have so that your post doesn't seem devoid of any substance other than pure rhetoric over American culture. Would Romanians, Hungarians, the former Yugoslavian states, Poles have an appeal still for Communism as it existed in their nations, intrinsically flawed. With the exception of some small minority of Russians who still have an infatuation for the superpower state that existed under so called Communism, as is the case with China today. I see few who cares for the failed system of Communism as practiced by governments in the world, past and present. If you can name me one successful "Communist" state I would welcome that and if you can't why do you think this is so.
___________________
Trance = Heart, Mind, Body and Soul all in 1
Current fav. Global Experience = Madras
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Apr-13-2004 14:48
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George Smiley
Supreme tranceaddict

Registered: Jan 2004
Location: 9 Bywater Street, Chelsea, London
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| quote: | | Mr. Smiley is there anything that the U.S. did not do to the world, every commentary you post has some derogatory overtone on American society, people, politics when speaking on the subject matter |
America...killed...my...goldfish
No seriously I take your point. Out of all nationalities in the world I have met I think Americans are the nicest bunch of people I have met, so I obviously have no beef to grind with them.
However, you are right, I am not a big fan of American society or politics (foreign politics that is) and the reason I am so out spoken about it in here is mainly due to the number of people here who stand up for it...obviously I will air my disagreement!
| quote: | | You started off your first post by insinuating that most Americans have no clue about communism, only what has been fed to them by American government propoganda and Fox News |
No offence to you or any other Americans but every single time I have chatted to an American about communism or socialism I get exactly the same thing - that communism means you are not free etc, and anyone who says that simply does not know what communism actually is (and the origin of their views stems from government propaganda during the Cold War)
Now when the majority of Americans who comment on communism actually say what communism is, then I will change my view, until then, I stick by my comments that Americans dont know what communism is!
| quote: | | Would Romanians, Hungarians, the former Yugoslavian states, Poles have an appeal still for Communism as it existed in their nations, intrinsically flawed |
Politically I doubt they would want a return to communism (or Communism as it should be called in this sense) but economically I do actually think they would prefer it economically compared to what they have got now (and thats not me talking I've seen that view on countless news documentaries) They liked the social security and low crime levels for example compared with the huge unemployemtn and subsequent poverty they face now under capitalism
| quote: | | I see few who cares for the failed system of Communism as practiced by governments in the world, past and present |
Now you yourself are living proof about what I said above...you are confusing a totalitarian fascist system of government for a political ideology (and as this thread is titled "Capitalism vs Communism" I assume we are talking ideologically)
Sorry if I offend you as that isnt my aim and I have no problems with American, but if we are going to have an ideological debate about communism, then can we please talk about the ideology communism and not the totalitarian fascist state of Russia (as I can assure you that resembles nothing of communism!)
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Apr-13-2004 15:24
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mps242
Senior tranceaddict
Registered: Oct 2003
Location: NY, NY, USA
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| quote: | Originally posted by biznology
ummm...ok. whatever you say. |
It's not what I say, it's what experience and the laws of economics say.
| quote: | | both forms of organization can and *ARE* perversed in their practiced forms. capitalism has its problems, just as Soviet Russia and CCCP China had\have. |
True, but... Pure capitalism can't function because of social forces, pure communism can't work because of social forces AND because it's grounded in a faulty understanding of economic.
| quote: | | i agree with dmatrox in saying that somewhere between is preferable. Canada follows that course, just as Sweden and increasingly China. Sweden and Canada consistently rank higher on quality of life than even the US - but that isnt only dependent on economics. |
I agree that the preferable system is capitalism with a safety net. Unfortunately, people like Von Mises would tell us that socialism in any form will ultimately lead to the collapse of society and reliance on subsistance living. We're currently seeing the first signs of this collapse (although our government systems are such that they will reform before they collapse) in Europe (pension reform, education reforms, healthcare reforms) and China (they have just decided to allow private property), the former Warsaw pact states, and we're seeing Cuba steadily decay since the loss of Soviet subsidies. Even in the US, arguably the least socialized of developed nations, is facing serious problems with our own socialized programs.
| quote: | | China is looking to catch the US in many areas. that being said China is not, and was never a utopian socialist state. |
Agreed, but that's because a utopian socialist state can never be acheived (at least with human nature, productivity, and the economic realities of the world today)
| quote: | | how does that make either solution perfect? |
Capitalism isn't perfect, and laissez faire capitalism is profoundly flawed because it refuses to acknowledge the proper role of government to mitigate and correct market inneficiencies. Pure laissez faire capitalism can only work correctly in efficient markets, and there are few if any (although commodities markets are pretty close) truly efficient markets.
