[OT] Another heated discussion about the Iraq siutation, war and politics.

[teal]

Originally posted by geoschmo:
Tbontob, there is no way to have a "theoretical communist" government. Marxism in practice will naturally flow towards either anarchy or Stalinism, because the theory of Marxism is inherantly flawed. It's flaw is that it fails to account for the fact that it must be administered by human beings, and human beings are inherantly flawed. We are greedy by our nature.

A system such as capitalism assumes this truth and uses the inherrant nature of the species as a check and balance agaisnt it's baser tendancies. Yes of course there are plenty of examples of corruption but they are the exception rather then the rule in a truely free capitlaist economy. They result from fallible humans attempting to control market forces, which goes against the capitalist principle, instead of "letting it be".

hmmmm. I seem to detect a possible double standard here. Please correct me if I'm wrong here Geoschmo because in order to say anything I have to make several assumptions. The biggest assumption that I am making and the source of my post is that you are advocating laisez fair capitalism with as little government or other influence as humanly possible (i.e. the type of capitalism championed by Ayn Rand and the Libertarian party of the United States). I make this assumption based on your comments about a "truly free" capitalistic system and "letting it be".

You point out, correctly, that "utopian" communism is inherently flawed because it fails to account for human nature (i.e. it is unrealizable). I would further add that IMO laisez fair capitalism is equally as flawed for exactly the same reason. The language in your own post helps to support my point of view when you are forced to say a "truly free" capitalistic society has little corruption. You are, of course, forced to use the words "truly free" because no such society exists and never will. People are greedy not only for money, but for power as well and in a laisez fair economy whatever powers benefit from the random fluctiations in power levels to gain power will quickly change the rules away from "truly free" to "whatever benefits us" and you will no longer have a "truly free" economy anymore. I keep putting "truly free" in quotes because IMO there is no such thing, even in theory, since the economic game has to be played by some rules and those rules will always benefit some players over others. What this leads to in my observance of the real world, is exactly as you said, when you try and implement a "truly free" capatilistic economy what you inevitably end up with is large levels of corruption.

A very good book on this topic is "The Mystery of Capitalism" by Hernando DeSoto. To summarize: DeSoto asks the question, "given that Capitalism has worked so incredibly well in the western world and undeniably led to great wealth and prosperity for most (if not quite all, certainly better than any other system in historical record), how come recent experiments with implementing capitalistic economies in third world countries and former communist countries has been such an abject failure?" He goes on to display good documentation that in fact, these third world countries (and in particular the poor people in these countries) have incredible resources and "capital" for investment which is for some reason locked up in their economies and not being unleashed to create more wealth. The reason for this, in DeSoto's opinion, is that these countries laws do not reflect the situation that these poor people find themselves in. The systems for exchanging wealth in these countries are entirely based around those who are already in the system and does not allow poor people to readily convert and move their capital around. For example, many poor people "own" houses (in the sense that they made them with their bare hands), but do not have title to those houses and thus can not obtain a loan to start a small business (for example) by using their house as collatoral. Furthemore to obtain such a title would require something like 100 hours of waiting in line and filling out forms (he actually sent research assistants to stand in line and timed them) a procedure which is considerably expedited for those who already own property and/or have the resources to hire people to do their paperwork for them. Of particular interest was DeSoto's revisiting of U.S. history in which he showed that the famous Homesteading act was in fact a law introduced after the fact to allow people who had worked hard improving land they did not own to benefit from the capital they produced and thus generate more capital. DeSoto argues that these third world countries need similar acts to help them in their situation and they really need strong and fair laws which allow them to utilize their already existing capital. In short, what is needed is a Strong, but Fair, Government. Thus Government, far from being the bane of a prosperous economy, is something which is *essential* to allowing the greatest number of people to play at this economic game and thereby freeing up even more capital for investment and productive use. Obviously too much Government is bad (that 100 hours of waiting in line), but not enough Government is equally bad. The question (and an extremely tricky one at that) is how to decide these laws and how to best implement them, what level of police power is needed, etc. It is here that the idea of checks in balances is, to my mind, the best one, but it is very important to remember that the unchecked free market must also be checked.

To summarize: both capitalism (read little government, dog eat dog competition) and communism (read strong central government, dog shoots competing dog in back of head so their will be no competition) are straw men and their followers (Libertarians on the one hand, and communists on the other) are rightly relegated to minority status in any body politic. Let's try to keep the straw manning down to a dull roar rather than the knee jerk response it typically is...

[Fyron]

Teal, you seem to gone off on a tangent from a few words in Geo's post and missed the meaning of it entirely...