The following (from the ultra-conservative economics department at UC Berkeley ) sums up the fundamental economic problem with communism.
| quote: | Karl Marx, one of the few in the nineteenth century to see the explosion of wealth the twentieth century would bring, mocked the sober, dark-suited businessmen of his time. They claimed to want only stability. Their claimed to view revolution with horror. Yet they were themselves, in a sense, the most ruthless revolutionaries the world had ever seen. Businessmen--members of what standard translations of Marx call the bourgeoisie-- were indeed a most revolutionary and progressive class. In a real sense, the prehistory during which scarcity, want, and oppression had been human destiny was about to end. It was the business class of entrepreneurs and investors, together with the market economy that pitted individual businessmen against each other through competition, that was responsible for this greatest of all revolutions in the potential human condition.
But Marx also saw an overpowering danger: the economic system that the bourgeoisie had created would soon become the main obstacle to happiness. It could, Marx thought, create wealth, but it could not distribute wealth evenly. Alongside prosperity would come increasing polarization of wealth. The rich would become richer. The poor poorer, kept in a poverty made all the more hateful because needless.
Marx tried to make his argument as simple and convincing as one, two, three. He chose to analyze the economy using "labor value" units: define the production of the average worker to have a "labor value" of one. As time passes and productivity grows, the quantity of commodities that make up this one unit of value will increase. As long as this is remembered, the use of "labor values" is innocuous: production can be measured in any units as long as they are used consistently.
At any given time, the economy as a whole has a fixed, set stock of capital. Call the amount of capital that the average firm has for each of its workers "Capital". The economy also has a set total flow of annual profits. Call the profits that the average firm earns divided by its total capital stock the "Profit_Rate". Call the annual wages of the average worker "Wages". Then it must be--arithmetically--that the Profit_Rate times Capital per worker plus Wages must add up to one, where everything is measured in terms of its "labor value".
(1) Profit_Rate x Capital + Wages = 1
As time passes and economic development progresses, production becomes more and more capital intensive. More machines are used by each worker. New methods are more productive, and new methods are more capital intensive. Businesses that do not adopt the newest technology will lose first market share and then money as other, more efficient, more modern firms undersell them. So over time the variable "Capital"--the number of machines per worker--grows.
But the economic system requires profits to function. If the rate of profit drops too low, then investors will stop investing. A falloff in investment causes a depression and unemployment. During the depression wages will drop, and the depression will not lift until the rate of profit is once again up above some minimum acceptable rate necessary to induce the business class to invest again.
Call this long-run floor that bounds the sustainable Profit_Rate "Profit_Floor". Because the rate of profit cannot stay lower than the Profit_Floor for long, we know that:
(2) Wages < 1 - Profit_Floor x Capital
Over time, Marx argued, "Capital"--capital per worker--grows, and "Profit_Floor" stays the same. So Wages--the real annual wage of the average worker, defined in "labor value" terms--must fall.
Profits per unit of capital must be at least as large as Profit_Floor. The number of units of capital per worker--Capital--grows. So either economic development comes to a halt, or workers' wages will keep falling.
This was Marx's argument that capitalism can deliver rapid economic growth, but it cannot deliver permanently rising living standards for the working class--the proletariat.
There are holes in this argument.
When a normal reader hears "declining wages" he or she hears not that workers' share of total production falls, but that workers' material standard of living--their ability to buy goods and services on the market--falls. Yet workers' material standard of living is not "Wages" but is instead equal to the labor value of wages times the average productivity of labor. There is no reason in Marx's system for this--the labor value of wages times average labor productivity--to fall.
One interpretation is that Marx never meant to imply that the absolute standard of living of workers falls, but only that relative standards of living fall--that workers would be paid a smaller share of total production, and would feel realtively deprived as they gazed on the palaces of the rich. But those who hold to such an interpretation have a very hard time facing passages in Marx's writings like:
In proportion as capital accumulates, the lot of the laborer, be his payment high or low, must grow worse. The law that always equilibrates the relative surplus [unemployed] population to the extent and energy of accumulation, this law rivets the laborer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the [working] class...
Or:
The more productive capital grows, the more the division of labor and the application of machinery expands. The more the division of labor and the application of machinery expands, the more competition among the workers expands and the more their wages contract. [T]he forest of uplifted arms demanding work becomes thicker and thicker, while the arms themselves become thinner and thinner.