Capitalism is not a government. It does not require any specific form of government to be in practice. Democracies, monarchies, oligarchies, etc. can all have capitalistic governments. Capitalism does not require "real little government", no more than "real strong central government" requires or creates "communism". Economic and government theory are not that simplistic.

[teal]

Originally posted by Imperator Fyron:
Teal, you seem to gone off on a tangent from a few words in Geo's post and missed the meaning of it entirely...

Capitalism is not a government. It does not require any specific form of government to be in practice. Democracies, monarchies, oligarchies, etc. can all have capitalistic governments. Capitalism does not require "real little government", no more than "real strong central government" requires or creates "communism". Economic and government theory are not that simplistic.

Laisez fair capitalism (as championed by Ayn Rand) *is* a form of Government or to be more precise a form of society which defines all the laws and norms which the people in that society will practice and adhere to.

Topic of discussion was "communism vs. capitalism". I fail to see how my post was a tangent.

Capitalism *does* require certain types of governments in order to be effective. That's the whole point. Its not a magic bullet you can just pull out of your hat and say its the best and that's how you create wealth and help people. You need strong and fair government in order to realize the benefits of capitialism. Question should be not how do we instill free market capitalism on as many countries and places in the earth as possible, but how do we help people obtain fair and strong Governments which can make good laws and have the power to enforce them? A much harder question.

Certainly you can run capitalism under many forms of government, but it will be most effective under that type of Government which allows everyone to play the game and has enough power to enforce its laws. Once again, how you set up such a Government is an extremely complex question.

Cheers!

[geoschmo]

teal, you make some very valid points. As with Pure Marxism, pure capitalism is an unatainable goal as long as soceity is composed of falible human beings. However, because capitalistic theory assumes and makes use of the falibility of man instead of ignoring or rejecting it as comunnism does, even an imperfect capitalistic system can result in a stable, prosperous nation. While the imperfect communist system will trend towards totalitarianism as the government strives to maintain growth and order in the absence of personal incentive.

The rule of law is required for a stable society regardless of economic system. Most laws have nothing to do with the produciton and distribution of goods and services. Those that do should strive to use as light of a touch as possible, to allow the "Unseen hand" unfettered movement.

Social programs are not by definition anti-capitalist, and neither is government as a whole. But either can be done to an excess that becomes anti-capitalist.

Government with a light touch that encourages entrepreneurship and competition can be most decidedly pro-capitalist.

Social programs that act as safety nets for the truely unfortunate members of a soceity can also be pro-capitalist as it can help prevent the spread of crime and disease which are bad for the wealth of the nation. Pro-capitalist social programs must be designed with incentives for the receipients that encourages their own personal entrepreneurship. To provide them the means and opportunity to better themselves. Not to simply provide their needs and wants indefinetly. Or they are no longer part of the market. They become non-productive.

Government is also neccesary for the common good. To do the things that individuals can't, and business shouldn't do. Infrastructure, defense, keeping the peace, enforcing the rule of law. But they need to be accountable to the public, and strive to be as efficent as possible. As Smith said these duties may be noble, but they are by their nature unproductive. Government cannot be productive, but it should strive to keep it's level of non-productiveness to an absolute minimum that is still sufficent to maintain the general welfare of the population.

Jeez, this is turning into a manifesto here.

Geoschmo

P.S. And Tbontob, Anti-Trust laws are not anti-capitalist, because capitalism needs competition between providers of goods and services. Monopolies are anti-capitalist.

[ May 15, 2003, 19:49: Message edited by: geoschmo ]

[geoschmo]

Originally posted by teal:
Capitalism *does* require certain types of governments in order to be effective. That's the whole point.

You are quite correct on this point. Although the Chinese are currently running an interesting soceitetal expirement in which they are attempting to bring in aspects of a capitalist economic system, while maintaining the totalitarian hold of the government. It is showing some benefits as their eceonomy is currently booming, growing faster than anywhere else in the world I believe.

I think the idea is ultimately doomed to failure as it is difficult for a person to accept "a little bit" of freedom. They can tolerate none, and they will flourish with a lot. But give them just a little and they will be the most miserable. Case in point, Soviet Union/Eastern Europe.

You pointed them out as examples of the failure of western capitalism, but it's still way to early to be making those sorts of judgements. Most of the problems they are having have to do with half steps towards free and open markets, rather then moving too fast. The corrupt governments trying to stay corrupt. Hard to do while simultaneously giving the population the freedom to better themselves.

Geoschmo

[ May 15, 2003, 20:06: Message edited by: geoschmo ]

[tbontob]

Originally posted by geoschmo:
P.S. And Tbontob, Anti-Trust laws are not anti-capitalist, because capitalism needs competition between providers of goods and services. Monopolies are anti-capitalist.