Leon Trotsky, a good authority on Marx, thought that the doctrine was one of "relative immiserization" --increasing income inequality going along with rising working class material standards of living--in good times, absolute immiserization in bad times, all adding up to absolute immiserization over the long run.
But the logic slips for "relative immiserization" as well. "Capital" is the value of the machines used by the average worker measured in labor value units. Yet the argument that "Capital" will increase is an argument that the machine-to-worker ratio will rise--not that the labor value of the machines used by each worker will rise. If the price of machines falls relative to the price of labor as economic development continues, the capital intensity of production can rise while the variable "Capital" measured in labor units stays constant.
In fact, this is economic development: machines become cheap relative to labor as technology advances. Relative wages-of skilled and of unskilled workers-in rich industrial nations have by and large kept pace with the growth of productivity over the past two centuries. There has been no consistent pattern of "relative immiserization."
The holes in Marx's logic would be unimportant had the substance of Marx's predictions been correct. If decade after decade had seen falling wages, growing productivity, and polarization of the income distribution, we would not care whether Marx's logic was airtight or not. We would say that while he got details wrong he got the big picture right.
The holes would also be unimportant if we were judging Marx as a critic of his time. For in the mid-nineteenth century his fears were not unreasonable. The early stages of industrialization in Great Britain saw total production and national wealth rise, and saw wages fail to keep pace. It is possible to argue--it is not crazy to think--that from a material welfare standpoint the average unskilled laboring Englishman was worse off in 1840 than his predecessor had been in 1790.
But Britain's "first industrial revolution" is the only national case of industrialization in which there is a "standard of living debate." In all subsequent national industrial revolutions, whether in Europe, in Asia on the Pacific rim, or in Europe's settler colonies, even early industrialization has enriched the poor.
Marx, however, did not have this multiplicity of examples before him in the 1840's when his views crystallized. He had only one example of industrialization to draw on: Britain. In Britain large and visible sections of the working class were worse off in 1840 than in 1790. Spinning and weaving textiles had been a part-time occupation for many and a full-time occupation for some of Britain's rural poor.
The "putting out" system by which merchants would hire rural "handloom weavers" to turn yarn into cloth had provided much employment in Britain's countryside in the early nineteenth century. But with the coming of the power loom first the wages of the handloom weavers collapsed, and then the jobs themselves disappeared. Dark satanic mills in Lancashire left rural weaving skills useless, and populations impoverished. Andrew Carnegie's father was an impoverished handloom weaver in rural Scotland. Deprived of his livelihood, the family emigrated to America.
Some of the economists of the day said that the plight of the weavers was awful, but that nothing could be done. Attempts to ease their lot would only decrease the speed with which they abandoned the industry for other employments. This decreased speed of exit would lengthen and increase the total mass of misery generated by technological change. Hence the merciful thing was to let them starve as fast as possible.
The fact that nineteenth-century economists preached such doctrines led Thomas Carlyle to call economics by a nickname that has stuck: "The Dismal Science."
Such was the situation that confronted Friedrich Engels in the early 1840s when he went to work in his family firm in the British textile industry, and that he then taught to his friend Karl Marx. Is it any wonder that Marx turned his mind to trying to discover why it was that the tremendous advances in productivity of the industrial revolution did not raise the standard of living of the poor?
But Marx mistook the birth pangs of industrial market capitalism for its death throes. In 1848 the belief that market capitalism inevitably produced a distribution of income that was unbearable and doomed to get worse was reasonable. By 1867, when Marx published the first volume of Capital, such a belief was eccentric. And by 1883, when Marx died, such a belief was indefensible. By 1914 or 1933 it was a doctrine not of reason, but of pure faith alone.
Why, then, spill so much ink on Marx? Because Marx became the prophet and his writings became the sacred texts of what can only be described as a Major World Religion: Communism. As interpreted by Lenin and others, Communism has been one of the major political forces of the twentieth century. Without Marx, the history of the twentieth century would have been unimaginably different: probably much better, possibly much worse, but very much other than it actually was. The dogmas of Communism as derived from the writings of Marx dictated insane and destructive policies to governments that ruled over billions, and left pronounced scars on the history of the twentieth century. |
http://econ161.berkeley.edu/TCEH/Slouch_intro1.html
Last edited by mps242 on Apr-13-2004 at 15:47
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Apr-13-2004 15:41
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