I think this comment would be more appropriately addressed to Ruatha since he was the one who made it.

But I do agree with it. [Edit: Ruatha's remark]

And IMO Teal has it right.

Two centuries ago, capitalism was based on a "let the market mechanism determine what happens and the government should not be involved."

"Lassez-faire" was the term used to both describe and promote the doctrine of minimal government interference in capitalism.

The latin phrase "Caveat emptor" (Let the buyer beware) was also used extensively for the same purpose by implying that the buyer had no one to blame but himself since he should have been more careful in making his decision.

And since the responsibility lay with the buyer, the government should not become involved.

Now if you want to redefine capitalism to include extensive government laws and regulations, well ok.

But it is the same as telling me a mule is a horse. However much they share similiarities, and have the same parentage, IMO a mule and a horse are not the same animal.

Similarly, capitalism in the 18th century is fundamentally different from the capitalism you are proposing.

Further my Websters Collegiate Dictionary defines capitalism as:

"An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decisions rather than by state control, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market."

Seems to me that when governments pass laws which affect the market place, it changes the private decisions of investors, and interferes with free market competition.

And each law that is passed which affects the market place, takes the country one step further away from capitalism.

[ May 15, 2003, 20:49: Message edited by: tbontob ]

[Ruatha]

Yes to write off Russia as a failure is plain gross.
Ukraine hasn't fared very well, it's still totalitarian. But conditions in Russia is improving all the time, it is aswell one of the growing markets in the world and it starts to show for the common people there aswell.
Most of the other central-european countries are soon to join the European Union and conditions are improving there aswell. But in some of these countries (Read Polen (What's the english name for the country where Polish people live? Is it Polen? Will have to google it later!)) where there is a large ineffecient agricultural sector things can still get worse before it turns..

EDIT:
It's somewhat irritating when people (read Tbontob ) writes Posts when I'm doing it and then Posts before I've finished my Posts.
Thereby making me miss their post as I (wrongly) assume that I've read all that is before my post.
Will have to write faster in the future!

[ May 15, 2003, 21:02: Message edited by: Ruatha ]

[Fyron]

Laisse-faire is one type of capitalism. It was never at any point in history the only form of capitalism. Noone redefined capitalism when the US (and other countries) began to have the government get more involved in breaking up trusts (defintiely anti-capitalistic entities) and such.

The country is Poland, for "Pole land".

[ May 15, 2003, 20:43: Message edited by: Imperator Fyron ]

[tesco samoa]

You are quite correct on this point. Although the Chinese are currently running an interesting soceitetal expirement in which they are attempting to bring in aspects of a capitalist economic system, while maintaining the totalitarian hold of the government.

Geo... I think you ment to say the Canadians are currently running an interesting soceitetal expirement in which they are attempting to bring in aspects of a capitalist economic system, while maintaining the totalitarian hold of the government.

[geoschmo]

[quote]Originally posted by tbontob:

I think this comment would be more appropriately addressed to Ruatha since he was the one who made it.

NARF! Sorry about that, to both of you.


[quote]Originally posted by tbontob:

Similarly, capitalism in the 18th century is fundamentally different from the capitalism you are proposing.

No, it's not fundamentally different. It's fundamentally the same, although their may be some differences of degrees and in execution. But the needs for those differenaces are based on a realistic understanding of the changes in world between the 18th centruy and today.

200 years ago you could get by with a mule and the sweat of your brow. You could eeke out a living of bare sustenance working your own piece of land. And if you wanted to improve your station you developed a skill and marketed it freely. Competition, supply and demand all worked on a local scale. Government wasn't needed to get involved in those things.

In our modern industrial world technological advances have improved our lives immesurably, but it has also made us dependant on those technologies. Water, electricity, phones, gasoline, these are all fundamental needs for a person to exsist in todays modern soceity. Specialization has made production more efficent, but the same time made the role of the individual producer or craftsman smaller.

In my mind this doesn't change the basic advantage of capitalism of any other sort of economic system we have devised, but it does need to evolve somewhat to remain relevant.

[quote]Originally posted by tbontob:

Seems to me that when governments pass laws which affect the market place, it changes the private decisions of investors, and interferes with free market competition.

And each law that is passed which affects the market place, takes the country one step further away from capitalism.

I think you are wrong here. Laws can be written in such a way as they encourage entrepreneurship and competition, without interfering in the natural flow of the market.

I don't see it as stepping away from capitalism. Capitalism is evolving as soceity evolves. It may not be capitalism in it's pure 18th centruy theoretical form. I have conceeded that. But that doesn't mean it's something entierly different.

Geoschmo